MEDIA RELEASE

KELOWNA, B.C. – July 4, 2018. June residential sales across the region of Revelstoke to Peachland continued a downward trend with 799 sales, a slight drop from May but 22% lower than this time last year, reports the Okanagan Mainline Real Estate Board (OMREB).

“This is the fourth consecutive month where sales volumes are substantially down from the same period last year,” comments OMREB President Marv Beer.

After the highs of the last few years, a shift towards a more balanced market is a natural and welcome progression, although the current trend may be somewhat amplified by government intervention in the form of new mortgage rules, interest rate hikes and the specter of a speculation tax that could impact Kelowna and West Kelowna.

“In a weird kind of irony, government measures to increase housing affordability are actually having the opposite effect, not just curbing housing demand, but affecting household purchasing power as well,” says Beer. “People aren’t able to qualify for the same amount of mortgage as before, and this, coupled with higher interest rates, means they can afford less, which is likely to be particularly impactful on first-time buyers and those at the lower end of the price-range.”

Federal government intervention layered onto a softening market is already having the effect of dampening demand, so there doesn’t appear to be a need for a further check on demand via the provincial government’s proposed speculation tax.

Beer contends that there are other ways government can enhance housing affordability instead of the misnamed and ill-conceived speculation tax, which wouldn’t actually address speculation and would carry the risk of many unforeseen consequences. For example, focusing on improving housing supply would aid in addressing a chronic housing shortage plaguing not just the Okanagan but most of BC. Members of the public wishing to express concerns about the proposed speculation tax to the BC government can do so via the scrapthespeculationtax.ca website.

Supply has struggled to keep up with the Okanagan’s rising population over the past several years, contributing to housing shortages, higher prices and reduced affordability. While June saw a 22% increase in the inventory of homes for sale over this time last year, inventory continues to be relatively low by historical comparison, with new listings down 5% from May and just 4% over this time last year. However, new housing units continue to come on stream, with 33 new home developments slated for the Kelowna region alone, including 18 condo, 8 townhouse and 7 single family developments.

“New housing construction should ease some of the pressure on both prospective buyers and renters in the next couple of years, offering much needed supply which, in turn, is likely to contribute to a flattening of price growth. Some developments, aided by local government incentives and zoning changes, are specifically intended for rental, which should improve current vacancy rates,” says Beer.Average prices have yet to shift, with June’s average at $547,485, up slightly over May and 7% over this time last year.

“Price is typically one of the last indicators to shift, as sellers adjust to changing conditions associated with a normalizing market,” says Beer.

OMREB serves three diverse markets within the region: the Central Okanagan Zone (Peachland to Lake Country), the North Zone (Predator Ridge to Enderby) and the Shuswap- Revelstoke Zone (Salmon Arm to Revelstoke).

For detailed statistics specific to each of the three regions served by OMREB, visit www.omreb.com.

I thought I would share some information on suspended slabs with you.

We are starting to see quite a few suspended slab garages in the Okanagan - it's great way to add extra space in the basement underneath. As we all know, the concrete floor in a garage usually cracks during the curing process and usually these small cracks are innocuous and don't cause any harm. However, with a suspended slab these small cracks can let water through to the room underneath. Car comes in with snow on it, it melts, runs down through the crack to the space below.

Depending on how the room below is finished there maybe damage hidden in the ceiling from years of water slowly dripping through. It will take either time or a lot of water all at once before it appears on the basement side of things and this can be hard to detect during our dry season.

Something to keep in mind when you are showing property or listing a house with a suspended slab. If you see lots of cracks in the garage floor some further investigation is probably worthwhile to ensure there is no damage to the structure underneath and a plan to have the cracks sealed would be prudent. If you know someone who is building a house with this feature - recommend they have the garage floor sealed from the get go and let them know that if they see any cracks they should be addressed before any water has a chance to ingress

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Media Release 

KELOWNA, B.C. – April 6, 2018. Residential sales across the region of Revelstoke to Peachland rose to 628 in March, 25% over the previous month, yet down 24% from this time last year, reports the Okanagan Mainline Real Estate Board (OMREB).

