Province Caps Annual Rent Increase

General Angela Calla 11 Sep

Province caps annual rent increase well below inflation

For the second consecutive year, B.C.’s maximum allowable rent increase is being set below the inflation rate. The maximum increase for 2024 will be 3.5%.

“Across the country, costs have been increasing — especially for housing — at a rate that’s unsustainable for many people,” said Ravi Kahlon, Minister of Housing. “We know that’s the case for both landlords and renters, and that’s why we’ve found a balance to protect renters while helping to keep rental units on the market.”

The rent cap of 3.5% is well below the 12-month average inflation rate of 5.6% and applies to rent increases with an effective date on or after Jan. 1, 2024. If landlords choose to increase rent, they must provide a full three months’ notice to tenants using the correct Notice of Rent Increase form. B.C. landlords can increase rent only once every 12 months.

The Province has been taking steps to support renters throughout British Columbia. Before 2018, the annual allowable rent increase was based on the inflation rate plus 2%. Following a recommendation by the Rental Housing Task Force, the rent increase was reduced to just the inflation rate. A rent increase freeze was put in place in 2020 and 2021 to support renters during the COVID-19 pandemic. To protect renters from high inflation in 2023, the Province capped rent increases at 2%, well below the 5.4% inflation rate that would have otherwise applied.

“With renters facing a possible rent increase of almost 6%, the government listened to the voice of renters and acted, and I’m so glad they have,” said Spencer Chandra Herbert, Premier’s Special liaison for Renters, former chair of the Rental Housing Task Force and MLA for Vancouver-West End. “We also know people renting out homes are facing increased costs and want to make sure they continue to make places available for long-term renters.”

The 2024 maximum allowable rent increase is significantly less than what it would have been prior to changes made by the Province in 2018 that limited rent increases to inflation. As inflation returns to normal levels, the Province intends to return to an annual rent increase that is tied to B.C.’s Consumer Price Index in future years. Under the previous government, maximum rent increases could include an additional 2% on top of inflation. This change has saved families hundreds of dollars.

Since 2017, the Province has taken steps to better protect renters, including banning illegal renovictions and strengthening the financial penalties for landlords who evict tenants in bad faith. A renoviction is an eviction that is carried out to renovate or repair a rental unit. 

In addition, government provided the Residential Tenancy Branch (RTB) with $15.6 million in additional funding to improve services and reduce delays. The capacity of the RTB’s Compliance and Enforcement Unit was also increased to allow for earlier interventions and to eliminate the need for hearings in the first place.

Quick Facts:

  • If a landlord served a tenant with a Notice of Rent Increase that takes effect in 2023 using the 2024 annual allowable rent increase, it is null and void and the tenant does not have to pay it. They must follow the set rent increase for 2023.
  • The maximum allowable rent increase is defined by the 12-month average per-cent change in the all-items Consumer Price Index for B.C. ending in July the year prior to the calendar year for which a rent increase takes effect.
  • For example, if a rent increase takes effect in 2025, the maximum allowable rent increase is the 12-month average per-cent change in the all-items Consumer Price Index for B.C. ending in July 2024.
  • The 2024 maximum increase for manufactured-home park tenancies will be 3.5%, plus a proportional amount for the change in local government levies and regulated utility fees.
  • The rent increase does not apply to commercial tenancies, non-profit housing tenancies where rent is geared to income, co-operative housing and some assisted-living facilities.

 

Angela Calla is an 19-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 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. 

Bank of Canada Holds The Overnight Policy Rate Steady at 5%

General Angela Calla 6 Sep

Bank of Canada Holds Rates Steady Acknowledging Economic Slowdown

With last Friday’s publication of the anemic second-quarter GDP data, it was obvious that the Bank of Canada would refrain from raising rates at today’s meeting. Economic activity declined by 0.2% in Q2; the first quarter growth estimate decreased from 3.1% to 2.6%.

Today’s press release announced, “The Canadian economy has entered a period of weaker growth, which is needed to relieve price pressures.” The Q2 slowdown in output reflected a “marked weakening in consumption growth and a decline in housing activity, as well as the impact of wildfires in many regions of the country. Household credit growth slowed as the impact of higher rates restrained spending among a wider range of borrowers. Final domestic demand grew by 1% in the second quarter, supported by government spending and a boost to business investment. The tightness in the labour market has continued to ease gradually. However, wage growth has remained around 4% to 5%.”

