If I knew then….

If you’re a first-time homebuyer, you’re hearing a lot of talk in the real estate market these days. Will prices go up? Will the market crash? Will I ever be able to afford a house? How will the new rule changes affect me? How will I ever pay off this debt?
It’s easy to get caught up in all the noise but harder to separate the facts from the hype. As I edge closer to celebrating my first half century on this planet, I find myself using the phrase “if I knew then.. ” more and more — which got me thinking about the next wave of first-time homebuyers, and what pearls of wisdom I could bestow on them.

I had an interesting conversation with a colleague the other day regarding property values in Vancouver. He relayed me a story of a friend who had bought a house on the west side of Vancouver in the mid 1990s and it is now worth over 4 times the amount they paid. In terms of equity, it was the equivalent of winning the lottery. We pondered the question, what will people be saying 20–25 years from now? Is it quite possible that a young 25 year old couple today might look back in the year 2033 and say “If only we had bought that house back in 2013? Why didn’t we? Oh ya, there were new mortgage rules and a lot of global uncertainty…”

Here are a few things that I’ve learned about real estate:

  1. Real estate has peaks and valleys, but there has never been a future peak that is lower than the past one. Just give it time.
  2. Time is your ally. Time can turn any bad real estate decision into a good one.
  3. Equity is your safety net. It can supplement a pension and give you financial options in later years.
  4. Your mortgage is a forced savings program.

So let’s assume that 20–25 years from now you’ll be looking back and saying to yourself one of two things:

  • I’m sure glad I bought that first house, or
  • I wish I had  bought something back in 2013

A lot of people are in this situation today and paralyzed by all the noise around them. And in the absence of facts or perspective, fear will take over. So what are the factors that are influencing your decisions today?
New Mortgage Rules

Yes, there are new mortgage rules that have been implemented over the past few years, but in some respects, this could be to your advantage. Many first-time homebuyers are unaware that you can still buy a home with as little as 5 per cent down. The main rule change that impacts your ability to afford a home is that you can no longer access a 30 year amortization. Your payments will now be determined based on you paying off that mortgage over a maximum 25 year period. Although this does make your payments a little higher in the beginning, it increases the amount of equity you build with each payment (remember your forced savings plan).
In addition, the rule changes imposed by the government have had the exact effect they were looking to accomplish and that is to slow down what was becoming an over-heated housing market. Again, this is to your advantage because it will help to bring house prices back within your range.

Global Uncertainty

There is no doubt that we live in an age of global uncertainty and face the threat of financial chaos in Europe and a pending credit crisis in the US. However, this is not the first time our world has faced these challenges and it won’t be the last. The key factor to look at is what you can control in your world. Ask yourself about your own employment options – your own employment future. The key to creating long term wealth in real estate through equity is your ability to afford your monthly mortgage payments and making them consistently over a long period of time — regardless of what is happening on the other side of the world. If you do so, one day you’ll wake up and realize two things:

  1. Your mortgage is paid off, and
  2. Your house is worth more than the day you bought it — regardless of what happened during the years in between.

So if you’re a first-time homebuyer in 2013, here’s my advice to you. Create a budget that you can afford and be comfortable with. Buy a house or home that does not put a strain on your budget. Focus on taking baby steps and don’t get overwhelmed by the big picture. Make the monthly payments into that forced savings program you called a mortgage and then let time be your friend and real estate will do what it has done for many generations before — eventually go up as your mortgage goes down — and that is what we call “creating equity.” And then maybe, just maybe, as you’re about to celebrate your first half century on this planet, you’ll look back and say, “I’m glad I got started in 2013.”

Republished by permission from Peter Kinch’s The Mortgage Minute.

