BC’s Restart Plan | COVID-19 Update

General Angela Calla 30 Jun

Published by the Tri-Cities Chamber of Commerce 2021

The Government of British Columbia has just announced BC’s Restart Plan and outlined the road the recovery.

BC’s Restart – a four-step plan to bring BC back together will be a slow and gradual return to a more normal life, with safety and health protocols such as mask-wearing and physical distancing remaining in place and mandatory during the initial two steps of the plan.

The step-by-step plan will follow approximate timelines and will ease people and businesses slowly out of the pandemic.

Scroll down to find information on the following:

An overview of the four steps can be found below:

Click here to open image.

See the BC Government website for full details.

 

Step 1 – May 25, 2021

Step 1 begins on May 25, 2021, with at least 60% of the adult population having received Dose 1, along with stable COVID-19 case counts and COVID-19 hospitalizations.

PHO guidance under Step 1 is as follows:

  • Physical distancing and masks continue to be required in public indoor settings.
  • If you or anyone in your family feels sick stay home and get tested immediately.

Under Step 1, the following restrictions will be in place:

  • Personal Gatherings
    • Maximum of five visitors or one household allowed for indoor personal gatherings.
    • Maximum of 10 people for outdoor personal gatherings.
  • Outdoor Gatherings
    • Maximum of 10 people for seated indoor organized gatherings with safety protocols.
    • Maximum of 50 people for seated outdoor organized gatherings with safety protocols.
  • Travel
    • Recreational travel only within travel region (travel restrictions extended).
    • Non-essential travel between regions continues to be restricted.
  • Business
    • Indoor and outdoor dining for up to six people with safety protocols (not restricted to your household or bubble).
    • Liquor served until 10PM.
  • Offices and Workplaces
    • Start gradual return to workplaces.
    • Employers must continue to have a COVID-19 Safety Plan and daily health check in place.
  • Sports and Exercise
    • Indoor low-intensity group exercise allowed with limited capacity.
    • Outdoor games and practices for both adults and youth group/team sports allowed.
    • No spectators at any indoor or outdoor sports activities.

Step 2 – June 15, 2021 

Step 2 will begin when 65% or more of the adult population has received Dose 1, cases continue to decline, and COVID-19 hospitalizations are declining.

The earliest date for Step 2 is expected to be June 15, 2021.

PHO guidance under Step 2 is as follows:

  • Physical distancing and masks continue to be required in public indoor settings
    If you or anyone in your family feels sick stay home and get tested immediately.

Under Step 2, the following restrictions will be in place:

  • Personal Gatherings
    • Outdoor personal gatherings up to 50 people (birthday parties, backyard BBQs, block parties).
    • Playdates.
  • Organized Gatherings
    • Indoor seated organized gatherings of up to 50 people with a COVID-19 Safety Plan.
  • Travel
    • Provincial travel restrictions lifted.
    • Recreational travel within BC allowed.
    • BC Transit and BC Ferries offers increased service as needed.
  • Business
    • Liquor served until midnight.
    • Banquet halls can operate with limited capacity and a COVID-19 Safety Plan
  • Offices and Workplaces
    • Continued return to the workplace.
    • Small, in-person meetings allowed
  • Sports and Exercise
    • Indoor high-intensity group exercise allowed with reduced capacity.
    • Indoor games and practices for both adults and youth group/team sports allowed.
    • No spectators at any indoor sports activities.
    • Outdoor spectators up to 50 allowed.

Consultation begins in Step 2 for the next steps regarding:

  • Indoor and outdoor organized gatherings
  • Easing restrictions for businesses

Step 3 – July 1, 2021

Step 3 will begin when 70% or more of the adult population has received Dose 1, cases are low, and COVID-19 hospitalizations are declining.

With British Columbians achieving nearly 80% adult Dose 1 vaccine coverage and COVID-19 case counts continuing to decline, the Province is safely moving to Step 3 of its four-step restart plan on July 1, 2021.

Moving to Step 3 will also signal the end to the longest provincial state of emergency in BC’s history, which will be lifted on June 30 at 11:59PM.

