That is the question.

Industry & Market Highlights 

Bank of Canada enacts another overnight rate cut

For the third time this month, the Bank of Canada cut to the overnight rate, this time slashing off 50 basis points to a new level of .025%. The Bank Rate is correspondingly 0.50% and the deposit rate is .025% percent.

In a press statement, the central bank said this “unscheduled rate decision brings the policy rate to its effective lower bound and is intended to provide support to the Canadian financial system and the economy during the COVID-19 pandemic.”

The BoC also launched two programmes designed to address the economic chaos created by COVID-19: The Commercial Paper Purchase Program (CPPP) is designed to “alleviate strains in short-term funding markets and thereby preserve a key source of funding for businesses,” while the second initiative will have the BoC acquiring Government of Canada securities in the secondary market, beginning with a minimum acquisition of $5 billion per week across the yield curve.

“The program will be adjusted as conditions warrant, but will continue until the economic recovery is well underway,” the BoC said, adding that its balance sheet “will expand as a result of these purchases.” By Phil Hall.

Government introduces Canada Emergency Response Benefit to help workers and businesses. 

The Government of Canada is taking strong, immediate and effective action to protect Canadians and the economy from the impacts of the global COVID-19 pandemic. No Canadian should have to choose between protecting their health, putting food on the table, paying for their medication or caring for a family member.

To support workers and help businesses keep their employees, the government has proposed legislation to establish the Canada Emergency Response Benefit (CERB). This taxable benefit would provide $2,000 a month for up to four months for workers who lose their income as a result of the COVID-19 pandemic. The CERB would be a simpler and more accessible combination of the previously announced Emergency Care Benefit and Emergency Support Benefit.

The CERB would cover Canadians who have lost their job, are sick, quarantined, or taking care of someone who is sick with COVID-19, as well as working parents who must stay home without pay to care for children who are sick or at home because of school and daycare closures. The CERB would apply to wage earners, as well as contract workers and self-employed individuals who would not otherwise be eligible for Employment Insurance (EI).

Additionally, workers who are still employed, but are not receiving income because of disruptions to their work situation due to COVID-19, would also qualify for the CERB. This would help businesses keep their employees as they navigate these difficult times, while ensuring they preserve the ability to quickly resume operations as soon as it becomes possible.

The EI system was not designed to process the unprecedented high volume of applications received in the past week. Given this situation, all Canadians who have ceased working due to COVID-19, whether they are EI-eligible or not, would be able to receive the CERB to ensure they have timely access to the income support they need.

Canadians who are already receiving EI regular and sickness benefits as of today would continue to receive their benefits and should not apply to the CERB. If their EI benefits end before October 3, 2020, they could apply for the CERB once their EI benefits cease, if they are unable to return to work due to COVID-19. Canadians who have already applied for EI and whose application has not yet been processed would not need to reapply. Canadians who are eligible for EI regular and sickness benefits would still be able to access their normal EI benefits, if still unemployed, after the 16-week period covered by the CERB.

The government is working to get money into the pockets of Canadians as quickly as possible. The portal for accessing the CERB would be available in early April. EI eligible Canadians who have lost their job can continue to apply for EI here, as can Canadians applying for other EI benefits.

Canadians would begin to receive their CERB payments within 10 days of application. The CERB would be paid every four weeks and be available from March 15, 2020 until October 3, 2020.

This benefit would be one part of the government’s COVID-19 Economic Response Plan, to support Canadian workers and businesses and help stabilize the economy by helping Canadians pay for essentials like housing and groceries, and helping businesses pay their employees and bills during this unprecedented time of global uncertainty.

March 25, 2020 – Ottawa, Ontario – Department of Finance Canada

https://www.canada.ca/en/department-finance/news/2020/03/introduces-canada-emergency-response-benefit-to-help-workers-and-businesses.html

Ontario Prohibits Gatherings of More Than Five People with Strict Exceptions

Stronger action required to stop the spread of COVID-19

The Ontario government is taking immediate and decisive action to further stop the spread of COVID-19 and protect the health and well-being of all Ontarians.

Based on the best advice of Ontario’s Chief Medical Officer of Health, the Ontario government is issuing a new emergency order under the Emergency Management and Civil Protection Act to prohibit organized public events and social gatherings of more than five people, effective immediately.

This order would not apply to private households with five people or more. It would also not apply to  operating child care centres supporting frontline health care workers and first responders provided the number of persons at each centre does not exceed 50 people. Funerals would be permitted to proceed with up to 10 people at one time.

“If we are going to stop the spread of COVID-19 now and keep our communities safe, we need to take extraordinary measures to ensure physical distancing,” said Premier Doug Ford. “I strongly encourage everyone to do the responsible thing and stay home unless absolutely necessary. I can assure everyone that we will do everything in our power to stop this virus in its tracks.”

“We are acting on the best advice of our Chief Medical Officer of Health and other leading public health officials across the province,” said Christine Elliott, Deputy Premier and Minister of Health. “These are extraordinary times that demand extraordinary measures to stop the spread of COVID-19 and protect our people. Nothing is more important.”

Organized public events include parades, events including weddings, social gatherings and communal services within places of worship. This order replaces a previous emergency order which prohibits organized public events of over 50 people.

Ontario declared a provincial state of emergency on March 17, 2020 and has issued orders to close non-essential workplaces, recreational programs, libraries, publicly funded schools, private schools, daycares, provincial parks, churches and other faith settings, as well as bars and restaurants, except those that may only offer takeout or delivery. Essential services, such as grocery stores, convenience stores, pharmacies, public transit, manufacturing facilities, and supply chain companies remain open and operational.

Quick Facts

• Everyone in Ontario should be practicing physical distancing to reduce their exposure to other people. Avoid close contact (within 2 metres) with people outside of your immediate families.
• On March 25, 2020, the federal government announced an Emergency Order under the Quarantine Act that requires any person entering Canada by air, sea or land to self-isolate for 14 days whether or not they have symptoms of COVID-19. They should monitor for symptoms of COVID-19 for 14 days.
• Take everyday steps to reduce exposure to COVID-19 and protect your health: wash your hands often with soap and water or alcohol-based hand sanitizer; sneeze and cough into your sleeve; avoid touching your eyes, nose or mouth; avoid contact with people who are sick; stay home if you are sick.

Additional Resources

• Visit Ontario’s website to learn more about how the province continues to protect Ontarians from COVID-19.
• Ontario Enacts Declaration of Emergency to Protect the Public
• The 2019 Novel Coronavirus (COVID-19)
• For public inquiries, call ServiceOntario, INFOline at 1-866-532-3161 (toll-free in Ontario only).

https://news.ontario.ca/opo/en/2020/03/ontario-prohibits-gatherings-of-five-people-or-more-with-strict-exceptions.html

Pent up housing demand during COVID-19 may lead to hot summer market

As Canada prepares to weather the worst of the COVID-19 pandemic, there are already hopeful signs emerging from China where the novel coronavirus originated months ago.

China is maintaining a long streak of reporting no new local COVID-19 infections as its economy is gradually ramping back up after coming to a screeching halt earlier in the year. With it, the Chinese housing market is experiencing a sharp rebound in March, in what could be a bellwether for anticipating Canada’s own market trajectory once the pandemic’s impact subsides in the country.

“China’s private housing market is springing back to life as more sales offices reopened across the country following a nationwide shutdown, saving home builders from a deeper financial slump this year,” wrote South China Morning Post reporter Iris Ouyang in an article published today.

Ouyang cited home transaction volume in eight large Chinese cities that has eclipsed levels observed in the final quarter of 2019. She also noted that property sales in 30 tier-1 and tier-2 Chinese cities tripled in March from February, a sign that the coronavirus crisis was waning. South China Morning Post uses a four-tier system to rank cities in China using GDP, population and political governance data.

“There’s a release of pent-up demand from the Spring Festival and the coronavirus lockdown period in February,” Yang Hongxu of E-House China Research and Development Institute, a Shanghai-based real estate research firm, told South China Morning Post. “Thus we are seeing partial warming up of the property market.”

While nothing can be guaranteed during these extraordinary times, many economists believe that the experience of China and other Asian countries that were first hit by the virus early in the year will largely mirror the experience of Western countries now facing the full brunt of their outbreaks.

“If the dynamics seen in Asia repeat (and we have reason to believe it will) we are about 3 to 4 weeks away from the global pandemic inflection point,” wrote Tamara Basic Vasiljev, senior economist at Oxford Economics, in a research note published today.

“True, the numbers of coronavirus cases continue to rise sharply and western economies have been unable to repeat the success of Asian quarantine and containment policies. But the dynamics of COVID-19 deaths in the West are similar to patterns seen in Asia, pointing to a near turnaround,” she continued.

When this turning point is reached in Canada and new infections begin to ebb, there is promise that pent up housing demand in the country’s major markets will be unleashed in the second half of the year.

The conditions are certainly right for a reinvigorated market in the summer and fall. BMO economist Priscilla Thiagamoorthy wrote earlier this month that Canada’s housing market “found a solid footing in the first couple of months of 2020” before being derailed by the unprecedented disruptive effects of the COVID-19 pandemic.

In response to the pandemic’s wide-ranging economic impacts, the Bank of Canada slashed its key interest rate to a historic low last week.

With strong housing demand in the months prior to the pandemic and all-time low mortgage rates expected when Canada emerges on the other side of its COVID-19 crisis, there are plenty of reasons to expect a housing rebound in the subsequent months.

China is seemingly following this trajectory as its outbreak wanes, bolstering the case further that Canada’s market could bounce back rapidly if it follows the same path. By Sean MacKay. 

Economic Highlights

Bank of Canada Moves to Restore “Financial Market Functionality”

The Bank of Canada today lowered its target for the overnight rate by 50 basis points to ¼ percent. This unscheduled rate decision brings the policy rate to its effective lower bound and is intended to provide support to the Canadian financial system and the economy during the COVID-19 pandemic (see chart below).

Strains in the commercial paper and government securities markets triggered today’s action to engage in quantitative easing. The Governing Council has been meeting every day during the pandemic crisis. Market illiquidity is a significant problem and one the Bank considers foundational. These large-scale purchases of financial assets are intended to improve the functioning of financial markets.

Credit risk spreads have widened sharply in recent days. People are moving to cash. Liquidity has dried up in all financial markets, even government-guaranteed markets such as Canadian Mortgage-Backed securities (CMBs) and GoC bills and bonds. The commercial paper market–used by businesses for short-term financing–has become nonfunctional. The Bank is making large-scale purchases of financial assets in illiquid markets to improve market functioning across the yield curve. They are not attempting to change the shape of the curve for now but might do so in the future.

These large-scale purchases will create the liquidity that the financial system is demanding so that financial intermediation can function. Risk has risen, which creates the need for more significant cash injections.

At the press conference today, Senior Deputy Governor Wilkins refrained from speculating what other measures the Bank might take in the future. When asked, “Where is the bottom?” She responded, “That depends on the resolution of the Covid-19 health issues.”

The Bank will discuss the economic outlook in its Monetary Policy Report at their regularly scheduled meeting on April 15. In response to questions, Governor Poloz said it is challenging to assess what the impact of the shutdown of the economy will be. A negative cycle of pessimism is clearly in place. The Bank’s rate cuts help to reduce monthly payments on floating rate debt. He is hoping to maintain consumer confidence and expectations of a return to normalcy.

The oil price cut alone would have been sufficient reason for the Bank of Canada to lower interest rates. The Covid-19 medical emergency and the shutdown dramatically exacerbates the situation. All that monetary policy can do is to cushion the blow and avoid structural problems to the economy. The overnight rate of 0.25% is consistent with market rates along the yield curve.

High household debt levels have historically been a concern. Monetary policy easing helps to bridge the gap until the health concerns are resolved. The housing market, according to Wilkins, is no longer a concern for excessive borrowing by cash-strapped households.

At this point, the Bank is not contemplating negative interest rates. Monetary policy has little further room to maneuver, given interest rates are already very low. With businesses closed, lower interest rates do not encourage consumers to go out and spend money.

Large-scale debt purchases by the Bank will continue for an extended period to provide liquidity. The Bank can do this in virtually unlimited quantities as needed. The policymakers are also focussing on the period after the crisis. They want the economy to have an excellent foundation for growth when the economy resumes its normal functioning.

Fiscal stimulus is crucial at this time. The newly introduced income support for people who are not covered by the Employment Insurance system is a particularly important safety net for the economy. There are many other elements of the fiscal stimulus, and the government stands ready to do more as needed.

The Canadian dollar has moved down on the Bank’s latest emergency action. The loonie has also been battered by the dramatic decline in oil prices. Canada is getting a double whammy from the pandemic and the oil price war between Saudi Arabia and Russia. The loonie’s decline feeds through to rising prices of imports. However, the pandemic has disrupted trade and imports have fallen.

