RBC made what I think are some some pretty serious – and costly – mistakes for their customers and it is too bad … for the customers!
My 2 favorite quotes from this article are:
“My husband and I both felt pretty robbed,” she said. “I feel … it was deceptive.”
“Based on his reading of it, the tone of the bank’s letter to affected customers is “probably an attempt to avoid litigation, because if they took the opposite position then people would be owed money,” he said, noting the letter falls well short of an apology or acceptance of responsibility.
“There is no particular offer … to compensate or provide a small amount of money as a token of having made a mistake,” he said.”
Here is the full article:
“Always get mortgage advice from a full-time, professional, mortgage broker”
Mortgage Mark Herman; Calgary, Alberta top rated mortgage broker.
Below is the technical, boring stuff we read to see where rates are going for you. Just ask us for the short version.
Short version is that the Bank of Canada is going to leave the rates the same for a while yet – like a year.
Long boring version is below.
Canadian Dollar Down in Wake of BOC Dropping Tightening Bias
TORONTO–The Canadian dollar is lower Thursday morning as it struggles with the implications of the Bank of Canada’s erasure of its tightening bias amid a broader retreat in commodity currencies.
The U.S. dollar was at C$1.0409 Thursday, from C$1.0384 late Wednesday, according to data provider CQG.
Its high for the session so far at C$1.0419 fell just shy of resistance around the C$1.0420 area.
The Australian and New Zealand dollars are also lower Thursday amid concerns about monetary policy and banking system liquidity in China. Any threat to economic growth in China puts pressure on commodities and commodity-linked currencies because Chinese demand for commodities is a key support for the asset class.
But the Canadian dollar is also grappling with the implications of the Bank of Canada’s decision on Wednesday to drop its 18-month-old tightening bias, a move some analysts believe could prompt a new round of weakness in the Canadian unit as it undermines the perception the Bank will raise interest rates before other advanced economies.
Currency strategists at UBS said in a report the Bank’s move derailed a rally they had expected to see in the currency.
“Having felt conditions were ripe for a CAD rally, we were taught a harsh lesson on Wednesday by the BOC: never ever underestimate the determination of a small, open economy’s central bank to defy expectations for a positive outlook,” they said.
The tightening effect on the Canadian economy from any gain in the Canadian dollar is simply too big for the Bank of Canada to risk, and the bank wanted to keep policy steady in order to retain maximum policy flexibility, UBS said.
Write to Don Curren at email@example.com
Another article showing that the underlying fundamentals of continued in-migration and job growth – of quality jobs – supports the Calgary home market.
Calgary housing market sizzles in September
MLS sales and prices continue to climb
CALGARY — Calgary’s red-hot housing market continued to sizzle in September as MLS sales and prices followed an upward trend.
According to the Calgary Real Estate Board, total MLS sales in the city of 1,923 during the month were up 19.44 per cent from a year ago.
The average sale price rose by 8.27 per cent to $454,352 while the median price was up 8.78 per cent to $402,500.
Calvin Buss, involved in real estate marketing and sales, said job creation and in-migration are fuelling the current market.
“The international in-migration is getting stronger and stronger. And if you look at the number of people that came out of Ontario over the last six months into Alberta, it’s just staggering,” said Buss who has his home for sale in Edworthy Park at $4.49 million. The home is situated in the middle of a forest overlooking the Bow River and the downtown.
“In Calgary we have a tight market. We’ve had good markets over the last two years. And that’s tightened everything up. And then you get all that in-migration coming based on jobs. You start to get things really tightening up. Like the vacancy rate downtown doesn’t have any elasticity to help absorb these people so they’re forced into the marketplace. And the marketplace only has a certain capacity.”
Calgary is in a sellers’ market which is good news for people like Buss who have their homes for sale.
In September, there were 2,796 new listings in the Calgary market, up 4.33 per cent from a year ago but active listings at the end of the month were down by 23.08 per cent to 3,922.