Lest we get too comfy with a more dovish stance in monetary policy, the central bank warned that the Governing Council remains resolute in its commitment to restoring price stability.

Inflationary pressures remain broad-based. CPI inflation rose to 3.3% in July after falling to 2.8% in June. Much of the rise in July was caused by the statistical base effect. Nevertheless, current harbingers of inflation remain troubling. The increase in gasoline prices in August will boost inflation soon before easing again. “Year-over-year and three-month measures of core inflation are now running at about 3.5%, indicating little recent downward momentum in underlying inflation. The longer high inflation persists, the greater the risk that elevated inflation becomes entrenched, making it more difficult to restore price stability.”

The Bank also continues to normalize its balance sheet by letting maturing bonds run off. This quantitative tightening keeps upward pressure on longer-term interest rates.

Tiff Macklem and company concede that excess demand is diminishing and the labour markets are easing. The unemployment rate rose to 5.5% in July, up from a cycle low of 4.9%, and job vacancies continue to decline. Net exports have slowed, and the Chinese economy has weakened sharply. Consumers are tightening their belts as the saving rate rose and household spending slowed markedly in Q1.

Monetary policy actions have a lagged effect on the economy. As mortgage renewals rise, peaking in 2026, the economic impact of higher interest rates will grow. Homeowners renewing mortgages this year are seeing roughly a doubling in interest rates.

The Governing Council will focus on the movement in excess demand, inflation expectations, wage growth and corporate price decisions.

Bottom Line

The Bank of Canada, though independent, is coming under increasing political pressure. In an unusual move, the premiers of both BC and Ontario have publicly called for a cessation of rate hikes. Even so, the BoC is keeping its hawkish bias to avoid a bond rally that could trigger another boost in the housing market, similar to what we saw last April. The government bond yield is hovering just under 5%, having breached that level recently with the release of robust US economic data.

There are two more meetings before the end of this year, and many are expecting another rate hike in one of those meetings. The odds of this are less than even, given the downward momentum in the economy.

The central bank’s next decision is due October 25, after two releases of jobs, inflation and retail data, gross domestic product numbers for July and an August estimate.

(Courtesy of Dr. Sherry Cooper, Chief Economist, Dominion Lending Centres)

Angela Calla is an 19-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 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. 

September Newsletter

General Angela Calla 5 Sep

Welcome to the September issue of my monthly newsletter!

This month, I am covering what you need to know about condition-free offers, plus since the kids are headed back to school, now is a great time to teach them about money. Also, hear the economic forecast straight from our Chief Economist, Dr. Sherry Cooper!

Market Beware: Condition-Free Offers

When it comes to purchasing a home, most offers include “conditions” (or “subjects” if you are in the provinces of British Columbia or Manitoba), which are requirements or criteria to be met before the sale can be finalized and the property is transferred.

Some of the most common conditions include:

  • Financing approval
  • Home inspection
  • Fire/home insurance protection
  • Strata document review if applicable

The purpose of these conditions is to protect the buyer from making a poor investment and ensure that there are no hidden surprises when it comes to financing, insurance, or the state of the property.

These conditions are written up in the purchase offer with a date of removal. This is agreed to by the seller before the sale is finalized. Assuming the conditions are lifted by the date of removal, the sale can go through. If the conditions are not lifted (perhaps financing falls through or something is revealed during the home inspection), the buyer can waive the offer and the purchase becomes void.

In some cases, homebuyers choose to approach an offer without conditions.  Below we have outlined the impact of what this means for buyers and sellers to help you better understand the risks and outcomes:

The purpose of these conditions is to protect the buyer from making a poor investment and ensure that there are no hidden surprises when it comes to financing, insurance, or the state of the property.

These conditions are written up in the purchase offer with a date of removal. This is agreed to by the seller before the sale is finalized. Assuming the conditions are lifted by the date of removal, the sale can go through. If the conditions are not lifted (perhaps financing falls through or something is revealed during the home inspection), the buyer can waive the offer and the purchase becomes void.