PHO guidance under Step 3 is as follows:

  • Increased social contact
    If you or anyone in your family feels sick stay home and get tested immediately

Mask guidance under Step 3 is as follows:

  • Masks are recommended in public indoor settings for all people 12 and older who are not yet fully vaccinated
    • Those who receive the vaccine are fully vaccinated 14 days after Dose 2
    • Some people may choose to continue to wear a mask after they’re fully vaccinated and that’s okay
  • The mask mandate order under the Emergency Program Act will be lifted on July 1, and no proof of vaccination will be needed

As BC moves from Step 2 to Step 3, here are some of the new things that you can do:

  • Personal Gatherings
    • Return to usual for indoor and outdoor personal gatherings
    • Sleepovers
  • Organized Gatherings
    • Indoor organized gatherings 50 people or 50% capacity, whichever is greater
    • Outdoor organized gatherings 5,000 people or 50% capacity, whichever is greater
    • No capacity limits or restrictions on religious gatherings and worship services
    • Fairs, festivals and trade shows return to normal with a Communicable Disease Plan
  • Travel
    • Canada-wide recreational travel.
  • Business
    • Restaurants and Bars:
      • No group limits for indoor and outdoor dining, events allowed
      • Return to normal liquor service hours
      • No socializing between tables
    • Nightclubs:
      • Up to 10 people seated at tables, tables 2 m apart
      • No dancing, no socializing between tables
    • Casinos:
      • Reduced capacity
      • Gaming stations can operate at approximately 50% capacity
  • Offices and Workplaces
    • Continued return to the workplace
    • Seminars and bigger meetings allowed
    • Additional safety precautions required in higher-risk workplaces
  • Sports and Exercise
    • All indoor fitness classes allowed, normal capacity
    • Gyms and recreation facilities, normal capacity
    • Outdoor spectators 5,000 people or 50% capacity, whichever is greater
    • Indoor spectators 50 people or 50% capacity, whichever is greater

During Step 3, businesses, offices, and workplaces will gradually transition from a COVID-19 Safety Plan to a new Communicable Disease Plan, with guidelines for these plans released by WorkSafeBC. These guidelines were developed in consultation with public health and businesses will continue to be supported by WorkSafeBC and the PHO as they transition.

View the Communicational Disease Prevention Plan Guidelines released by WorkSafeBC here.

These plans will continue to include physical barriers in many business and retail settings. Capacity limits, formal health screening tests and directional arrows, as well as other physical distancing measures, will no longer be required. However, they may still be used during this transition period.

Step 4 – Early September (Earliest Date: September 7)

Step 4 will begin when more than 70% of the adult population has received Dose 1, cases are low and stable (contained clusters), and COVID-19 hospitalizations are low.

The earliest date for Step 4 is expected to be September 7, 2021.

PHO guidance under Step 4 is as follows:

  • Masks in public indoor settings a personal choice
  • Normal social contact
  • If you or anyone in your family feels sick stay home and get tested immediately.

Under Step 4, the following restrictions will be in place:

  • Personal Gatherings
    • Return to normal personal gatherings and social contact.
  • Organized Gatherings
    • Increased capacity at large organized gatherings, like a concert.
  • Travel
    • Canada-wide recreational travel.
  • Business
    • Businesses will continue to operate based on the new COVID-19 safety guidelines and their updated COVID-19 Safety Plan.
  • Offices and Workplaces
    • Workplaces fully reopened.
  • Sports and Exercise
    • Return to normal sports competitions with an updated COVID-19 Safety Plan in place.
    • Increased outdoor and indoor spectators.

Angela Calla is a 17-year award-winning woman of influence which sets her apart from the rest. She is without a doubt, a true expert in her field. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. 

In August of 2020, at the young age of 37, Angela surpassed $1 Billion dollars in funded personal mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click  here to view the latest news on our blog. 

Team Banner housing market

Low Rates Helping Borrowers Pay Off Mortgages at Record Pace

General Angela Calla 29 Jun

Home prices may be astronomical in certain parts of the country, but historically low mortgage rates are allowing borrowers to pay off their mortgages faster than ever.

At today’s average rates, 61% of a new homebuyer’s very first mortgage payment is going towards principal repayment, according to data from Edge Realty Analytics.