“While the market was busier than February, as is the norm this time of year, sales were substantially down from last March. At this point, it’s difficult to know whether or not this is significant or if it is simply an anomaly.” says OMREB President Tanis Read.

Average price was $521,192, up just 2% over February and 10% higher than this time last year. Days on market, or the time it takes to sell a home, averaged 78 fewer in March than February’s 89, but consistent with last year’s 79 days. New listings, at 1393, were 53% higher than last month, but just 3% more than last March’s tally of 1353.

“If we were to focus solely on sales volume, we might anticipate movement towards a balanced market, although current housing inventory is nowhere near what it would need to be to meet the definition of such a market. However, average price, days on market and new listings are all generally consistent with this time last year, so it’s anybody’s guess as to whether or not March’s stats are the beginning of a trend,” says Read.

Read notes a number of external factors that could impact the market, not the least of which is the recently announced BC government’s housing-related taxes, including the controversial speculation tax, which isn’t really a tax on speculators, but rather a tax on assets.

“If implemented, the BC government’s housing-related taxes, coupled with recent federal mortgage tightening rules and interest rate hikes, could be the tipping point that takes the market from a gradual downturn to a potentially steep decline,” Read cautions.

“When you tinker with the market, you can’t predict or control what will happen, nor can you put a halt to it. At the end of the day, these proposed housing-related taxes are bad for B.C and, while recently announced housing-related taxes are aimed at enhancing affordability, they may have the opposite effect, harming the very people the government is trying to protect and support.”

A recent British Columbia Real Estate Association Market Intelligence Report notes that ‘even a relatively minor 10% negative shock to home prices would extinguish $90 billion of (BC homeowners’) wealth, or $70,000 of the average homeowner’s equity.’ Falling home prices could severely impact the BC economy, with declining household wealth leading to reduced consumer spending and job loss. A drop in housing demand would curtail home construction, slowing expansion of housing supply and leading to more critical shortages in future.

“Ultimately, more housing-related taxes translates into reduced housing affordability on two fronts. First, a slower economy reaps fewer jobs which means that, even if houses are available at lower prices,fewer folks will have the means to buy them. Second, a lack of housing supply means competition for available units for the folks who can still afford to buy, which drives up prices.”

Read contends that increased housing affordability, a concept that OMREB and its members strongly support, is more likely to be achieved through other means such as addressing factors that have chronically prevented supply from keeping up with demand. Read notes that the focus over the past several years, both federally and provincially, has solely been on the demand side, with little to no attention paid to the supply side of the equation.

With so many factors impacting the market, conditions are tricky and buyers and sellers are advised to engage a local real estate professional whose job it is to stay abreast of conditions and who has the knowledge to analyze and accurately interpret market implications. 

OMREB serves three diverse markets within the region: the Central Okanagan Zone (Peachland to Lake Country), the North Zone (Predator Ridge to Enderby) and the Shuswap- Revelstoke Zone (Salmon Arm to Revelstoke).

For detailed statistics specific to each of the three regions served by OMREB, visit www.omreb.com.

 MEDIA RELEASE

KELOWNA, B.C. – March 6, 2018. Across the region of Revelstoke to Peachland, residential sales tallied 503 in February, up 12% over January, yet consistent with this time last year, reports the Okanagan Mainline Real Estate Board (OMREB).

“The market typically picks up this time of year and this year is no exception despite recent new federal mortgage tightening rules and an interest rate increase,” comments OMREB President Tanis Read.

Read notes February’s key indicators are largely consistent with last year. “Average price, at $509,545 is just 6% over this time last year and within 3% of January’s pricing. Days on market (how long it takes to sell a home) averaged 89 - fewer than January’s 99, but consistent with last year’s 86 days. New listings, at 912, were up 16% over January, but comparable to last year’s 904 as was available inventory at 2333 active listings.

“While indicators suggest we are in a typical point in the market cycle, we have yet to see impacts arising from the BC Government’s recent announcement of an impending array of residential property-related taxes,” says Read, adding “While we appreciate that the intent of these new taxes is to cool the BC housing market and curb perceived speculation, we are concerned about the unintended consequences that are likely to arise.”