In some cases, homebuyers choose to approach an offer without conditions.  Below we have outlined the impact of what this means for buyers and sellers to help you better understand the risks and outcomes:

Pros of Condition-free Offers

  • Buyers: The main benefit of a condition-free offer for a buyer is the ability to “beat the competition” in a heated market. However, it is not without risks.
  • Sellers: Typically, a condition-free offer will include a competitive price, willingness to work with the dates the seller prefers, and evidence that the buyer has already done as much research as possible. If time is sensitive for the seller because they are trying to purchase another home or want to move as soon as possible, they may also choose your offer over conditions offers to expedite the process.

Cons of Condition-free Offers

  • Buyers: As a buyer submitting a condition-free offer, you are assuming a great deal of risk in several areas including financing, inspection, and insurance:
    • Financing: While buyers may feel that they have a pre-approval and so they don’t require a condition to financing, it is important to recognize that a pre-approval is not a guarantee of financing. If you are submitting a condition-free purchase based on a pre-approval, buyer beware. The financing is subject to the lender approving the property and the sale; from the price and location to type of property or other variables the lender deems important. By submitting a condition-free offer without a financing guarantee (or an inspection, title check, etc.), there is a risk that the deal can fall through. Even when you do not include conditions on the offer, you still are required to finance your purchase. In addition, as deals are submitted typically with a deposit, there is a risk that if the condition-free offer falls through the buyer will lose their deposit. This amount can range vary in the thousands and is typically a percentage of the purchase price or down payment.
    • Inspection & Insurance: If a buyer is also opting to skip the home inspection and home insurance protection conditions to have the offer accepted, then they assume huge risk as they do not know what they are getting and whether or not the property is up to code for insurance.
    • Due Diligence: With condition-free offers, there is no opportunity for due diligence after the offer has been made. This requires the buyer to do all their research before their initial bid. Because it is firm and binding, a buyer who decides to back out will likely be met with serious legal ramifications. Submitting an offer without conditions is not due diligence and it is at the buyer’s behest.
  • For Sellers: When it comes to the individual selling the property, there is less risk with condition-free offers but not zero. While the benefit is essentially there is no wait to accept the offer on the seller’s side, they do not know for sure if financing will come through.

Financing Around Condition-free Offers

When submitting a condition-free offer, it is essentially up to the buyer to do as much due diligence as possible before submitting. They will need to identify what the lender is looking for to make sure they walk away with a mortgage. Though approval is never certain, prospective buyers placing a condition-free offer should do their very best to secure financing beforehand.

Contractual Obligations

Be mindful when it comes to purchasing offers versus purchase agreements. While your purchase offer is a written proposal to purchase, the purchase agreement is a full contract between the buyer and seller. The purchase offer acts as a letter of intent, setting the terms you propose to buy the home. If financing falls through, for example, then the contract is breached and this is where the buyer may lose the deposit.

It is also important to be aware of a breach of contract in the event that a seller chooses to take action. For example, if you submit a condition-free offer of $500,000 and cannot secure financing for that offer and the seller turns around and is only able to get a $400,000 deal with another buyer, they could potentially sue the initial buyer for the difference due to breach of contract.

Preparing a Condition-Free Offer

If you have decided to go ahead with a condition-free offer, regardless of the risks, there are some things you can do to mitigate potential issues, including:

  • Get Pre-Approved: Again, this is not a guarantee of financing when you do make an offer, but it can help you determine whether you would be approved or not.
  • Financing Review: Identify what the lender is looking for to make sure they walk away with a mortgage. Though approval is never certain, prospective buyers placing a condition-free offer should do their very best to secure financing beforehand.
  • Do Your Due Diligence: Look into the property and determine if there have been major renovations or a history of damage. This could come in the form of a Property Disclosure Statement. While this statement cannot substitute a proper inspection, it can help identify potential issues or areas of concern. If possible, conduct an inspection before submitting your bid/offer.
  • Get Legal Advice: This can help you determine your potential risk and ramifications of the offer should it be accepted, or otherwise.
  • Title Review: Be sure to review the title of the property.
  • Insurance: Confirm that you are able to purchase insurance for the home. Keep in mind, an inspection may be required for this but in some cases, you can substitute for a depreciation report if it is recent.
  • Strata Documents (if applicable): Thoroughly review strata meeting minutes and any related documents to determine areas of concern.