The Bank of Canada suggested as well that they are meeting twice a week with the leadership of the Big-Six Banks. The cost of funds for the banks has risen sharply. CMHC is buying large volumes of mortgages from the banks, which, along with CMB purchases by the central bank, will shore up liquidity. The banks are well-capitalized and robust. The level of collaboration between the Bank of Canada and the Big Six is very high.

The Stock Market Has Had Three Good Days

As the chart below shows, the Toronto Stock Exchange has retraced some of its losses in the past three days as the US and Canada have announced very aggressive fiscal stimulus. As well, the Bank of Canada has now lowered interest rates three times this month, with a cumulative easing of 1.5 percentage points. The Federal Reserve has also cut by 150 basis points over the same period. In addition to lowering borrowing costs, the central bank has also announced in recent days a slew of new liquidity measures to inject cash into the banking system and money markets and to ensure it can handle any market-wide stresses in the financial system.

The economic pain is just getting started in Canada with the spike in joblessness and the shutdown of all but essential services. Similarly, the US posted its highest level of initial unemployment insurance claims in history–3.83 million, which compares to a previous high of 685,000 during the financial crisis just over a decade ago.

These are the earliest indicator of a virus-slammed economy, with much more to come. All of this is without precedent, but rest assured that policy leaders will continue to do whatever it takes to cushion the blow of the pandemic on consumers and businesses and to bridge a return to normalcy.

By Dr. Sherry Cooper, Chief Economist, Dominion Lending Centres.

Millions of Canadians already missing payments due to COVID-19

We are still relatively early in the coronavirus crisis but already many people are missing payments.

A new report from insolvency practitioners Bromwich+Smith with Leger Research has found that 49% of households in Ontario and Alberta, and more than half in British Columbians, have suffered an immediate income reduction since the crisis began.

The share of households who reported already falling behind with payments on credit cards, utilities, or telecoms is 24% in Alberta, and 19% in Ontario and BC.

“The results are quite staggering really. Of course, we get a sense of what is happening when we read the news, but the survey results make it far more real having interviewed 750 people across BC, Alberta and Ontario,” says David de Lange, Senior Vice President of Leger Research.

Getting help

Most of those struggling will reach out for help from the federal and provincial governments but almost a quarter of respondents said they didn’t know how they would adjust to a reduction in income.

Bromwich+Smith advises that getting government help is a good first step for those that cannot pay their debts followed by asking their mortgage lender to see if a deferral could work for them or call a licensed insolvency trustee to understand if restructuring debts makes sense for their current state. By Steve Randall.

Mortgage Interest Rates

The Bank of Canada’s target overnight rate is now 0.25%.  Prime lending rate is now down to 2.45%.  What is Prime lending rate?  The prime rate is the interest rate that commercial banks charge their most creditworthy corporate customers. The Bank of Canada overnight lending rate serves as the basis for the prime rate, and prime serves as the starting point for most other interest rates.  Bank of Canada Benchmark Qualifying rate for mortgage approval lowered to 5.04% adding on average another $10,000 in increased borrowing capacity, but changes to the mortgage qualifying rate is coming into effect April 6, 2020: Instead of the Bank of Canada 5-Year Benchmark Posted Rate, the new benchmark rate will be the weekly median 5-year fixed insured mortgage rate from mortgage insurance applications, plus 2%. 

Banks/Lenders started raising fixed rates due to market volatility and and liquidity concerns.  Discounts on variable rates have also been reduced now at Prime plus. Bond markets are not operating as normal and lenders cost for hedging funds has become more expensive also affecting rates.

View rates Here – and be sure to contact us for a quote as rates are moving faster than can be updated.

Why Are Mortgage Rates Rising?

Over the past month, the Bank of Canada has lowered its overnight rate by a whopping 1.5 percentage points to a mere 0.25%. Many people expected mortgage rates to fall equivalently. The banks have reduced prime rates by the full 150 basis points (bps). But, since the second Bank of Canada rate cut on March 13, banks and other lenders have hiked mortgage rates for fixed- and variable-rate loans. That’s not what happens typically when the Bank cuts its overnight rate. But these are extraordinary times.

The Covid-19 pandemic has disrupted everything, shutting down the entire global economy and damaging business and consumer confidence. No one knows when it will end. This degree of uncertainty and the risk to our health is profoundly unnerving.

Most businesses have ground to a halt, so unemployment has surged. Hourly workers and many of the self-employed have found themselves with no income for an indeterminate period. All but essential workers are staying at home, including vast numbers of students and pre-school children. Nothing like this has happened in the past century. The societal and emotional toll is enormous, and governments at all levels are introducing income support programs for individuals and businesses, but so far, no cheques are in the mail.

In consequence, the economy hasn’t just slowed; it has frozen in place and is rapidly contracting. Travel has stopped. Trade and transport have stopped. Manufacturing and commerce have stopped. And this is happening all over the world.

What’s more, the Saudis and Russians took advantage of the disruption to escalate oil production and drive down prices in a thinly veiled attempt to drive marginal producers in the US and Canada out of business. This has compounded the negative impact on our economy and dramatically intensified the plunge in our stock market.

Many Canadians are now forced to live off their savings or go into debt until employment insurance and other government assistance kicks in, and even when it does, it will not cover 100% of the income loss. The majority of the population has very little savings, so people are resort to drawing on their home equity lines of credit (HELOCs), other credit lines or adding to credit card debt. Businesses are doing the same.

The good news is that people and businesses that already have loans tied to the prime rate are enjoying a significant reduction in their monthly payments. All of the major banks have reduced their prime rates from 3.95% to 2.45%. So people or businesses with floating-rate loans, be they mortgages or HELOCs or commercial lines of credit, have seen their monthly borrowing costs fall by 1.5 percentage points. That helps to reduce the burden of dipping into this source of funds to replace income.

So Why Are Mortgage Rates For New Loans Rising?

These disruptive forces of Covid-19 have markedly reduced the earnings of banks and other lenders and dramatically increased their risk. That is why the stock prices of banks and other publically-traded lenders have fallen very sharply, causing their dividend yields to rise to levels well above government bond yields. As an example, Royal Bank’s stock price has fallen 22% year-to-date (ytd), increasing its annual dividend yield to 5.31%. For CIBC, it has been even worse. Its stock price has fallen 30%, driving its dividend yield to 7.66%. To put this into perspective, the 10-year Government of Canada bond yield is only 0.64%. The gap is a reflection of the investor perception of the risk confronting Canadian banks.

Thus, the cost of funds for banks and other lenders has risen sharply despite the cut in the Bank of Canada’s overnight rate. The cheapest source of funding is short-term deposits–especially savings and chequing accounts. Still, unemployed consumers and shut-down businesses are withdrawing these deposits to pay the rent and put food on the table.

Longer-term deposits called GICs, which stands for Guaranteed Investment Certificates, are a more expensive source of funds. Still, owing to their hefty penalties for early withdrawal, they become a more reliable funding source at a time like this. As noted by Rob Carrick, consumer finance reporter for the Globe and Mail, “GIC rates should be in the toilet right now because that’s what rates broadly do in times of economic stress. But GIC rates follow a similar path to mortgage rates, which have risen lately as lenders price rising default risk into borrowing costs.”

To attract funds, some of the smaller banks have increased their savings and GIC rates. For example, EQ Bank is paying 2.45% on its High-Interest Savings Account and 2.55% on its 5-year GIC. Other small banks are also hiking GIC rates, raising their cost of funds. Rob McLister noted that “The likes of Home Capital, Equitable Bank and Canadian Western Bank have lifted their 1-year GIC rates over 65 bps in the last few weeks, according to data from noted housing analyst Ben Rabidoux.”

The banks are having to set aside funds to cover rising loan loss reserves, which exacerbates their earnings decline. An unusually large component of Canadian bank loan losses is coming from the oil sector. Still, default risk is rising sharply for almost every business, small and large–think airlines, shipping companies, manufacturers, auto dealers, department stores, etc.

Lenders have also been swamped by thousands of applications to defer mortgage payments.

Hence, confronted with rising costs and falling revenues, the banks are tightening their belts. They slashed their prime rates but eliminated the discounts to prime for new variable-rate mortgage loans. Some lenders will no doubt start charging prime plus a premium for such mortgage loans. Banks have also raised fixed-rate mortgage rates as these myriad pressures reducing bank earnings are causing investors to insist banks pay more for the funds they need to remain liquid.

An additional concern is that financial markets have become less and less liquid–sellers cannot find buyers at reasonable prices. The ‘bid-ask’ spreads are widening. That’s why the central bank and CMHC are buying mortgage-backed securities in enormous volumes. That is also why the Bank of Canada has started large-scale weekly buying of government securities and commercial paper. These government entities have become the buyer of last resort, providing liquidity to the mortgage and bond markets.

These markets are crucial to the financial stability of Canada. Large-scale purchases of securities are called “quantitative easing” and have never been used before by the Bank of Canada. It was used extensively by the Fed and other central banks during the 2008-10 financial crisis. When business and consumer confidence is so low that nothing the central bank can do will spur investment and spending, they resort to quantitative easing to keep financial markets functioning. In today’s world, businesses and consumers are locked down, and no one knows when it will end. With so much uncertainty, confidence about the future diminishes. The natural tendency is for people to cancel major expenditures and hunker down.

We are living through an unprecedented period. When the health emergency has passed, we will celebrate a return to a new normal. In the meantime, seemingly odd things will continue to happen in financial markets.  By Dr. Sherry Cooper, Chief Economist, Dominion Lending Centres.

Your Mortgage

If you have concerns about your mortgage and the rapidly changing market, please contact us to discuss your needs, concerns and options in detail to protect your best interest.

Ensure that your current mortgage is performing optimally, or if you are shopping for a mortgage, only finalize your decision when you are confident you have all the options and the best deals with lowest rates for your needs.

Here at iMortgageBroker, we love looking after our clients’ needs to ensure you get all the options and the best deals and best results.  We do this by shopping your mortgage to all the lenders out there that includes banks, trust companies, credit unions, mortgage corporations & insurance companies.  We do this with a smile, and with service excellence!

Reach out to us – let us do all the hard work in getting you the best results and peace of mind!

For Continued Updates on The COVID-19 Pandemic, please visit:

Middlesex Health Unit

https://www.healthunit.com/news/novel-coronavirus

Ontario Health

https://www.ontario.ca/page/2019-novel-coronavirus

Government Canada Public Health

https://www.canada.ca/en/public-health/services/diseases/coronavirus-disease-covid-19.html

World Health Organization: 

https://www.who.int/emergencies/diseases/novel-coronavirus-2019

Factual Statistics Coronavirus COVID-19 Global Cases

https://gisanddata.maps.arcgis.com/apps/opsdashboard/index.html#/bda7594740fd40299423467b48e9ecf6

https://www.youtube.com/watch?v=qgylp3Td1Bw&app=desktop

 

Many current and future homeowners, are feeling concerned about the real estate market due to the health crisis and financial crisis that is slowly developing.   Real estate is impacted by market volatility and financial liquidity/solvency concerns.  Real estate is a commodity, and property values fluctuate as the market changes due to many influences that include supply and demand, rules regulations and laws, seasons, micro and macro economics, demographics, consumer sentiment & confidence and many other factors.  All these impact local markets connected to the larger markets.  The extend of changes and corrections also depend on the current status of a market and the current values of local markets.  

For example, during the last recessions in 2008-2009, the London regional market saw a 2 year stagnation in growth in property values for average priced homes, and only executive high-valued homes saw a drop in property values.  Compared to property values in Toronto during that time that saw a large market correction in overpriced homes.

Though the market is London is currently still very active and hot, we are already experiencing and anticipate that a lot of buyers and sellers are choosing to put their plans on hold to wait and see how this crisis develops and hopefully resolves, sooner than later.

Our recommendation now because of the health crisis, is first and foremost to protect your family and household.  Follow the guidelines and instructions from your local Public Health Authority.  See also our HOMEOWNERS GUIDE TO THE HEALTH CRISIS & FINANCIAL CRISIS.

Only list and sell your home if you have to.  For example estate sales, required relocation, divorce/separation, or you have have already purchased and now have to sell in order to complete your purchase closing.  

Only buy if you have to, or if you have found your dream home, or that great deal and you absolutely have to make it yours.  We are recommending you follow the local real estate board and provincial real estate association directive that sales to be virtual as much as possible, with no open houses, and protection guidelines in place to limit exposing your home and family’s health. This might change in the near future should the government impose further mandatory lock-downs.

Make an offer conditional on financing if you need a mortgage, and conditional on an inspection if you have been unable to view it in person only virtually due to showing restrictions. 

