Fears of a Canadian housing bubble are largely unfounded and, in fact, house prices remain affordable in three-quarters of the country, with the exception of Vancouver, Toronto and Victoria, says a new BMO report.
Overall, the Canadian housing market is about 10% overvalued – half what it was in 1989, when prices began a 13% decline, and a third of the height US houses hit before crashing by some 34%, says the Canadian Housing Affordability study released Friday.
Despite significant price hikes the last 10 years, house prices remain affordable across most of the country, with mortgage payments on the average Canadian home eating up a “moderate” 28% of family income, and just 23% when the two costliest cities, Vancouver and Toronto, are factored out, says BMO Senior Economist Sal Guatieri.
Vancouver, Toronto and Victoria remain somewhat more susceptible to a downturn, largely because escalating prices have significantly reduced the pool of potential buyers who can afford them, a risk that’s minimal as long as interest rates remain low, notes Guatieri.
Click here for more details from The Star.
More homeowners are poised to cash out and move up this year backed by gains averaging some 93% during a 10-year housing boom that, in losing some of its steam, has opened new doors for would-be buyers, according to a new report from RE/MAX.
Move-up buyers took advantage of the softening market last year as a chance to buy a bigger home in 14 of 16 major markets surveyed by RE/MAX – the exceptions being Victoria and Vancouver, where sales slumped significantly.
Move-up houses in the $500,000 to $700,000 range accounted for about 20% of sales across the GTA last year – up 8% from the previous year – says the REMAX Move-Up Buyers Report 2013 released Thursday.
That buy-up spree is likely to continue this year as interest rates remain low and many first-time buyers take a breather in the face of tougher mortgage lending rules, the report notes.
Click here to read more in The Star.
When it comes to home values, mortgage payment affordability acts like a giant lever.
A meaningful rise in mortgage payments (relative to income), would bear down on home prices, and vice versa.
Given this relationship and today’s towering home values, mortgage affordability is centre stage.
That has inspired a stream of articles about whether swarms of people will default when rates “normalize.”
But how worrisome is that threat really? For insights, CanadianMortgageTrends.com turned to BMO Capital Markets Senior Economist Sal Guatieri.
Click here to read the full article.
Home sales and prices are rising briskly in those US neighbourhoods where the well-heeled like to plant their mailboxes: along Chicago’s north shore, in the San Francisco Bay area and in the haute Hamptons.
Sales of properties worth between US$750,000 and US$1 million are up 38.7% over a year ago; $1 million-plus property sales are up 25.7%, according to the National Association of Realtors.
The luxury real estate revival is being fueled, in part, by another resurgence: so-called jumbo mortgages – those loans, typically over US$417,000, that are too big to qualify for purchase by federal agencies, namely Fannie Mae and Freddie Mac.
Jumbo loans are returning to the mortgage market after almost disappearing entirely in the wake of the credit crisis of 2008 and the real estate meltdown. Most lenders stopped making new jumbo loans when the private secondary market dried up in the credit crunch.
Click here to read more from the Financial Post.
You have to look beyond what the big banks offer if you want a higher rate on a savings account or GIC for your RRSP.
Stock markets are booming. But as the March 1st RRSP deadline looms, many people don’t feel comfortable putting their retirement savings at risk. They would rather earn a low interest rate than face a potential capital loss if there’s an economic slowdown.
So where can you find the best interest rates on RRSP savings accounts and guaranteed investment certificates?
Click here for a guide to last-minute shopping for those still looking to contribute to a registered retirement savings plan for 2012 courtesy of The Star.