While there are things that can be done to help with condition-free offers, it is still risky. Ultimately submitting an offer with conditions gives you the time and ability to gather information on the above, as well as access to the property or home for inspections.

If you are intent on submitting a condition-free offer, be sure to discuss it with your real estate agent as they can determine if a condition-free offer is necessary, or if perhaps a short closing window would suffice to seal the deal. A good realtor will keep you informed of potential interest and other bids during the process as well. Their goal should be to maximize your opportunity and minimize your risk. In addition, before making any offers, be sure to contact me to discuss your mortgage and financing so you can make the best decision.

Back to School: Teaching Kids About Money

Financial independence is a critical skill for future success that your children will not learn anywhere else.

Not only does financial literacy help your children have more success in life, but it allows them to move out sooner and it avoids delaying your retirement with additional expenses to support them.

So, how do you teach your children about money?

  1. Review Your Attitude Towards Money: The first and most important thing is to examine your own attitude towards money. Are you a penny pincher? Frivolous spender? Do you buy on impulse, or take a long time to make a purchase? How much debt do you have? Your financial habits will shape your children. To ensure that you are setting them up for their best financial future, parents need to consider what messages they are sending with their own money habits.
  2. Give Your Children an Allowance: Providing an allowance to your children (especially one in exchange for chores) is an age-old way of teaching your kids about money. A good guideline is $1.00 per year of your child’s age. For a 10-year-old, this would be $10 per week.
  3. Teach Your Child to Save: If you are giving your child $10 per week in allowance for chores, encourage them to put even just $1 per week into a piggy bank. In six months, show them how much money they have saved and talk to them about why it is important, and what they can do with that larger amount now.
  4. Encourage Kids to Think Before They Buy: While it’s hard to get a 10-year-old excited about an RRSP, there are other ways to help them plan ahead. One is to encourage them to think about their purchases before they commit. They saw a toy on TV and they have to have it – teach them about how advertisements are designed to make you want something. Ask them to wait a week. Do they still want it?
  5. Involve Your Children in the Family Finances: It is more valuable than you might think to let your kids see and hear you discuss financial planning; let them be part of opening and paying bills or planning vacations. Explain why and how much you pay for certain things and discuss affordable choices. This helps them be part of the conversation and will work to instill a sense of financial responsibility as they grow up.

Remember, you are the best example to your children about money. Don’t be afraid to share the ups and downs with them. Be patient with your kids, but don’t give up! The best thing you can do as a parent is to promote financial security and independence

Economic Insights from Dr. Sherry Cooper

The Bank of Canada has a single mandate—to ensure that inflation returns to the 2% target. This means that the Bank will raise interest rates if inflation is too high and lower interest rates if inflation is too low.

The U.S. Federal Reserve, in contrast, has a dual mandate—to maximize employment given a 2% target for inflation.

July inflation data showed that the headline CPI inflation rose to 3.3%, up from 2.8% in June. One challenge in understanding year-over-year inflation data is base effects. Base effects occur when the current year’s inflation is compared to the previous year’s inflation, called the base year. If the base year has unusually high inflation, then the current year’s inflation will appear lower than it is.

For example, inflation in Canada was very high in June 2022. This means that inflation in June 2023 appeared to be lower than it is, even if there is no change in the underlying level of inflation.

Gasoline prices peaked in June 2022 and trended downward for most of the year. That makes y/y comparisons look worse starting last month. If you are only focusing on the annual change in inflation, you will be misled.

Looking at monthly changes in the headline inflation data can also be misleading because so many components of headline inflation are highly volatile. For example, monthly consumer prices in July rose 0.6% compared to only 0.1% in June. The y/y increase was smaller for core inflation measures. And if you exclude food, energy and mortgage rates, y/y inflation was quite moderate.

The main point here is that it’s complicated. I am more sanguine about last month’s inflation data than most Bay Street economists. The overall Canadian economy has slowed. Following the strong first quarter growth of 3.1%, Q2 GDP growth will likely come in at around a much more muted 1.2%. Job vacancies have fallen for a year, and the unemployment rate has risen to 5.5%–still low by historical standards but up from the record low this cycle of 4.9%.

The single major economic release ahead of the September 6 Bank of Canada policy decision is Q2 GDP, released on September 1. The BoC is expecting growth of 1.5%.