Read points to the legions of non BC residents, primarily Albertans, who own properties in Kelowna and West Kelowna who are now going to be potentially subject to a new speculation tax. “This would force out-of-province owners to either contribute dramatically more to BC government coffers or rent out their homes to avoid the levy - effectively taking away the owner’s ability to use their own home.”

“This is also liable to have a detrimental effect on the Okanagan economy, not because of the intended changes to real estate prices, but due to the unintended loss of revenues generated by those homeowners who take advantage of local services such as car dealers, wineries, restaurants, gas stations, etc. and the resulting potential job losses,” says Read.

“In the long run, I can’t see how curbing sales of recreational, student or non-primary housing options to people from provinces next door and beyond will address the Lower Mainland’s issues with housing affordability,” says Read, noting that, at this point, the speculation tax only affects properties in Kelowna and West Kelowna, and not elsewhere in the region served by OMREB.

Read suggests that, more to the point, is the need to address a generalized lack of supply of available housing. “We have been lagging in housing supply for months and, when supply is limited, prices rise, housing becomes less affordable and fewer people have the opportunity to own their own home.”

Read contends that the solution lies less in curbing demand through taxation and other measures and more in working with local governments to address factors that prevent the housing supply from keeping up with demand and affordability such as lengthy and uncertain approval timelines for building permits.

Particularly in light of the volume of recent regulatory change affecting the housing market, both buyers and sellers are advised to engage a local real estate professional whose job it is to stay abreast of conditions and who has the knowledge to analyze and accurately interpret the market implications.

OMREB serves three diverse markets within the region: the Central Okanagan Zone (Peachland to Lake Country), the North Zone (Predator Ridge to Enderby) and the Shuswap- Revelstoke Zone (Salmon Arm to Revelstoke).

For detailed statistics specific to each of the three regions served by OMREB, visit www.omreb.com.

OMREB is a member-governed not-for-profit association representing almost 1300 REALTORS® and 89 real estate offices within the southern interior region of British Columbia (Peachland to Revelstoke). The Board is dedicated to providing leadership and support to its members in their pursuit of professional excellence.

DISCLAIMER: Monthly Sales statistics are based on the sales reported by real estate offices on or before the last day of the month. Sales not reported by month end and collapsed sales are reflected in the subsequent month’s statistics.

All OMREB listings are published in the MLS® Real Estate Review and MLS® Commercial Review magazines available at all real estate offices and various locations in the Central Okanagan, North Okanagan, the Shuswap and Revelstoke areas. For comprehensive Board-wide statistical information, please visit our local public site: www.omreb.com

ADDITIONAL PROPERTY TAX FOR FOREIGN ENTITIES AND TAXABLE TRUSTEES

1.            Has gone from 15% to 20%, effective today.

2.            Contracts written before Feb. 20, 2018 with a closing on or before May, 2018 are exempted, but only for Capital Regional District, Fraser Valley Regional District, Regional District of Central Okanagan or Nanaimo Regional District. Note this exemption does not apply in Greater Vancouver.

3.            Transfers pursuant to court order, order nisi of foreclosure, separation agreement, transfer from personal rep of deceased’s estate to beneficiary or transfer to surviving joint tenant are also exempt, provided the triggering event occurred before Feb. 20, 2018.

4.            This tax applies to the Capital Regional District, Fraser Valley Regional District, Regional District of Central Okanagan, Nanaimo Regional District and Greater Vancouver. The areas for each region can be found at https://www2.gov.bc.ca/gov/content/taxes/property-taxes/property-transfer-tax/understand/additional-property-transfer-tax/bc-areas

5.            Only on residential property; if property is farmland or commercial with a residential component, tax applies on the residential component.

6.            Exemption for BC Provincial Nominee Program still applies.

SPECULATION TAX

1.            Tax is meant to target foreign and domestic homeowners who do not pay income tax in B.C.

2.            Tax will apply to same areas as foreign buyers tax apart from Okanagan, where it only applies to Kelowna and West Kelowna.

