TORONTO AND AREA REAL ESTATE MARKET NEWS BLOG : Bank of Canada

CANADA'S REAL ESTATE MARKET UPDATE

Alexandre Malkhassiants, Salesperson, Anna Falile — Sat, 12 Jan 2013 02:09:00 GMT

Canada's real estate market remains "relatively solid" and should experience a "soft landing" despite the current slowdown and fears of overbuilding in the condominium segment, the country's leading bankers said on January 8.

Speaking to a RBC banking conference in Toronto, the country's top bankers said they don't expect a dramatic downturn like the one in the United States about five years ago.

The bursting of the U.S. housing bubble is considered a major cause of the credit crunch that swept Wall Street and then the global economy in the fall of 2008, after interest rates on sub-prime mortgages rose and defaults soared.

By contrast, sub-prime mortgages have been less common in Canada and real estate prices have trended upward for the most part — except for a few months during the 2008-9 recession and in some economically disadvantaged areas.

"Our expectation is that the overall real estate market in Canada is still relatively solid," said Royal Bank CEO Gord Nixon.

Despite reports that suggest Canadian housing is in crisis, he said the pullback is limited to a couple of markets, notably Vancouver.

"We have seen a slowdown in sales and we've certainly seen a slowdown in mortgage demand but price levels are relatively stable," he said, adding that other than debt to disposable income, most indicators are in line with historic standards.

"So our expectation is we've got this sort of soft landing scenario on the real estate side."

The head of Canada's largest bank said he expects RBC's consumer lending growth will slow to mid single digits but it should see a nearly double-digit increase in commercial loans.

Nixon said Royal has relatively small exposure to the condominium market at $1.2 billion of a $700-billion balance sheet and has requirements that protect it from troubled lenders.

"We're not overly concerned with respect to condo itself because our relative exposures are quite small — on a relative basis, the smallest of the Canadian banks," he said.

However, Nixon noted that a significant decline in the overall real estate market would have broader impact across the economy, which would hurt the banking industry.

Gerry McCaughey of CIBC said the bank hasn't seen credit problems in condo construction but a slowdown could be a fairly significant economic event.

"Pure math says that a soft landing, if it means you go back historic levels of activity, that we're going to have some softness in our economy," McCaughey said.

"... That softness doesn't necessarily come out in mortgage defaults, it comes out in employment softness and consequential unsecured consumer lending softness."

Bank of Montreal CEO Bill Downe told the conference that BMO deliberately limited its exposure to the Canadian condo construction market at $700 million after watching some of the problems surface in the United States in 2007 and 2008.

He doesn't expect Canadian homeowner debt to keep growing at previous levels, which will avoid an "outright collapse in the market."

"In fact, house prices may just stagnate. Condominium prices may just stagnate for a couple of years. And that's the definition of a soft landing," Downe said.

Downe predicted the overall U.S. housing market will show considerable strength this spring, stimulating commercial loans.

After a strong fourth quarter, Downe is anticipating that the American economy will be much stronger this year, which will put upward pressure on interest rates in both the U.S. and Canada.

"I think the U.S. economy is going to perform much better in 2013 than people are anticipating," he said.

Scotiabank CEO Rick Waugh said he also foresees a soft landing for the Canadian condo market, which poses the greatest risk.

http://www.globalnews.ca/money/bankers+expect+canadian+housing+market+faces+a+soft+landing+despite+slowdown/6442784150/story.html

TORONTO MORTGAGE - VARIABLE RATES

Alexandre Malkhassiants, Salesperson, Anna Falile — Tue, 01 May 2012 02:35:00 GMT

It's not enough to choose a variable rate mortgage based solely on rate - you also have to consider what type of variable rate you'd prefer. Below is a breakdown of the most common types:

1. Adjustable Rate Mortgage

An Adjustable Rate Mortgage, otherwise known as an ARM, will see your mortgage payments adjust with every Bank of Canada announcement that causes the Prime rate to increase or decrease. Some lenders will change your mortgage payment immediately, while others - like ING Direct - will evaluate it every three months.

2. Standard Variable Rate Mortgage

A Standard VRM will allow you to maintain the same monthly payment throughout your mortgage term, but the percentage of that payment that goes towards interest will change according to the Bank of Canada's prime rate.

3. Capped Variable Rate Mortgage

A Capped VRM comes with a built-in limit as to how high your mortgage payment can go within a given term (usually the cap is equivalent to the 5-year fixed rate at the time of signing). While your interest rate may change on a monthly basis, your payment remains the same. If interest rates rise above the capped rate, your mortgage payment won't change.

