September 2020 - Latest Market Update

Mortgage Rates Fall To Record Lows

Mortgage rates continue to fall and have now reached new record lows.  Five year fixed rates are as low as 1.73% for insured deals and 1.81% for uninsured deals.  Variable rates are also under 2%.  Last Wednesday the Bank of Canada made it clear that they intend to keep rates are low as necessary to help the Canadian economy recover from the impact of Covid19.   There has not been a better time in decades to consider re-negotiating your mortgage.  Although qualifying is not the easiest the opportunity to lock into a fantastic deal is worth the effort. 

Mortgage rates are not the only thing on fire these days.  The real estate market continues to accelerate with increased sales and higher prices but that being said this is primarily being experienced in the detached home market.  Detached homes across lower mainland listed under $2million are selling fast and in many cases with multiple bidders.  Greater Vancouver saw the second best July on record and August wasn’t much different.   If you need to sell the timing is great.  Price your home smartly and it will sell fast.  

Not everything is so rosy.  Certain market segments have not done so well.  Condo re- sales are moderate and pre-sales are down significantly this year.  This moderation has also pushed down rental rates and increased vacancies.  This may be a temporary trend until we see the employment and our economy recover from the impact of the pandemic.  Conditions can change quickly and I recommend to all my clients to review your financial well-being before these opportunities evaporate. 

Need funds but the bank said no.  Private first and second mortgages are easily available.   You can access up to 85% of your home’s equity. 

July 2020 - Latest Market Update

Mortgage Rates Pushing Record Lows

The effects of the pandemic have sent mortgage rates down and are nearing record low levels. Five year fixed rates are just above 2% and variables are being offered under 2%. These are rates I haven’t seen in a very long time.  On Wednesday the bank of Canada kept the overnight lending rate at 0.25% and noted that the economic outlook in Canada is uncertain if not bleak.   There has been improvement here and around the world but this will not be enough to prevent an estimated 8% contraction in Canada this year.  This will likely extend the period of low interest rates which are not expected to rise until the middle of 2021.  We have already been experiencing a rebound in the local real estate but these low rates should provide a further boost to our Housing market.  This of course doesn’t mean getting a fully discounted mortgage is easy.  The lending criteria for a prime rate deal continue to be very tight and banks are often looking for reasons not to lend.  Although banks have touted how they have helped consumers by providing clients the option to defer their payments, they failed to inform the borrowers that deferrals can prevent you getting an approval for a refinance.  Good thing that not all banks are the same.  Some lenders are not penalizing clients for deferring their mortgage payments and many borrowers are having success accessing cheap money.  Don’t wait to consider a refinance.  It’s an opportune time to review your financial situation and save money.  

We make it easy for borrowers.  You can apply online with an easy one page application; supporting documentation can be emailed, you can sign your paperwork electronically and the lawyers I work with can sign you up over Zoom!   You don’t ever need to leave the comfort of your home to get a mortgage.  NOW that’s convenience.  

Find my easy application here: click here

June 2020 - Latest Market Update

Vancouver’s Real Estate Market Remains Resilient During COVID19

Sales of homes in metro Vancouver decreased 44% from the same period as last year but saw a rise of 34% from April.  The impact on sales from Covid19 may have been temporary and it appears that buyers and sellers are adjusting to become more comfortable operating during this pandemic. Although one month doesn’t make a trend our efforts here in BC to control the virus seems to have worked.  Inventory levels continue to be below the seasonal averages and currently the total amount of homes listed for sale in metro Vancouver is 32% lower than the same period as last year and have risen only modestly from April.   Benchmark prices have been stable with a modest increase over last year.  For a detached home the benchmark price is $1,456,700.  For condos and townhomes they are $686,500 and $792,700 respectively.

The real estate market may be recovering quickly but the economic impact to businesses may not be so lucky.  Economic growth has been impacted significantly and most major economies have begun contracting and will likely be headed or are already in a recession.  Mortgage rates have dropped further since last reporting and 5 year fixed rates hoover around 2.50%.  Lower in some cases depending on the nature of the deal and the lender.  The Bank of Canada has also reduced the qualifying rate used for the stress test and now stands at 4.94%.  Borrowers that have an existing variable rate mortgage have seen the greatest benefit and the current rate for many of these customers are below 2%.  New Variable rate mortgages are being offered as low as 2.25%. The recessionary pressures on our economies will very likely keep interest rates very low.  The big question is how long these low rates will last.  Our economies may be as resilient as our real estate prices and things may roar back quicker than anticipated.  Don’t wait to consider that refinance or a real estate purchase.  Things often change quickly.  “The best time to buy a home is always five years ago.” Ray Brown

Don’t stress if the bank says no to your mortgage request as there are other options.  My alternative lenders have been very busy during these times and offer very easy approvals without the rigorous assessment of your income and other assets.  First mortgage rates can be available as low as 5.99% and second mortgages as low as 8.99%. 