A few additional important considerations:

• Mortgage application turnaround times have increased during the current climate.
• If an appraisal is required, additional time will most likely be required as appraisers may have limitations or delays in accessing subject properties. Some lender are allowing adjusted full appraisals with interior pictures through windows, and also drive by appraisals instead.
• Rush transactions will be met with challenges and are not recommended at this time.
• If your financial status e.g job loss  changes prior to your mortgage closing, the lender will most likely pull out and cancel the mortgage as mortgage approvals include clause that the lender has the right to cancel the transaction should there be any significant change to your material and financial status.
• We have identified the top lenders that will allow mortgage documents to be signed via e-signatures and also lawyers who are able to complete transactions virtually so that no in-person meetings are required.  For now the Land Registry Office is open and running and we are able to complete mortgage transactions and land transfer transactions during social isolation and lock down for as long as the LRO remains open. Currently, there are no plans to close the LROs, however in the event of closure, then real estate transactions will not be able to proceed and you would need to seek extensions wherever possible. The good news is that everyone is in the same situation! The bad news is that there is no right in most re-sale agreements to insist on an extension, however, most people are understanding and you will have to rely on their goodness as well as common law principles to extend the transaction. 

To protect yourself against this, have your Realtor include a clause in your purchase transaction to protect you in case of delays in closing as result of the crisis.  Example: The parties herein acknowledge and agree that they are required to close this transaction notwithstanding any impacts of COVID-19, save and except the closing of the Land Registry Office(s) and all financial institutions. In the event the closing cannot occur due to a shutdown/disruption of the Land Registry System and/or banking system, then the closing date shall be automatically extended to the fifth (5th) business day following the date upon which said systems have returned to operational status and can clear funds accordingly.

These are extraordinary times we are living in with so many variables and uncertainties.   Keep yourself informed and continue to stay calm and work together to keep our families, clients and communities safe.  Follow the direction of your local health unit and the government to help flatten the curve of transmission so that our health care system can function well to help those who get sick with serious symptoms.

I’ll include in the text below links to our municipal, provincial and federal agencies, as well as other helpful links to keep you updated on facts.  For regular updates on the economy and markets as the COVID-19 pandemic develops and evolves over time visit my Blog:  http://imortgagebroker.ca/blog/

Also visit our Vlog regularly for more helpful information: https://www.youtube.com/channel/UCNYRjVZjsNph8ymVFEeBQhw

We are always here to help.  Reach out to us.

For Continued Updates on The COVID-19 Pandemic, please click below:

Middlesex Health Unit

https://www.healthunit.com/news/novel-coronavirus

Ontario Health

https://www.ontario.ca/page/2019-novel-coronavirus

Government Canada Public Health

https://www.canada.ca/en/public-health/services/diseases/coronavirus-disease-covid-19.html

World Health Organization: 

https://www.who.int/emergencies/diseases/novel-coronavirus-2019

Factual Statistics Coronavirus COVID-19 Global Cases

https://gisanddata.maps.arcgis.com/apps/opsdashboard/index.html#/bda7594740fd40299423467b48e9ecf6

https://www.youtube.com/watch?v=qgylp3Td1Bw&app=desktop

 

 

Industry & Market Highlights 

Bank of Canada lowers overnight rate at second 2020 meeting

The Bank of Canada lowered its target for the overnight rate by 50 basis points to 1.25 percent from 1.75 percent.

This is the first time the benchmark rate has changed since October 24, 2018.

Comparing the Bank’s two most recent statements (today and January 22, 2020), we find several notable new comments:

• It is “becoming clear that the first quarter of 2020 will be weaker than the Bank had expected” when CPI inflation was “stronger than expected”
• While Canada’s economy has been operating close to potential with inflation on target, “the COVID-19 virus is a material negative shock to the Canadian and global outlooks”
• COVID-19 “represents a significant health threat to people in a growing number of countries” and in some regions, business activity has fallen sharply, supply chains have been disrupted, commodity prices have been pulled down and the Canadian dollar has depreciated
• The drop in Canada’s terms of trade, if sustained, will weigh on income growth
• Business investment “does not appear to be recovering as was expected following positive trade policy developments”
• Although markets continue to “function well,” the Bank of Canada will continue to ensure that the Canadian financial system has sufficient liquidity

As a result of its revised near-term outlook, the Bank’s Governing Council noted that it “stands ready” to adjust monetary policy further if required to support economic growth and keep inflation on target.

BoC’s next policy announcement is set for April 15, 2020 and in the ensuing period the Bank’s Governing Council intends to coordinate with other G7 central banks and fiscal authorities as it “closely” monitors economic and financial conditions. We will closely monitor these conditions as well.  By First National Financial. 

Ontario passes Trust in Real Estate Services Act

The Ontario Government has passed the Trust in Real Estate Service Act, 2019 (TRESA), and was announced at the Ontario Real Estate Association’s REALiTY Conference and AGM by new OREA President Sean Morrison.

The legislation was called back on Wednesday, and the Bill was unanimously passed after its third and final reading. TRESA amends the Real Estate & Business Brokers Act, 2002 (REBBA).

“This is a huge win for our Realtor members, their clients and hardworking Ontarians across the province,” said OREA President Sean Morrison. “Thanks to the Ford Government’s newly passed legislation, Ontario’s homebuyers and sellers can have greater confidence that the Realtor at their side during the largest financial transaction of their life has the highest professional standards, training and modern tools in North America, such as the ability to form personal real estate corporations.”

TRESA is one of the few pieces of legislation in Ontario to receive bi-partisan support following constructive debate in the Legislature led by Minister Lisa Thompson and NDP Consumer Critic Tom Rakocevic and other MPPs.

“By strengthening consumer protection and fixing the broken real estate discipline system, the Government of Ontario is showing Realtors and home buyers and sellers that it is on their side,” said OREA CEO Tim Hudak. “Ontarians deserve the best when it comes to making the biggest financial transaction of their lives and TRESA will make this province the North American leader once again when it comes to a well-regulated real estate market.”

OREA has been advocating for a review of REBBA for over a decade and finally, the Ontario Government has passed this historic piece of legislation.

There are five primary goals in the proposed legislation: enable regulatory changes that would improve consumer protection and choice; improve professionalism among real estate professionals and brokerages through enhanced ethical requirements; update the powers available to RECO to address poor conduct and improve efficiency; create a stronger business environment; and bring legislation and regulations up-to-date and reduce regulatory burden.

Ontario’s real estate rules were nearly 20 years old and this legislation brings the profession into the modern age, Hudak indicated.

OREA will continue to work closely with the Government of Ontario as they develop regulations for the Bill, and work towards enacting the legislation into law.  By Kimberly Greene. 

Changes to stress test

Minister of Finance Bill Morneau announced changes to the benchmark rate used to determine the minimum qualifying rate for insured mortgages.

Instead of the Bank of Canada 5-Year Benchmark Posted Rate, the new benchmark rate will be the weekly median 5-year fixed insured mortgage rate from mortgage insurance applications, plus 2%. These changes will come into effect on April 6, 2020.

The new benchmark rate will be published on a Wednesday and come into effect the following Monday.

“For many middle-class Canadians, their home is the most important investment they will make in their lifetime. Our government has a responsibility to ensure that investment is protected and to support a stable housing market. The government will continue to monitor the housing market and make changes as appropriate. Reviewing the stress test ensures it is responsive to market conditions,” Morneau said.

The minimum qualifying rate for insured mortgages will now be the greater of the borrower’s contract rate, which is the mortgage interest rate agreed to by the lending institution and the borrower; or the new benchmark rate.

The change comes after a recent review by federal financial agencies, which concluded that the minimum qualifying rate should be more dynamic to better reflect the evolution of market conditions. Overall, the review concluded that mortgage standards are working to ensure that home buyers are able to afford their homes even if interest rates rise, incomes change, or families are faced with unforeseen expenses. This adjustment to the stress test will allow it to be more representative of the mortgage rates offered by lenders and more responsive to market conditions.

The new Benchmark Rate for insured mortgages will be published weekly on the Bank of Canada’s website, and will be based on submitted mortgage insurance application contract rates. If, on any given week, there are any delays in updating the new Benchmark Rate, the previous week’s published Rate will stand until a new Rate is published.  By Kimberly Greene. 

Who are the winners with the new qualifying interest rate?

Mortgage brokers and homebuyers across Canada got the relief that many of them have been clamouring for: a change in the qualifying interest rate for insured mortgages.

Last week, Minister of Finance Bill Morneau announced changes to the benchmark rate used to determine the minimum qualifying rate for insured mortgages. As of April 6th, that rate will be the weekly median 5-year fixed insured mortgage rate from mortgage insurance applications, plus 2%.

“It’s fantastic news. Borrowers will now have a little more buying power,” said Michelle Campbell, principal mortgage broker at Mortgage District. “It’s definitely a step in the right direction.”

Others, however, are a little slower to rejoice.

“At this time it is too hard to tell – with no idea what the new benchmark rate is going to be, we don’t know if it is just a 10bps or 25bps difference. That difference might increase a borrower’s purchasing power a little but at the same time we will see a potential upswing in increases in prices for the Spring market as well as the perception that the market is hot—which could potentially just mitigate or counteract any potential this change might provide,” said Claire Drage, CEO of the Windrose Group.

The so-called stress test was put into place at a time where the interest rate environment was thought to be rising, and it did effectively put the brakes on the runaway housing markets of Toronto and Vancouver. Given that prices had begun to rise again in Toronto, however, some people question whether or not this is the right time to change it—and whether or not a more regional-specific strategy would had a better effect nationwide.

In fact, Royal LePage President and CEO Phil Soper recently reiterated this point a few weeks ago, calling for housing policy that meeds the varied economies and needs that vary region to region.

Mixed benefits have also been shared by industry analysts.

“Changes are likely to further increase home prices, further stretching affordability and consumer leverage,” RBC Capital Markets analyst Geoffrey Kwan told Bloomberg. “The changes are aimed at the demand side of the equation regarding home ownership, instead of addressing the supply side.”

But buyers aside—it could be that the entities that stand to benefit the most from this change are the companies with the highest gearing to the mortgage market (i.e., Equitable Group, Home Capital, Genworth MI, and First National) as opposed to companies that are more diversified, such as the big banks and regional lenders.

National Bank Financial Analyst Jaeme Gloyn told Bloomberg that the lower qualifying rate should shift part of the mortgage away from private, unregulated lenders back into the regulated mortgage market. Borrowers at least have a choice to get a larger mortgage or at least qualify for one, both of which stimulate the housing market and benefit lenders.

“In the short run, this change will likely help some Canadians who currently do not qualify for mortgage financing get into the housing market,” Cormark Securities Inc. Analyst Meny Grauman told Bloomberg. “However, over time this change is likely to only raise prices given increased marginal demand.”

The move could be a risky one, as household debt continues to rise. In a note to investors, Bank of Montreal economists said that “to the extent the rule change fans some already-hot regions, it might discourage the Bank of Canada from lowering rates.”

The Office of the Superintendent of Financial Institutions (OSFI) said it’s considering a similar change for uninsured mortgages and is seeking input before March 17.  By Kimberly Greene. 

London area home sales remain at peak levels

Last month, local residential real estate transactions remained at peak levels, with 740 homes trading hands in LSTAR’s jurisdiction – only 22 less than three years ago, when the Association had its best February sales ever.

“Overall, home sales took a leap over the previous month – from 568 to 740, which signals an early start of a busy spring market,” said 2020 LSTAR President Blair Campbell.

Compared to a year ago, the local residential sales activity saw a 23.7% increase, while the overall average home price experienced a 13% surge, rising to $445,535 in February.

“Even though the number of LSTAR new listings grew to 1,034, which is almost on par with the 10-year average, the number of active listings at month end was still much lower than normal. This reflects the strong demand for residential properties in our area,” stated Campbell.

Inventory is another important measure of the balance between sales and the supply of listings. This shows how long it would take to liquidate existing inventories at the current rate of sales activity. At the end of February 2020, there were only 1.8 months of inventory across the entire LSTAR district – the lowest level in the last ten years.

“Looking at the home sales activity in LSTAR’s five main regions, it’s interesting to see that three of them – Elgin County, Middlesex County and Strathroy – had their second best February ever. London witnessed its third best February with 488 home sales, while St. Thomas set a new absolute record for February home sales, with 68,” Campbell noted.

“However, if you will dig deeper into the London statistical figures, you will be surprised to discover that London South’s February home sales reached their highest peak ever. This demonstrates, once again, that real estate is local and that, if you’re looking for real estate information or guidance, a local REALTOR® is your best bet,” Campbell emphasized.

The following table illustrates last month’s average home prices in LSTAR’s main regions and how they compare to the values recorded at the end of February 2019.