Scott Bollinger, broker for the ComFree Commensense Network, said the jump in prices isn’t too surprising when you look at the underlying factors, which include a tight inventory, a close-to-zero-vacancy rental market converting many would-be renters into potential buyers, and the fact the economy’s humming along.
“What is a little surprising is that the numbers of new listings aren’t keeping pace with big jumps in prices and sales,” said Bollinger. “I think Calgarians know this is a seller’s market. It has been for months. So that tells me that population growth and demand are simply outpacing supply. Speculators who sat for years on second and third properties, waiting for a hot market, have already sold.”
Days on the market to sell in September fell from 45 a year ago to 36, which represented a 20 per cent decline.
“The economy continues to support factors that are driving housing demand forward,” said Richard Cho, senior market analyst in Calgary for Canada Mortgage and Housing Corp. “Employment in Calgary has trended up, with many full-time jobs also created.
“Latest reports also show that net migration to Alberta has been strong as well. After two quarters, net migration in Alberta has increased over 40 per cent from last year. Sales thus far are up compared to 2012 levels, and that is not expected to change by the end of the year.”
Ben Brunnen, a Calgary economic consultant, said the local real estate market should perform well this fall with a favourable economic outlook, a tight rental market and strong population growth the key factors.
“Alberta has been one of the most resiliant economies in Canada, and this gives buyers confidence,” said Brunnen.
“At the same time, supply remains tight with limited inventory to meet demand and builders trying to catch up. For the economy as a whole, strong real estate prices give homeowners confidence, and this could help boost consumer spending in Alberta.”
CREB said single-family home sales in September of 1,354 were up 20.25 per cent from last year while the average price rose by 9.25 per cent to $512,359. Condo apartment sales increased by 17.39 per cent to 324 with the average price up by 4.38 per cent to $298,765. Condo townhouse sales were up 17.79 per cent to 245 while the average sale price increased by 2.95 per cent to $339,534.
“Tight market conditions have supported price growth in the Calgary market,” said Ann-Marie Lurie, CREB’s chief economist. “But the pace of unadjusted monthly growth has eased in September.
“While prices show strong year-over-year gains, if the level of new listings continues to improve relative to sales activity, prices should level off for the remainder of the year.”
The article below echoes the theme of many of my posts – Inbound migration to Alberta is supporting home prices. Our growth at 6% is 1% less than India – the world leader. My new favorite quote is below, “Alberta actually has the dynamics or properties you’d normally see in emerging economies.”
Lamphier: Hot air can’t bust a housing bubble that doesn’t exist
EDMONTON – If I’ve read one story about a possible U.S.-style housing bust in Canada, I’ve read a hundred.
Indeed, the Toronto-centric national media, whose world view apparently extends from the Don Valley Parkway to Highway 427, seem absolutely obsessed by the topic. Barely a week goes by without another breathless warning from some Toronto economist, columnist or TV news anchor about a looming price collapse.
It’s complete nonsense, in my opinion. For starters, there is no national housing market. Prices vary wildly from place to place, and always will. So while Toronto or Vancouver look pricey, many other cities — including Edmonton— simply don’t.
Of course, I’m just a newspaper scribbler. But when one of the world’s top economic forecasters says the gloom and doom crowd is out to lunch, well, that’s not as easy to dismiss.
Stefane Marion, chief economist and strategist at Montreal-based National Bank, was recently ranked among the top 20 forecasters in the world by U.S.-based Bloomberg Markets magazine. He’s the only Canadian to make that prestigious list.
In Marion’s view, those who insist that Canada’s house prices are “bubbly” — as Britian’s Economist magazine recently argued, and as The Globe and Mail dutifully reported — simply don’t understand what drives housing in the first place.
It’s simple demographics, he says. Canada’s population grew by 1.2 per cent in 2012, versus just 0.8 per cent in the U.S., and 0.2 per cent in the eurozone. Japan’s population, on the other hand, has shrunk for six straight years.
The big reason? Immigration. Newcomers accounted for fully 60 per cent of Canada’s population growth last year, he says, far more than the U.S. or Europe.
