southseacompany points out this article about Finance minister Bill Morneaus plan to ‘help‘ homebuyers.
“One of the things Finance Minister Bill Morneau did in the budget on Tuesday was to take steps to fix Canada’s home ownership problem. But who told him Canada has a homeownership problem?”
“Homeownership rates in Canada are among the highest in the developed world. Even among young people, homeownership rates are high compared to our peers with more than 40 per cent of households led by people under 35 owning homes. And yes, even in Toronto and Vancouver, homeownership rates are high relative to those cities’ global peers.”
Read the full article here.
Mortgage brokers make their money by getting people mortgages. In a softening market this can present a challenge.
FICOM is the agency that regulates mortgage brokers and they are issuing a warning:
Brokers should not overleverage their clients; this may be done by fudging applications – overstating the income of a borrower to obtain a bigger loan (and hence a bigger commission), said Carter, who also warned brokers of working with unregistered fixers.
Carter told brokers in Vancouver that the days of “how to get to yes” are over with new market uncertainty, and slumping sales and prices. Now, brokers need to be extra vigilant and learn “when to say no.”
He said Canadians could be in for a rude awakening if real estate prices fall and they’re still saddled with big mortgages and even loans against their equity, suggested Carter. And the brokers who brought loans to those homebuyers will face extra scrutiny, he said, which is why he’s calling on the industry to ease back the throttle on new mortgages that may be contrary to the best interests of the public.
Read the full article here.
Not only are we almost certain to have the worst sales numbers for February in recent history, but – for the first time ever, it appears that we may increase MOI from Jan-Feb (that never happens).
Now the weather will have some impact for sure but this February is not going well and many people are waiting things out as prices settle down.
It’s the beginning of a whole new year and that means it’s time for expert predictions about the Real Estate market in 2019:
From the Professor:
“My guess is 2019 will not be a banner year for sales in Greater Vancouver and I expect further price declines,” said Tom Davidoff, an associate professor at UBC’s Sauder School of Business.
From the Accountant:
Historically, the real estate industry has been a “laggard” when it comes to embracing technology, says Frank Magliocco, a partner at PwC Canada who specializes in the housing market.
“But I think what you’re going to see now is a fairly significant ramp up in embracing that technology once it becomes more mainstream,” he said.
“It’ll be increasingly important to remain and be competitive in the marketplace. Once you see these technologies prove out, you’ll see more and more adoption.”
On Quantative Tightening:
When it comes to reversing their crisis-era bond buying, central bankers are focused on the destination. Traders in risk assets care more about what could be a painful journey.
The tension may prove even more consequential in 2019 now that the European Central Bank is stopping — though not yet unwinding — asset purchases. Bank of America Corp. analysts say liquidity from the developed world’s four major central banks will contract by $200 billion next year, driving volatility in the riskier markets that thrived under quantitative easing.
From the Real Estate Salespeople:
Even though British Columbia is expected to lead the country’s year-over-year decline in home sales in 2019, the provincial average resale price will rise slightly, according to a national real estate forecast published December 17.
The average sale price of a B.C. home sold on the Multiple Listing Service next year will be $720,000 – a rise of 0.9 per cent over 2018’s figure, predicted the Canadian Real Estate Association (CREA).
Ever felt like telling the future?
What do you foresee happening to the local economy an housing market in 2019? Where will interest rates go?
The Bank of Canada seems to think we’re not in for hot growth and are keeping rates flat for the moment.
A couple of brokerages predict prices will stay flat or decline only slightly in 2019.
The general consensus and safe bet is to predict a status quo situation. No major drops or increases in the market. That sound about right?