Bank of Canada publishes 2023 schedule for interest rate announcements

General Angela Calla 28 Jul

The Bank of Canada today published its 2023 schedule for the release of its policy interest rate decisions and quarterly Monetary Policy Report.

The dates are as follows:

  • Wednesday, January 25*
  • Wednesday, March 8
  • Wednesday, April 12*
  • Wednesday, June 7
  • Wednesday, July 12*
  • Wednesday, September 6
  • Wednesday, October 25*
  • Wednesday, December 6

The Bank also reconfirmed the scheduled rate announcement dates for the remainder of 2022:

  • Wednesday, September 7
  • Wednesday, October 26*
  • Wednesday, December 7

*The Monetary Policy Report is published concurrently with the January, April, July and October rate announcements.

All rate announcements will take place at 10:00 (ET).

(These dates are taken from the Bank of Canada)


Angela Calla is an 18-year award-winning woman of influence which sets her apart from the rest. 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. 

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Interest rates are still rising, but investors should start preparing for when they come back down

General Angela Calla 27 Jul

The Bank of Canada over the past 30 years has had six periods of interest-rate hikes, ranging from 1.25 to 3.2 percentage points, before this most recent set in 2022.

The one thing they all had in common was that it didn’t take long for each of them to be followed by a period of declining interest rates, ranging from 1.25 to 5.125 percentage points.

One logical reason for this is that rate rises are meant to slow down the economy, and rate declines are meant to boost the economy. There is a general view that the increases typically start too late, and so rates are still rising after the economy is already slowing. Once they really start to take effect, the impact can be too much, and the central bank has to do a quick about-face.

Let’s do a quick review of the six rises and falls since 1994.

In October 1994, the Bank of Canada’s overnight rate was 4.94 per cent. Over the next four months, it rose significantly to 8.125 per cent — a rise of 3.2 percentage points. Over the following nine months, it declined to 5.94 per cent, and one year later it was sitting at three per cent. This was a large rise and fall historically, but it outlines how quickly rates can rise and how steep the ultimate decline can be.

The next period of rate adjustments saw the overnight rate rise to 5.75 per cent from three per cent over a 15-month period in 1997 and 1998. The subsequent decline wasn’t as steep, but it did drop over the following nine months to 4.5 per cent in May 1999.

In October 1999, the rate was still 4.5 per cent, but then rose to 5.75 per cent by May 2000. One year later, it was back to 4.5 per cent and it was all the way down to two per cent by January 2002.

Over a 25-month period from March 2002 to April 2004, the rate went from two per cent to 3.25 per cent and back to two per cent.

During a relatively prosperous time, the rate rose to 4.5 per cent in July 2007 from 2.5 per cent in August 2005. But the financial crisis of 2008 started to rear its head, and rates fell first to three per cent by April 2008 and all the way to 0.25 per cent a year later.

More recently, the rate in June 2017 was at 0.5 per cent, rose to 1.75 per cent by October 2018, and then dropped to 0.25 per cent by March 2020 when COVID-19 began.

What does this mean for today?  So far, we are 1.25 percentage points into an interest-rate-hiking cycle.  Some think there are another one or two more points in front of us. Others think it will be less than that. What if the overnight rate goes from 0.25 per cent (where it was in February 2022) to 2.75 per cent? For many of us, that would be a bad thing because our borrowing costs would be meaningfully higher. However, if we were somewhat confident that rates would soon be heading down from there, would that ease our concerns?

History suggests this will happen. The six hiking cycles averaged 13 months in length. The current one is four months in. The six declining cycles began on average 5.7 months after the hikes stopped, but it happened within three months in three of the six scenarios. The average interest rate hike was 1.95 percentage points and the average decline was 2.85 percentage points.

History can be a guide, but certainly not a clear roadmap. If all we did was simply look at the averages here, it would suggest that we have another 0.7 percentage points of rate hikes, which would take another nine months to reach. Interest rates would then start to decline by September 2023 and eventually drop all the way back to 0.25 per cent (or more if it was possible).

Of course, each scenario is different, so things won’t simply follow these averages. The causes are different and the starting point on interest rates is different. That said, this cycle has been very repetitive over the past 30 years.

If I had to guess, I would expect the rate-hiking timeline will be shorter than 13 months, but that rates will move up by more than just 0.7 percentage points. I believe the start of the rate declines might happen sooner than September 2023. The implied policy curve for Canada currently suggests that rate hikes will peak in six months and then start to decline with the following year. This doesn’t mean that this is a fact, but it shows that even today, the implied policy rate is giving some indication of the same cycle we have seen several times before.

