Real Estate Predictions Always Subject to Change
According to a recent article in the Globe and Mail, The Canadian Real Estate Association has been continually adjusting its forecast for 2011. The stronger than expected sales across the country as well as high prices in British Columbia caused the 4 per cent gain in prices versus the predicted 1.3 per cent decline. “Although sales activity in the first quarter of 2011 came in largely as expected, multimillion dollar property sales in Greater Vancouver have surged unexpectedly. These sales have upwardly skewed average sale prices for the province and nationally, prompting the average price forecast to be revised higher,” stated Steve Laurantaye, a Real Estate Reporter for the Globe and Mail Blog.
More on this topic:
The Globe and Mail – Home Price Forecasts Changed
Debt on Home Equity Lines of Credit
According to a study of conducted by the Canadian Associated of Accredited Mortgage Professionals of the 5.7 million Canadians who have a mortgage 15% of them took out equity in the home in the past year, averaging $30,000. The majority was used for renovations, investing, and debt consolidation.
The report also showed that Canadians are trying to make larger down payments when buying a new home with the average amount paid up front at 30% up from 26% in the previous two years.
More on this topic:
The Globe and Mail – Debt on Home Equity
Is it harder for Canadians to get a Mortgage?
Finance Minister Jim Flaherty has continued to tweak and tighten the rules for Canada Mortgage and Housing Corp. in the last two years. These ongoing changes to the rules can make it more difficult for Canadians to get a mortgage. With the low interest rates coupled by the climbing property values and buying taking on more debt, there is worry that many won’t be able to afford mortgage payments if interest rates rise considerably. It is important for Canadians to stay up-to-date on these changes and should talk to their mortgage professional.
More on this topic:
The Globe and Mail – Rule Changes make Mortgages a moving Target
Market Update:
• TSX -222.32 to 13,419.74 (Reuters) amid a sell off in resource stocks as oil prices retreated on signs of lower U.S. energy demand and metal prices fell on worries about a slowing Chinese economy.
• DOW -130.33 to 12,630.03
• Dollar -.37c to 104.05c USD
o A big retracement in commodity prices pushed the Canadian dollar down.
• Oil -$5.67 to $98.21USD per barrel
o After the Chinese government released data showing inflation remains stubbornly high while industrial output dropped more than expected in April. With the high price of gas, sales of Vespas and other scooters have nearly tripled in the past six weeks. Copper prices also fell sharply as China is the worlds’ largest biggest consumer of the metal.
• Gold -$15.50 to $1501.40 per ounce.
• Canadian 5 yr bond yields markets -.04bps to 2.54. The spread (based on the MERIX 5 yr rate published rate of 4.29%) is above the comfort zone at 1.75.