In the early 2000s, that percentage was 26.5%. The change is even more drastic when looking back at the 1990s, where just 11.9% of a homebuyer’s first payment went towards paying down the principal, or the 1980s, when that percentage was a minuscule 4.6%.

The result is a much faster build-up of equity over a short period of time, so long as interest rates remain low.

After the first five years of mortgage payments, today’s homebuyers borrowing at today’s prevailing rates will have paid back more than a fifth of their mortgage (16.5%). Here’s a look at how that compares to past decades:

Mortgage payments

(Courtesy: Edge Realty Analytics)

 

“Homeownership represents a very aggressive forced saving program,” Mortgage Professionals Canada noted in its annual consumer report.

“As a result (and even before we consider the impact of price growth) housing equity is built very rapidly,” the report noted. “This excellent ‘net affordability’ goes a long way to explaining why homebuying activity has remained strong in Canada and why a large majority of Canadians see homeownership as financially better than renting, despite the rapid run–up in house prices and the higher burden of mortgage (principal plus interest) payments.”

(Source: Mortgage Professionals Canada)

 

Not only have low interest rates allowed borrowers to repay their mortgages more quickly, but it’s also kept housing moderately “affordable” despite the 38.4% run-up in average home price in the past 12 months.

“If it were not for the extremely low interest rate, most cities in Canada, especially Toronto, Ottawa, Vancouver and Montreal, would be in overvalued territory,” Alberta Central chief economist Charles St-Arnaud wrote in a recent analysis. “It means that the main driver for affordability is the record low level of interest rates.”

But Rates Won’t Stay Low Forever

All good things must come to an end, and that goes for ultra-low mortgage rates.

The Bank of Canada has made it abundantly clear that it expects to start raising interest rates by late next year.

How much rates will increase in the Bank’s next rate-hike cycle is anyone’s guess. But for what it’s worth, markets are pricing in at least eight 25-bps hikes over the next five years, which would bring Canada’s overnight rate to 2.25%, up two percentage points from its current record-low of 0.25%.

But even a more modest rise in rates of as little as 100-150 basis points could “push the valuation metrics into overvalued territory,” St-Arnaud noted, making today’s still somewhat “affordable” housing market patently unaffordable for most.

“Our simulations show that many cities in Canada will struggle with housing affordability as interest rates increase,” he added. “A 150-bps increase in mortgage rates could be enough to generate significant headwinds on some housing markets and house prices.”

 

 This article was published by the Canadian Mortgage Trends, to view the article on their website click here.

Angela Calla is a 17-year award-winning woman of influence which sets her apart from the rest. She is without a doubt, a true expert in her field. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. 

In August of 2020, at the young age of 37, Angela surpassed $1 Billion dollars in funded personal mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click  here to view the latest news on our blog. 

Team Banner housing market

 

Home buyers should think twice before sending a ‘pick me’ letter to the seller

General Angela Calla 17 Jun

The housing market is so competitive buyers are doing anything they can to get a home.

A common way to try to stand out is to write a heartfelt “love letter” to a seller — a seemingly harmless note to express appreciation of the home and make a personal connection.

But in this overheated real estate market, what were once simple handwritten or typed letters have lately given way to more polished packages, with photographs of the buyers and even videos, agents say. Some prospective homebuyers even purchase letter templates on sites like Etsy.

But these letters can present problems, according to the National Association of Realtors, raising fair housing concerns. While some agents say the tactic is a tried and true way to win a bidding war, other agents, following recent guidance from NAR, won’t deliver or accept love letters anymore.

According to the federal Fair Housing Act, it is illegal to discriminate in the sale of housing because of race, color, national origin, religion, sex, familial status, and disability. And these letters can be full of those kinds of details.

When I started to collect the letters and the pictures, it became clear they all came from a place of privilege. It was almost always white, heterosexual couples. Sometimes on their wedding day, or with one or two kids and their dog.”

LIZ BRENT, THE BROKER AND OWNER OF GO BRENT

“Typically, a letter like this is telling the seller who is going to live in the home and how they are going to live in it,” said Francine Viola, a broker with Coldwell Banker Evergreen Olympic Realty in Olympia, Washington. “But writing a love letter is not going to get you the house and you’re putting that seller in a position that they could be violating Fair Housing laws.”