3.            Starts in 2018 at $5.00 per $1,000.00 of assessed value, goes up to $20 in 2019.

4.            Not sure how this will affect vacation homes, nor when this tax is payable.

PROPERTY TRANSFER TAX

1.            Tax rises from 3% to 5% on value of homes over $3,000,000.00.

2.            Remains at 1% on first $200,000.00, 2% on amounts between $200,000.00 and $2,000,000; 3% on amounts between $2,000,000.00 and $3,000,000.00 and 5% on amounts over $3,000,000.00.

PRE-SALE CONDO ASSIGNMENTS

1.            Developers will collect and report information about pre-sale condo purchases; nothing else in budget about pre-sale contracts or assignments that we have seen.

B.C. HOME OWNER SECOND MORTGAGES

1.    This program is now cancelled .

MEDIA RELEASE

For Immediate Release

Residential Market Delivers Solid Start for 2018

KELOWNA, B.C. – February 5, 2018. Residential sales across the region of Revelstoke to Peachland totaled 449 in January, consistent with sales in December and a 27% increase over this time last year reports the Okanagan Mainline Real Estate Board (OMREB).

“January showed a substantial jump in both sales volume and new listings over this time last year, with increases of 27% and 45% respectively,” says OMREB President Tanis Read. Read notes that, despite the increase in new listings, average price, at $523,402, rose 19% over January of last year while staying consistent with December at a less than 1% uptick.

“It’s not really surprising that the volume of new listings hasn’t had an effect on pricing. We still need more inventory to match current demand and there would be a lag between an increase in inventory and potential price moderations,” Read comments. Read adds that it will bear watching over the next couple of months as to whether the spike in new listings continues and any resulting impacts a possible increase in supply has on price.

Another market indicator, days on market, showed an average of 99 in January, consistent with this time last year, but up from December’s 79. “December’s average days on market was a bit of an anomaly, as averages have tended to be in the 90 plus days for the winter months over the past several years,” notes Read.

Alongside product supply versus demand, other factors affecting the local real estate market include interest rate hikes and the new mortgage stress test which came into effect January 2018.

“The Bank of Canada interest rate hike on January 17, the forecast of more increases to come this year and the new stress test are all expected to have an impact,” says Read, although these factors will likely be offset by continued strong economic performance predicted for BC, albeit somewhat moderated from the last several years.

“It’s anyone’s guess at this point as to how much of an impact interest rates and the stress test will have as compared to other factors that can buoy the market, like a robust economy,” comments Read.

Local market characteristics continually shift with the factors that impact, so it pays to engage a real estate professional whose job it is to stay abreast of conditions and who has the knowledge to analyze and accurately interpret the implications.

Taking a look at buyers of homes in the region, the results of which lag the market statistics by one month, we find a strong showing from first time buyers at 21% of the buyer population, followed by move-up buyers at 18% and a spike in those buying for revenue/investment purposes at 18%, up from 13% the previous month.

In terms of family make-up, couples without children led the way at 25%, followed by two-parent families with children at 24% and empty nesters/retired at 18%.

As has been the case since OMREB started tracking this data back in 2010, the significant majority of buyers are from within the region OMREB serves at 64%. The next largest buyer group hails from the lower Mainland/Vancouver Island area at 19%, followed by buyers from other BC regions at 8% and just 4% from Alberta.

OMREB serves three diverse markets within the region: the Central Okanagan Zone (Peachland to Lake Country), the North Zone (Predator Ridge to Enderby) and the Shuswap- Revelstoke Zone (Salmon Arm to Revelstoke).

For detailed statistics specific to each of the three regions served by OMREB, visit www.omreb.com.

For more information, please contact:

Board-wide statistical information:

Tanis Read, OMREB President tanisread@gmail.com, (250) 215-2121

Province-wide statistical information:

Cameron Muir, BCREA Chief Economist, or Brendon Ogmundson, Economist cmuir@bcrea.bc.ca (604) 742-2780 / bogmundson@bcrea.ca (604) 742-2796

OMREB is a member-governed not-for-profit association representing more than 1200 REALTORS® and 92 real estate offices within the southern interior region of British Columbia (Peachland to Revelstoke). The Board is dedicated to providing leadership and support to its members in their pursuit of professional excellence.