Sellers and buyers in a stand off

Positive signs Fraser Valley housing market is starting to move »

Lower inventory keeps home prices in check as ‘slow but steady’ market continues

April, 03 2013  09:38:56 am, by FVREB Categories: Statistics

In March, the Fraser Valley Real Estate Board processed 1,128 sales on its Multiple Listing Service® (MLS®), a 20 per cent decrease compared to the 1,412 sales during the same month last year, and a 24 per cent increase compared to February’s 913 sales.
The Board also received 11 per cent fewer new listings in March compared to last year – 2,736 compared to 3,066 – keeping inventory in check. March finished with 9,503 active listings, 1.5 per cent fewer than March of last year and 3.5 per cent fewer than the 9,832 available during March of 2009; the highest volume of active listings for that month in the last decade.
Ron Todson, President of the Board, explains, “Although we saw a typical spring uptick in activity from February to March, our sales remained at about 70 per cent of the norm for March and our new listings came in at 90 per cent of what the Board would typically receive.


“Because inventory levels are in check, prices are staying in check.”
In March, the benchmark price of single family detached homes in the Fraser Valley was $544,300, an increase of 0.6 per cent compared to $541,300 during the same month last year. For townhouses, the benchmark price was $298,200, a decrease of 1.7 per cent compared to $303,400 in March 2012 and the benchmark price of apartments was $204,200, an increase of 0.8 per cent compared to $202,500 in March 2012.
Todson adds, “Inventory levels are not as high as they need to be to put significant downward pressure on prices of the benchmark, or ‘typical’ home. These are homes that have characteristics most common to houses in a given community.
“In fact, we’re seeing the reverse happen. Benchmark prices for all three main property types in the Fraser Valley increased in value during the first quarter of 2013. Since January, detached homes are up by 1 per cent, townhomes by 0.6 per cent; and apartments by 2 per cent.”

Fraser Valley Real Estate Prices Stable, Inventory Low


(Surrey, BC) – Fraser Valley’s real estate market in 2012 will be remembered as the year buyers and sellers took a breather reflecting quieter sales, an average number of new listings and prices overall remaining flat.

The president of Fraser Valley’s Real Estate Board, Scott Olson, says, “The last half of 2012 was like a Mexican stand-off. Buyers kept hoping for greater price drops while sellers who didn’t have to sell just took their home off the market rather than lower their price.

“With the economy so stable, we’re not in a situation where people have to sell their home, so they’re not. It’s a very different market than in 2008 when listings were at an all-time high and sales were at historical lows.”

The Board’s Multiple Listing Service® processed 13,878 sales in 2012 compared to 15,529 the previous year, a decrease of 11 per cent, while the number of new listings remained about the same – 31,009 in 2012 compared to 31,592 in 2011. Over the year, the number of active listings for buyers to choose from dropped by 3 per cent going from 7,399 properties in December 2011 to 7,187 in December 2012.

Although 2012 ranks the second slowest year for sales in Fraser Valley since 2003, the volume of new listings finished in the middle of the pack. Scott Olson, says, “Inventory levels are down, which is a sign of a healthy market where insufficient demand leads to reduced supply. This is also keeping prices in most areas either flat or down only slightly.”

In December, the benchmark price of a detached home in the Fraser Valley was $539,000, an increase of 1.2 per cent compared to $532,700 in December 2011 and a decrease of 1.0 per cent compared to November.

For townhouses, the benchmark price in December was $296,400, a decrease of 2.2 per cent compared to the same month last year when it was $303,000 and down 0.8 per cent compared to November. The benchmark price of apartments in December was $200,100, an increase of 1.6 per cent compared to December 2011 when it was $196,900 and a decrease of 1.3 per cent compared to November.

Average prices year over year show detached homes down 3 per cent – $576,709 in 2012 compared to $594,402 in 2011. The average price of townhomes increased by 3.7 per cent, going from $316,259 in 2011 to $327,935 in 2012 and the average price of apartments decreased by 0.2 per cent going from $218,235 in 2011 to $217,843 in 2012.

Good News for First Time Home Buyers

If you are a First Time Homebuyer afraid you wont be able to enter the housing market with the new mortgage rules, fear not.