What’s more, 55 per cent of those newcomers are between the ages of 20 and 44, when many are launching careers, getting married, starting families, and yes, buying new homes.
Japan is at the opposite end of the spectrum. Its aging population, low birth rate and aversion to immigration curbs demand for housing. Yet the same Economist article that slammed Canada’s housing market as bubbly argues that Japan’s house prices are “undeservedly flat,” Marion says.
“If you don’t have household formation where are your home prices going to go? That’s the key right there. That’s where Canada really, really is different from other countries,” he says, notably in high-growth provinces like Alberta.
“It does explain why the new housing market or home resale market in Alberta seems to be so tight all the time. This is key. Household formation is just surging,” he says. “So it fascinates me that we have economists coming out and taking a shot at Canada and not taking that into account.”
That was one of several key insights Marion offered to local bank clients and advisers at a packed luncheon that was organized by Angus Watt, managing director, individual investor services at National Bank Financial.
Marion’s generally upbeat outlook for the Canadian and Alberta economies jives with the positive tone of Bank of Canada governor Stephen Poloz’s latest comments.
“We are now close to the tipping point from improving confidence into expanding capacity,” Poloz told a Vancouver Board of Trade audience on Wednesday.
Looking ahead, Marion says he expects those demographic trends to continue over the next five years. In the key 20-to-44-year age cohort, he expects India to lead all nations in population growth, at seven percent, followed by Canada, at four per cent. On the flip side, countries like Germany, France, Italy, Russia, China and Japan will show marked declines.
“Alberta would be just behind India, at six per cent. So that shows you how potent this growth is for Alberta. Alberta actually has the dynamics or properties you’d normally see in emerging economies.”
Turning to the oil markets, Marion says despite declining U.S. consumption, falling imports and soaring production — up an astounding 47 per cent in the U.S. since 2006 — Canada’s exports south of the border remain strong.
The biggest loser? OPEC, whose share of U.S. imports has declined from 55 per cent in 2008 to just 46 per cent last year, he says.
“By next year the U.S. will produce as much crude as it did in the 1980s, so we have to cope with this energy revolution in the U.S. . . . but Canada is shipping as much oil and petroleum products to the U.S. as all of OPEC put together. I never thought this would happen anytime soon, so that’s a big, big deal.”
As for TransCanada’s proposed $12 billion Energy East oil pipeline, which would carry Alberta bitumen to refineries in Quebec and New Brunswick, Marion says the potential economic upside for Canada is big, since it would displace higher-priced Brent crude imports from unstable countries like Algeria, Kazakhstan and Angola.
© Copyright (c) The Edmonton Journal
AGAIN – this will cause more head offices to move here, creating or supporting continued housing demand and price support. Once a city hits about one million people the influx of in-bound migration continues.
CALGARY — Calgary continues to draw attention globally as a financial centre.
The city has moved up 11 spots to 17th overall in the London-based Z/Yen Group’s Global Financial Centre Index (GFCI) — the only well-established index measuring global financial centres. The index ranks 77 of the world’s major financial centres in terms of competitiveness.
The index has been in existence since 2007.
Calgary made the list for the first time in March 2012.
“Calgary continues to make strong progress as a financial centre having joined the Global Financial Centres Index one year ago,” said Mark Yeandle, GFCI author, Z/Yen Group, in a statement. ”The Economist Intelligent Unit rates Calgary highly in its Business Environment Index and its Operational Risk Rating, The Fraser Institute rates Canada highly in its Economic Freedom of the World index and Standard & Poor rate Canada very highly in its measure of Banking Industry Country Risk. Additionally the Milken Institute ranks Canada very highly in its Capital Access Index. Respondents to our questionnaire continue to recognize the significant growth in financial services within Calgary as a result of the success of the energy sector.”
Bruce Graham, president and chief executive of Calgary Economic Development, said the city’s 11-point improvement in the past year supports the organization’s goal to build Calgary’s reputation as a global financial centre and demonstrates the growing strength and confidence in the sector.