Another clue as to why the next cycle might look like the past is that even the Bank of Canada has said one of the reasons for increasing rates is so it will have some greater tools and leverage to help the economy by lowering rates if we go into a recession or something similar.

If that is the future, what does that mean for investors and borrowers?

Variable-rate borrowers will feel more pain in the near future, but it isn’t a one-way road. Variable rates will likely be a benefit once again in the midterm.

If you are looking at buying guaranteed investment certificates, annuities or bonds, it may still be a little early to lock in or invest, but there will likely be a sweet spot to do so later this year or in the first half of next year.

High inflation and higher interest rates seem like the obvious situation today, but this may shift in the not-too-distant future, so don’t go overboard with this investing thesis as it can turn on you. You want to be nimble.

The key message here is that we should not panic about runaway rate hikes. They will continue to rise, but it is also very likely that we will see rates fall shortly after the hikes stop. Maybe this rollover will happen by the end of this year or at some point in 2023, but being prepared for this scenario will allow for some investment opportunities and debt opportunities to be maximized.

(This article is courtesy of Financial Post)


Angela Calla is an 18-year award-winning woman of influence which sets her apart from the rest. 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. 

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Panicking over rising interest rates? Mortgage specialists share advice to help ease stress

General Angela Calla 26 Jul

Mortgage specialists say they’re busier than usual these days answering panicked calls from Canadians holding a variable mortgage or set to renew who want to know how to save money in the face of rising interest rates.

Earlier this month, the Bank of Canada raised its benchmark lending rate a full percentage point, bumping it up to 2.5 per cent. This prompted Canadian banks to hike their prime lending rate to 4.7 per cent — the highest it’s been in more than 10 years.

“The really interesting thing about what’s going on is the incredible speed of the rate increases.… We’ve gone from 1.79 to 5.09 in a very short time — 22 months,” said Ron Butler, mortgage broker and one of the founders of Butler Mortgage, which operates across Canada.

He says people have grave concerns about just how far the rate is going to go, especially since it’s widely speculated Canada’s central bank is expected to boost its rate another 0.5 to 1.0 per cent in the fall.

“The horror show we’re experiencing right now, it just seems to be going up, up and up,” said Butler.

Shop around

Butler says whether you are a new home buyer or you are coming up for renewal, it’s worth looking around at the rates being offered by different banks before signing any contracts.

“In today’s marketplace, if one bank is offering you 5.09 and another bank is offering you 4.89 or 4.79, if there’s a quarter or half a per cent difference, I mean, you would want to get that because literally every dollar counts,” said Butler.

But applying to different banks can hurt a person’s credit score, says mortgage specialist Angela Calla, who is based in British Columbia.

Calla suggests that instead, people use a mortgage broker to hunt for the best deals because their services are free — they’re compensated by the lender — and they can compare rates and options using just one application.

She says mortgage brokers are not biased to a particular institution. She says they give the pros and cons of products and services.

“There’s a whole significant aspect of mortgage lenders and products that are only available through mortgage professionals, so consumers are completely limited if they didn’t know that this option existed,” said Calla.

But she says they’re not all created equal.

“We all run our own practices and have different approaches and strategies on how we continually help individuals manage their mortgage to ensure that they have the best strategy in place for the changes in the market, as well as their personal lifestyle,” said Calla.

Age-old question

Fixed or variable?

Calgary mortgage broker Lori Grill says unfortunately there is no right or wrong answer.

She says both have their risks and their benefits.

“Sometimes they want somebody to tell them what to do, which I will never do. You have to make your own decisions on that. I can give you the numbers and give you my knowledge, and that’s about it,” said Grill, specialist with the Mortgage Group.

Variable rates are usually determined by discounting the prime rate. But they can also match prime or be slightly higher.

Generally, variables are lower than fixed rates but can float higher at times.

With variables, Grill says it’s important to focus on the long game and being able to ride out the peaks and valleys.

But for some, she says, paying a little higher of a fixed rate is worth it to gain stability in budget planning, especially when other things, from the price of groceries and gas to the pandemic, are unstable.

“Those things are totally out of your control, but if you can control your mortgage payment, then maybe it’s time to lock in,” said Grill.

If you do lock in to avoid future rate hikes, she says be warned that you may be kicking yourself if the rates start to drop again.

