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18 August 2010

July Stats are down

Yesterday, CREA, (Canadian Real Estate Association), released its stats for the month of July, and as expected the drops in real estate activity are now a reality. There is no shortage of statistics trying to rationalize or explain these drops. But I have to say that I was really impressed with how quickly CREA made the following video available to the public.

This was by no way a surprise taking into account the changes in lending policies, and the implementation of HST on July 1st that the figures are showing significant drops in BC and Ontario, the 2 provinces where HST were launched. A very large percentage of Real Estate transactions that would have normally closed in the month of July were pushed forward to June to “beat the HST”, pumping up June’s numbers clearly at the expense of July’s figures. But with that being said, that excuse really only works for July but what about August and September’s figures? It is important to stay informed as to what is happening in the market, I think this video is an excellent realtor’s perspective. The good news for all home owners both current and potential future homebuyers, mortgage rates are still dropping. Making home ownership even more affordable. My Best 5 year fixed has now gone to 3.84% I have an incredible 3 year fixed rate at 2.90% And variable rate is still holding at PRIME -.70% or currently 2.05% 1. So what does this all mean ? Is the sky falling? No I don’t think so. I just think we are seeing some adjustments from a really busy June. 2. Do I see price drops in the future? Yes for some homes, I think the higher priced homes are going to see the greatest percentage drop. With many looking to down size, and with the new tighter lending policies with CMHC there is a greater demand being placed on lower priced homes. 3. I also think sellers have to become a little more realistic with their listing prices, every one wants to get the highest price for thei r house, but you need to understand that the market is clearly shifting to a buyer’s market, and when this happens, multiple offers are no longer going to be driving prices skyward. Bottom line for the first time homebuyers, with these low mortgage rates, you can still purchase today and pay a lower monthly payment then if you rent the same house. So if you are thinking about buying a home, or maybe you would like to get rid of the one you currently have, please give me a call. For the current mortgage holders, both fixed or variable rate clients take a serious look at my 3 year mortgage rate product (2.90%), it could be a very good solution for these volatile times. I understand how some are having a hard time with going from 2.00%- 2.45% variable to almost 4.00% fixed, this 3 year fixed is great way to get the protection from any further interest rate increases (current Variable rate clients), or to significantly lower your current fixed rate which will lower your payment and save you $1000’s in interest costs. Don’t wait too long, REFI NOW.

Canadian Mortgage Broker News - Dream Achiever

Mortgage Alliance President Micheal Beckette talks with Canadian Mortgage Broker News

Click below to see the article.

Canadian Mortgage Broker News - Dream Achiever

10 August 2010

Housing sector cooling ...

By REUTERS, , Updated: August 10, 2010 10:19 AM
Once-hot housing sector cooling further
Once-hot housing sector cooling further
By Ka Yan Ng
OTTAWA (Reuters) - Canadian home construction fell in July and new home prices rose less than expected in June, further evidence a housing market boom that helped drive the country's recovery from recession is starting to stall.
The reports released on Tuesday are in line with other recent home data that has shown higher interest rates and a new blended sales tax in Ontario and British Columbia are weighing on the key sector.
Housing starts fell a less-than-expected 1.6 percent in July to a seasonally adjusted annualized rate of 189,200 units from a revised 192,300 in June, Canada Mortgage and Housing Corp (CMHC) said. Analysts had called for 186,500 starts in July. June housing starts were originally reported at 189,300 units.
"This report confirms that housing has been lost as a driver of growth in the Canadian economy," Scotia Capital economists Derek Holt and Gorica Djeric said in a commentary.
"There are no BoC (Bank of Canada) implications stemming from this report in our view. The BoC expected housing to cool, and it is being replaced as a growth driver by business investment in machinery and equipment."
Canada's central bank, along with most economists, had forecast residential investment would weaken markedly for the balance of the year.
Still, the Canadian dollar weakened to a session low against its U.S. counterpart after the data.
The CMHC report showed the seasonally adjusted annual rate of urban starts rose 1.9 percent to 169,300 units as a big jump in the volatile multidwelling group offset a retreat in single-family homes.
The multidwelling group, which includes high-rise condos, climbed 13.4 percent to 101,400 units. Starts in the closely watched single-family component dropped 11.3 percent to 67,900 units.
"Canadian home sales have softened significantly so far this year, and that should translate into a slower rate of housing starts in the second half of 2010. We're already seeing a marked correction in single-unit activity," said Robert Kavcic, economist at BMO Capital Markets.
Separately, new home prices climbed 0.1 percent in June, following identical increases of 0.3 percent in the previous three months, Statistics Canada data showed.
Analysts expected a 0.2 percent rise in the month, according to a Reuters survey. Prices, which do not include taxes, rose on a monthly basis in nine of the 21 cities surveyed, and were flat in five and declined in seven.
The top contributors to the monthly increase were Toronto and Oshawa, with a 0.3 percent rise, and a 0.5 percent gain in Ottawa-Gatineau. The largest decrease was recorded in Regina, down 0.3 percent.
Year over year, the new home price index was up 3.3 percent in June, following a 2.9 percent rise in May.
The housing-only component of the new housing price index rose 0.2 percent on a monthly basis and 5 percent for the year. The land-only component was flat in June and slipped 0.1 percent on the year.
(Editing by Jeffrey Hodgson)

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