“Building on the strength of the energy sector, Calgary is well-positioned to see sector diversification and continued growth in the financial services sector,” he said. “Through our Calgary. Be Part of the Energy campaign, our inclusion in the index will help elevate the international profile of Calgary in the attraction of financial institutions and qualified talent needed in this sector.”
According to Calgary Economic Development, Calgary’s finance and business industry is experiencing huge growth with 8,100 new jobs created over the past 10 years, an increase of 47.6 per cent (2003-2012). A result of the success of the energy sector is that most major Canadian financial institutions and lenders have a presence in Calgary, along with a growing list of international financial groups, says the organization. Examples of international financial institutions in Calgary include the Bank of America, Citigroup, Barclays Capital, Deutsche Bank, Bank of China, Goldman Sachs, HSBC, ICICI Bank, JP Morgan, Merrill Lynch, Royal Bank of Scotland and Société Générale.
Rachel Yin, business development manager for financial services at Calgary Economic Development, said the index is important for Calgary in attracting investment and talent in the industry.
She said several factors led to Calgary’s improvement in the global ranking including: Canada’s strong banking system; Calgary’s economy; investment into Canada and Alberta in the resource sector; and support from different industries and levels of government.
“We have the financial sector advisory committee that’s led by CED and in that committee we have a lot of experts from the industry so they promote Calgary. They are a good promoter for Calgary,” said Yin.
“Calgary has always been famous for energy. An energy hub. We see a lot of deals going on.”
She said 12 per cent of the city’s global energy deals are conducted in Calgary.
Calgary listed as an “out-performer” in Canadian real estate market
Pace predicted to be moderately lower for the rest of Canada
Calgary realtor Kaitlyn Gottlieb of Century 21 Bamber Realty Ltd.
Photograph by: Colleen De Neve Colleen De Neve, Calgary Herald
CALGARY — Canada is expected to embark on a gradual, modest, downward housing market adjustment over the next three years with a “measly” two per cent annual price gain over the next decade, says a study released Monday by TD Economics.
But the bank has also listed Calgary as an “out-performer” in Canada for the long-run rate of return on Canadian real estate. Compared with the national picture, Edmonton, Vancouver, Victoria and Toronto were also listed as out-performers for the future.
“With the slowdown in the Canadian housing market well entrenched, many are worried about the future value of their homes. This is not surprising as real estate is the largest financial asset most Canadians have in their possession,” said TD Economics.
“The housing market is prone to cyclical ups and downs and we should embark on a gradual, modest, downward adjustment over the next three years. We project a 3.5 per cent annual rate of return on real estate to prevail beyond 2015 – this is the long-run rate of increase for home prices in Canada. However, this pace will be moderately lower than they have been historically (5.4 per cent).”
Derek Burleton, vice-president and deputy chief economist with TD Economics, said Calgary had a run-up in prices before the recession and then a sharp decline during the recession.
“I guess prices didn’t come back too much but certainly sales fell back and now you’re getting a bit of a cyclical bounce,” he said, adding a long-term forecast takes into account key economic drivers like population growth and the potential of the economy to generate income.
“Based on some of the key drivers of growth, Calgary ranks right up there at the top and that should stand the housing market good stead. At least continue to drive above average price gains over the long run.”
The average MLS sale price in Calgary was $180,420 in 2000. That climbed to a peak of $423,770 in 2007 before dipping to $394,064 in 2009. From then, it has steadily climbed, reaching an all-time record of $428,644 in 2012.
Becky Walters, president of the Calgary Real Estate Board, said the Calgary market is really strong this year due to the in-migration it has been getting over the past 12 months.
“It’s not maybe as strong this year as it was last year but it’s certainly strong,” said Walters. “We’re seeing a nice steady growth. We’re seeing prices starting to come up a little bit not tons.”
For example, according to CREB, year-to-date until March 10, there have been 3,595 MLS sales in the city, up 4.66 per cent from the same period a year ago, and the average sale price has jumped by 9.23 per cent to $451,189.