This is actually an opportune time to take advantage of the historical low mortgage rates and negotiate better prices on housing, especially in the condo/townhome market. While many feared this market would be the most negatively affected, take a look at these numbers to help put it in perspective:

2007  40 years of amortization (the longest you could get at the time) at an average interest rate of 5.71% – $350,000 = $1,831* would have been your monthly mortgage payment.

2012 25 years of amortization at an average interest rate of 3.29% – $350,000 = $1,704* monthly mortgage payment.

Right away, you’ll notice a truly substantial savings in that you’ll pay your mortgage off 15 years earlier and approximately $330,000 in interest that would have developed over the 40-year amortization.

For more information on First Time Homebuyer Programs, click here

Buyers Being Cautious in Metro Vancouver and Fraser Valley Real Estate Markets

The Vancouver housing market isn’t the pressure cooker it used to be, which makes buying a house a far less painful endeavour than in years past. But no one’s about to call Vancouver a “buyer’s market.”

Nice houses that are priced right are selling within days, some in bidding wars. But anything priced too high or considered undesirable is apt to sit idle in this market, which is, according to the Real Estate Board of Greater Vancouver, witnessing the lowest total sales for the region since July, 2000. The Board reported 2,098 property sales in July, a drop of 11.2 per cent compared to June. It’s a drop of 18.4 per cent compared to July, 2011.

There are many anecdotal stories around the Lower Mainland about houses that have sat on the market for months, priced too high for the more price-conscious market. A six-year-old West Vancouver home on a 21,000-square-foot lot overlooking Capilano Golf & Country Club was originally listed at $3.695-million three months ago. The owners have reduced the price by $400,000 and it still hasn’t sold.

“There is a lot of product but it’s not selling for the price that people expected or hoped for,” says real estate finance expert Tsur Somerville, who is director of the University of B.C.’s Centre for Urban Economics and Real Estate. “People aren’t buying at the prices that are being set.”

But Mr. Somerville also attributes other factors to the drop in sales. Immigrant investors aren’t buying like they were back in 2010 and 2011, and tighter federal rules regarding mortgage lending have made it more of a challenge for property investors.

“Up until earlier this year, there was a two-year period where certain areas were very, very active,” he says. “There were areas that tended to see more capital flowing in from overseas, whether it be from immigrants, investors, whatever. In the areas where we had these really strong price increases, they have flattened out.”

Long-time realtor Rick Stonehouse says there is a lot of product that is over-priced, but sales are still buoyant if the price is right.

Mr. Stonehouse recently sold a three-level, two-bedroom townhouse in Strathcona for the asking price of $899,000 within five days of going on the market. Another renovated heritage house in Strathcona sold for the same price the second week after going on the market. He says the house would have sold for more but was close to a busy street and didn’t have a basement. He’s about to list a Vancouver Special on a 50-foot-lot on West 13th Avenue in Kitsilano for $2.3-million.

Helmut Pastrick, chief economist for Central Credit Union 1, says average sales price numbers are misleading because they are often skewed by outrageously priced houses. Instead, he relies on house price index (HPI) figures that remove the outliers and compare properties with similar features, in similar neighbourhoods.

“Market dynamics typically are such that we see changes in demand conditions obviously through sales first, then it has a ripple effect, on supply, inventory, and consequently, on prices as well,” says Mr. Pastrick.

“When it comes to Vancouver, we have seen sales turn lower since roughly March, and I’m referring to the monthly, seasonally adjusted sales, which is the relevant figure.”

Overall, the HPI shows little significant fluctuation until recently. The index went from 163.9 in May, 2012, to 161.5 in July, 2012, which is a significant drop compared to months past.

“That’s significant in the world of HPI,” says Mr. Pastrick. “And we expect to see prices to slide lower in coming months. At a minimum, we are going to see some supply adjustment occur – listings withdrawn from the market.

“I think in 2013, we’ll also begin to see sales pick up as well. I’m not suggesting a big surge in sales, but something at higher levels than we are currently experiencing.”