“Analyzing average prices in London’s three main geographic areas, it is worth to note that London East saw the biggest year-over-year increase,” Campbell added.

The average home price in London East was $369,094, up 21.8% from last February, while London North saw an increase of only 6.1% over last February, with an average home sales price of $530,042. In London South, the average home price was $437,667 – up 11.5% over February 2019.

The following chart is based on data taken from the CREA National Price Map for January 2020 (the latest CREA statistics available). It provides a snapshot of how home prices in London and St. Thomas compare to some other major Ontario and Canadian centres.

Toronto approves increase in residential property tax

In a move touted by local leadership as a vital component of a “good, responsible, realistic” budget, the Toronto city council has implemented a 4.24% residential property tax hike for 2020.

The new levy that came with the approval of the city’s $13.5-billion operating budget would mean an estimated $130 in additional expenses for each household this year.

“The budget is balanced in the sense that the revenues meet the expenditures as is required by law. But I believe it is also balanced in the context of balancing all the competing interests and different interests that the city has,” Mayor John Tory said in a news conference earlier this week, as quoted by CBC News.

“I understand that people, in many cases, are finding life stressful on a financial basis today, but together with a modest tax increase, we’re also doing things to try to make their lives more affordable,” Tory added. “It will cost a lot more in the future if we don’t invest in transit and affordable housing and community safety now.”

Housing taxes have been repeatedly put forward as solutions to a wide assortment of market ills, and this has become an especially contentious topic in the higher-end market.

Among the suggestions put forward by city officials is a 3% tax on homes with sales values of $3 million and higher. Councillor Ana Bailao (Ward 9 Davenport) has also called for a policy similar to that of Vancouver’s vacant homes tax – which earned the latter city around $40 million last year alone.

However, Don Kottick of Sotheby’s warned that such a move will only end up discouraging talent from other places.

“I don’t think taxing is the right way to go. We’re already paying more tax than people pay in other countries,” the Sotheby’s CEO told the Toronto Star. “If you keep taxing we’re going to become anti-competitive.”

“At some point people are going to say, ‘Enough is enough.’”  By Ephraim Vecina. 

Economic Highlights

Interest Rates Nosedive as Bank of Canada cuts rates 50 BPS

Following the surprise emergency 50 basis point (bp) rate cut by the Fed, the Bank of Canada followed suit and signalled it is poised to do more if necessary. The BoC lowered its target for the overnight rate by 50 bps to 1.25%, suggesting that “the COVID-19 virus is a material negative shock to the Canadian and global outlooks.” This is the first time the Bank has eased monetary policy in four years. 

According to the BoC’s press release, “COVID-19 represents a significant health threat to people in a growing number of countries. In consequence, business activity in some regions has fallen sharply, and supply chains have been disrupted. This has pulled down commodity prices, and the Canadian dollar has depreciated. Global markets are reacting to the spread of the virus by repricing risk across a broad set of assets, making financial conditions less accommodative. It is likely that as the virus spreads, business and consumer confidence will deteriorate, further depressing activity.” The press release went on to promise that “as the situation evolves, the Governing Council stands ready to adjust monetary policy further if required to support economic growth and keep inflation on target.” 

Moving the full 50 basis points is a powerful message from the Bank of Canada. Particularly given that Governor Poloz has long been bucking the tide of monetary easing by more than 30 central banks around the world, concerned about adding fuel to a red hot housing market, especially in Toronto. Other central banks will no doubt follow, although already-negative interest rates hamper the euro-area and Japan.

Canadian interest rates, which have been falling rapidly since mid-February, nosedived in response to the Bank’s announcement. The 5-year Government of Canada bond yield plunged to a mere 0.82% (see chart below), about half its level at the start of the year. 

Fixed-rate mortgage rates have fallen as well, although not as much as government bond yields. The prime rate, which has been stuck at 3.95% since October 2018 when the Bank of Canada last changed (hiked) its overnight rate, is going to fall, but not by the full 50 bps as the cost of funds for banks has risen with the surge in credit spreads. A cut in the prime rate will lower variable-rate mortgage rates. 

Many expect the Fed to cut rates again when it meets later this month at its regularly scheduled policy meeting, and the Canadian central bank is now expected to cut interest rates again in April. Of course, monetary easing does not address supply-chain disruptions or travel cancellations. Easing is meant to flood the system with liquidity and improve consumer and business confidence–just as happened in response to the financial crisis. Expect fiscal stimulus as well in the upcoming federal budget. 

All of this will boost housing demand even though reduced travel from China might crimp sales in Vancouver. A potential recession is not good for housing, but lower interest rates certainly fuel what was already a hot spring sales market. Data released today by the Toronto Real Estate Board show that Toronto home prices soared in February, and sales jumped despite low inventories. The number of transactions jumped 46% from February 2019, which was a 10-year sales low as the market struggled with tougher mortgage rules and higher interest rates. February sales were up by about 15% compared to January.

Virus Anxiety and The Canadian Housing Market

As though things weren’t volatile enough, a new wave of virus terror is wreaking havoc on global financial markets. The novel conronavirus, COVID-19, continues to spread causing panic in worldwide stock and bond markets for the seventh day. Share prices have plummetted in Asia, Europe, the U.S. and Canada. The sell-off is fueled mostly by concern that measures to contain the virus will hamper corporate profits and economic growth, and fears that the outbreak could get worse.

Interest rates are falling sharply, hitting record lows reflecting a movement of cash out of stocks and commodities like oil, into the safer havens of government bonds and gold. In Canada, the 5-year bond yield has fallen to 1.16% this morning, down more than 50 basis points (bps) year-to-date and down 65 bps year-over-year (see chart below). Mortgage rates are closely linked to the 5-year government bond yield, so further downward pressure on mortgage rates is likely. Oil prices have fallen sharply, hitting the Prairie provinces hard. Crude oil WTI prices have fallen to just over US$45.00 a barrel compared to $62.50 earlier this year.

The Canadian dollar has also taken a beating, down to 0.7468 cents US, compared to a high of 0.7712 early this year.

The Canadian economy was already battered as today’s release of fourth-quarter GDP data shows. Statistics Canada reported that the economy came to a near halt in Q4 as exports dropped by the most since 2017 and business investment declined. Household spending was a bright spot–a reflection of a strong labour market and rising wages.

Monthly data for December, also released this morning, came in stronger than expected, showing the economy had some momentum going into 2020 before the coronavirus reared its ugly head.

The weak 0.3% growth in Q4 was expected as a series of temporary factors including a week-long rail strike, manufacturing plant disruptions and pipeline shutdowns slowed growth. Even though December posted an uptick, the first quarter will no doubt be hampered by the rail blockade and now virus-related supply and travel disruptions as well as reduced tourism.

Bottom Line: Panic selling in the stock market is never a good idea. The TSX opened down more 550 points this morning following yesterday’s outage. Trading on Thursday was suspended around 2 PM for technical reasons. None of this is good for psychology or the economy.

The Bank of Canada meets next Wednesday, and clearly, their press release will address these issues. It’s unlikely the Bank will cut rates in response on March 4, but if the economic disruption continues, rate cuts could be coming by mid-year.

The new stress test will be in place on April 6. If rates were at today’s level, the qualifying rate for mortgage borrowers would be more than 40-to-50 basis points lower than today’s level of 5.19%. This will add fuel to an already hot housing market.

Mortgage Interest Rates

Prime lending has lowered 50 bps is 3.45%.  Bank of Canada Benchmark Qualifying rate for mortgage approval is still at 5.19% but changes to the mortgage qualifying rate is coming into effect April 6, 2020: Instead of the Bank of Canada 5-Year Benchmark Posted Rate, the new benchmark rate will be the weekly median 5-year fixed insured mortgage rate from mortgage insurance applications, plus 2%. 

Fixed rates are moving down with lower bond yields.  Deep discounts are offered by some lenders for variable rates making adjustable variable rate mortgages very attractive again.

Ensure that your current mortgage is performing optimally, or if you are shopping for a mortgage, only finalized your decision when you are certain you have all the options and the best deals with lowest rates for your needs.

Here at iMortgageBroker, we love looking after our clients needs to ensure your best interest is protected.  We do this by shopping your mortgage to all the lenders out there that includes banks, trust companies, credit unions, mortgage corporations & insurance companies.  We do this with a smile, and with service excellence!

Reach out to us – let us do all the hard work in getting you the best results and peace of mind!

Economic Highlights

Market Commentary: An update on rates and January employment numbers

Wow has the world changed since last commentary. How? Well for one, coronavirus was just a twinkle in the eye of whatever host it mutated from. Two, if I was reading Twitter correctly, World War 3 was on its way because of the Iran situation. Crazy how fast things change. Markets now are less interested on the latter and completely focused on the former. Don’t believe me? Just look at the Google trend:

*

*note: this does not include any of the 1,000  Bing users

Because remember, average consumer sentiment drives these markets!

Rates

So where have rates gone in the wake of the coronavirus pandemic? The 5 year GoC is currently yielding 1.36% while the 10 year is yielding 1.34%. The ‘belly’ of our curve is still inverted. Compared to a week ago, the 5 year was yielding 1.28% and the 10 year was yielding 1.27%. If you go back a month, around the time of our last commentary (we hear you marketing ladies), both the 5 and 10 year Government of Canada Bonds were yielding 1.63%.

Canada Mortgage Bonds are also lower than a month ago. The current 5 year CMB is yielding 1.64% and the current 10 year is yielding 1.71%. Compared to a month ago, the 5 year is 25 bps lower and the 10 year is 30 bps lower. It’s a good time as ever to explore an early rate-lock with First National. Help us, help you.

ECONOMIC NEWS

How’s the economy doing? Well better than the Bank of Canada would have you believe. The last Bank of Canada meeting and statement came off as ‘dovish’ to many in the market. If you recall, the Bank’s signaling for further potential rate cuts was focused around an extension of further weakness in data. Since then, we’ve had precisely the opposite.

Case in point, today brought January Canadian employment numbers. The job market beat expectations adding 34.5K jobs vs the 17.5K expected. The unemployment rate also fell to 5.5%. That’s all-around good news. Full-time positions rising 35.7K was also encouraging, as was the average hourly earnings of permanent workers gaining 4.4%. If there was one negative, private sector jobs only grew +5,000 versus the public sector, which made up the majority of the job creation at 21.3K.

Today’s strong job numbers only added to the string of strong economic data that beat expectations.  Retail sales, GDP and trade reports since the last Bank of Canada meeting have all exceeded market expectations. All in all, signs point for the potential for rate cuts in 2020 as being lower. The market is currently pricing a 5% chance of a rate cut on the next meeting date, March 4th.

Finally, the POTUS also known as Donald Trump was acquitted on his impeachment by the Senate this past week.  With all the drama and lack of bipartisanship south of the border, I guess we can find solace that our Prime Minister’s biggest shake up has been his new beard. What will he do next?  By Andrew Masliwec, Analyst, Capital Markets, First National Financial.

January Starts 2020 With Strong Canadian Job Growth

January follows December in erasing the weak November job numbers providing good news for the Canadian economy. Manufacturing led the way as the jobless rate fell, and wage growth accelerated meaningfully. The robust labour market, coupled with consumer confidence holding firm in January at about historical averages, is a reassuring sign for the resilience of the economy. 

Canada’s economy created 34,500 net new jobs in January, all in full-time positions, beating economists’ expectations. The unemployment rate fell slightly to 5.5%, wage growth accelerated to 4.4%, and hours worked rose by 0.5%. This second strong reading of Canada’s job market will reinforce the Bank of Canada’s assessment of the underlying health of the Canadian economy.

 

Slowing activity in the second half of last year was more a function of temporary disruptions and geopolitical tensions. Some of these factors remain, augmented by the coronavirus, which has disrupted travel and trade and dramatically reduced energy and other commodity prices.

 

 

Manufacturing and construction led the job gains, and agriculture picked up as well. Quebec, Manitoba and New Brunswick posted employment gains. Fewer people were employed in Alberta, and the jobless rate spiked in Saskatchewan. The resumed decline in oil and other commodity prices has hit both prairie provinces hard. 

British Columbia continued to boast the lowest unemployment rate by province, followed by Manitoba, Quebec and Ontario (See table below).

Bottom Line: Canada’s economy has been boosted by the fastest pace of immigration in the Group of Seven countries, spurring a housing boom that is pushing up demand for everything from plumbers to electricians. Indeed, Bloomberg News recently highlighted the more substantial surge in male employment in Canada relative to the US, where women have eclipsed men as the majority of jobholders.

 

Female job growth in Canada is also strong, and labour force participation rates are higher in Canada than in the US. The jobless rate for women age 25 and older is only 4.6% in Canada, compared to 4.9% for men. 