A buyer may write a letter to the seller that says: “This is my dream home and I’m excited to live there with my husband and our two young children. We love that the home has a first floor bedroom for my mother, who lives with us. I can imagine the kids running down the stairs on Christmas morning.”

“Right there you have information about family status, religion and a possible disability,” Viola said. “These are protected classes in the Fair Housing Act. You can talk about that kind of personal information, but you can’t do it in a real estate contract.”

Viola said she feels for the buyers who want to snag a seller’s attention. “It’s a boilerplate offer and they don’t feel like they have a lot of control in the process, I get why they want to write a letter to find common ground,” she said.

But she tells her buyers to spend more time writing an offer, not a letter.

Coming from a place of privilege

 When Liz Brent, the broker and owner of Go Brent, who works in Maryland and Washington DC, first began seeing buyers writing letters in the early 2000’s, it didn’t faze her.

But over the past five years, as the market grew more competitive and she saw many more letters with photographs of the potential buyers, she began to see them as a way for buyers to signal personal attributes.”I call them ‘pick me’ letters,” said Brent. “It is “pick me because of who I am.’ ”

The soft discriminatory issues at play, she said, are harder to pin down than clearer forms of bias in real estate and rely more on unconscious than explicit bias. Still, Brent said she began to see a pattern in the letters.

“When I started to collect the letters and the pictures, it became clear they all came from a place of privilege,” she said. “It was almost always white, heterosexual couples. Sometimes on their wedding day, or with one or two kids and their dog.”

She said she’s never seen a letter with a photo of a single person, or a person with a visible disability, or of an older couple.

Her firm recently began stating in their listing information that no buyer letters will be accepted.

“Sellers should be making a decision only on the best combination of the highest amount of money and least amount of risk from a buyer,” she said. It’s not always the highest offer that is the winning offer, she said, but a mix of factors. A letter could help sway a homeowner, but likely for the wrong reasons.

Letters of love or liability?

Last fall, the National Association of Realtors released guidance on love letters for its 1.4 million members, advising agents they can be a liability. Other real estate associations, including the California Association of Realtors, have also flagged letters as a practice that may not be motivated by discrimination, but may still have a discriminatory effect.

It isn’t a rule and there are no consequences for agents who do otherwise, but NAR recommends that its member agents should not draft, read, deliver or accept love letters.

Both sellers and agents could be sued under the Fair Housing laws, and agents have additional professional liabilities because they are licensed by the state, said Bryan Greene, NAR’s vice president of policy advocacy.

“Buyers can say whatever they want and can send letters,” said Greene, “But NAR is saying to its agents that it is a best practice to avoid letters in a recognition that things could go awry, even if there is no legal consequence.”

Greene is quick to point out that the liability is mostly theoretical. He is not aware of any actual case that has been brought as a result of a love letter.

And, he added, it would be hard to bring a Fair Housing complaint unless you had direct knowledge that a seller made a decision based on a detail about one of the protected classes revealed in one of these letters.

“A buyer may suspect that someone took the love letter over other offers,” he said. “Then you’d have to prove that the seller relied on a specific discriminatory aspect of the letter.”

Still, the NAR guidance is a warning for agents and their clients to be conscientious. “If you do rely on a letter, agents and sellers need to document that the decision to accept an offer had nothing to do with race, national origin, religion or other protected classes.”

Best for buyers to focus on price and terms

In such a competitive real estate market, many buyer’s agents may be reluctant to turn off a buyer by telling them not to write a letter.

Technically, agents say, letters that don’t include any kind of information about protected classes are fine. Just saying you like the deck and fireplace is okay, Brent says, but that ultimately shouldn’t matter to the seller.

Similarly, a buyer could write a letter that highlights their intentions with the property — to live in it rather than to flip it, say — Greene said, that doesn’t include any personal descriptions.

Corey Burr, a senior vice president at TTR Sotheby’s International Realty in Washington, DC, recently sold a home listed for over a million dollars that had six offers. A potential buyer took notice of some of the New England and maritime photographs and decor in the house because they were from that part of the country, too. They felt compelled to tell the seller.