She recalls paying a 13 per cent interest rate in the 1990s in Calgary on a one-year, fixed-term mortgage. She says she eventually decided to lock in to a five-year, fixed-term at 11 per cent, only to end up paying a penalty to break her mortgage to go with a variable one when the rates began lowering.

Not all variables are equal

If you do choose a variable rate, Grill suggests people increase their payments to match the comparable fixed-rate terms if they can — because that added money goes directly to the principal and will help you pay off your mortgage sooner.

Butler says that advice is now more important than ever these days with respect to variable mortgages that offer static payments regardless of rate changes.

That means when the interest rate goes up, less of your payment goes toward the principal. In some cases, the rates go so high, you reach what the banks call a trigger point.

“The trigger point is when the interest grows so much within the mortgage payment that there no longer is any principal being paid and that you actually have a mortgage that’s growing each month because the payment isn’t covering the interest,” said Butler.

In those cases, the banks reach out to the customer and either ask for a lump sum payment to cover the principal or radically change the payment structure.

Butler expects to see more people with these types of mortgages reach their trigger points this fall if the Bank of Canada raises its rate another 75 basis points.

To avoid that, homeowners should be topping up their static variable mortgages now, he says.

Other cost-cutting tips

Customers can change the frequency of payments, which are typically monthly, biweekly and weekly. Accelerated biweekly and accelerated weekly plans are also options but cost more over the year. Experts say monthly tends to be a lower amount than other offerings.

They can also increase their amortization period.

But Butler says that requires a whole new mortgage application and not everyone may be able to qualify with the more rigorous stress tests now in place.

Instead of a five-year, fixed term, people could choose a shorter term fixed mortgage to see whether the rates will drop in that time period.

“In 18 months, [the variable rate] could start coming back down again. It’ll never go down as low as it was. It’ll never be these super, super low rates that you got in December. That won’t happen again for a long time,” said Butler.

Customers can also consolidate their debt by adding it on to their mortgage, says Calla, which gives people more cash flow.

She says cutting back on expenses is important. Because she says that’s the point of the interest rate hikes, to slow inflation. And she says perhaps if Canadians heed the message, the hikes will stop — at least for now.

But she says her best advice right now is for those having a mortgage renewal next year, get a rate hold today until you decide what to do.

Because she says no one really knows for sure what the future brings.

“No economist has gotten it right 100 per cent,” said Calla.

The economic factors that have to happen in order for the Bank of Canada and for the bond market to react to the market and decide what it’s going to do is based on influences that not a single human being has control over.”

(This article is courtesy of CBC)


Angela Calla is an 18-year award-winning woman of influence which sets her apart from the rest. 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. 

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Fixed-Rate Mortgage Speculation

General Angela Calla 25 Jul

For any of you who are waiting to lock into a fixed-rate mortgage, you may want to watch the rates closely over the next little bit. Fixed rates are based on the bond market.


Angela Calla is an 18-year award-winning woman of influence which sets her apart from the rest. 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. 

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Expansion of Speculation Tax

General Angela Calla 22 Jul

For those that missed it, the BC Speculation and Vacancy Tax has been expanded to include Lions Bay, Squamish, North Cowichan, Duncan, Ladysmith and Lake Cowichan.

This will not affect any closings, but any potential buyers of properties in these areas should be told of the requirement to file an annual declaration.

The government also announced a mandatory 3-day cooling-off period, effective Jan. 1, 2023.

(This announcement is from the Spagnuolo & Company LLP newsletter)


Angela Calla is an 18-year award-winning woman of influence which sets her apart from the rest. 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. 

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B.C. enhances consumer protection for homebuyers

General Angela Calla 21 Jul

“A new homebuyer protection period will protect people in B.C. looking to buy a home from being pressured into high-risk sales.” You can read the full announcement here.

A short summary of the change:

The homebuyer protection period will come into effect on Jan. 1, 2023. It includes a cancellation fee of 0.25% of the purchase price, or $250 for every $100,000, for those who choose to back out of a deal. For example, if the purchaser exercises the right of rescission on a $1-million home, they would be required to pay $2,500 to the seller (Buyers still may make offers conditional on home inspections or financing at any time).

A few comments on this from Angela Calla 

– This is not something intended to cool the market or help with supply or qualifying

– This does not remove the importance of a buyer getting fully pre-approved and doing the inspection, financing, and review of any/all related documents required for completion of a purchase

– In today’s market conditions most offers already have a subject period for due diligence, unlike we saw for the 12 months previous to today and in last cycles with demand outweighing supply

– With new construction, this is already in place and for a full 5/7 days with the exception of the cancellation fee (Which is not kept during the cancellation period should you decide not to proceed).