According to Bloomberg News:

• Jared Menkes, executive vice president at Toronto-based Menkes Developments Ltd., said finding enough labour is a constant source of angst. Central Toronto posted the fastest-growing population in North America last year with a dozen office buildings and countless condos under construction, along with 25 light rail stations, hospitals and all sorts of infrastructure work (see chart below). “We are short actual labour, whether it’s a crane operator, whether it’s drywallers, electricians, plumbers, drivers,” Menkes said. “We’re short truck drivers, architects, consultants.”

 

Roughly half of all immigrants to Canada located in Ontario, but as the second chart below shows, Quebec and British Columbia garnered their fair share of new residents as well. The Bank of Canada highlights this factor in suggesting that the economy will continue to grow in 2020 and 2021. Certainly, it is a strong positive for the housing markets in these provinces.

By Dr. Sherry Cooper.  Chief Economist, Dominion Lending Centres

Mortgage Interest Rates

Prime lending rate is 3.95%.  Bank of Canada Benchmark Qualifying rate for mortgage approval is still at 5.19% but the pressure is on to see if other Banks and the BOC will follow suit now that TD Bank lowered its 5 year posted rate to 4.99%.  Changes to the mortgage qualifying rate is coming into effect April 6, 2020: Instead of the Bank of Canada 5-Year Benchmark Posted Rate, the new benchmark rate will be the weekly median 5-year fixed insured mortgage rate from mortgage insurance applications, plus 2%. 

Fixed rates are moving down slowly with lower bond yields.  Deep discounts are offered by some lenders for variable rates making adjustable variable rate mortgages somewhat attractive, but still not a significant enough spread between the fixed and variable to justify the risk for most.

Ensure that your current mortgage is performing optimally, or if you are shopping for a mortgage, only finalized your decision when you are certain you have all the options and the best deals with lowest rates for your needs.

Here at iMortgageBroker, we love looking after our clients needs to ensure your best interest is protected.  We do this by shopping your mortgage to all the lenders out there that includes banks, trust companies, credit unions, mortgage corporations & insurance companies.  We do this with a smile, and with service excellence!

Reach out to us – let us do all the hard work in getting you the best results and peace of mind!

Industry & Market Highlights

Residential Market Commentary – Jobs up. Rates steady

The Canadian economy just keeps playing into the hands of the Bank of Canada as the central bank continues to resist pressures to trim interest rates.

The latest jobs report has given the Bank yet more ammunition to defend its position.  The December figures showed a nice recovery following the sharp drop in November.  The economy netted 35,200 additional jobs last month and the unemployment rate dropped three basis points to 5.6%.  Virtually all of the gains came in full-time employment in the private sector.  The number of part-time positions fell by 3,200 and the public sector shed more than 21,000 jobs.

For all of 2019 Canada added more than 320,000 jobs: 283,000 full-time and 37,500 part-time.  Most of that was in the first half of the year.  Some market watchers see the slowdown through the second half of 2019 as an indicator that big, job growth numbers will likely diminish for 2020.  This could be a sign that slack in the labour market is tightening-up.

None the less, on-going job growth and low unemployment support the Bank of Canada’s stance that the economy remains relatively resilient, despite globe headwinds, and rate cuts are unnecessary.

The next rate setting and Monetary Policy Report are due on January 22nd.   By First National Financial LP.

Residential Market Commentary – 2020 foresight

The New Year is here, we are heading into a new decade and by most accounts all is right in Canada’s housing market.

2019 has been a turnaround year in the industry, particularly through the second half.  The Canadian Real Estate Association, the big realtors and the Canada Mortgage and Housing Corporation all expect an ongoing recovery through 2020.  But each has its own interpretation of “recovery”.

CREA’s early projections for the coming year forecast a 9% increase in sales activity to 530,000 units with a 6% increase in the national average cost of a home to $531,000.  However, the association says the price increase will be driven by a lack of supply.  New listings sagged in the second half of 2019 and CREA expects that trend to continue.

Re/Max and Royal LePage see prices rising by 3.7% and 3.2% respectively.  Both firms say homebuyers, especially millennials, have adjusted to the government “stress test” and are coming back to the market after stepping to the sidelines back in 2018.

CMHC measures the recovery in terms of the market falling in line with economic fundamentals.  Its concerns with overvaluation and rampant price acceleration are easing especially for the hot markets of Toronto and Vancouver.  The agency says the current outlook “does not imply that overvaluation and/or price acceleration … will necessarily worsen”.  But with ongoing, ultra-low interest rates, and the prospect of a Bank of Canada rate cut sometime in 2020 there is no implication there will be an improvement either.  By First National Financial. 

Ontario Housing Market Update by Genworth

Merix Financial shared the December 2019 Regional Risk Reports courtesy of our partners at Genworth Canada.  XXX.   View the full report for your province here. 

LSTAR News Release for December 2019 – The Third Best Year in the History of LSTAR

2019 proved to be not only a solid year for real estate in the London-St Thomas area, but also the third best year for sales activity since the Association began tracking its performance back in 1978.

469 homes traded hands in LSTAR’s jurisdiction in December, which brings the total number of 2019 residential transactions recorded via MLS® to 10,125 – up 3.4% over 2018. This is only the third time that sales surpassed 10,000 units. It happened for the first time in 2016 and then again in 2017, a record year with more than 11,000 home resales.

“For the local REALTORS®, 2019 started strong and continued on the same note, with three monthly records in July, October and November,” said 2019 LSTAR President Earl Taylor. “For the most part of the year, LSTAR’s overall sales-to-new-listings ratio hovered around the 70% mark. However, toward the end of the year its value jumped significantly, to reach 110.1%. This means that Sellers have the upper hand in home sales negotiations here. It also speaks to the high buyer demand and the lack of local housing supply,” Taylor explained.

Overall, the December average home price was $426,539, up 15.1% compared to December 2018. The year-to-date average home price in LSTAR’s jurisdiction sits at $409,858.

Looking at London’s three main geographic areas, the average home price in London East was $356,065, up 25.4% from last December.

In London South (which includes data from the west side of the city), the average home sales price was $454,455, up 7.9% compared to the previous year, while London North saw an increase of 20.8% over last December, with an average home sales price of $515,958.

The following chart is based on data taken from the CREA National Price Map for December 2019 (the latest CREA statistics available). It provides a snapshot of how home prices in London and St. Thomas compare to some other major Ontario and Canadian centres.

Canadian buyers increasingly worried about qualifying for mortgage

Ninety-two percent of Canadians see at least one barrier to home ownership, and two of the top concerns are related to the mortgage process, according to a recent survey from Zillow and Ipsos.

Canadians report feeling pressured by stricter mortgage regulations that went into effect in 2018 and Zillow’s survey found that 56% of Canadians see qualifying for a mortgage as a barrier to home ownership—a six-point increase from 2018. This concern rises to 64% for consumers who recently purchased a home, likely linked to the impending mortgage regulation changes at the time of their home search.

New and stricter mortgage requirements took effect in January 2018 with the addition of a stress test, requiring borrowers to qualify under a higher rate. The rule only applies to newly originated mortgages and is designed to prevent borrowers from taking on more debt than they can handle if interest rates go up. Since its passing, buyers’ worries are growing according to the survey. Half of Canadians (51%) say they are specifically concerned that stricter rules will prevent them from qualifying for a mortgage, up five points since 2018.

Steve Garganis, lead mortgage planner with Mortgage Architects in Mississauga, said that the concerns have risen due to more information flowing to consumers.

“Canadians are surprised to learn that even a large down payment won’t guarantee you a mortgage approval. Got 30%, 40%, 50%, 60% down payment and great credit? Guess what?  You still may not qualify for a mortgage. This is ridiculous, in my opinion,” Garganis said. “Those of us with years of experience in risk mitigation and credit adjudication know that if you have a large down payment, the chances of default are slim and none. Chances of any loss to the lender is nil.”

Younger home shoppers also feel the weight of the law. Sixty-nine percent of younger home shoppers, those between 18-34 years old, are concerned about qualifying for a mortgage under the stricter guidelines. This worry is also present for current renters who may be considering the purchase of their first home: 66% express concerns about mortgage qualification under stricter guidelines.

This despite a recent CMHC survey that found homebuyers were overwhelmingly in favour of the stress test, agreeing that the measure would help prevent Canadians from shouldering mortgages that they couldn’t afford.

Garganis added that more Canadians are being forced back to the six big banks, as smaller lenders now have more costs in raising funds to lend. This results in Canadians paying more than they should.

Most people have heard the buzz word “stress test” but don’t really know what it means or know the specifics of what it did, said Jeff Evans, mortgage broker with Canada Innovative Financial in Richmond, B.C. He thinks that the higher qualifying standard is “quite unreasonable,” and that the government has “taken a hatchet to anything to do with helping the average Canadian to own a home.”

Evans says that Canadians have a right to be concerned, although there’s no sign of their concerns hampering their desire to purchase a home.

“Life has gone on. They qualify for less, the market has gone down primarily because of the changes the government has made, so it’s starting to get more affordable again and people are gradually coming into the market as it becomes more affordable, “Evans said.

Other perceived barriers to home ownership include coming up with a down payment (66%), debt (56%), lack of job security (47%), property taxes (46%), not being in a position to settle down (15%), or not being enough homes for sale (13%). Only 8% of Canadians claim not to see any barriers to owning a home.  By Kimberly Greene.

Weak New Listings Slow Canadian Home Sales as Prices Continue to Rise

Statistics released today by the Canadian Real Estate Association (CREA) show that national existing-home sales dipped between November and December owing to a dearth of new listings, especially in the GTA.

National home sales edged down 0.9% in the final month of 2019, ending a streak of monthly gains that began last March. Activity is now about 18% above the six-year low reached in February 2019 but ends the year about 7% below the peak recorded in 2016 and 2017 (see chart below).

There was an almost even split between the number of local markets where activity rose and those where it declined, with higher sales in the Lower Mainland of British Columbia, Calgary and Montreal offsetting declines in the Greater Toronto Area (GTA) and Ottawa.

Actual (not seasonally adjusted) activity was up 22.7% compared to the quiet month of December in 2018. Transactions surpassed year-ago levels across most of Canada, including all of the largest urban markets.

The December decline in home sales is not a sign of weakness but is instead the result of diminishing supply. Excess demand continues to push up prices in most regions of Canada. Demand has been boosted by low interest rates, strong population growth and strong labour markets that have triggered significant gains in household incomes. Mitigating this, in part, is the mortgage stress-test, which continues to sideline some potential buyers.

According to Gregory Klump, CREA’s Chief Economist, “The momentum for home price gains picked up as last year came to a close. If the recent past is prelude, then price trends in British Columbia, the GTA, Ottawa and Montreal look set to lift the national result this year, despite the continuation of a weak pricing environment among housing markets across the Prairie region.”

New Listings

The number of newly listed homes slid a further 1.8% in December following a 2.7% decline the month before, leaving supply close to its lowest level in a decade.

Slightly higher sales and a drop in new listings further tightened the national sales-to-new listings ratio to 66.3%, which is well above the long-term average of 53.7%. If current trends continue, the balance between supply and demand makes further home price gains likely.

December’s drop was driven mainly by fewer new listings in the GTA and Ottawa–the same markets most responsible for the decline in sales. Listings available for purchase are now running at a 12-year low. The number of housing markets with a shortage of listings is on the rise; should current trends persist, fewer available listings will likely increasingly weigh on sales activity.

With new listings having declined by more than sales, the national sales-to-new listings ratio further tightened to 66.9% in December 2019 – the highest reading since the spring of 2004. The long-term average for this measure of housing market balance is 53.7%. Price gains appear poised to accelerate in 2020.

Considering the degree and duration to which market balance readings are above or below their long-term averages is the best way of gauging whether local housing market conditions favour buyers or sellers. Market balance measures that are within one standard deviation of their long-term average are generally consistent with balanced market conditions.

Based on a comparison of the sales-to-new listings ratio with the long-term average, just over half of all local markets were in balanced market territory in December 2019. That list still includes Greater Vancouver (GVA) but no longer consists of the GTA, where market balance favours sellers in purchase negotiations (see chart below). By contrast, an oversupply of homes relative to demand across much of Alberta and Saskatchewan means sales negotiations remain tilted in favour of buyers. Meanwhile, an ongoing shortage of homes available for purchase across most of Ontario, Quebec and the Maritime provinces means sellers there hold the upper hand in sales negotiations.

The number of months of inventory is another important measure of the balance between sales and the supply of listings. It represents how long it would take to liquidate current inventories at the current rate of sales activity. There were 4.2 months of inventory on a national basis at the end of December 2019 – the lowest level recorded since the summer of 2007. This measure of market balance has been falling further below its long-term average of 5.3 months. While still within balanced market territory, its current reading suggests that sales negotiations are becoming increasingly tilted in favour of sellers.