However, at the national level, TD said a string of lacklustre performances over the next few years will mean that the annual rate of return for real estate in nominal terms will be a “measly” two per cent over the next decade, meaning home price gains should simply match the pace of inflation.
“Our research at REIN Canada is showing that for the coming five years, outperforming markets will be those based not in speculation or foreign investment, they will be those markets supported by underlying economics,” said Don Campbell, senior analyst and founding partner of the Real Estate Investment Network. “The Canadian real estate market is too broad and too diverse to paint with one story or byline and will become an increasingly regional story. Supporting economics such as increasing jobs, increasing population through migration — especially those areas which are attracting a younger, working age cohort — and increasing incomes will play a larger role in market demand and value than it has in the last five years.
“Despite Calgary and Edmonton’s value moves already experienced, they are both rated in the most affordable major centres in the country because average incomes are also higher than in most other regions. This, along with the younger age of in-migrants to these cities from other parts of the country, will be strong and supporting factors for these market for the coming years.”
Richard Cho, senior market analyst in Calgary for Canada Mortgage and Housing Corp., said in the Calgary region the average price in 2013 is expected to reach $423,000, up 2.6 per cent from 2012.
“The rate of growth is anticipated to be higher here than in many other areas of the country as the average resale price in Canada is forecast to increase by only one per cent in 2013,” he said. “Supply of homes in Calgary’s resale market has come down from a year earlier while sales have been fairly stable. The resale price in 2014 is forecast to continuing rising in Calgary, averaging $434,000.”
This is a great article by broker in Toronto.
|Wednesday, 06 March 2013 20:42|
With a movement towards lower rates for a longer period of time what should you do?
This Newsletter will explain what the Bank of Canada said at this morning’s meetings and aid you in your mortgage decision making process.
The Bank of Canada and most economic indicators suggest that our economy is struggling and we need low rates and economic stimulus to support it well into the future. Whether you have a Fixed or Variable Rate Mortgage right now, or have an impending mortgage decision to make in the next 6 to 8 months reading this newsletter could really help.
There are few lines from the Bank of Canada’s meeting today that strike us as important enough to quote for you.
This is a change from the previous Bank of Canada message, and to us signals that low rates will be the norm for a while. The Bank of Canada had been indicating that the low rates we are experiencing were to be removed in 2013. However, now there is no expected removal date.
Secondly: “With continued slack in the Canadian economy, the muted outlook for inflation, and the more constructive evolution of imbalances in the household sector, the considerable monetary policy stimulus currently in place will likely remain appropriate for a period of time, after which some modest withdrawal will likely be required,”
The outlined comments signal to us that the Bank of Canada remains comfortable with rates being as low as they are and keeping them there for some time. It should also be noted that the Bank of Canada is now less concerned with the amount of our consumer debt.
1. Be wary of the low fixed rate mortgage offers coming from the Banks, they come with horrible penalties!
More on what the B20 is doing:
- According to simulation, 17% of high ratio mortgages funded in 2010 could not have been funded today.
- This includes 11% of prospective high ratio homebuyers who can’t qualify for a mortgage under the new 25 year amortization rule.
- Source: CAAMP Annual State of the Residential Mortgage Market, November 2012.
What Does This Mean for You?
Consumers’ buying power in the housing market has been affected. In order to adapt and continue to meet your clients’ needs, you need to work with a mortgage broker who knows how to get real estate purchases done.
We specialize in the most competitive solutions for borrowers who do not fit inside the traditional “A” Lending guidelines. This includes buyers who:
- Are self-employed or commissioned individuals with stated income
- Are salaried individuals with a GDS/TDS that does not meet traditional bank requirements
- Earn additional “soft income” on the side that may not be reported on taxes – like auto mechanics and computer programmers
- Have imperfect credit due to extenuating circumstances
- Are new immigrants to Canada – we love New-to-Canada buyers!
- And sophisticated residential real estate investors
If you know someone who does not meet the traditional “A” guidelines, call me today to for a discussion on what is possible for you.