The impact on the economy of higher interest rates has a long lag. The full effects of the tightening will not be evident for a few more years. Given that most Canadian mortgage borrowers renew their mortgages every five years, the largest impact is yet to come. Nevertheless, higher interest rates have slowed the most interest-sensitive sectors.

Canadian new home prices edged down 0.1% in July, deepening the year-over-year decrease to 0.9%. In the same month, the yearly decline in the benchmark price of an existing home (as measured by the MLS HPI) eased to 1.5%. While prices for existing homes are still rising modestly, the momentum looks to have slowed as the market returns roughly to balance following the Bank’s latest two rate hikes.

Barring a massive upside surprise in Q2 GDP, the central bank will leave the policy rate unchanged at 5.0%. Longer-term market rates, however, have been rising, boosting fixed-rate mortgage yields. This results from economic and political concerns in the U.S. There is a good chance that overnight rates in Canada have peaked. If the economy remains too strong, the Bank will keep the door open for further tightening as inflation exceeds the 2% target.

 

Angela Calla is an 19-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 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. 

Rate Hikes Off The Table With Weak Q2 GDP Growth In Canada

General Angela Calla 1 Sep

Rate Hikes Are Definitely Off The Table

The Canadian economy weakened surprisingly more in the second quarter than the market and the Bank of Canada expected. Real GDP edged downward by a 0.2% annual rate in Q2. The consensus was looking for a 1.2% rise. The modest decline followed a downwardly revised 2.6% growth pace in Q1. (Originally, Q1 growth was posted at 3.1%.) According to the latest monthly data, growth dipped by 0.2% in June, and the advance estimate for economic growth in July was essentially unchanged. This implies that the third quarter got off to a weak start.

The Bank of Canada forecasted growth of 1.5% in Q2 and Q3 in its latest Monetary Policy Report released in July. The central bank is now justified in pausing interest rate hikes when it meets again on September 6th. Today’s report is consistent with the recent rise in unemployment. It suggests that excess demand is diminishing, even when accounting for such special dampening factors as the expansive wildfires and the BC port strike.

Some details of Q2 Growth

Housing investment fell 2.1% in Q2, the fifth consecutive quarterly decline, led by a sharp drop in new construction and renovations. No surprise, given the higher borrowing costs and lower demand for mortgage funds, as the BoC raised the overnight rate to 4.75% in Q2. Despite higher mortgage rates, home resale activity rose in Q2, posting the first increase since the last quarter of 2021.

Significantly, the growth in consumer spending slowed appreciably in Q2 and was revised downward in Q1.

Bottom Line

The weakness in today’s data release may be a harbinger of the peak in interest rates. Inflation is still an issue, but the 5% policy rate should be high enough to return inflation to its 2% target in the next year or so. As annual mortgage renewals peak in 2026, the increase in monthly payments will further slow economic activity and break the back of inflation.

The Bank of Canada will be slow to ease monetary policy, cutting rates only gradually–likely beginning in the middle of next year. In the meantime, the central bank will continue to assert its determination to do whatever it takes to achieve sustained disinflationary forces.

Today’s release of the US jobs report for August supports the view that the Canadian overnight rate has peaked at 5%. (The Canadian jobs report is due next Friday). Though the headline number of job gains in the US came in at a higher-than-expected 187,000, the unemployment rate rose to 3.8% as labour force participation picked up, growth in hourly wages was modest, and job gains in June and July were revised downward.

In Canada, 5-year bond yields have fallen to 3.83%, well below their recent peak shown in the chart below.

 

(article courtesy of Dr. Sherry Cooper – Chief Economist, Dominion Lending Centres)

Angela Calla is an 19-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 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. 

Bank of Canada to hold rates steady on Sept. 6; home prices to fall in 2023: Reuters poll

General Angela Calla 30 Aug

BENGALURU, Aug 30 (Reuters) – The Bank of Canada is expected to hold its key interest rate steady at 5.00% on Sept. 6 and stay at that level through at least the end of March 2024, according to a majority of economists in a Reuters poll, with a small but growing minority expecting one more rate rise.

Inflation, which the Canadian central bank targets at 2%, rose more than expected to 3.3% in July, and further price rises continue to be the upside risk to expectations the BoC has already reached its terminal rate.