Each type of variable rate mortgage comes with its list of pros and cons, so it's important to ask a lot of questions and make sure you understand each product before signing on the dotted line. Remember, we're here to help - so ask away!

What will happen if mortgage rates will go up?

Alexandre Malkhassiants, Salesperson, Anna Falile — Tue, 15 Nov 2011 00:49:00 GMT

About 12 per cent of Canadian mortgage holders would be challenged if their rate went up by less than one percentage point, found a report from the Canadian Association of Accredited Mortgage Professionals. CAAMP is a national agency that represents 12,300 people who work somewhere in the mortgage industry.
    Some 650,000 out of 5.8 million Canadians who have some sort of mortgage would be at risk if their rate went up by as little as less than one percentage point, the agency said in its annual report. Many of those people are on fixed-rate mortgages, and the agency says by the time their mortgages are due for renewal, their financial capacity will have increased and the amount of mortgage debt will be reduced. Indeed, the group's annual report paints a picture of a mortgage market in gradual recovery from the recession. All in all, there's a "gradually falling rate" of people falling behind on their mortgages, the report notes.
    But the report also says as many as 175,000 Canadian homeowners — as much as two per cent of the market — may owe more on their mortgages than their homes are worth on the market.
    On the other side of the ledger, the report found there are 2.85 million Canadian homeowners who are debt-free on their homes — meaning, they owe nothing on their homes either in terms of a mortgage or home-equity line of credit. And 94 per cent of Canadian homeowners own at least 10 per cent of the equity in their homes, the report finds. Within that, more than three-quarters (78 per cent) own more than 25 per cent of their homes.
     But about 75,000 Canadian homeowners own less than 10 per cent of their homes. That figure represents less than two per cent of mortgage holders, but those are the people who could be susceptible to a modest pullback in home prices, as has happened in large parts of Europe and the United States in recent years.
For much of the past year, the Bank of Canada, federal government officials and private sector economists have warned Canadians to get their finances in order and reduce their debt loads ahead of higher mortgage interest rates to come.
    "While the forecasts for the economy, housing market, and mortgage market are encouraging, there is, as always, uncertainty about the outlook," the report warns.
    And to be sure, the picture of Canada's housing market painted in the CAAMP report looks significantly better than the picture in the United States. A report from real estate data firm Zillow released Tuesday found that 28.6 per cent of U.S. homeowners are underwater — meaning, they owe more on their mortgages than their homes would be worth if they sold them.
     Nonetheless, the CAAMP report says a "sizable minority" of Canadian homeowners would be unable to withstand even a one percentage point rise in their mortgage. Although 60 per cent of Canadians are in fixed rate mortgages (the average rate was at 3.92 per cent in 2011, a drop from 4.22 per cent a year earlier) the budgets for a number of homeowners are squeezed enough that they would be in trouble if their rates went up by that comparatively small amount.
     "A vast majority of mortgage holders has considerable capacity to afford rises in mortgage interest rates," the report stated. CAAMP estimates that the typical mortgage-holder could withstand an increase of about $750 a month without succumbing.
     Canadians owe a collective $982 billion of debt on their homes, and the report estimates that there are about 13.6 million occupied dwellings in Canada.
     Within that, about 9.55 million are owner-occupied, including about 5.80 million with mortgages and 3.75 million without mortgages.
     Across all homeowners, the average amount owed on a mortgage is $90,000 and the average home-equity line of credit is $12,000. http://www.cbc.ca/news/canada/story/2011/11/09/caamp-mortgage-survey.html

Toronto mortgage news.BANK OF CANADA: NO CHANGES FOR MORTGAGE RATES

Alexandre Malkhassiants, Salesperson, Anna Falile — Wed, 26 Oct 2011 00:06:00 GMT

The Bank of Canada saw no reason to move its key lending rate from 1.00%, where it has been for a little over a year.
That's precisely what the market anticipated and it means prime rate (which is the basis for variable mortgage rates) should remain at 3.00%.
The Canadian economy is now expected to return to full capacity by the end of 2013 (it was previously mid-2012). Core inflation is expected to be declining through 2012.