“The letter struck a chord with my seller,” Burr said, and they went with that buyer. “But their offer was also the best one.”

It is imperative that sellers don’t choose someone because of a connection that is made through a letter, but on the criteria in the offer, Burr said.

“I’ve never seen a property sell on the letter on its own — only when a letter is also with an offer that is better than someone else’s,” he said.

But he doesn’t tell his buyers they can’t write them. “I don’t encourage it,” he said. “Sometimes they can come off stale and cliche, but buyers are hearing from family and friends that these letters can make a difference.”

It may be small comfort to buyers frantically trying to appeal to a seller, but he says that sellers are less precious about what may happen to their home after it sells or feeling a “connection” with the buyer than buyers may think.

“Letters are not a major part of the transaction,” said Burr. “The meat of the transaction is the price and the terms. That’s where buyers should focus.”

This article was published by CNN, to view the article on the CNN website, please click here.

Angela Calla is a 17-year award-winning woman of influence which sets her apart from the rest. She is without a doubt, a true expert in her field. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. 

In August of 2020, at the young age of 37, Angela surpassed $1 Billion dollars in funded personal mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click  here to view the latest news on our blog. 

Team Banner housing market

Bank of Canada will hold current level of policy rate until inflation objective is sustainably achieved, continues quantitative easing

Latest News Angela Calla 9 Jun

FOR IMMEDIATE RELEASE
Bank of Canada Update
Media Relations
Ottawa, Ontario
June 9, 2021
 

The Bank of Canada today held its target for the overnight rate at the effective lower bound of ¼ percent, with the Bank Rate at ½ percent and the deposit rate at ¼ percent. The Bank is maintaining its extraordinary forward guidance on the path for the overnight rate. This is reinforced and supplemented by the Bank’s quantitative easing (QE) program, which continues at a target pace of $3 billion per week.

With COVID-19 cases falling in many countries and vaccine coverage rising, global economic activity is picking up. Growth remains uneven across regions, however. The US is experiencing a strong consumer-driven recovery and a rebound is beginning to take shape in Europe, while a resurgence of the virus is hampering the recovery in some emerging market economies. Financial conditions remain highly accommodative, reflected in broadly higher asset prices. Commodity prices have risen further, notably oil, and the Canadian dollar has seen a further appreciation.

In Canada, economic developments have been broadly in line with the outlook in the April Monetary Policy Report (MPR). Despite the second wave of the virus, first quarter GDP growth came in at a robust 5.6 per cent. While this was lower than the Bank had projected, the underlying details indicate rising confidence and resilient demand. Household spending was stronger than expected, while businesses drew down inventories and increased imports more than anticipated. Renewed lockdowns associated with the third wave are dampening economic activity in the second quarter, largely as anticipated. Recent jobs data show that workers in contact-sensitive sectors have once again been most affected. The employment rate remains well below its pre-pandemic level, with low wage workers, youth and women continuing to bear the brunt of job losses.

With vaccinations proceeding at a faster pace, and provincial containment restrictions on an easing path over the summer, the Canadian economy is expected to rebound strongly, led by consumer spending. Housing market activity is expected to moderate but remain elevated. Strong growth in foreign demand and higher commodity prices should also lead to a solid recovery in exports and business investment. Despite progress on vaccinations, there continues to be uncertainty about the evolution of new COVID-19 variants. More broadly, the risks to the inflation outlook identified in the April MPR remain relevant.

As expected, CPI inflation has risen to around the top of the 1-3 percent inflation-control range, due largely to base-year effects and much stronger gasoline prices. Core measures of inflation have also risen, due primarily to temporary factors and base year effects, but by much less than CPI inflation. While CPI inflation will likely remain near 3 percent through the summer, it is expected to ease later in the year, as base-year effects diminish and excess capacity continues to exert downward pressure.

The Governing Council judges that there remains considerable excess capacity in the Canadian economy, and that the recovery continues to require extraordinary monetary policy support. We remain committed to holding the policy interest rate at the effective lower bound until economic slack is absorbed so that the 2 percent inflation target is sustainably achieved. In the Bank’s April projection, this happens sometime in the second half of 2022. The Bank is continuing its QE program to reinforce this commitment and keep interest rates low across the yield curve. Decisions regarding adjustments to the pace of net bond purchases will be guided by Governing Council’s ongoing assessment of the strength and durability of the recovery. We will continue to provide the appropriate degree of monetary policy stimulus to support the recovery and achieve the inflation objective.