Teacher Barb MacKay says it took her about a year and a half to find the right house to buy. She found it recently on a 30-by-90-foot lot in New Westminster. She’d originally seen the bungalow a year ago, listed for $490,000. However, she thought it needed too much work. Someone else purchased the house, did the renovations, and recently relisted it. By now, Ms. MacKay knew the house was a good deal, especially with the renovations all done, and she made an offer. There were other offers, but she got the house a couple of months ago for $592,000.

“I think there is still stuff out there, but a lot of it is unaffordable,” she says. “I noticed, in my overall impression, that there are lots of people with overpriced houses, and they’d either just let them sit there, or they’d come down in price, or they’d take them off the market.”

The condo market has also been softening for some time, says Mr. Somerville.

“Other than a few notable projects that had dramatic presales, overall the condo market has been subdued for a while.”

Jay Berman, who lives in Manhattan Beach, Calif., purchased an 800-square-foot condo in Vancouver’s West End 20 years ago, with a dream of one day retiring there. His plan has changed, so he put the condo on the market two months ago, for $299,000, which would seem a steal for a large one-bedroom in one of the most desirable neighbourhoods in Canada. But so far, he’s had no interest.

“We’re not in a hurry, so it doesn’t matter much, but yeah, I guess I thought it would be pretty quick at that price,” says Mr. Berman.

“I think in a neighbourhood as nice as that, it would be at least $100,000 more for a comparable condo in Southern California.”

That said, nobody is suggesting it’s a buyers’ market in Vancouver, where the HPI benchmark for a detached home is up 1.4 per cent since last year, at $950,200.

“I’ve made this comment before,” says Mr. Somerville. “House price levels in this market are such that I will never use the term ‘buyer’s market.’ I will say, ‘prices are more restrained and less frenzied.’”

New Mortgage Rules from the Bank of Canada

The mortgage industry was caught off guard by government changes that are swiftly coming into effect July 9th, 2012. These changes however will ONLY effect purchasers who plan on putting less than 20% down payment.


Four measures were announced by Finance Minister Jim Flaherty who outlined these new rules impacting CMHC, Genworth and Canadian Guaranty; Canada’s high ratio mortgage insurers.



These changes speak to ensuring we have a strong first-time homebuyer who are building equity in their properties, soften debt exposure and limit the loan to value ratios on higher priced real estate.


It is important to understand again that these current changes will NOT effect consumers providing a down payment of 20% or more.



1. Amortizations reduced to 25 years from 30 years. (on properties with less than 20% down payment)



A mortgage of $250,000 with a current 30 year amortization at 3.09% 5-year fixed rate = $1094.89 monthly payment

A mortgage of $250,000 with the new 25 year amortization at 3.09% 5-year fixed rate = $1227.54 monthly payment


Difference of $132.65 per month
2. Refinancing is REDUCED from 85% Loan-to-value (LTV) to 80% – no change to purchases. (It is important to note that most consumers currently choose to do refinancing to a maximum of 80% LTV to avoid insurance fees so this specific change should have very little impact)
3. Properties purchased over $1 Million no longer will eligible for mortgage insurance (If the home purchase price is under $1 Million dollars consumers can still purchase up to 95% LTV with insurance – anything over $1 Million dollars, 20% down payment is required).
4. GDS and TDS set at 39% and 44% – The reduction in amortization combined with the lowered GDS ratio could affect a number of people’s ability to qualify.




5% down payment rule still remains in effect for property values under $1 Million dollars
These changes are an indication that interest rates will continue to remain low for some time. Interestingly, Ben Bernanke of the US Federal Reserve indicated a few days ago that the US may reduce interest rates further.

These changes will not affect mortgages already in place or approvals already issued by the lender.


It will however effect pre-approvals for purchases with less than 20% down with a 30-year amortization. The client will now need to re-qualify at the 25-year amortization.


As the mortgage qualification landscape becomes more complicated, it is critical consumers work with an independent mortgage professional that understand these changes and can help navigate the rules to ensure the best mortgage solution.