The bank left out language about potential rate hikes or cuts, but slashed its 2012 Canadian growth forecast from 2.6% to 1.9%.
With a commitment from the U.S. Fed to keep its policy rates “exceptionally low” until mid-2013, there is little expectation that the BOC will diverge and raise rates substantially before then.
The bank also hinted that if the euro-area crisis is not contained, that could be a reason to lower rates here.
According to the current Big 6 bank consensus forecast, 2012 should see a 50 bps increase in prime rate. Financial markets don't believe that, however, with derivatives traders effectively pricing in no change by the Bank of Canada in the next year.
The final BoC rate meeting for 2012 is December 6.
To find out more about Toronto mortgage rates and lowest mortgage in Ontario go here - http://www.torontogreathomes.com/ONTARIO_MORTGAGE/page_929364.html

News on Canadian mortgage rates and August Toronto market update

Alexandre Malkhassiants, Salesperson, Anna Falile — Wed, 07 Sep 2011 18:54:00 GMT

The Bank of Canada kept Canada’s key lending rate at the same place it’s been for a year: 1.00%.
As a result, variable-rate mortgage holders can expect prime rate to also stay put at 3.00%.
The BoC said this about its decision: In light of slowing global economic momentum and heightened financial uncertainty, the need to withdraw monetary policy stimulus has diminished. Largely due to temporary factors, Canadian economic growth stalled in the second quarter. The Bank continues to expect that domestic growth will resume in the second half of this year.

The main takeaway here is that the BoC is no longer talking tough about rate increases, as it has recently. That supports the market’s thesis that rates will remain lower for longer.
As always, the Bank of Canada’s overriding goal is to keep inflation near 2% “over the medium term.”
Its next interest rate meeting is October 25. The financial markets expect no rate increase then either.
Fi Greater Toronto REALTORS® reported 7,542 sales through the TorontoMLS® system in August – a 24 per cent increase over 6,083 sales in August 2010. New listings, at 12,509, were up by 20 per cent compared to August 2010. Market conditions remained tight as sales growth outstripped growth in new listings.
"Home sales in the GTA have stood up well despite a less certain economic outlook," said Toronto Real Estate Board President Richard Silver. "Home sales will be bolstered by low mortgage rates moving forward. The Bank of Canada is expected to be on the sidelines until the second half of 2012 or even into 2013. However, home ownership affordability in the City of Toronto could be further improved with the removal of the City's land transfer tax. This tax currently represents a substantial upfront cost for home buyers."
With market conditions remaining tight in the GTA, the average selling price continued to grow strongly in August – up by more than 10 per cent year-over-year to $451,663.
"We remain on pace for the second best year on record for sales. Approximately 90,000 transactions are expected by the end of December," said TREB's Senior Manager of Market Analysis Jason Mercer. "Major home ownership costs, including the average monthly mortgage payment, remain affordable despite the strong price growth experienced so far this year."

Toronto real estate. JULY RESALE MARKET

Alexandre Malkhassiants, Salesperson, Anna Falile — Tue, 16 Aug 2011 01:15:00 GMT

Greater Toronto REALTORS® reported 7,922 transactions through the TorontoMLS® system in July 2011, representing a 23% increase over July 2010. Total sales through the first seven months of this year amounted to 55,863 – down by 1.3% compared to the same period in 2010. After adjusting for seasonal fluctuations, the July figure continued to point to an annual sales result close to 90,000 – in line with results from the previous six months.
“Strong home sales continued in July, with a substantial rebound over last summer’s slow-down brought about by higher mortgage rates, new lending guidelines and misconceptions about the HST. The greatest rebound was seen in the condominium apartment segment in the City of Toronto,” said Toronto Real EstateBoard President Richard Silver. “If the current pace of sales holds up, we could see the second best year on record under the current TREB market area.”
The average selling price in July was $459,122 – up by almost ten % compared to the July 2010 average of $418,675.
“Tight market conditions have boosted the annual rate of price growth this year. However, the listings situation is starting to improve. A better supplied market later this year and into 2012 would lead to a more sustainable rate of price growth,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.
Competition from the resale market has impacted demand for new homes, comments the Canada Mortgage and Housing Corporation. With sales of newly built contemporary homes potentially suffering, the 0.3% reduction is hoped to increase interest from buyers and overseas investors.
Despite worries that the US economic downturn may impact sales, however, there is still overall confidence in the Canadian housing market. A study from theReal Property Association of Canada, revealed yesterday in the Canadian Real Estate Magazine, has found that the country's property market is still growing, and has been for the last eight quarters.
“The market is largely viewed as stable and attractive, which bodes well for future investment and development,” says the report.