Information note

The next scheduled date for announcing the overnight rate target is July 14, 2021. The next full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the MPR at the same time.

Content Type(s): Press, Press releases
 
To view the article on the Bank of Canada website click here.

Angela Calla is a 17-year award-winning woman of influence which sets her apart from the rest. She is without a doubt, a true expert in her field. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. 

In August of 2020, at the young age of 37, Angela surpassed $1 Billion dollars in funded personal mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click  here to view the latest news on our blog. 

Team Banner housing market

Bank of Canada Holds Rates and QE Steady–Asserting That Both the Upside in Inflation and the Downside in GDP is Temporary

General Angela Calla 9 Jun

The Bank of Canada left the benchmark overnight policy rate unchanged at 0.25% and maintained its current pace of GoC bond purchases at its current pace. The Governing Council renewed its pledge to refrain from raising rates until the damage from the pandemic is fully repaired. The $3 billion weekly pace of bond-buying–known as quantitative easing–will decline as the recovery proceeds. In April, at their last meeting, the Bank reduced the pace of GoC bond buying from $4 billion to $3 billion per week. The central bank was among the first from advanced economies to shift to a less expansionary policy in April when it accelerated the timetable for a possible interest-rate increase and pared back its bond purchases.

The Bank’s view regarding the domestic economy appears to be little changed despite the April Monetary Policy Report (MPR) overestimating Q1 GDP growth by 1.4 percentage points. Indeed, today’s Policy Statement notes that Q1 GDP growth was “a robust 5.6 percent” and that the details of the report point to “rising confidence and resilient demand.” Concerning Q2, the third wave lockdowns are “dampening economic activity…largely as anticipated.” Note that the April MPR projected 3.5% growth in Q2 GDP, while the consensus forecast currently sits at 0% for Q2, with downside risk.

The Bank also noted that “Recent jobs data show that workers in contact-sensitive sectors have once again been most affected. The employment rate remains well below its pre-pandemic level, with low-wage workers, youth and women continuing to bear the brunt of job losses.” The chart below shows that the labour market is still below the Bank’s target for a full recovery.

Bank of Canada Upbeat Over the Medium Term

“With vaccinations proceeding at a faster pace, and provincial containment restrictions on an easing path over the summer, the Canadian economy is expected to rebound strongly, led by consumer spending. Housing market activity is expected to moderate but remain elevated.”

On the inflation front, there were no surprises. The Statement says that inflation has risen to the top of the 1-3% control range due to base effects and gasoline prices. The rise in the core measures is blamed on temporary factors as well. The Bank anticipates headline inflation will stay around 3% through the summer before pulling back later in the year. On the cautious side, the BoC highlights that the labour market still has a way to go before healing. There’s also uncertainty surrounding COVID variants.

The concluding paragraph didn’t change much. It reiterates that there “remains considerable excess capacity” and that policy rates will stay at the lower bound until “economic slack is absorbed,” which the April MPR said was in 2022H2. Concerning further tapering, the “assessment of the strength and durability of the recovery” will guide that decision.

The C$ barely garnered a mention yet again, with the Statement noting the recent gains and accompanying rise in commodity prices. The market might view the lack of concern here as a green light for further strength.

Bottom Line

The Bank of Canada is looking through “transitory” ups in inflation and downs in GDP. With vaccination rates continuing to ramp up significantly, and provinces beginning a gradual reopening process, the economy will rebound substantially beginning in June.

Indeed, with the near-term growth outlook increasingly bright, concerns have shifted to rising production input prices and the prospect for a sharp recovery in consumer demand to stoke inflation pressures. For now, the BoC is positing that near-term increases in consumer price growth rates will prove ‘transitory.’ But there have also been signs of harder-to-dismiss firming in most measures of underlying price growth gauges, including the BoC’s own preferred core measures edging up towards or above the 2% inflation target.