Mark Herman, 403-681-4376
CALGARY — Calgary’s residential housing market is poised for expansion in 2013, with move-up buyers set to lead the charge, says a report released Thursday by RE/MAX.
The report said the 10-year appreciation in average house prices for residential properties in the city and area was 108 per cent going from $198,350 in 2002 to $412,315 last year.
By comparison, average house prices across Canada jumped by 93 per cent during the same period from $188,164 to $363,740.
“Low interest rates and a slow but steady increase in average price have provided the impetus, with purchasers finding the current climate ideal for trading up to a larger home and/or better neighbourhood, or laterally, to a downtown condominium,” said the RE/MAX Move-Up Buyers Report about the Calgary market. “While equity gains have been limited over the past five-year period, those who purchased within the last decade have realized solid appreciation.”
Tanya Eklund, a realtor with RE/MAX Real Estate Central, said it has been amazing start to the new year in the market.
According to the Calgary Real Estate Board, year-to-date until February 20, MLS sales in the City of Calgary are up 11.97 per cent compared with the same period last year and average sale prices have increased by 9.36 per cent.
“Listing inventory is down and sales are up based on last year to date. We seem to be in this little sweet spot in the market right now,” said Eklund. “Sellers have gained momentum due to inventory levels and low selection. We are seeing multiple offers again, not just on land but on resale homes.
“Buyers seem to be very confident and are considering move-up homes or buying investment properties. Rental rates have increased due to the low vacancy so this is putting new buyers into the market and giving consumers confidence to purchase revenue properties again.”
Calgary and area average house prices are actually down slightly by just under one per cent from 2007 when they were $416,399 during the housing boom.
The RE/MAX report said a supply shortage, particularly in sought-after neighbourhoods, could place “serious” upward pressure on pricing once again.
“The strong economic fundamentals at play in Calgary and the province overall, will likely buoy the residential real estate market in 2013,” said RE/MAX. “While more experienced, move-up buyers are forecast to dominate homebuying activity this year, the first-time buyer won’t sit still for long. Pent-up demand — combined with a tight rental market — could spark renewed interest by year-end.”
Calgary’s 10-year price appreciation was the seventh highest in the country of the 16 markets surveyed by RE/MAX.
The top percentage increases and the average prices in 2012 were: Regina, 198.90 per cent, $301,145; Saskatoon, 165.41 per cent, $315,834; Winnipeg, 160.12 per cent, $255,058; St. John’s, 149.10 per cent, $285,529; Greater Vancouver, 142.17 per cent, $730,063; and Edmonton, 122.63 per cent, $334,318.
Against a backdrop of strong equity gains and lower interest rates, move-up buyers are once again set to ramp up their role in major Canadian housing markets, said the RE/MAX report.
Driving the upward movement has been substantial price appreciation in most major centres.
But gains have been more muted over the last five-year period.
“Canadian confidence in home ownership continues to fuel homebuying activity, particularly in the move-up segment,” said Elton Ash, regional executive vice-president for RE/MAX of Western Canada. “Equity gains have been a primary driver, with return on investment exceptionally strong in the past decade. In fact, the Prairies have seen a substantial upswing in housing values between 2002 and 2012, yet prices remain surprisingly affordable. Strong economic fundamentals helped fuel record price appreciation in markets like Regina, Saskatoon, and Winnipeg after decades of slow but steady growth.”
RE/MAX said the time between moves has decreased with first-time buyers generally prepared to upgrade within four to seven years after their initial purchase.
Good news in Canada easily goes unnoticed. Below is some good stuff:
• Canadian 10-year bond yields touch 2.00%, marking an 8-month high. = MORTGAGE RATES will have pressure to creep up! This is one of the indicators I watch.
• TD Economics has pushed back the first Bank of Canada rate hike to the first quarter of 2014.
• November GDP surprises markets on the upside, growing by 0.3%.
• Small business owners were more optimistic in January, with near-term hiring intentions at a post-recession high.