The housing market, where prices surged about 50% during the coronavirus pandemic and have fallen only about 10% from their peak, is also showing signs of a revival, with forecasters in a separate Reuters poll raising price expectations for this year.

For the time being, an expected slowdown in economic growth to 1.1% in the second quarter and a rise in the jobless rate gives Bank of Canada policymakers plenty of room to leave interest rates unchanged next week.

Thirty-one of 34 economists polled Aug. 24-30 expect no change to the central bank’s overnight rate (CABOCR=ECI), with the remaining three expecting a 25-basis-point rise. Interest rate futures are pricing in no change next week, but are nearly split over whether rates rise once more.

“Our base case call at the moment is for them to keep the overnight rate steady at 5.00% … (and) throughout the rest of this year,” said Claire Fan, an economist at RBC.

Fan pointed out that by the October meeting, policymakers will have two more job market and inflation reports to consider.

In the latest poll, eight of 34 economists expect one more rate rise to 5.25% by the end of this year, compared with only one in a July poll. In response to an additional question, 60% of respondents, 12 of 20, said the risk of the central bank raising rates once more from the current level was high.

“We expect the Bank will hold the overnight rate steady at 5.00% through mid-2024 as the full impact of past rate hikes helps push the economy into a moderate recession. Still, additional BoC rate hikes are possible if economic growth is stronger than we anticipate,” said Tony Stillo, the director of Canadian economics at Oxford Economics.

A majority of economists, 24 of 34, expect the central bank will keep its policy rate at the current level or higher until at least the end of March 2024. The median shows 50 basis points worth of cuts by the end of June next year, in line with expectations for the U.S. Federal Reserve.

A scenario in which Canadian interest rates stay higher for longer could increase pressure on highly-indebted households, with almost 20% of Canadian mortgages due for renewal next year.

The Aug. 14-29 poll of 13 property analysts forecast average home prices would fall 5.0% this year, less severe than the nearly 9% drop expected just three months ago. Analysts expected a 12% fall in home prices at the beginning of the year.

“We’re not anticipating further rate increases from the Bank of Canada, but that threat alone is enough to keep buyers on the sidelines for the rest of this year,” said Sal Guatieri, senior economist at BMO Capital Markets.

“It won’t be until early next year … when it becomes clear the bank’s next move is to lower rates, that we’ll see the housing market strengthening once again.”

The prospect of higher mortgage repayments on ever-more expensive property, along with record immigration, is expected to drive further demand for rentals.

When asked what will happen to average rents for the rest of 2023, all 10 analysts said they would either rise slightly (5) or rise significantly (5). A majority of analysts also said rental affordability would worsen over the coming year.

“I think rents will continue to rise across Canada because of the shortage of housing that we’re seeing and the underlying sturdy demand,” BMO’s Guatieri said.

(courtesy of reuters.com)

Angela Calla is an 19-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 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. 

Tax-Free Gifting to your Children with a Reverse Mortgage

General Angela Calla 30 Aug

Rising house prices and interest rates make it more challenging for young Canadians to start families, own homes, or save. Parents often step in to help, with 35% of first-time buyers receiving financial assistance in a lump sum payment toward their purchase, while 25% of buyers received support on their monthly mortgage payments. HomeEquity Bank offers CHIP Reverse Mortgage solutions for Canadians aged 55+ to leverage home equity to help their adult children.

How can us as Mortgage brokers help parents give their children a leg-up in today’s economic climate?

The Reverse Mortgage can help parents provide a tax-free gift to their children. Let’s take Robert and Jonathan as an example.

 

Angela Calla is an 19-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 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. 

Access Youth – The Bus is going out into the dark, helped by your contributions

General Angela Calla 30 Aug

 

 

 

Angela Calla is an 19-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 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. 

Homeowners Affected by Canadian Wildfires – Merix Financial

General Angela Calla 24 Aug

Canada has been affected by ongoing, devastating wildfires since early this year, making for the worst wildfire season in our country’s history. In times of such turmoil and uncertainty, we know how important it is to keep your clients up to date with timely and relevant information. With their homes and their possessions at risk, we want clients to know that we have their backs and are here to help.