There remain significant and increasing disparities in housing market activity across regions of Canada. The number of months of inventory has swollen far beyond long-term averages in Prairie provinces and Newfoundland & Labrador, giving homebuyers ample choice in these regions. By contrast, the measure is running well below long-term averages in Ontario, Quebec and Maritime provinces, resulting in increased competition among buyers for listings and providing fertile ground for price gains. The measure is still within balanced market territory in British Columbia but is becoming increasingly tilted in favour of sellers.

Home Prices

The Aggregate Composite MLS® Home Price Index (MLS® HPI) rose 0.8%, marking its seventh consecutive monthly gain. It is now up nationally 4.7% from last year’s lowest point posted in May. The MLS® HPI in December was up from the previous month in 14 of the 18 markets tracked by the index. ( see table below).

Home price trends have generally been stabilizing in the Prairies in recent months following lengthy declines but are clearly on the rise again in British Columbia and Ontario’s Greater Golden Horseshoe (GGH). Further east, price growth in Ottawa and Montreal has been ongoing for some time and strengthened toward the end of 2019.

Comparing home prices to year-ago levels yields considerable variations across the country, although for the most part has been regionally split along east/west lines, with declines in the Lower Mainland and major Prairie markets and gains in central and eastern Canada.

The actual (not seasonally adjusted) Aggregate Composite MLS® (HPI) rose 3.4% y-o-y in December 2019, the biggest year-over-year gain since March 2018.

Home prices in Greater Vancouver (-3.1%) and the Fraser Valley (-2%) remain below year-ago levels, but declines are shrinking. Elsewhere in British Columbia, home prices logged y-o-y increases in the Okanagan Valley (+4.2%), Victoria (+2.3%) and elsewhere on Vancouver Island (+4.2%). Calgary, Edmonton and Saskatoon posted y-o-y price declines of around -1% to -2%, while the gap has widened to -4.6% in Regina.

In Ontario, home price growth has re-accelerated well above consumer price inflation across most of the GGH. Meanwhile, price gains in recent years have continued uninterrupted in Ottawa, Montreal and Moncton.

All benchmark home categories tracked by the index accelerated further into positive territory on a y-o-y basis. One-storey single-family home prices posted the most significant increase (3.6%) followed closely by apartment units (3.4%) and two-storey single-family homes (3.3%). Townhouse/row unit prices climbed a slightly more modest 2.7% compared to December 2018.

The actual (not seasonally adjusted) national average price for homes sold in December 2019 was around $517,000, up 9.6% from the same month the previous year.

The national average price is heavily skewed by sales in the GVA and GTA, two of Canada’s most active and expensive housing markets. Excluding these two markets from calculations cuts more than $117,000 from the national average price, trimming it to around $400,000 and reducing the y-o-y gain to 6.7%.

Economic Highlights

Capital Market Update. Market Commentary: A review of the latest employment numbers, rates and more

Welcome to the 2020 edition of your favourite market commentary.  A lot has happened in the last couple weeks, but I made a New Year’s resolution to not live in the past. So, I probably won’t cover any of it.

See? 2020 is already off to a great start. It really helps when you set achievable goals. 

Rates

Where are rates headed these days? That’s a good question. So, if you find out let me know. What I do know is that the current 5-year GoC bond is yielding 1.61% and the 10-year is yielding 1.60%. There’s still a slight inversion in the 5-10 area of our yield curve (also known as the belly). The 30-year GoC is currently yielding 1.71%.  The 5 and 10s are about 6 bps higher than a week ago and only 2 bps higher than this time in December.  Maybe we didn’t miss much after all.

On the credit curve, 5-year Canada Mortgage Bond’s are currently yielding 1.88% and 10-year CMB’s are yielding 1.96%. That’s about 2 bps wider in the 5-year from a month ago and unchanged from a month ago for the 10-year. Compared to the same time last year, the 5-year is 41 bps lower and the 10-year is 52 bps lower. What I am trying to get across is that it’s still a very good time to be a borrower in the Canadian real estate market. Talk to your favourite First National originator today.

Economic News

After November’s UGLY employment number of -71.2K jobs, all eyes were on December’s employment numbers this morning. If you recall, that number also left us with a 0.4 bp rise in the unemployment rate, the worst reading in a decade.

So how did December do? Much better.  Canadian jobs came in at +35.2K and the unemployment rate retraced 0.3% of the November increase (unemployment rate is now 5.6%).  The underlying details were mostly positive, with the hiring coming in full-time employment and roughly split between the goods (+15.7K) and services(+19.4K) sector. Remember, if the gain was only in seasonal and part-time work in services that would not be nearly as positive.  I say mostly positive because wage growth, the bane of the Canadian economy, had a larger than expected slowdown. Wage growth was expected to be 4.4% year-over-year and the number came in at 3.8%. The 3.8% wage growth number is still a strong number. I mean its higher than the inflation rate, but have you seen the prices of organic CBD-infused kombucha drinks recently? It’s absurd. How are millennials supposed to live?

Bank of Canada

It’s been a while since we spoke about our favourite central bank. The big news was that the Governor, Stephen Poloz, will be stepping down this year. If you’re interested in applying, you can do so at the link below. Just don’t use me as a referral –https://econjobmarket.org/positions/6410.

Speaking of our soon to be ex-Governor, Mr. Poloz gave a speech yesterday in which he covered a variety of topics including: inter-provincial free trade, data dependency, labour and housing.  Overall, he wasn’t in the cheeriest mood with housing being of concern for the BOC with real estate expectations adding froth and increasing household debt levels. On the global trade side, Poloz noted that although there’s still much uncertainty, damage from the global trade conflict is likely to be permanent. Of note to me, he also spoke about the “outrageous” lack of internal free trade in Canada. I would have to agree. Everyone knows beer is cheaper at Quebec Costco’s.

Overall, the market is looking to July for the next rate cut by the Bank of Canada. If you’re a betting person, those odds are sitting at 35%.

Finally, I almost forgot that brevity was another of my New Year’s resolutions. See you on the flip side.  By Andrew Masliwec, Analyst, Capital Markets, First National Financial. 

Mortgage Interest Rates

Prime lending rate is 3.95%.  Bank of Canada Benchmark Qualifying rate for mortgage approval is at 5.19%.  Fixed rates are holding steady.  Deep discounts are offered by some lenders for variable rates making adjustable variable rate mortgages somewhat attractive, but still not a significant enough spread between the fixed and variable to justify the risk for most.

 

 

Industry & Market Highlights 

CMHC

Statistics released by the Canadian Real Estate Association (CREA) show that national home sales increased in April with most markets recording increases in both transactions and prices.

The number of homes sold rose 3.6% compared with March, on a seasonally adjusted basis. The rebound in sales over the past two months still leaves activity slightly below readings posted over most of the second half of 2018, having dropped in February of this year to its lowest level since 2012.

April sales were up in about 60% of all local markets, with the Greater Toronto Area (GTA) accounting for over half of the national gain.

Actual (not seasonally adjusted) sales activity was up 4.2% year-over-year (y-o-y) in April (albeit from a seven-year low for the month in 2018), the first y-o-y gain since December 2017 and the largest in more than two years. The increase reflects improvements in the GTA and Montreal that outweighed declines in the B.C. Lower Mainland.

“Sales activity is stabilizing among Canada’s five most active urban housing markets,” said Gregory Klump, CREA’s Chief Economist. “That list no longer includes Greater Vancouver, which fell out of the top-five list for the first time since the recession and is well into buyers’ market territory. Sales there are still trending lower as buyers adjust to a cocktail of housing affordability challenges, reduced access to financing due to the mortgage stress-test and housing policy changes implemented by British Columbia’s provincial government,” said Klump.

New Listings

The number of newly listed homes rose 2.7% in April, adding to the 3.4% increase in March. New supply rose in about 60% of all local markets, led by the GTA and Ottawa.

With sales up by more than new listings in April, the national sales-to-new listings ratio tightened marginally to 54.8% from 54.3% in March. This measure of market balance has remained close to its long-term average of 53.5% since early 2018.

Based on a comparison of the sales-to-new listings ratio with the long-term average, about three-quarters of all local markets were in balanced market territory in April 2019.

There were 5.3 months of inventory on a national basis at the end of April 2019, down from 5.6 and 5.5 months in February and March respectively and in line with the long-term average for this measure.

Housing market balance varies significantly by region. The number of months of inventory has swollen far beyond long-term averages in Prairie provinces and Newfoundland & Labrador, giving homebuyers their ample choice. By contrast, the measure remains well below long-term averages in Ontario and Maritime provinces, resulting in increased competition among buyers for listings and fertile ground for price gains.

Home Prices

The Aggregate Composite MLS® Home Price Index (MLS® HPI) appears to be stabilizing, having edged lower by 0.3% y-o-y in April 2019. Among benchmark property categories tracked by the index, apartment units were again the only one to post a y-o-y price gain in April 2019 (0.5%), while two-storey there was little change in single-family home and townhouse/row unit prices from April 2018 (-0.3% and -0.2%, respectively). By comparison, one-storey single-family home prices were down by -1.4% y-o-y.

Trends continue to vary widely among the 18 housing markets tracked by the MLS® HPI. Results remain mixed in British Columbia, with prices down on a y-o-y basis in Greater Vancouver (GVA; -8.5%) and the Fraser Valley (-4.6%), up slightly in the Okanagan Valley (1%) and Victoria (0.7%), while climbing 6.2% elsewhere on Vancouver Island.

Among Greater Golden Horseshoe housing markets tracked by the index, MLS® HPI benchmark home prices were up from year-ago levels in the Niagara Region (6.2%), Guelph (5.1%), Hamilton-Burlington (4.6%) the GTA (3.2%) and Oakville-Milton (2.5%). By contrast, home prices in Barrie and District held below year-ago levels (-5.3%).

Across the Prairies, supply remains historically elevated relative to sales and home prices remain below year-ago levels. Benchmark prices were down by 4.6% in Calgary, 4% in Edmonton, 4.3% in Regina and 1.7% in Saskatoon. The home pricing environment will likely remain weak in these cities until demand and supply return to better balance.

Home prices rose 7.8% y-o-y in Ottawa (led by an 11% increase in townhouse/row unit prices), 6.3% in Greater Montreal (driven by a 7.8% increase in apartment unit prices), and 1.8% in Greater Moncton (led by an 11.5% increase in apartment unit prices).

Bottom Line:

The spring rebound in home sales is most evident in Toronto, where transactions climbed 11%, and prices rose 1.3%. Of 19 major markets tracked by the Ottawa-based real estate association, 16 recorded price gains last month.

One huge exception is Vancouver, which continues to soften. Benchmark home prices in that city were down 0.3% in April and have fallen 8.5% over the past 12 months. Even with the widespread rebound, national home sales are still below historical averages.

Economic fundamentals — from substantial employment gains to a sharp increase in immigration — remain supportive. Governor Poloz said earlier this week that he expects the housing markets to return to a more normal pace in the second half of this year. Benjamin Tal, the deputy chief economist at CIBC, reported yesterday that housing demand is stronger than suggested by official figures. Tal said incorrectly counting the number of students who live outside of their parents’ home for the majority of the year is problematic because it doesn’t provide a real sense of supply and demand in the country’s housing market.

Also supportive for housing is the dovish tilt globally from central banks that have helped bring down borrowing costs in recent months. Rates to renew a five-year mortgage aren’t much higher than they were when the mortgages were taken out, according to National Bank research. That means “no payment shock” for the 17.4% of mortgages renewing in 2019.  By Dr. Sherry Cooper.  Chief Economist, Dominion Lending Centres.

Dirty money in the real estate market  

Some startling numbers released last week show how deeply Vancouver real estate is influenced by money laundering.

A report prepared for the British Columbia government says about $7.4 billion was laundered through the province in 2018.  More than two-thirds of that money, about $5 billion, was used to buy real estate.

It is estimated that money laundering activity raised the benchmark price of a home in B.C. by an average of 5%.  Popular and high-priced markets like Victoria and Greater Vancouver likely felt even bigger impacts, but separate numbers were not provided.

The report by Maureen Maloney, a law professor who chairs B.C.’s expert panel on money laundering in real estate, says the problem is even worse in Alberta, Ontario and the Prairies.  It is estimated that more than $40 billion was laundered through Canada last year.

The B.C. government is taking aim at money laundering in real estate with the Land Owner Transparency Act.  The legislation would create a public real estate registry that would clearly show who owns what.  One estimate, from 2016, put one-third of the most expensive properties in the Vancouver region under the ownership of opaque entities such as numbered companies.