July’s meeting will likely be a bit more interesting with the Bank issuing more details in another Monetary Policy Report. We don’t see any need for dramatic forecast revisions at this stage, and the BoC’s guidance that rates might have to start increasing in the second half of next year remains appropriate. It looks like the main question will be around further tapering of the BoC’s asset purchases. The BoC didn’t signal an imminent taper (we didn’t think it would) but said decisions regarding the pace of purchases would be guided by its assessment of the strength and durability of the recovery. If incoming data aligns with the BoC’s forecasts, we could see it reduce weekly bond-buying again in July to $2 billion per week from $3 billion. If not, September might serve as a backup as the bank seeks to prevent its footprint in the bond market (nearly 44% at the end of May) from becoming too large while at the same time setting itself up to shift QE to reinvestment only well in advance of the first interest rate hike.

Angela Calla is a 17-year award-winning woman of influence which sets her apart from the rest. She is without a doubt, a true expert in her field. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. 

In August of 2020, at the young age of 37, Angela surpassed $1 Billion dollars in funded personal mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click  here to view the latest news on our blog. 

Team Banner housing market

Housing Drove the Economic Expansion in Q1

General Angela Calla 7 Jun

This morning’s Stats Canada release showed that the economy grew at a 5.6% annualized rate in the first quarter, after a revised 9.3% pace in the final quarter of last year. That was somewhat below economists’ expectations. Housing investment grew at an annualized 43% pace, by far the biggest impetus of the expansion. Residential investment now makes up a record proportion of GDP (see chart below). Compared with the first quarter of 2020, housing investment was up 26.5% and led the recovery. Growth in housing was attributable to an improved job market, higher compensation of employees, and low mortgage rates. After adding $63.6 billion of residential mortgage debt in the last half of 2020, households added $29.6 billion more in the first quarter of 2021.

Residential investment is a component of the Gross Domestic Product accounts and is technically called ‘gross fixed capital formation in residential structures’ by Statistics Canada. Investment in residential structures is comprised of three components: 1) new construction, 2) renovations and 3) ownership transfer costs. The first two components are obvious.

The home-resale market’s contribution to economic activity is reflected in ‘ownership transfer costs.’ These costs are as follows:

  • real estate commissions–including realtors and mortgage brokerage fees;
  • land transfer taxes;
  • legal costs (fees paid to notaries, surveyors, experts etc.); and
  • file review costs (inspection and surveying).

The second chart below shows the quarterly percent change in the components of housing investment in inflation-adjusted terms. This chart illustrates the surge in existing home sales since the second quarter of last year (reflected in the red bar). Although the resale market has slowed since the third quarter of last year, it remains a driving force of economic expansion.

Growth in housing investment was broad-based. New construction rose 8.7% (quarter-over-quarter), largely driven by detached units in Ontario and Quebec. Ownership transfer costs increased 13.1%, with the rise in resale activities. Working from home and extra savings from reduced travel heightened the demand for, and scope of, home renovations, which grew 7.0% in the first quarter.

 

 

The increase in GDP in the first quarter of 2021 reflected the continued strength of the economy, influenced by favourable mortgage rates, continued government transfers to households and businesses, and an improved labour market. These factors boosted the demand for housing investment while rising input costs heightened construction costs.

The GDP implicit price index, which reflects the overall price of domestically produced goods and services, rose 2.9% in the first quarter, driven by higher prices for construction materials and energy used in Canada and exported. The sharp increase in prices boosted nominal GDP (+4.3%). Compensation of employees rose 2.1%, led by construction and information and cultural industries, and surpassed the pre-pandemic level recorded at the end of 2019.

Strength in oil and gas extraction, manufacturing of petroleum products, and construction industries led to a higher gross operating surplus for non-financial corporations (+11.5%). Higher earnings from commissions and fees bolstered the operating surplus of financial corporations (+3.9%), coinciding with the sizeable increases in the value and volume of stocks traded on the Toronto Stock Exchange (TSX).

Most aspects of final sales were solid in Q1, with consumers a bit stronger than expected (2.8% a.r.), government adding (5.8%), and net exports also contributing. In contrast, business investment was one real source of disappointment, with equipment spending surprisingly falling. But the biggest drag came from a drop in inventories, with this factor alone cutting growth 1.4 ppts in Q1, and versus expectations, it could add a touch. The good news is that this should reverse in Q2, supporting activity in the current quarter.