Toronto real estate. August Mortgage Rates

Alexandre Malkhassiants, Salesperson, Anna Falile — Tue, 02 Aug 2011 20:27:00 GMT

Financial Institution	3 Yr	5 Yr	7 Yr	10 Yr	5 Yr Variable
CENTUM Primo**	3.29	3.49	5.65	4.99	2.40
First National	3.65	3.79	4.79	4.99	2.25
FirstLine	3.79	3.89	5.04	5.24	2.60
HomeTrust	3.65	3.79	N/A	N/A	2.60
ING	3.69	3.89	4.79	4.99	2.25
MCAP	3.69	3.74	4.79	4.99	2.35
Scotia Express	3.69	3.69	4.79	5.39	2.50
Street Capital	3.49	3.79	N/A	N/A	2.40
TD	3.65	3.89	4.90	5.14	2.35
ResMor	3.94	3.79	N/A	N/A	2.50

Rates Effective as at: August 2, 2011
Prime Rate: 3.00%
Qualifying Rate: 5.39%
Greater Toronto area home prices accelerated during the second quarter as buyers grappled with a tight supply of residential properties for sale. The heightened competition between buyers has created a seller's market, leading to multiple offers and pushing the median sales price up 10 percent, to $405,000 (about $424,000 in U.S. dollars), in June.
At the same time, active listings declined 24 percent from a year ago in Canada's largest metropolis.

Four banks are lowering residential mortgage rates

Alexandre Malkhassiants, Salesperson, Anna Falile — Sun, 29 May 2011 03:26:00 GMT

Four of Canada’s biggest banks are once again lowering residential mortgage rates at a time when falling government bond yields are cutting funding costs for financial institutions.

Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia and Bank of Montreal are all trimming their posted rates on popular five-year fixed-rate mortgages by 0.1 percentage point to 5.49 per cent among other reductions.

This is the second time that major banks have lowered that benchmark consumer rate in just over a week. The last time they did so was on May 19 when rates for five-year closed mortgages fell by 0.1 percentage point to 5.59 per cent.

RBC, TD, Scotiabank and BMO are also trimming interest rates for a number of other residential mortgage products, including various special offers.

This latest round of mortgage rate cuts was prompted by falling yields on government bonds across a range of terms, said TD spokeswoman Barbara Timmins in an e-mail.

Toronto Mortgage Rate Update

Alexandre Malkhassiants, Salesperson, Anna Falile — Mon, 18 Apr 2011 19:30:00 GMT

Rates Effective as at: April 18, 2011
Prime Rate: 3.00%

Qualifying Rate: 5.69%

Financial Institution	3 Yr	5 Yr	7 Yr	10 Yr	5 Yr Variable
CENTUM Primo**	3.69	4.09	5.65	5.50	2.30
Concentra	3.99	4.29	N/A	N/A	3.00
First National	3.69	4.19	5.10	5.34	2.25
FirstLine	4.00	4.39	5.25	5.34	2.35
Home Trust	4.59	5.09	N/A	N/A	3.50
ING	3.69	4.29	4.79	4.99	2.25
MCAP	4.09	4.14	5.10	5.50	2.35
Scotia	3.99	4.39	5.29	5.79	2.85
Street Capital	3.79	4.29	N/A	N/A	2.30
TD	4.00	4.39	5.14	5.34	2.35
ResMor	3.94	4.24	N/A	N/A	2.40
Lendwise	3.65	4.02	N/A	N/A	2.15

If you have any questions about Canada mortgage rates and Toronto real estate, call Alexandre Malkhassiants,
Sales Representative and Mortgage Specialist.
Right at Home Realty Inc., Real Estate Brokerage.
Office: (416) 391-3232.
Cell: (416) 723-9383.
E-mail: amalkhass@rogers.com
Website: Toronto real estate
Website: Ontario real estate
Blog: Lowest Canada mortgage rates

MORTGAGE RATES ARE DROPPING

Alexandre Malkhassiants, Salesperson, Anna Falile — Fri, 18 Mar 2011 03:17:00 GMT