Angela Calla is an 18-year award-winning woman of influence which sets her apart from the rest. 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. 

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Clarification on Minimum Qualifying Rate for Adjustable rate Mortgages

General Angela Calla 21 Jul

Given the recent increase in the Prime Rate, we want to provide clarification regarding the application of the minimum qualifying rate on Adjustable Rate Mortgages (“ARM”), insured and conventional.  All ARM loans must now be qualified using a rate of contract plus 2%, which is now greater than the 5.25% Qualifying Rate.

Existing First National Commitments for Adjustable Rate Mortgages (“ARM”) do not have to be requalified using a rate of contract plus 2%, unless there is a material change to the deal.

Existing preapprovals for Adjustable Rate Mortgages (“ARM”) must be requalified at the current qualifying rate when the deal is converted to a live deal, and a commitment is issued.

Example: Borrower has a preapproval committed which was qualified using 5.25% which was greater than the contract plus 2% when issued. The borrower has now found a property and the transaction is scheduled to close within the rate hold period. Due to the Prime Rate change, the borrower will now be qualifying off their adjusted contract rate plus 2% using the new Prime Rate of 4.70%

All adjustable rate submissions will be qualified using the new prime rate of 4.70%, effective immediately.

(This article is from the First National Financial LP. newsletter)


Angela Calla is an 18-year award-winning woman of influence which sets her apart from the rest. 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. 

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Canadian Inflation Rises Further in June

General Angela Calla 20 Jul

Canadian Inflation Surged to 8.1% in June

Another bad inflation number was posted today. The rate of consumer inflation continued to rise, reaching 8.1% year over year (y/y) in June, following the 7.7% gain in May. The increase was the largest yearly change since January 1983. The acceleration in June was mainly due to higher prices for gasoline; however, price increases remained broad-based, with seven of eight major components rising by 3% or more.

Excluding gasoline, the CPI rose 6.5% year over year in June, following a 6.3% increase in May (see chart below).

On a monthly basis, the CPI rose 0.7% in June, following a 1.4% increase in May. On a seasonally adjusted monthly basis, the CPI was up 0.6%.

On average, prices rose faster than hourly wages, which increased 5.2% from 12 months to June, based on the Labour Force Survey data.

Gasoline prices are highly visible and have surged a whopping 54.6% y/y. That compares to a 48% increase in May. There might be some reprieve in this component of inflation, as gas prices largely follow crude oil prices, which peaked in early June and have trended downward so far in July. This would be welcome news for the Bank of Canada.

Bottom Line

All central banks worldwide (except Japan) face much more than expected inflation. The rise in the annual pace of inflation past the 8% mark will keep the Bank of Canada on its tightening path, though the numbers show some evidence of softening. For example, food prices appear to be easing, and gasoline price inflation may have peaked. Food prices were up 0.1% in June, the slowest increase in a year. Shelter costs gained 0.4%, the smallest increase since November. Statistics Canada said that reflects lower real estate commissions as the housing market slowed.

With some luck, price pressures might be peaking. The chart below shows the Bank of Canada’s most recent forecast for inflation published last week in the July Monetary Policy Report. The Bank of Canada estimated inflation would average about 8% through the third quarter of 2022 before slowing.

According to the swaps market, traders are betting that the central Bank will hike its policy interest rate another 75 basis points on September 7 when it meets again, after the full percentage point increase last week. That would take the overnight rate from 2.5% current to 3.25%–above the Bank’s estimate of the neutral range. It would also push up the prime rate from 4.7% to 5.45%, leading to a 75 bps hike in variable rate mortgages. Last week’s action already took variable mortgage rates to roughly 4.25%, which increased the qualifying rate on such loans to 6.25%–above the 5.25% rate before the move. As a result, the gap between the qualifying rate for fixed-rate mortgage loans and variable-rate loans has fallen to only about 100 bps, its lowest level in years. This undoubtedly continues to slow housing activity, reducing economic growth in Canada.

The question remains–will the Bank of Canada successfully reduce inflation without triggering a recession? Stay tuned.

(This article is courtesy of the Sherry Cooper Assoc.)


Angela Calla is an 18-year award-winning woman of influence which sets her apart from the rest. 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. 