*For sample purposes only. Rates are subject to change. On approved credit.

Jared Dreyer, AMP
Your Mortgage Professional
604 649-5991

The Sky is Falling

I read an article in Maclean’s earlier this month and was truly
taken-a-back by the bold call for a housing meltdown. Interestingly, recently
in the Financial Post, columnist Andrew Coyne wrote a great article
encapsulating the sentiment around the media selling fear over facts. I find it
interesting how many articles have the bold “sky is falling” headlines however
if you read through the article, they typically point to a balanced market. I
guess balanced headlines don’t sell papers. Anyhow, take a read when you have a
minute and  as always, feel free to use any of my email materials to forward to your clients, we’re here to help.

Hope you enjoy the rest of your day and week.

Harbingers of doom

Even by Maclean’s standards, the cover was alarming. “You’re
about to get burned,” screamed the headline, over a picture of a house that was
literally on fire. “Canada looks like the US before its devastating housing
crash — maybe even worse.” And the kicker, for those still hesitating: “Why
it’s officially time to panic.”

This last was doubtless something of a little in-joke. For my old colleagues at Canada’s newsweekly, it is always
time to panic, especially about house prices. The magazine’s editors inhabit a
world beset by all manner of hitherto undetected demons, from more expensive
groceries (“sudden shortages, riots over prices, the world food crisis is about
to hit home”) to insomnia (“the truth about a modern epidemic”).

But nothing, nothing frightens the magazine or, it is hoped, its readers, more than real estate. For years
Maclean’s has been shuddering in terror of the imminent collapse of the
Canadian housing market. From the relative calm of its late 2007 cover story
(“Buy? Sell? Panic?”), the magazine soon picked up signals of the coming
apocalypse. “House prices start to fall,” the magazine announced the following
summer. By autumn, with the world financial crisis in full swing, so was
Maclean’s. “Canada’s Looming Real Estate Crisis,” the cover shouted: “Why house
prices may soon fall through the floor.”

As the months wore on, and the cataclysm failed to arrive, Maclean’s remained ever hopeful of a real collapse.
But durned if prices, after a brief dip, resumed rising. By June 2008, a grumpy
Maclean’s was warning readers “Don’t believe the housing hype,” insisting there
are “plenty of signs that the Canadian housing market is still on some very
shaky ground,” even if “average home prices are up more than 16 per cent this year.”

Fast forward through several more stories in the same vein and by this year the magazine and others were in even
less doubt: Canada was in a housing bubble. Why, just look at the numbers. For
starters, there’s the oft-repeated fact that Canadians are carrying debts worth
153% of their annual income. That’s true: but other countries’ citizens manage
much heavier debt loads, from the spendthrift Swiss (200%) to the feckless
Dutch (260%) to the profligate Danes (320%). We may be carrying almost as much
debt as the Americans before the crash, but with nothing like the same risk
factors, from subprime mortgages to small regional banks, that made their
economy such a firetrap. And if we’re mentioning how Canadians’ debts have
grown, we should surely also mention that their assets have as well: still five
times as large as their debts.

Mortgage costs, interests and principal combined, are currently running at about 30% of disposable income
— again, higher than a few years ago, but barely half what they were in the
early 1990s. Yes, house prices were still rising as of year-end, but more
slowly than before, as even the Maclean’s piece acknowledges — though somehow
it cites this as evidence for its doomsday thesis. But then, what doesn’t? If
prices were rising quickly, that would be proof of housing “mania.” If they
fell a little, that would be the bubble starting to burst. And if they fell a
lot? Look out below!

The truth is the real estate market is cooling slightly, helped by a modest
tightening of lending regulations. It’s true that a rise in interest rates from
current, historically low levels would put some homeowners in distress, but
they’d have to spike a long way before the damage grew widespread to full blown
panic. Andrew Coyne Apr10, 2012 –

Beaten Down Prices & Banks Fighting for Mortgage Business open Window of Opportunity for Buyers this Spring…

Why the latest mortgage war was months in the making:

Before it waded back  into the market with deeply discounted mortgage rates last week, Bank of
Montreal sought to give policy makers in Ottawa a heads-up that it was about to shake up the housing market again.