DISCLAIMER: Monthly Sales statistics are based on the sales reported by real estate offices on or before the last day of the month. Sales not reported by month end and collapsed sales are reflected in the subsequent month’s statistics.

All OMREB listings are published in the MLS® Real Estate Review and MLS® Commercial Review magazines available at all real estate offices and various locations in the Central Okanagan, North Okanagan, the Shuswap and Revelstoke areas. For comprehensive Board-wide statistical information, please visit our local public site: www.omreb.com

Bank of Canada Held Their Rate

As you know, your variable rate mortgage, line of credit and/or student loans are all based on the Prime Rate and here is your personal update from me on the recent Bank of Canada announcement on changes to their Overnight Rate which in most cases impacts your Prime Rate.

At 10:00 am EST, Wednesday December 6, 2017, the Bank of Canada maintained their overnight rate which means no change to your interest rate. I know you may be feeling the impact of the rate changes earlier in 2017, but you can feel at ease that your rate will stay the same for now.

As we discussed previously this year, there have been several changes to the mortgage regulations this fall, which affect your purchasing power and flexibility in your mortgage product. These changes will impact your plans for borrowing funds in the future – whether it is refinancing to maximize the low interest rates and equity in your home, purchasing rental properties or moving up into a bigger home? You can of course always opt to stay with your current mortgage product and just renew, however this gives your lender the upper hand and doesn’t allow you the ability to shop around! Ultimately this new guideline will negatively affect your ability to access the equity in your home! Equity that you have built up, by paying down your mortgage and consistently making your payments. If you have goals of accessing this cash, then please reach out to me now!

Call me now for a complimentary consultation to review your current financial situation and let’s start planning for your future now. These legislation changes don’t come into effect until January 1, 2018, so let’s get started on a plan RIGHT NOW!

To continue with the Bank of Canada news, here is an excerpt of the announcement and what they had to say about their decision today:

“Recent Canadian data are in line with October’s outlook, which was for growth to moderate while remaining above potential in the second half of 2017. Employment growth has been very strong and wages have shown some improvement, supporting robust consumer spending in the third quarter. Business investment continued to contribute to growth after a strong first half, and public infrastructure spending is becoming more evident in the data. Following exceptionally strong growth earlier in 2017, exports declined by more than was expected in the third quarter. However, the latest trade data support the MPR projection that export growth will resume as foreign demand strengthens. Housing has continued to moderate, as expected.

Inflation has been slightly higher than anticipated and will continue to be boosted in the short term by temporary factors, particularly gasoline prices. Measures of core inflation have edged up in recent months, reflecting the continued absorption of economic slack. Revisions to past quarterly national accounts have resulted in a higher level of GDP. However, this is unlikely to have significant implications for the output gap because the revisions also imply a higher level of potential output. Meanwhile, despite rising employment and participation rates, other indicators point to ongoing¬ – albeit diminishing – slack in the labour market.”

Based on this outlook, the Bank estimates that the economy’s growth is still moderate and they want to operate with a conservative approach to monetary policy. They do indicate that higher interest rates will be required over time, but they want to remain cautious in their approach when increase rates.

Fixed rates haven’t really changed at all since the last announcement, and are around 3.09% to 3.39% for a five-year fixed term.

Currently variable rate products are still lower than current fixed term rates, however if concern regarding impending rate increases is going to affect your monthly budget, locking in now might be a good option. Call me to book a complimentary consultation and let’s discuss your current financial situation. I’ll be in touch again for the next announcement on January 17, 2018.

I wonder if I can ask a favour; this time of year can be really tough for many that are not as financially fortunate as us. No matter their situation; whether it is mountains of debt that they can’t get a handle on, low income or even unemployed… I can help. If you hear a colleague, friend or family member talk about going through a financially tough time would you mind letting them know I might be able to help. I can assist home owners by helping them access their equity to get them back on their financial feet and relieve some stress. My expertise will help with budgeting, credit counselling or debt consolidation. If you would be so kind as to pass along my contact information on to anyone who might need a helping hand – I’ll provide a pro bono consultation to provide some great options on how I can help!