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Canadian Home Prices Fall Sharply in June

General Angela Calla 19 Jul

House Price Decline Accelerated in June

Statistics released today by the Canadian Real Estate Association (CREA) show that the slowdown that began in March in response to higher interest rates has broadened. Home sales recorded over Canadian MLS® Systems fell by 5.6% between May and June 2022, taking second-quarter sales down sharply (see chart below). The actual (not seasonally adjusted) number of transactions in June 2022 came in 23.9% below the record for that month set last year and is below its 10-year monthly moving average.

“Sales activity continues to slow in the face of rising interest rates and uncertainty,” said Jill Oudil, Chair of CREA. “The cost of borrowing has overtaken supply as the dominant factor affecting housing markets at the moment, but the supply issue has not gone away.”

The Bank of Canada’s shocking 100 basis point hike in the benchmark policy rate will accelerate the slowdown in the coming months.    “One important feature of the market right now that isn’t getting enough attention is the difference in mortgage qualification criteria between fixed and variable, because while variable rates adjust in real-time, fixed rates have already priced in most of what the Bank of Canada is expected to do over the balance of 2022,” said Shaun Cathcart, CREA’s Senior Economist. “As such, it’s no surprise to see people piling into variable rate mortgages at record levels, but probably not for the reasons they may have chosen them in the past. It’s because the 200 basis points plus the contract rate element of the stress test has, just since April, become much more difficult to pass if you want a fixed-rate mortgage. A strict stress test made sense when rates were at a record-low, but policymakers may want to assess if it continues to meet its policy objectives now that fixed mortgage rates are back at more normal levels.”

New Listings

The number of newly listed homes climbed 4.5% month-over-month in May. The monthly increase was influenced by a jump in new supply in Montreal, while new listings in the GTA posted a modest decline.

With sales down and new listings up in May, the sales-to-new listings ratio eased back to 57.5% — its lowest level since April 2019. It was also not far off the long-term average for the national sales-to-new listings ratio of 55.1%.

Almost three-quarters of local markets were balanced based on the sales-to-new listings ratio being between one standard deviation above or below the long-term average in May 2022 – the most significant number since the fall of 2019. A little less than one quarter was in seller’s market territory, while a small handful was in buyer’s market territory.

There were 2.7 months of inventory on a national basis at the end of May 2022, still historically low but up by a month from the tightest conditions ever recorded just six months ago. The long-term average for this measure is a little over five months.

 

New Listings

The number of newly listed homes climbed 4.1% month-over-month in June. The monthly increase was most influenced by a jump in new supply in Montreal, while new listings in the GTA and Greater Vancouver posted slight declines.

With sales down and new listings up in June, the sales-to-new listings ratio eased back to 51.7% – its lowest level since January 2015. It was also below the long-term average for the national sales-to-new listings ratio of 55.1%. Almost three-quarters of local markets were balanced markets based on the sales-to-new listings ratio being between one standard deviation above or below the long-term average in June 2022.

There were 3.1 months of inventory on a national basis at the end of June 2022, still historically low but slowly increasing from the tightest conditions recorded just six months ago. The long-term average for this measure is more than five months.

Home Prices

The Aggregate Composite MLS® Home Price Index (HPI) edged down 1.9% on a month-over-month basis in June 2022.

Regionally, most of the monthly declines were seen in markets in Ontario. Home prices have also eased in parts of British Columbia, although the B.C. provincial totals have been propped up by mostly static prices in Greater Vancouver.

Prices continue to be more or less flat across the Prairies while only just now showing small signs of declines in Quebec.

On the East Coast, prices are mostly continuing to rise but appear to have stalled in Halifax-Dartmouth.

The non-seasonally adjusted Aggregate Composite MLS® HPI was still up by 14.9% on a year-over-year basis in June, although this was just half the near 30% record year-over-year increases logged in January and February (see chart and tables below for details by region).

Bottom Line

In many respects, today’s housing data trends are already outdated. It changed with the blockbuster rate hike a couple of days ago. Excess housing demand is essentially over, and we are heading into a more fragile period for resale volumes and prices. The national sales-to-new listings ratio fell to 51.7% in June, which is considered balanced, but it’s the lowest ratio since 2015 and is headed in a softer direction. Buyers’ markets are already evident, especially in some of the suburbs/exurbs in Ontario and parts of BC. These are the regions that posted extreme price gains last year. Others, such as cities in oil-rich Alberta and Atlantic Canada, are still holding in well.