On the monthly figures, there were few big surprises. March’s initial flash estimate of +0.9% was nudged up in the official estimate to +1.1% as the economy began to re-open from the second wave. Tougher COVID public health rules slammed the brakes on Canada’s economy in April. Statistics Canada estimates gross domestic product shrank 0.8% in the month, representing the first contraction in a year and a weak handoff heading into the second quarter. April may well be followed by a soft May. Even so, we still expect a strong June will keep Q2 roughly flat overall and look for robust Q3 growth.

Bottom Line

In many respects, Q1 data is ancient history. We know with the resurgence in lockdowns, growth in Q3 will at best be flat. In the hopes that vaccinations will accelerate and COVID case numbers will continue to fall across the country, Q4 will likely see a strong resurgence in growth.

Click here to read this article on Dr. Sherry Cooper’s website. 

Angela Calla is a 17-year award-winning woman of influence which sets her apart from the rest. She is without a doubt, a true expert in her field. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. 

In August of 2020, at the young age of 37, Angela surpassed $1 Billion dollars in funded personal mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click  here to view the latest news on our blog. 

Team Banner housing market

 

 

Introducing the First Responder Mortgage Program™

General Angela Calla 4 Jun

To gesture our appreciation to our First Responders across the country we created a program specifically for them! The First Responder Mortgage Program™ is our way of saying THANK YOU.

Who is Eligible: The First Responder Mortgage Program™ is open to the following individuals:

  • Police Officers
  • Paramedics
  • Firefighters (employed and volunteering)
  • Correctional Services
  • Border Services
  • Search & Rescue (employed and volunteers)
  • Registered Physicians
  • Registered Nurses

What You Can Expect: From purchasing a home or switching from a current mortgage provider, the Dominion Lending centers ® First Responder Mortgage Program™ is focused on providing you with the best available mortgage options, including:

  • Competitive rates1
  • Up to $1,600 cashback on all eligible new purchase transactions – or up to $1,200 when you switch2 your existing mortgage to a new qualified Fixed or Variable rate mortgage 3
  • Up to $400 for discharge and switch fees4
  • Additional cash offers available with eligible banking packages4
1 Rates are subject to change and are dependent on qualification and credit rating, speak with your mortgage expert to learn more
2 Switch Promotional Cashback offer cannot be combined with the cashback for purchase transactions or IFP cashback deal.
3 Customers must attend in branch meeting in order to qualify for the cashback promotion
4 Some conditions apply

Angela Calla is a 17-year award-winning woman of influence which sets her apart from the rest. She is without a doubt, a true expert in her field. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. 

In August of 2020, at the young age of 37, Angela surpassed $1 Billion dollars in funded personal mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click  here to view the latest news on our blog. 

Team Banner housing market

NEW Mortgage Stress Test | How it will affect YOU

General Angela Calla 1 Jun

Further to the original announcement in early April, the new mortgage stress test released on June 1st has officially increased for home purchases and those looking to refinance. This has caused a decrease in their borrowing power by about 5%.

To put this in perspective, if they were approved for 1 million dollars, that is reduced to approx. 950k. You can download our app to see how this will impact you.

Some points to keep in mind about the new mortgage stress test:

  • Rates are still near record lows, and these new changes do not increase your borrowing cost.
  • All lenders have different sources of income they will utilize to help you qualify for the mortgage that is right for you. We have seen lenders step up in many different ways, and most recently with a special first responders program.
  • As an unbiased mortgage broker, we protect your credit by reviewing all the options by all the lenders in the country to find a mortgage to suit your needs with the best value for you, that are only available to us as licensed professionals

If you or someone you care about with like a mortgage review to ensure you have the best option for you, we are here to help and just an email away callateam@countoncalla.ca.

Watch my segment on the new mortgage stress test with Global News here:

Angela Calla is a 17-year award-winning woman of influence which sets her apart from the rest. She is without a doubt, a true expert in her field. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. 

In August of 2020, at the young age of 37, Angela surpassed $1 Billion dollars in funded personal mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click  here to view the latest news on our blog. 

new mortgage stress test