Compliments of

April Dunn

Okanagan Residential SalesTypical for Fall Time

KELOWNA ,B.C.–November 3,2017.Residential sales posted to theMultiple Listing Service (MLS®) for the Okanagan region of Peachland to Revelstoke totaled 736 in October, comparable to last month’s 740 and just 6% 
lower than this time last year reports the Okanagan Mainline Real Estate Board (OMREB).

“Not unusual for this time of year, October sales and new listing volumes were both slightly lower than previous months, with both indicators in the range of what we were seeing this time last year,” comments OMREB President
Tanis Read, adding " The average number of days on market rose over previous months, also typical as we head into the wintermonths."

New listings were 898 in October, compared to 1118 in September, whereas the average number of days it took to sell a home in October was 83  as compared to 78 in September and 92 this time last year.

Read notes that average price, at $526,418, was a bit of an irregularity, likely due to the mix of properties sold as compared to the previous month. October’s average price was 6% higher than September’s and up 16% over this time last year.

“While a lack of available homes for sale continues to be a problem and a major contributor to pricing, the good news
, at least for some parts of the region we serve, is the number of new, multi-family residences that are closing in on
completion. This, coupled, with a surge in housing starts, could mean good news in terms of availability and affordability, ”comments Read.

More housing supply offers benefits not only for prospective buyers but those looking to rent and even those considering selling. While a seller’s market, where there are fewer homes for sale to a larger pool of buyers, can be
attractive for those considering listing, it can also pose challenges for those same sellers when they look to find a new home at a price they can afford.

“Even within a local real estate market, conditions can differ within particular sub-regions or the various types of housing product. " says Read, encouraging buyers and sellers to consult a local real estate professional to ensure they have comprehensive data to inform their decision-making.

Turning to buyers of homes in the region, results compiled from monthly OMREB buyer surveys year to date (January through September,2017), indicate that first time buyers accounted for 20% of purchasers, with move-up buyers at 17%. Those moving within the region were 56%, followed by those from the Lower Mainland/Vancouver Island at 18% and Alberta at 11%. The 84-month average has first time buyers accounting for 20% of buyers and move-up buyers at 22%. Those moving within the region were 57%, followed by buyers from Alberta at 14% and Lower Mainland/Vancouver at 12%.

“It’s encouraging that first time buyers continue to be a strong force within the region as they estimulate the chain of housing ownership ”, says Read, noting that move-up buyers tend to rely on first time buyers to purchase their  existing homes

OMREB serves three diverse markets within the region: the Central Okanagan Zone (Peachland to Lake Country), the North Zone (Predator Ridge to Enderby) and the Shuswap -Revelstoke Zone (Salmon Arm to Revelstoke).

DISCLAIMER: Monthly Sales statistics are based on the sales reported by real estate offices on or before the last day of the month. Sales not reported by month end and collapsed sales are reflected in the subsequent month’s
statistics.

All OMREB listings are published in the MLS® Real Estate Review and MLS® Commercial Review magazines
available at all real estate offices and various locations in the Central Okanagan, North Okanagan, the Shuswap and
Revelstoke areas. For comprehensive Board-wide statistical information, please visit our local public site: www.omreb.com
.

The leaves are falling, but the sky is not! We know this year has had a lot of changes in the lending landscape, so let’s chat about what this means for you!

As you know, your variable rate mortgage, line of credit and/or student loans are all based on the Prime Rate and here is your personal update from me on the recent Bank of Canada announcement on changes to their Overnight Rate which in most cases impacts your Prime Rate.

At 10:00 am EST, Wednesday October 25, 2017, the Bank of Canada maintained their overnight rate which means no change to your interest rate. I know you may be feeling the impact of the rate changes earlier in 2017, but you can feel at ease that your rate will stay the same for now.

In the last few weeks there have been additional changes in the mortgage legislation and qualifying guidelines all in the hope of maintaining stability in the real estate market as well as ensuring home owners and those with significant debt can handle future interest rate increases. These changes will impact your plans for borrowing funds in the future – whether it is refinancing to maximize the low interest rates and equity in your home, purchasing rental properties or moving up into a bigger home? Call me now for a complimentary consultation to review your current financial situation and let’s start planning now. These legislation changes don’t come into effect until January 1, 2018, so let’s make sure we get you prepared now and ensure the changes won’t impede your future borrowing plans.

