Southseacompany shared this article, looks like everyone’s mortgage is going to get more expensive:
The Bank of Canada raised its benchmark interest rate to 1.25 per cent Wednesday and signalled that, barring certain risks, more hikes are likely in the rest of the year. That’s creating an unusual situation for Canadians: for the first time in years, those renewing mortgages will be faced with higher rates and an increase in payments.
Even before Wednesday’s decision, five of the country’s largest banks hiked five-year fixed rates 15 basis points to 5.14 per cent last week. (CIBC is still offering 4.99 per cent.) In a country where consumers have grown accustomed to low rates, and where households are burdened with record levels of debt relative to income, this kind of change is worth noting. A recent survey published by insolvency trustee MNP Ltd.found 48 per cent of Canadian respondents were $200 or less away from being unable to fulfill their monthly financial obligations, an eight point increase since September.
Read the full article over at Macleans.
Bullwhip29 points out that BC Finance Minister Carol James has no plans to prohibit foreign buyers in BC.
Foreign buyers who want to buy residential real estate in Metro Vancouver pay a 15 percent tax.
Meanwhile, Finance Minister Carole James has no intention to outlaw foreign buying of B.C. homes when the NDP government introduces a series of policies in the next couple of months to address the high cost of housing.
James has said that there will be no ban like the one that exists in New Zealand.
B.C. Green Leader Andrew Weaver, on the other hand, has demanded an outright ban on foreign buying of residential real estate to curb demand. And he wants James to introduce this in her upcoming budget.
Read the full article over at the Straight.
Southseacompany pointed out this article about rising interest rates around the world:
The bond market is getting a wake-up call from global central banks that the post-financial crisis era of easy money and super low interest rates is coming to an end.
In what was a sizzling move for the Treasury market, the 10-year yield zipped higher Tuesday amid talk that the Bank of Japan could finally be ready to wind down its easy policies. The 10-year yield broke above the key 2.50 percent level and was trading as high as 2.55 percent, the highest since March.
The 10-year is key since it is a benchmark that mortgages and many other consumer and business loans are based on.
Read the full article here.
A comment from Ulsterman to kick off the new year:
Well, it’s been almost 15 years of being wrong about this market. Yup, believe it or not back in 2003 people thought prices were too high. Yes, it’s comical now, but at the time when you watched a Commercial Drive condo go from 80k to 115k within a year, people were worried about buying at a peak….
Anyhow, 2018 certainly looks like there are many factors aligned against rising prices:
1) SFH prices have already been falling
2) rates are rising
3) more restrictive lending
4) a kinda/sorta foreign buyers’ tax
5) the upcoming stress test
6) insane debt levels
What i have learned through bitter experience is that the LM market can be incredible resilient, so i won’t get my hopes up for a really significant drop in prices, but i genuinely do think SFH’s will be cheaper a year from now. Will it make a difference to me? Unlikely.
Good luck to all of you in 2018!
Southseacompany points out this article claiming speculators are leaving the local market and selling homes purchased in the last two years for less than the purchase price:
Dozens of homes in Metro Vancouver bought in the last two years are currently listed to be sold for a loss as speculators appear to exit Canada’s hottest real estate market.
An industry insider sent ThinkPol sales data for single family houses in the Lower Mainland showing roughly 40 properties that are currently listed for prices lower than what the sellers originally paid for them.
As the property purchases were made within the last two years, ThinkPol was able to validate this data using information published by BC Assessment.
price read the full article here.