If any of your clients are affected by the wildfires, please stress the importance of acting as quickly as possible. We know there is so much on their minds right now, so we have put together some next steps to help guide them through.

Contact their insurance company

Should your clients be faced with any fire-related damages to their property, it is crucial that they contact their insurance company as soon as possible to make a claim. Neither you nor MERIX can make a claim on their behalf.

Contact MERIX Financial

We are standing by to provide the support and assistance your clients need. Please let them know they must contact MERIX to advise they have made a claim with their insurance company. Please direct your clients to our contact page where they can select their preferred method to reach out.

We will work closely with your client and their insurance team to ensure all involved parties have the information needed to support your clients during this difficult time.

Thank you for your continued trust and partnership. Together, we will help your clients navigate this difficult and emotional time.

Sincerely,

Your MERIX Financial Team

 

Angela Calla is an 19-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 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. 

BC Wildfires Response – First National

General Angela Calla 21 Aug

As the devastating wildfires in British Columbia continue to pose a significant threat, we understand the importance of providing timely and accurate information to you and your clients. At First National, we are committed to supporting you during these challenging times and want to ensure that you and your clients are equipped with the necessary guidance to navigate through this situation effectively.
In the event that any of your clients are impacted by the ongoing wildfires, it is crucial to take immediate action. Here are the steps your clients will need to follow:

1. Contact their insurance company: Advise your clients to contact their insurance company as soon as possible to open a claim for any fire-related damages to their property. First National does not have the ability to open a claim directly on their behalf.

2. Inform First National: To enable us to provide the necessary support and assistance, your clients will need to contact First National to let us know that they’ve made a claim with their insurance company. First National can be reached by phone at 1.866.557.5509, or your clients can submit a ticket through My Mortgage. Your client will need to provide:
• The name of their insurance company
• The adjuster’s name and contact information
• The nature/scope of the damage their home has experienced
Once this information has been submitted, a dedicated First National Insurance Representative will contact your client to work closely with them and their insurer to ensure that all appropriate actions are taken.

There may be temporary or short-term financial assistance options available to eligible clients. We will work closely with them to explore any potential options.

Thank you for your continued trust and partnership. Together, we will ensure the well-being of your clients.

Angela Calla is an 19-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 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. 

Canadian Headline Inflation Rises to 3.3%, But Core Inflation Shows Promise

General Angela Calla 15 Aug

July Headline Inflation Rose to 3.3%, But Core Inflation Improved

The Consumer Price Index (CPI) rose 3.3% y/y in July, up from a 2.8% rise in June. The acceleration in headline inflation was widely expected due to a base-year effect on gasoline prices, as a sizeable monthly decline in July 2022 (-9.2%) no longer impacts the 12-month movement. Excluding gasoline, the CPI rose 4.1% from 4.0% in June.

The mortgage interest cost index (+30.6%) posted another record year-over-year gain and remained the most significant contributor to headline inflation. The all-items excluding mortgage interest cost index rose 2.4% in July.

The CPI rose 0.6% in July, following a 0.1% gain in June, mainly due to higher monthly prices for travel tours, with July being a peak travel month. On a seasonally adjusted monthly basis, the CPI rose 0.5%.

Food price inflation eased last month but remains sticky.​

The core inflation measures will hearten the Bank of Canada. CPI-trim eased to 3.6% y/y in July, continuing the downtrend following the November 2022 peak. CPI-median held steady at 3.7%.

The sizable slowdown in other economic indicators suggests that Q2 GDP growth slowed to roughly 1.0% in the second quarter–markedly below the 3.1% pace posted in Q1. Labour markets are also easing with a meaningful drop in job vacancies and a rising unemployment rate.

Bottom Line

It is now likely that when the Bank of Canada meets again on September 6, the Governing Council will announce a pause in rate hikes. They will promise to remain ever vigilant, but there is a good chance that the overnight policy rate has peaked at 5%–up 1900% since March 2022.

We will unlikely see the first drop in the policy rate until June of next year. The Bank will proceed slowly, taking rates down by 25 bp increments. The low in the policy rate will probably be around 3%, well above the pre-pandemic level of 1.75%.

(Article courtesy of Dr. Sherry Cooper, Chief Economist, Dominion Lending Centres)

 

Angela Calla is an 19-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 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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