With the Bank of Canada’s most recent tightening, qualifying rates are ratcheting up for both variable and fixed mortgage rates. Before the one percentage point rate hike, variable rate loans were qualifying at 5.25%, but now that has shifted to around 6%. Fixed-rate borrowers are qualifying at about 7%. The Canadian prime rate has surged this year, increasing variable mortgage rates by roughly 300 basis points. Robert Kavcic at BMO has calculated that “going from 1.5% to 4.5% on the same loan value would crank up the monthly variable-rate mortgage payment by almost 40%, making the current episode an even more abrupt shift than the late-1980s  after adjusting for income levels.”

Kavcic continues, “the vast majority of borrowers currently on variable-rate mortgages have fixed payment features, but even there, things are now getting dicey. For example, moving a variable rate up from 1.5% to 4% with a fixed payment would effectively increase the amortization from 25 years to 45 years. Another 50 basis-point rate hike in September would take that above 60 years—that is, many will reach the point where payments are no longer taking down the principal. Each mortgage will have its unique terms when payments start to move higher, but for those that caught the low in variable rates, we’ll probably be there soon. Of course, HELOC payments used to finance many multiple-property purchases are ratcheting up in real time.”

There is also the risk that the federal financial institutions’ regulator, OSFI, will intervene to protect the big Chartered Banks from taking on too much risk rather than making it easier for borrowers to qualify or to carry variable-rate loans in this environment.

Moreover, mortgage renewals pose a problem as well. Fixed mortgage rates five years ago were roughly 3%. Resetting the mortgage at 4.5% will lead to a monthly payment increase of approximately 15%, all else equal.

With the latest move by the Bank of Canada, more potential buyers will believe that home prices are likely to fall, taking the FOMO factor out of the housing market. This removes the critical ingredient that drove prices up rapidly since the pandemic began.

(This article is courtesy of The Sherry Cooper Assoc.)


Angela Calla is an 18-year award-winning woman of influence which sets her apart from the rest. 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. 

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The Pitfalls of Backing Out of a Real Estate Deal

General Angela Calla 14 Jul

  1. Why are more buyers attempting to back out of real estate deals right now? Is it because they cannot secure financing? Buyer’s remorse? A lower-than-expected appraisal?

Some may experience “buyer’s remorse” which it’s normal to feel in any market. Today with rates on the rise, inflation at a 40-year high, the increased cost of everything, staffing and supply shortages, and Russia attacking Ukraine; the compound effect of all of that is a natural consideration to proceed with caution.

For borrowers that had a pre-approval in place for 90 or 120 days, the rate they have is much lower than current rates so they can also be very grateful that they have secured a good option for their family. It is important that as soon as an offer is agreed upon, an appraisal is paid for and arranged to ensure that the price remains at purchase and not lower, or else there will be a shortfall to make up with gifted funds from family or a higher mortgage amount.

I have seen these market changes before and I am sure it will repeat itself again in my career as it has in the past. People still need to move, they go through a divorce, move for new job opportunities or lifestyle, and wind up estates. When we know change is constant we plan together for it the best we can by building in the security of rate holds, the protection of good contracts, and optimization of different markets and strategies.

  1. In 2021 and early 2022, many people were buying without conditions of financing or inspection. How does this complicate matters for buyers?

Yes, another past market experience, despite our best advice to borrowers we had hoped would not repeat itself was back in 2021 and early 2022. Just because a market appears to be going up with limited supply does not mean you shouldn’t do your due diligence. Going in without the precautions in place left borrowers assuming the risk, period. As long as they were comfortable with that risk, it was their choice to bear it with the circumstances at hand.  We saw some buyers forced to come up with extra money, get co-signers last minute, or have to take more expensive lending options. In either case or market, if the home is suited for you then that is just a part of your journey.

  1. What’s the difference between making an offer and signing a purchase agreement?

An offer is something the buyer makes to the seller. It does not become a purchase agreement until both parties agreed to the terms of the offer.

  1. If a would-be buyer breaks a deal, how much are they on the hook for? Can they be sued?

They can be on the hook for damages as well as the deposit and of course all the legal fees that will arise. The deposit will be held in trust until both have come to an agreement which can be an extended period of time. This is why sellers want the largest deposit possible to avoid any legal battle or people potentially backing out.

  1. Could a buyer have a harder time getting a mortgage in the future if they back out of a deal?

Not for the mortgage part as borrowers have offers they back out of all the time during their subject period and the conditions they set for themselves. They simply don’t remove their subjects, get a release and move on, all part of due diligence. Backing out if they have no conditions or after they have removed them is what makes it a legal battle between the buyer and seller only as no mortgage is registered yet.


Angela Calla is an 18-year award-winning woman of influence which sets her apart from the rest. 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. 

mortgage

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