Royal Bank of Canada started the latest round of cuts.
Toronto-Dominion Bank cut its four-, five-, seven and 10-year fixed rate mortgages to 4.99 per cent (-0.15 per cent, 5.34 per cent (-0.10 per cent), 6.14 per cent (-0.20 per cent) and 6.50 per cent (-0.15 per cent) respectively.
TD also cut its four-, five-, seven-and 10-year closed special fixed rate offers to 4.19 per cent (-0.15 per cent), 4.09 per cent (-0.10 per cent), 4.79 per cent (-0.20 per cent) and 4.99 per cent (-0.20 per cent) respectively.
Canadian Imperial Bank of Commerce cut its four-, five-, seven-and 10-year closed mortgages to 4.99 per cent (-0.15 per cent), 5.34 per cent (-0.10 per cent), 6.50 per cent (-0.20 per cent) and 6.60 per cent (-0.15 per cent).
National Bank adjusted its four-and five-year closed fixed-rate mortgages to 4.99 per cent (-0.15 per cent) and 5.34 per cent (-0.10 per cent). It also cut the 10-year closed mortgage to 6.40 per cent (-0.25 per cent) and the variablerate closed capped mortgage to 5.34 per cent (-0.10 per cent).

Financial Institution	3 Yr	5 Yr	7 Yr	10 Yr	5 Yr Variable
CENTUM Primo**	3.35	3.89	5.65	5.50	2.30
Concentra	3.80	4.09	N/A	N/A	3.00
First National	3.80	4.04	4.79	4.99	2.30
FirstLine	3.80	3.89	4.99	5.19	2.35
Home Trust	4.09	4.69	N/A	N/A	3.00
ING	3.89	4.04	5.10	5.40	2.25
MCAP	3.89	3.84	5.10	5.40	2.35
Scotia	3.80	4.04	5.10	5.69	2.85
Street Capital	3.80	4.09	N/A	N/A	2.30
TD	3.80	4.04	4.79	4.99	2.35
ResMor	3.74	3.94	N/A	N/A	2.65
Lendwise	3.35	3.80	N/A	N/A	2.60

Rates Effective as at: Mar 17, 2011
Prime Rate: 3.00%
Qualifying Rate: 5.44%

If you have any questions about Canada mortgage rates and Toronto real estate, call Alexandre Malkhassiants,
Sales Representative and Mortgage Specialist.
Right at Home Realty Inc., Real Estate Brokerage.
Office: (416) 391-3232.
Cell: (416) 723-9383.
E-mail: amalkhass@rogers.com
Website: Toronto real estate
Website: Ontario real estate
Blog: Lowest Canada mortgage rates

CANADIAN BANKS ARE STABLE

Alexandre Malkhassiants, Salesperson, Anna Falile — Mon, 10 Jan 2011 22:53:00 GMT

Canada’s Big Six banks, says a new Fitch year-end report, remain, like the country itself, stable , with earnings predicted to remain sound and credit costs manageable. Canada’s long-stable banks remain a source of national pride, with their...(read more)

Toronto real estate. BUYERS WHO BOUGHT ONCE - WILL BUY AGAIN

Alexandre Malkhassiants, Salesperson, Anna Falile — Thu, 23 Sep 2010 05:00:00 GMT

According to a new survey by TD Canada Trust, more than two-thirds of repeat homebuyers expect their next house purchase won't be their last. Twenty-three per cent of the more than 1,000 participants -- all repeat homebuyers -- said they plan to move...(read more)

Toronto real estate. LOW RATES IN BUYER'S MARKET

Alexandre Malkhassiants, Salesperson, Anna Falile — Tue, 24 Aug 2010 20:05:00 GMT

Sales of houses on Toronto MLS are down on a year-over-year basis, which isn’t a surprise. The decline was predicted. Each says last year’s sales were higher than expected because many buyers were brought into the market before the threat...(read more)

Toronto real estate, Toronto mortgage. RATES SET TO RISE

Alexandre Malkhassiants, Salesperson, Anna Falile — Wed, 16 Jun 2010 01:53:00 GMT

Canada Mortgage and Housing Corp. expects short-term interest rates will begin to rise in the second half of 2010. With the overnight rate expected to increase in the coming months, mortgage rates have begun to rise. According to a CMHC scenario, posted...(read more)

FORECLOSURE IN CANADA: YES OR NO?

Alexandre Malkhassiants, Salesperson, Anna Falile — Mon, 31 May 2010 01:58:00 GMT

Canadians will be spared a U.S.-style wave of foreclosures when the housing market corrects and interest rates rise, according to a report from DBRS Ltd. examining Canada’s $1-trillion mortgage market. DBRS expects housing prices to fall and acknowledges...(read more)