Selling your home; here’s a tip:

It has been said that buyers decide in less than ten seconds of walking into a home if they are interested in buying it?   When a buyer walks into your home, what they see matters.  Don’t miss the opportunity to make a good impression. 

May 2020 - Latest Market Update

The Impact of COVID-19 on Vancouver’s Real Estate Market

Residential home sales in Greater Vancouver experienced a 40% decline last month for same period last year and a 56% decline from the previous month.  April’s sales were a staggering 63% fall from the 10 year April sales average and it was the worst April since 1982.  Inventory levels continue to be constrained and were 35% lower than the same period last year. 

Normally this decline in activity would put significant downward pressure on prices but given the decline in the inventory and the low interest rates home prices have remained stable.  

Toronto’s April stats were even worse than Vancouver.   Sales and listings there fell 70% and 64% respectively.  Similar results were experienced in both Edmonton and Calgary. 

The impact from COVID-19 on Real Estate was expected and many economists believe the real estate market will roar back before the end of this year.  The overall economic impact of COVID-19 will be very significant.  Nearly three quarters of all businesses have had a significant impact to their revenue and many businesses will not be able to maintain their services.  It’s too early to know the full extent of the impact but it’s expected that many businesses will not be the same when things return to normal.  

Mortgage rates have pushed lower, but only very modestly.   Variable rate mortgages are as low as 2.25% and 5 year fixed as low as 2.54%.  Banks are currently being very cautious with mortgage lending as they adjust to the new economic environment.  Borrowers should ensure their 2019 taxes are filed and have all supporting documents available before applying.  On the private lending side many lenders have backed off and are not near as aggressive as they were a few months ago.  That being said, I still have plenty of lenders that are able to accommodate most loan requests. 

Did you know:  Zoom has boomed! It has increased its number of users by 290 million within only the last 5 months.   

April 2020 - Latest Market Update

Challenges Ahead - Here’s The Latest

Home buyer demand continued to outpace supply up until halfway into March and then levelled off significantly since then.   Inventory levels were and continue to be below the seasonal averages and home prices were on a steady rise.  The impact on the demand from the COVID-19 was not a surprise but the bigger question now is what we can expect to experience in the coming months.  The improvement in the number of virus cases being reported in BC and the so called flattening of the curve should help minimize the impact to the real estate market.  I suspect prices will be resilient to any downward pressure. 

The prime lending rate has fallen nearly 40% (1.5%) in the past month and currently stands at 2.45%.   Fixed rates did fall significantly too but banks quickly adjusted these rates along with the spreads on variable rate mortgages.  Fixed rates are now higher by nearly 30% and for the most part are being offered around 3%.  Variable rate mortgages that were being offered as low as Prime -1% are now as high as Prime +0.20%.  It has been reported that banks adjusted the rates as such to reflect higher risk in real estate lending as a result of the COVID-19.  That being said, every major nation in the world will be challenged to stimulate their economies and there is little doubt that low rates will be required to help us recover from what is expected to be the worst recession ever faced by the world. 

Latest stats for March 2020:

• Consumer prices fell 0.40%.  The largest decline in over 5 years.

• Inflation cooled to 1.5% y/y.

• GDP fell 9%. The largest drop ever recorded.

• Canadian employment plummeted and the unemployment rate is nearly 8%.

• BC lost 132,000 jobs and the unemployment rate is just over 7%.

• Canadian housing starts decreased over 7%.

• Home sales in Greater Vancouver increased 46% y/y. 

• Total number of homes listed for sale in Metro Vancouver decreased 25% y/y.

My thoughts are with you during these challenging times and many solutions are available to help you with financial matters.  Whether you need your mortgage payments deferred, need short term financing, or assistance to navigate the Federal or Provincial support programs – I’m just a click away. Send me an email by clicking here.