The Maloney report goes a step further though, recommending the province implement “unexplained wealth orders”.  These would force people to prove they made purchases with legitimate money or have their property seized.  The orders would not require criminal charges or even any evidence of criminal activity.  They have been roundly condemned by civil rights organizations.  By First National Financial.

BoC: Financial system is stable 

The Bank of Canada is maintaining its optimistic outlook for the country’s economy – but…

The central bank’s latest Financial System Review says two persistent problems remain and two others are on the rise.

High household debt and imbalances in the housing market continue to represent the greatest threats to the financial system, while the increasing chance of a recession and riskier corporate borrowing are adding to concerns.

The household debt-to-income level in Canada closed-out 2018 at nearly 180%.  That is $1.80 owing for every dollar of disposable income.  Canada’s corporate debt-to-income level now stands at 315%.  A growing amount of that borrowing is being done through the U.S. bond market and being paid in U.S. dollars.  Smaller firms and those with lower credit ratings are turning to the syndicated loan market, which could subject them to the changing whims of investors.

Bank of Canada governor Stephen Poloz is more confident about what is happening in housing.

“New measures have curbed borrowing, reduced speculative behaviour in housing markets and made the financial system more resilient,” he said in the report.

“While the fundamentals in the housing sector remain solid overall, and the sector should return to growth later this year, we continue to monitor these vulnerabilities closely.”  By First National Financial. 

Creeping rate cut speculation

In the run up to this week’s rate setting by the Bank of Canada, talk of a coming rate cut is creeping into the forecast.

A recent Reuters poll of 40 economists put the chances of a cut, within the next 12 months, at 40%.  However, the same poll but the chances of a cut, within this year, at about 20%.

Many of the economists cite global trade uncertainties – which are stalling economic growth in Canada and other countries – as the key trigger for a possible 25 basis-point reduction.  Most of the concern centres on the current China – U.S. tensions and the potential for a recession in the States rather than domestic, Canadian, factors.

Realistically, it is unlikely there will be any interest rate movement – down or up – in Canada before 2020.  The BoC is calling for moderate GDP growth through the second half of this year.  As well, the politics surrounding the October federal election will keep the bank on the sidelines.

In a separate Reuters poll, property market gurus predict home prices will remain in the doldrums for the rest of 2019.  They are forecasting a little breeze next year that will push prices up by about 1.7%, which will barely meet the rate of inflation.  The Canadian Real Estate Association is forecasting a 1.6% decline in sales for this year, with a 2.0% increase in 2020.

The market-watchers polled by Reuters point to debt-burdened consumers as the key reason for the slowdown.  By First National Financial. 

Toronto is steadily becoming a sellers’ market – TREB analysis

Toronto is in a gradual trajectory towards being a sellers’ market, with home sales last month shooting up and supply remaining virtually static.

According to latest figures from the Toronto Real Estate Board, the city saw 9,989 home sales through the Board’s MLS System in May. This represented an 18.9% increase from the 15-year low for the month, which was seen last year.

TREB president Garry Bhaura emphasized, however, that last month’s numbers are still markedly below the long-term May average of 10,300, despite the tangible improvements from the glacial pace at the beginning of 2019.

“Sales activity continues to be below the longer-term norm, as potential home buyers come to terms with the OSFI mortgage stress test and the fact that listings continue to be constrained relative to sales,” Bhaura explained.

On the whole, the market is still seeing a positive trend, the Board head assured.

“After a sluggish start to 2019, the second quarter appears to be reflecting a positive shift in consumer sentiment toward ownership housing. Households continue to see ownership housing in the GTA as a quality long-term investment as population growth from immigration remains strong and the regional economy continues to create jobs across diversity of sectors.”

In comparison, listings ticked up by a mere 0.8%, ending up at 19,386 properties for sale. Intensified market competition pushed sales prices up by 3.6% annually, up to an average of $838,540. Said increases in value considerably outpaced the year-over-year gains seen in April (1.9%) and March (0.5%).

TREB warned that while the market can absorb single-digit annual price increases, continued scarcity in housing supply could aggravate price growth to unsustainable levels.

“This potential outcome underpins calls from TREB and other housing industry stakeholders to address roadblocks preventing a more sustainable and diverse supply of housing reaching the market,” the Board’s chief market analyst Jason Mercer stated.

“Many households are not comfortable listing their homes for sale because they feel that there are no housing options available to better meet their needs.”  By Ephraim Vecina.

Economic Highlights

Another Strong Employment Report Signals Rebound In Canadian Economy  

It appears that the Bank of Canada’s optimism that the Canadian economy’s growth will pick up in the third and fourth quarters of this year is well founded. Not only was the employment report very robust for two consecutive months, but the jobless rate has fallen to its lowest level since at least 1976.

Also, Canada’s trade deficit, reported today, hit a six-month low in April, as exports continue to rebound from a recent slump. Consumer spending and business investment are also making a big comeback. Household spending has accelerated, despite concerns over bloated debt loads, assisted by easing rates on loans, substantial jobs gains, stabilizing housing markets and improving financial markets.

The Bank of Canada forecasts that growth will accelerate to an annualized 1.3% in the second quarter–following the meagre 0.4% expansion in Q1–and pick up further in the second half of this year, before accelerating back to above 2% growth by 2020. This comeback begs the question–why were markets expecting a rate cut by the bank in December? That expectation may well change after this morning’s Statistics Canada releases. Of course, one caveat remains, which is the uncertainty surrounding a trade war with China and Mexico. If the trade situation were to worsen, Canada’s economy would undoubtedly be sideswiped.

Canadian employment rose by 27,700 in May, bring the number of jobs created over the past year to a whopping 453,100. The jobless rate plunged to 5.4%, from 5.7% in April, the lowest in data going back to 1976. Economists had been forecasting employment to rise by only 5,000 last month after Canada recorded a record gain of 106,500 in April. The loonie jumped on the news.

The composition of the job gain was particularly heartening, as the rise was all in full-time employment. On the other hand, jobs by those who are self-employed increased by 61,500–the gig economy is alive and well.

The most substantial job gains were in Ontario and BC.

Wage growth continued to be strong in May as pay gains for permanent workers sere steady at 2.6%.

In direct contrast, the US jobs report, also released today, was weaker than expected. US payrolls and wage gains cooled as Trump’s trade war weighed on the economy. US employers added the fewest workers in three months, and wage gains eased, suggesting broader economic weakness and boosting expectations for a Federal Reserve interest-rate cut as President Donald Trump’s trade policies weigh on growth.  

Mortgage Interest Rates

Prime lending rate is 3.95%.  Bank of Canada Benchmark Qualifying rate for mortgage approval remains at 5.34%.  Fixed rates have dropped between 10-15 basis points in the last two weeks.  Deep discounts are offered by some lenders for variable rates making adjustable variable rate mortgages somewhat attractive, but still not a significant enough spread between the fixed and variable to justify the risk for most.

Other Industry News & Insights

Roundup of the latest mortgage and housing news.

From Mortgage Professionals Canada.

• Toronto home sales jump 18.9% as spring selling season heats up (BNN Bloomberg)
• Vancouver home sales rise 44.2% in May, but market still sluggish (BNN Bloomberg)
• BC residents think the government’s affordable housing initiatives aren’t helping (Livabl)
• Canadian Reverse Mortgage Debt Makes Largest Jump Since October (Better Dwelling)
• Consumers risk predatory lending in current environment (Canadian Real Estate Wealth)
• Toronto Is The Fastest-Growing City In U.S. And Canada, And That’s Not Good (Huffington Post)
• Construction costs keep rising in Canada, and it’s hitting homebuyers in the wallet (Livabl)
• Regional condo sales trends continue to diverge (Canadian Real Estate Wealth)
• Canadian Housing Is The Least Affordable In The World… For Local Incomes (Better Dwelling)
• Homebuyers escaping high housing costs by relocating to secondary cities (BNN Bloomberg)
• Canadian housing affordability just saw its biggest improvement in 5 years (Livabl)
• Mortgage Professionals Canada appears before FINA to testify on Bill C-97
• New mortgage loans slowed in Canada but overall value is still rising, says CMHC (CBC)
• Data Reveals Decrease in Non-Resident Home Purchases in GTA (Point2Homes)
• Canada’s big-city housing markets are all at different stages of the cycle, April figures show (Vancouver Sun)
• Wood frame buildings could help alleviate ‘missing middle’ shortage (Canadian Real Estate Wealth)
• Once a contender for Canada’s hottest market, Hamilton housing is weak this spring (Livabl)
• IMF urges Canada not to change policy despite calls to ease mortgage stress test (CBC)
• Canadian House Price Forecast: What The Next 5 Years Will Look Like In 33 Cities (Huffington Post)
• Only 3 Canadian Real Estate Markets Are Still Printing Peak Prices (Better Dwelling)
• Housing Market Vulnerabilities Diminish in Canada (Point2Homes)
• High household debt, possible housing market shocks are main risks to the economy: Bank of Canada (CBC)
• When it comes to money laundering in real estate, there are more unknowns than knowns (Vancouver Sun)
• ‘I would frown upon it’: Poloz on calls to loosen mortgage rules (BNN Bloomberg)
• Toronto 2-bedroom rents are still hovering near $3,000 in May (Livabl)
• Ultra high net worth buyers are pushing Toronto luxury home prices even higher (Livabl)
• Vancouver Detached Real Estate Sales Drop To 20 Year Low, Prices Roll Back 3 Years (Better Dwelling)
• Toronto Detached Real Estate Sales Rise, But Still Second Weakest April In 10 Years (Better Dwelling)
• National Home Sales Rebound in April: CREA (Canadian Mortgage Trends)
• Vancouver’s Dirty Money Figures: The Smoking Gun That Wasn’t (Bloomberg)
• B.C. to hold public inquiry into money laundering (BNN Bloomberg)
• The Bank of Canada is underestimating the housing slump, Capital Economics warns (Vancouver Sun)
• Why criminals look to Canada to launder their money through real estate (BNN Bloomberg)
• Time to ditch the homeownership dream? The debate rages on (BNN Bloomberg)
• Interest-Only Mortgages Have Come To Canada, But Do We Really Need This ‘Innovation’? (Huffington Post)
• Where are Canadian interest rates heading in 2019? It depends on who you ask (Livabl)
• What $2-million will buy in five Canadian real estate markets (Maclean’s)

There is never a better time than now for a free mortgage check-up.  It makes sense to revisit your mortgage and ensure it still meets your needs and performs optimally.  Perhaps you’ve been thinking about refinancing to consolidate debt, purchasing a rental or vacation property, or simply want to know you have the best deal?  Whatever your needs, we can evaluate your situation and help you determine what’s the right and best mortgage for you.

Industry & Market Highlights 

Bank of Canada key interest rate announcement

The Bank of Canada left its key interest rate unchanged, as expected, at 1.75 per cent.

This announcement came in the wake of a move by the Alberta government to curtail oil production in the province after Jan. 1 to try to clear a crude storage glut that has driven western Canadian oil prices to multi-year lows.

Meanwhile, the recently announced plan to close the General Motors of Canada car plant in Oshawa similarly offers a downside risk to future growth.

Bank economists say an unexpected dip in monthly gross domestic product figures in September and lower-than-expected oil prices so far in the fourth quarter have dampened growth expectations and placed in doubt forecasts for a January bank rate increase.

Lower growth prospects are expected to reinforce Bank of Canada Governor Stephen Poloz’s strategy of moving very gradually on increases to its overnight rate.

Economists say they will be closely watching Poloz’s speech on Thursday for signs of how events are affecting his view of the path forward.  By The Canadian Press.

  

LSTAR’s News Release for November 2018 – Strong Home Sales Continue in November 

London and St. Thomas Association of REALTORS® (LSTAR) announced 746 homes* were sold in November, up 6.7% over November 2017. The number of home resales was the second highest total ever for November since LSTAR began tracking data in 1978. November 2016 holds the record with 749 home resales, only three more than November 2018.

“In November, we saw more positive signs with new listings in the marketplace, which contributed to the robust sales activity,” said Jeff Nethercott, 2018 LSTAR President. “November had 898 new listings, an increase of 17.5% over the same month last year. The area of London East continues to be making healthy gains in both new listings and average sales price. It had 192 new listings, up 24.7 % from November 2017, where the average sales price was $302,737, up 18.7% from 2017 and up 58.9% compared to five years ago. Going back further, that’s up 75.0% compared to 10 years ago.”

Average sales price also made steady gains in the major geographic areas in London. In London North, the average sales price was $482,202, up 24.4% from last November and up 62.4% compared to the same month five years ago. It’s an increase of 98.7% compared to the average sales price in 2008.