The bank had also spent months amassing a stockpile of cheap funding in the bond market to backstop the discounted mortgages, a strategy
designed to ensure the cut-rate loans would not lose the bank money.

The parallel moves show the strategic manoeuvring that has gone on behind the scenes to set the
stage for Canada’s latest price war on mortgages. Most major lenders are now locked in battle, offering historic low rates.

After reports Ottawa was uncomfortable when the bank began offering record-low mortgage rates in
January, amid ongoing warnings of household debt, BMO signalled another price cut was coming in an effort to explain its rationale, sources said.

That was before BMO’s announcement last week that it would reintroduce five-year fixed rate mortgages at 2.99 per cent, after testing them in January, and 10-year mortgages at 3.99 per cent. The move cascaded through the sector, causing a flurry of price-matching by rival banks.

It has also spawned mudslinging between the country’s biggest lenders. Royal Bank of Canada has taken out ads across the country to combat BMO’s publicity push, pointing out
fine-print restrictions on BMO’s mortgage offers compared to its own. That prompted a flurry of rebuttal ads from BMO.

Meanwhile, CIBC has launched a cash-back campaign hoping to lure customers of other banks to switch lenders.

In an interview, Bank of Montreal chief executive officer Bill Downe said his bank took steps to ready itself for the attack on prices. “We were able to plan for that offer in a way that preserved our margins,” Mr. Downe said.

The bank has been stockpiling cheaper funding in the bond market over months, which it planned to unleash in advance of the spring mortgage season. The move has left rival banks with little choice but to introduce comparable rates on a variety of offerings, even though some are facing unattractive margins.

Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia, Canadian Imperial Bank of Commerce and a host of others, including credit unions, have put similar mortgage promotions in the market, usually involving 4-year fixed rates and 30-year amortizations, as opposed to BMO’s offer of 25-years and a five-year rate.

Mr. Downe would not comment on discussions BMO may have held with Ottawa. However, after reports that policy makers were uncomfortable when the bank began offering record-low mortgage rates in January, BMO is said to
have signalled to Ottawa that another price cut was coming.

At a time when government and regulators are trying to warn Canadians about the perils of rising household debt levels, the bank’s goal was to explain to policy makers that the discounts aren’t risky or irresponsible from a lending perspective.

But market watchers suggest the reason behind BMO’s high-profile push on mortgages is to regain market share the bank has lost since 2007, when it decided to stop using mortgage brokers.

BMO wanted to increase margins by bringing mortgage sales inside its branches, rather than use commissioned middlemen to sell the products. Branch sales also allow the bank to cross-sell customers on other products.

Since 2007, BMO has seen its market share on mortgages fall significantly, to about 6.5 per cent from more than 9 per cent as a result. In a $1.1-trillion mortgage market, that drop is worth billions to the loan book. It also comes at a time when profit margins have also shrunk, due to low interest rates, putting added strain on the balance sheet.

“You can see that [BMO] are really aggressive in the market right now. And at 2.99 per cent, their spreads are tight and getting tighter,” said Robert McLister, a mortgage adviser in Vancouver and author of the Canadian Mortgage Trends blog. “So they’re obviously trying to get their name in headlines and start to get their market share going in the right direction.”

The drop in market share at BMO in the past four years is a key risk for CIBC, as it looks to potentially exit the mortgage broker channel in search of fatter margins. CIBC confirmed last week that it is looking to sell its FirstLine mortgage broker business to “put more emphasis on branch mortgage originations.”

Analysts are now concerned that CIBC will see a significant drop in market if the strategy backfires. BMO, for example, grew its mortgage book 2 per cent in 2011, which was well behind its peers who used brokers to push more sales.

“The execution risk inherent to [CIBC’s] bold decision to exit the mortgage broker distribution channel in Canada warrants a discount” on the stock price, National Bank Financial analyst Peter Routledge said in a research note.

