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Archive for the 'Canadian Interest Rates' Category

The Ontario housing market continues to be red-hot. House prices have increased significantly because of supply and demand challenges, often leading buyers to go above and beyond asking prices, engaging in bidding wars in an effort to find housing in a market that can’t seem to meet the demand.

While some homeowners have enjoyed this increase in home values and sold to their own benefit, others have not been able to enter the market because of various factors, including a lack of supply, sky high prices and larger down payment requirements.

The cost of housing isn’t just impacting homeowners. Many renters are also feeling the effects as some landlords choose to arbitrarily drive up rental costs.

This has led many to call for housing reform and governmental action – and the government seems to be listening.

Just last week, the Ontario Government announced a list of measures aimed at cooling the market and making housing more affordable for all (both renters and homebuyers).

Dubbed the Fair Housing Plan, the announcement included 16 measures that, it is hoped, will do just that – make housing prices a little fairer across the province. Here are some of the highlights:

New Taxes

  • A new 15% foreign buyer tax – this means that non-Canadian citizens, non-permanent residents and non-Canadian corporations will be charged this new tax on residential properties that have 1-6 units. This tax will apply to property purchases in the Golden Horseshoe area.
  • A provision that would allow Toronto and other municipalities (if interested) to charge a tax on vacant or unoccupied units.

New Regulation

  • An expansion of rent control which will apply to all private rental units built after 1991. The goal is to protect tenants from “sudden and dramatic” rent increases.
  • Examination of ways to investigate practices like paper flipping (shadow flipping).

New Opportunities

  • Identify new opportunities for the government to create affordable housing on provincially owned surplus lands.

Supporting Developers

  • A $125 million, 5-year program aimed at encouraging the construction of new apartment buildings.
  • The creation of a new Housing Supply Team. Their goal will be to identify challenges that housing developers are facing and help them work more effectively with municipalities.

As long as supply and demand continue to be issues, Ontario’s market will continue to accelerate. These changes are expected to be a step towards easing that acceleration. You can view the full announcement here https://news.ontario.ca/opo/en/2017/04/making-housing-more-affordable.html.

What do you think? Do you think these will eventually help to cool the market? Join the conversation @teranet_social.





geo1With a July rate announcement right around the corner the Canadian interest rate guessing game begins. It has been wildly reported that one of the things that could certainly smolder a hot real estate market would be rate hikes.

2015 was an interesting year. With talk that Canada was in a recession combined with the ever dropping oil prices and a dollar that hit the floor, the Bank of Canada reduced interest rates by .25% twice, leaving Canada’s lending rate at .5% which has only been seen twice prior to 2007, before the recession in 2008 hit.

In fact, we took a look back at the Bank of Canada’s past interest rate announcements since 2007 and the results were interesting:

  • Jan 2004 – 4.25%
  • Jul 2007 – 4.5%
  • Dec 2007 – 4.25%
  • Jan 2007 – 4%
  • Mar 2008 – 3.5%.
  • April 2008 – 3%
  • Oct 2008 – 2.25%
  • Oct 2008 – 2%
  • Dec 2008 – 1.5%
  • Jan 2009 – 1%
  • Mar 2009 – .5%
  • Apr 2009 – .25%
  • June 2010 – .5%
  • July 2010 – .75%
  • Sept 2010 – 1%
  • Jan 2015 – .75%
  • July 2015 – .5%

A few points to note:

  • Interest rates have not been as low as they are now since July 2010
  • Interest rates remained at 1% from Sept 2010 – Jan 2015
  • The Bank of Canada reduced rates twice in 2015, the first time since 2009 when the BOC reduced rates 3 times during the course of the year.

Where speculation is concerned, Canada is not currently in a recession (this acknowledges the issues in Alberta) and oil prices are increasing (see more at: http://oilprice.com/Energy/Energy-General/Why-Oil-Prices-Increased-Despite-Doha-Disaster.html). Could this mean a July 2016 interest rate increase or, as was the case with April’s announcement, will the Bank of Canada maintain the status quo?

There is no doubt, should interest rates get back to 2007 levels, that this will have an impact on the housing market. Look at urban centres like Toronto and Vancouver, where the average price of a single family detached home has surpassed 1 million dollars, where a mortgage on the same property at 2007 interest rates vs todays rates would cost significantly more to repay both in bottom line cost and in massive mortgage payments. This could certainly impact demand.

Also, what is interesting is that, should rates go up, depending on how the economy is performing, it could happen as rapidly as they went down – and we saw that they went from 4.5% in July of 2007 down to .25% in under 24 months.

What are your thoughts? Join the conversation on our social networks:

Facebook: https://www.facebook.com/geowarehouse

Twitter: https://twitter.com/GeoWarehouse




geo2The Bank of Canada has done it again and for the second time this year, cut the nation’s interest rate. Widely publicized, you likely know that Canada’s lending rate is now 0.5%!

This has been in reaction to an underperforming Canadian economy – but interestingly, not so much in the Canadian housing market. In August of 2015, the Teranet-National Bank House Price Index http://www.housepriceindex.ca/default.aspx reported an increase of 1.2% from the previous month, a 7 consecutive monthly increase.

So, the housing market appears to be bustling and interest rates are at all-time lows – is it time to seize the day? 2 ways to maximize your profitability is strong marketing and maximum efficiency in your internal workflow.

Here are our tips for how to see a strong finish to 2015:

Marketing your listings

Be everywhere! Posting your listings on the MLS isn’t enough anymore. Ensure that you register with mobile apps for real estate that are marketing tools, like ViMO, Zoocasa, etc. Make sure that your listings are showing there. The more exposure you get to your listing, the better.

Marketing the brand that is you – what makes you different?

Leverage social media and mobile apps for real estate to market yourself. Outside of being able to share helpful information with prospects nurturing leads that may not be ready to buy or sell, you can establish yourself as a thought leader and a go-to source for real estate information and questions. You also increase your accessibility and connectivity to clients, prospects, partners and colleagues. Talk about what makes you different. What tools you use, what you do that makes you different from other real estate sales professionals and the best choice! You can demonstrate this by what you share.

Use the best tools to get the fastest most accurate results

The best way to maximize results in a hot market is to maximize efficiency. The more you can do in less time, the more profitable you will be. Let’s talk technology again. When taking on a new client there is immediate research that needs to be performed both related to the client and the property. Tools like GeoWarehouse provide a central place to research a property or borrower and obtain a host of other searches and documents. This platform enables you to go to single place to validate all the information you need to determine if you can move forward with your client.

Get rid of the paper – embrace electronic document signing

Remember we talked efficiency? Thanks to recent changes to the Electronic Commerce Act this past summer, you can now sign real estate documents with your clients electronically. A minor investment in a tablet and a mobile app for real estate like ViMO sets the stage for you to make your transactions paperless – whether in a face to face meeting with a client or if you are transmitting documents back and forth.

We hope that these tips help you to seize the day while interest rates are at all-time lows. For more information about the tools mentioned in this blog please visit:

Teranet-National Bank House Price Index http://www.housepriceindex.ca/default.aspx

ViMO (mobile app for real estate) http://myvimo.ca/

GeoWarehouse (web based tool) http://www.geowarehouse.ca/



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