To continue with the Bank of Canada news, here is an excerpt of the announcement and what they had to say about their decision on Wednesday:

“Canada’s economic growth in the second quarter was stronger than expected, and was more broad-based across regions and sectors. Growth is expected to moderate to a more sustainable pace in the second half of 2017 and remain close to potential over the next two years, with real GDP expanding at 3.1 per cent in 2017, 2.1 per cent in 2018 and 1.5 per cent in 2019. Exports and business investment are both expected to continue to make a solid contribution to GDP growth. However, projected export growth is slightly slower than before, in part because of a stronger Canadian dollar than assumed in July. Housing and consumption are forecast to slow in light of policy changes affecting housing markets and higher interest rates. Because of high debt levels, household spending is likely more sensitive to interest rates than in the past.

The Bank estimates that the economy is operating close to its potential. However, wage and other data indicate that there is still slack in the labour market. This suggests that there could be room for more economic growth than the Bank is projecting without inflation rising materially above target. Governing Council will be cautious in making future adjustments to the policy rate. In particular, the Bank will be guided by incoming data to assess the sensitivity of the economy to interest rates, the evolution of economic capacity, and the dynamics of both wage growth and inflation.”

Based on this outlook, the Bank estimates that the economy is operating close to its full potential. But they have indicated that they will be cautious in making future increases in order to determine the impact of the adjustments earlier this year. Remember, taking advantage of these low rates is a great way to pay down your mortgage faster!

Fixed rates haven’t really changed at all since the last announcement, and are around 3.09% to 3.39% for a five-year fixed term.

Currently variable rate products are still lower than current fixed term rates, however if concern regarding impending rate increases is going to affect your monthly budget, locking in now might be a good option. Call me to book a complimentary consultation and let’s discuss your current financial situation. I’ll be in touch again for the next announcement on December 6, 2017.

I wonder if I can ask a favour, going with my theme of “Let the sun set and the leaves fall along with Canadian consumer debt with our help” if you hear a friend or family member talk about going through a financially tough time – maybe I can help with some budgeting, credit counselling and debt consolidation options for them. In either of these cases, would you mind passing my contact information on to them – this is very much appreciated.

Thanks!

April

Update #4

RESTRICTIONS WILL BE PLACED ON CERTAIN LENDING ARRANGEMENTS THAT ARE DESIGNED, OR APPEAR DESIGNED TO AVOID LTV LIMITS

Mortgage lenders (excluding credit unions and private lenders) are prohibited from arranging with another lender: a mortgage, or a combination of a mortgage and other lending products, in any form that circumvents the institution’s maximum LTV ratio or other limits in its residential mortgage underwriting policy, or any requirements established by law. This is often referred to as “bundling” or “bundle partnership”.

What does this mean?

For example: a consumer applies for 80% LTV mortgage and the lender can only approve 65%. The lender then partners with a second lender for the additional 15%. The original lender then “bundles” the 15% LTV mortgage with the original 65% mortgage to form the complete 80% LTV loan. This is no longer permitted as per OSFI.

OSFI has implemented 3 new mortgage rule changes starting January 1, 2018

Update #3

LENDERS WILL BE REQUIRED TO ENHANCE THEIR LOAN TO VALUE (LTV) MEASUREMENT AND LIMITS TO ENSURE RISK RESPONSIVENESS

Mortgage lenders (excluding credit unions and private lenders) must establish and adhere to appropriate LTV ratio limits that are reflective of risk and updated as housing markets and the economic environment evolve. We are awaiting more details on this policy from lenders. As we have new information, we will update this document.

What does this mean?

OSFI directs lenders (excluding credit unions and private lenders) to have internal risk management protocols in higher priced markets (sometimes called “hot real estate markets” like Toronto and Vancouver). This is a continuation of a policy already in place. Many mortgage lenders have been following the principles of the policy for the last 10 to 12 months.

OSFI has implemented 3 new mortgage rule changes starting January 1, 2018