“Similar to October, we saw inventory (what is called active listings) making slight gains, despite the overall record low inventory that dominated our marketplace this year,” Nethercott said. “Last month, LSTAR’s jurisdiction had 1,391 active listings, up 7.6% from November 2017. The sales-to-new listings ratio was 83.1%, which the Canadian Real Estate Association (CREA) says represents conditions in the marketplace that favour sellers (a ratio between 40% and 60% is generally consistent with a balanced market). Looking at the major centres, St. Thomas had the highest sales-to-new listings ratio at 97.0%.”

A total of 65 homes were sold in November, up 10.2% from November 2017. The average home sales price in St. Thomas was $304,618 up 13.1% from a year ago and up 43.5% compared to five years ago. It’s also up 78.6% from 10 years ago.

The following chart is based on data taken from the CREA National MLS® Report for October 2018 (the latest CREA statistics available). It provides a snapshot of how average home prices in London and St. Thomas compare to other major Ontario and Canadian centres.

According to a research report¹, one job is created for every three real estate transactions and approximately $53,000 in ancillary spending is generated each time a home changes hands in Ontario. “It’s turning out to be another exceptional year for real estate across London and St. Thomas,” Nethercott said. “The business of real estate touches every layer of our regional economy, with November resale activity generating potentially more than $39 million and helping create approximately 248 jobs. The impact to economic growth is priceless.”

The London and St. Thomas Association of REALTORS® (LSTAR) exists to provide its REALTOR® Members with the support and tools they need to succeed in their profession. LSTAR is one of Canada’s 15 largest real estate associations, representing over 1,700 REALTORS® working in Middlesex and Elgin Counties, a trading area of 500,000 residents. LSTAR adheres to a Quality of Life philosophy, supporting growth that fosters economic vitality, provides housing opportunities, respects the environment and builds good communities and safe neighbourhoods and is a proud participant in the REALTORS Care Foundation’s Every REALTOR™ Campaign.

*These statistics are prepared for LSTAR by the Canadian Real Estate Association (CREA) and represent a data snapshot taken on December 1, 2018, based on processed home sales activity between November 1 and 30, 2018.

Predictions on a Cooling Down of the Real Estate Market 

For the first time since 2007 we are seeing an inverted Bond Yield Curve, and indicator that a potential bear market is ahead for stock markets and a cooling of other related markets.  Join Mike Maloney as he reveals an important factor of the partial Yield Curve inversion that is being ignored by mainstream news and media. Then stick around to the end of the video to see yet another indicator that is suggesting a huge change in markets could be upon us.  You can watch a full presentation by Mike Maloney HERE.

CMHC Announced that the cooling down of the Real Estate Market is finally here and predict that we will see house prices and mortgage rates moderate throughout 2019 into 2020.  Many economists have been claiming the prime rate increases (currently at 3.95%) are only cooling down the remainder of an extremely hot real estate housing market. Hopefully in London the pressure of having multiple offers are soon behind us.  Read more on CMHC Announcement HERE.

CIBC economist Benjamin Tal explains we are nearing comparable times to what the markets were like from 2007 to 2008 with the inverted bond. What does inverted bonds mean? This is where the 10 year fixed is almost side by side to the 5 year fixed. For example, today a 5 year conventional fixed rate is close to 3.94% and some banks have a 10 year special at 4.19% much like the fixed rates in 2007 where the 5 year was 5.65% and the 10 year fixed 5.75%. If you recall, in 2008 we saw the lower term products, 3-5 year fixed, quickly decrease.

In summary, CMHC and the economists say that everything is stabilizing and much like the past, we could even see some decreases on low term rates and also decreases to the prime rate and variable rate/Line of credit products.

Read Benjamin Tal’s market forecast HERE.

Economic Highlights

Canada’s Employment Numbers

Canada’s November employment numbers were stunning.  Economists had projected about 10,000 new jobs.  The economy created an amazing 94,000 jobs for the month, most of them full time.  The unemployment rate dropped to 5.6%, down 2 basis points from October and down 3 bps from a year ago.

Numbers like that usually set the stage for a lot of speculation about more interest rate hikes by the Bank of Canada, but not this time.

Two key details suggest the economy is not as robust as the headline employment number might suggest.

1Youth participation in the work force is down

2Wage growth continues to slow

For October and November the number of young people, aged 15 to 24, who wanted to work and who were employed sat at 62.5%.  That is the lowest level since 1998.  It is an indication that employers are not having any trouble finding the older, experienced help they want, suggesting there is still slack in the economy and labour pool.

Hourly wage growth, which is a key driver of inflation – which is, in turn, a key trigger for interest rate increases – came in at just 1.7% in November, compared to a year ago; the 6th straight monthly decline for wage growth.  It indicates the labour market is weaker than it appears and employers are not being compelled to raise wages to attract workers.

Then there is what the Bank of Canada, itself, is saying.  While the language used by central bankers can be downright cryptic, once you decipher what is in the economic statement that came with the latest interest rate decision it sounds a lot like “we’re just going to keep an eye on this for the time being.”  By First National Financial.

Bank of Canada’s Dovish Tone  

As was universally expected, the Bank of Canada’s Governing Council held overnight interest rates steady at 1-3/4% as it heralded a weaker outlook for the Canadian economy. The dovish tone in today’s Bank of Canada statement is in direct contrast to its attitude when it last met on October 24. Since that time, the global economy has moderated, and oil prices have fallen sharply. Troubling prospects for Alberta’s energy sector have weighed on the economy as the U.S. has expanded shale oil production. Benchmark prices for “western Canadian oil–both heavy and, more recently, light–have been pulled down even further by transportation constraints and a buildup of inventories”. The Notley government in Alberta ordered production cuts this week leading the Bank to conclude that Canada’s energy sector will be “materially weaker” than expected.

The Canadian economy grew at a 2% annual rate in the third quarter, mainly in line with the Bank’s expectation, however, September data suggest significantly less momentum going into Q4. The biggest disappointment was the plunge in business investment, which likely reflected trade uncertainty (see chart below). Business investment outside of the oil sector is likely to improve with the signing of the new trade agreement USMCA, the new federal tax measures to improve capital depreciation write-offs, and ongoing capacity constraints.

Household credit appears to be stabilizing following a significant slowdown in recent months. However, the rise in interest rates this year has had a more substantial impact on credit-sensitive spending than many had expected. For example, plunging car sales add to evidence that higher borrowing costs are dampening economic activity possibly to a more significant extent than the central bank expected. Light vehicle sales dropped 9.4% in November, the most since 2009. As well, Bank of Canada data show growth in residential mortgages decelerated to 1.4% in September on an annualized three-month basis, the weakest pace since 1982.

The Bank has raised borrowing costs five times since July 2017. New home building declined for the third consecutive quarter, down an annualized 5.9% in Q3. Moreover, according to the Toronto Real Estate Board (TREB), Toronto’s housing market posted its biggest monthly sales decline since March while prices remained little changed. Sales in Canada’s largest city fell 3.4% in November from the previous month TREB reported today (see chart below).

The housing market in the Toronto region has been stabilizing after a slowdown in sales and prices earlier this year amid more stringent mortgage-lending rules. The market picked up its pace through the summer, though sales have declined for the third month in a row.

The drop in sales could in part be attributed to a decline in new listings, which fell 26% year-over-year. “New listings were actually down more than sales on a year-over-year basis in November,” Garry Bhaura, the president of the board, said in a statement. “This suggests that, in many neighbourhoods, competition between buyers may have increased. Relatively tight market conditions over the past few months have provided the foundation for renewed price growth.”

Here is a sampling of other factors that highlight some of the headwinds confronting the Canadian economy:

Economic data have been coming in below expectations according to Citibank’s Surprise Index, which tracks the difference between market expectations for economic indicators and their actual values. This index has trended downward since last summer and has been below zero since mid-October–around the time of the Bank of Canada’s last Monetary Policy Report (MPR) and the most recent rate hike.

The Macdonald Laurier Institute’s Leading Indicator fell 0.1% in October. The composite gauge’s first decline since January 2016 was primarily driven by a pullback in S&P/TSX Composite Index, which fell 6.5% on the month, as well as marked decreases in commodity prices.

As well, inflation pressures have diminished. For example, gasoline prices have tumbled by about 25 Canadian cents back toward a dollar a litre since October. The latest policy statement says, “CPI inflation, at 2.4% in October, is just above target but is expected to ease in coming months by more than the Bank had previously forecast, due to lower gasoline prices. Downward historical revisions by Statistics Canada to GDP, together with recent macroeconomic developments, indicate there may be additional room for non-inflationary growth. The Bank will reassess all of these factors in its new projection for the January MPR.”

Bottom Line: “Governing Council continues to judge that the policy interest rate will need to rise into a neutral range to achieve the inflation target,” the bank said in the statement, adding the appropriate pace of increases will depend on the “effect of higher interest rates on consumption and housing, and global trade policy developments.”

“The persistence of the oil price shock, the evolution of business investment, and the Bank’s assessment of the economy’s capacity will also factor importantly into our decisions about the future stance of monetary policy,” the bank said.

As recently as October, investors were expecting at least three more rate hikes in 2019. Currently, those expectations have lessened to no more than two. The Bank had previously estimated the “neutral” range for overnight rates at between 2.5% and 3.5%. Today’s more dovish statement might well indicate that rate hikes over the next year will be to levels well below this neutral range.  By Dr. Sherry Cooper.  Chief Economist, Dominion Lending Centres.

Mortgage Interest Rates

Prime lending rate is 3.95%.  Bank of Canada Benchmark Qualifying rate for mortgage approval remains at 5.34%.  Fixed rates are on hold.  Deep discounts are offered by some lenders for variable rates making adjustable variable rate mortgages very attractive.

This edition of the Weekly Rate Minder shows the latest rates available for Canadian mortgages. At Dominion Lending Centres, we work on your behalf to find the best possible mortgage to suit your needs.

Explore mortgage scenarios using helpful calculators on my website: http://www.iMortgageBroker.ca

Other Industry News & Insights

Roundup of the latest mortgage and housing news.

From Mortgage Professionals Canada.

•Canada’s new construction housing market could be hit a wall, thanks to higher interest rates: TD (Livabl)

•The Ford government wants to develop the Ontario Greenbelt. Here’s why one expert thinks that’s a bad idea (Livabl)

•Consumer Insolvency Filings Spike In Canada, And It’s Likely Just The Beginning (Huffington Post)

•Here’s how the final quarter of 2018 is shaping up for the Canadian housing market (Livabl)

•Will changes to rent control mean more Toronto rental buildings? This expert says probably not (Livabl)

•Not too hot, not too cold: Vancouver’s new home market to remain stable in 2019 (Livabl)

•A ‘grey tsunami’ and the precariousness of aging for Vancouver renters (Vancouver Sun)

•These Canadian Housing Markets Took A Beating In 2018. What Does 2019 Have In Store? (Huffington Post)

•Once on top, the Canadian housing market has fallen to the bottom of this global price ranking (Livabl)

•New data shows how active foreign-homebuyers are in Metro Vancouver after big policy changes (Livabl)

•How migration impacts Vancouver’s housing prices (Vancouver Sun)

•The next Canadian interest rate hike may have just been pushed back all the way to next spring (Livabl)

•Bank of Canada holds key interest rate steady at 1.75% (CBC)

•Investors have little to fear of a housing meltdown (Canadian Real Estate Wealth)

•Here’s how Canadian household debt levels could affect the housing market in 2019 (Livabl)

•Vancouver real estate: sales and prices down to more ‘historical’ levels, says board (Vancouver Sun)

•Toronto home prices stable in November amid sharp drop in listings (BNN Bloomberg)

There is never a better time than now for a free mortgage check-up.  It makes sense to revisit your mortgage and ensure it still meets your needs and performs optimally.  Perhaps you’ve been thinking about refinancing to consolidate debt, purchasing a rental or vacation property, or simply want to know you have the best deal?  Whatever your needs, we can evaluate your situation and help you determine what’s the right and best mortgage for you.

Adriaan Driessen
Mortgage Broker
Dominion Lending Forest City Funding 10671
Cell:     519.777.9374
Fax:      519.518.1081
riebro@me.com
www.iMortgageBroker.ca
415 Wharncliffe Road South
London, ON, N6J 2M3

Lori Richards Kovac
Mortgage Agent & Administrator
Dominion Lending Forest City Funding 10671
Cell:     519.852.7116
Fax:      519.518.1081
loriakovac@icloud.com
415 Wharncliffe Road South
London, ON, N6J 2M3

Adriaan Driessen
Sales Representative & Senior Partner
PC275 Realty Brokerage
Cell:     519.777.9374
Fax:      519.518.1081
adriaan@pc275.com
www.PC275.com
415 Wharncliffe Road South
London, ON, N6J 2M3