At BMO, Mr. Downe said his bank has held talks with policy makers in Ottawa about the bank’s strategy of promoting shorter amortizations, something Ottawa favours.

“For the past two years, we have been advocating publicly for shorter amortizations and we have shared this point of view with government,” Mr. Downe said. “We have structured our offering based on maintaining margin,” he said.

grant robertson —

From Thursday’s Globe and Mail


Great opportunity for buyers this Spring: Stable prices & historically low intrest rates.

Housing sales slow in valley

 But prices, new listings, are up in new year
 The Times February 9, 2012
 Home sales this January were the lowest since the start of 2009, but Fraser Valley realtors also saw one of the highest numbers of new listings come on line last month in the past decade.

The Fraser Valley Real Estate Board reported this week there were 2,753 new listings last month, five per cent more than in January 2011.

The increase in new inventory raised the volume of active properties in Fraser Valley to 8,320 by the end of January.

This is good news for home hunters, said board president Sukh Sidhu.

“For buying power you can’t beat the combination of greater selection, the continuation of extremely low interest rates and stable prices,” he said.

The board’s Multiple Listing Service processed actual 799 sales last month, four per cent less than in January 2011.

While home prices are dropped slightly in the last six months, overall prices are still up over last year.

The board’s new MLS Home Price Index, launched on Monday, shows the benchmark price of a detached home in the Fraser Valley in January was $567,700, an increase of 7.6 per cent compared to $527,500 in January 2011.

The benchmark price in January for townhouses was $314,200, an increase of 2.4 per cent compared to January last year.

The benchmark price of apartments in January was $199,600, a decrease of 0.1 per cent compared to January 2011 when it was $199,800.

The MLS® Home Price Index (HPI), replacing the Lower Mainland’s MLSLink® Housing Price Index, is a new measure of price for residential properties in five major markets across Canada.

It includes Greater Vancouver, Fraser Valley, Calgary, Toronto, and Montreal, with more markets to be added.

The new pricing index system was pioneered by six founding partners: the real estate boards of Calgary, Fraser Valley, Greater Montreal, Greater Vancouver, and Greater Toronto and the Canadian Real Estate Association.

Sidhu says the new MLS HPI will help agents in guiding homeowners.

“It’s a bigger, better tool to measure the change in home prices and now we can more accurately compare our market to other major cities in Canada,” he said.

© Copyright (c) Abbotsford Times

Read more: http://www.abbotsfordtimes.com/business/Housing+sales+slow+valley/6125070/story.html#ixzz1mIQETPwN

Carney holds the line on Rates

From the Globe & Mail December 6th, 2011:

Europe is hurtling toward a recession that will be worse than anticipated just weeks ago, darkening the outlook for Canada and its key trading partners.

The United States will feel the pinch of both the European slump and its own troubles, despite signs that Canada’s chief export market is getting back on its feet. Emerging markets, especially those that export heavily to Europe, are also slowing down. And while Canada trades far less with Europe than with countries like the United States and China, it will still feel the sting of a weaker global backdrop through “financial, confidence and trade channels,” the Bank of Canada says.

Bank of Canada Governor Mark Carney and his policy team made those comments Tuesday as they held their main interest rate at 1 per cent, for a 10th consecutive time, warning that Europe’s downturn will be “more pronounced” than they projected in October in what was already a gloomy quarterly forecast.

Mr. Carney and his colleagues cited a deteriorating and increasingly unpredictable external climate in explaining their decision, adding that recent signs of improvement in Canada and the United States could prove to be short-lived as the euro zone crisis weighs on economies everywhere.

The warning comes early in a week when global markets threaten to swing back and forth as investors grope for hints that a crucial European summit on Dec. 9 in Brussels will yield real progress at stemming a melodrama which has dragged on for more than two years, escalating in recent weeks to dangerous new levels.

Some Canadian firms that do significant business in Europe are taking a wait-and-see approach, but overall confidence among exporters has dropped to its lowest level since the recession, according to a semi-annual survey released this month by Export Development Canada.

Exports were a key reason why the economy grew at a 3.5-per-cent annual pace in the third quarter, Statistics Canada said on Nov. 30, and consumer spending in the U.S. – still the destination for about 75 per cent of Canada’s exports, far more than European markets – has been surprisingly strong of late. However, that same report from Statscan also showed business investment fell during the three-month period, the first quarterly drop since 2009.

Don Lang, executive chairman of CCL Industries Inc., a Toronto-based specialty packaging company, said his company does about 40 per cent of its business in Europe, so he is naturally concerned. Nonetheless, he said his customers and suppliers have all been anticipating a European downturn for a while, and he hasn’t yet seen the kind of pullback one might expect.

More important, the company has increased its business with emerging markets in Asia and Latin America over the past decade, to about 19 per cent from low single-digits, and is concentrating its new investments in those regions, “because that’s where the growth is.”

“We’re going to protect our market share and positions in all the countries that we operate in,” he said. “But the majority of our new capital is going to the developing world, and developing economies.”

André Navarri, president and chief operating officer of Bombardier Transportation, said the impact from the debt crisis is minimal. He noted, though, that most of Bombardier’s rail customers are in Northern Europe, which has so far suffered much less impact than southern nations like Greece, Spain and Italy.

Mr. Carney has urged Canadian businesses to avoid feeling “paralyzed” by global uncertainty and to forge ahead with steps that will make them less dependent on the U.S. and Europe, where demand could be subpar for years.

On Nov. 23, he abandoned his script during a speech in Montreal, assuring his audience that Canada’s financial system can function “in difficult times,” and that Canada’s attractiveness to global investors will make it easier for companies to obtain access to capital at reasonable rates even as conditions tighten around the world.

Last week, the Bank of Canada and five other major central banks launched a co-ordinated bid to keep the world financial system sufficiently greased, and prevent a Lehman Brothers-esque scramble for cash that cripples credit markets. Most analysts, though, saw the move as a Band-Aid that buys European governments a bit more time to do their part to ensure a lasting solution.

“Additional measures will be required to contain the European crisis,” Mr. Carney said Tuesday.


Mortgage rates are down and the local real estate market takes another hit. We are passing the mid-point of the year most homeowners at this point are very aware of the down turn we are experiencing in the local real estate market. Inventory has climbed and sales have fallen. Property values are headed down and as much as some would call it a balanced market, it’s more of a buyers’ market. Of course, there are few exceptions to this. Vancouver area homes sales posted their weakest June in almost twenty years. “We’re continuing to see an expectation gap between home buyers and sellers in Metro Vancouver,” said Ashley Smith, REBGV president. “Sellers are often trying to get yesterday’s values for their homes while buyers are taking a cautious, wait-and-see approach.” To take a closer look at the stats, click here Selling property in this market is challenging and requires a skillful realtor. Hard work often pays off, but in these conditions; it’s more about price and affordability. Buyers are taking advantage of these conditions and ‘low ball offers’ are becoming the norm. Sellers should prepare themselves and understand that it will likely take additional time to sell their home. When it comes to selling successfully there are few things that can help in delivering great results. Click here to ask me. Mortgage lending conditions are not much better. The good news is that interest rates have fallen since the beginning of the year and 5 year fixed is now as low as 2.74%. Most economists think fixed rates should hold steady and that we should see the prime lending rate move lower later this year. Borrowers looking to access these cheap rates should ensure they have all income taxes up to date and if you are self-employed ensure you have updated financial statements. This will help get you the answer you need quickly. Alternatively, if you need funds quickly and cannot meet the stringent lending criteria; then there are lots options but it comes at a higher cost. Mortgage rates: (certain conditions apply): Best 5 year fixed: 2.74% - insured Best 5 year fixed: 2.79% - uninsured Best Variable: Prime – 1% Best 10 year fixed: 3.44%