Fall Economic Statement Delivered Despite Chrystia Freeland’s Resignation

General Angela Calla 18 Dec

 
Chrystia Freeland Resigns On The Day of The Fall Economic Statement
Finance Minister Freeland rocked markets today by submitting her resignation from Cabinet. Trudeau had asked her to take another Cabinet post, but she declined in a scathing letter accusing Trudeau of “costly political gimmicks” like “bribe-us-with-our-own-money cheques for $250 and a two-month GST holiday.

“Inevitably, our time in government will come to an end,” Ms. Freeland said, openly acknowledging what polls have been saying for over a year. “But how we deal with the threat our country currently faces will define us for a generation, and perhaps longer.”

The Federal deficit for 2023-2024 grows from $40 billion to $61.9 billion, partly boosted by a court settlement to pay funds to Indigenous children. The deficit far surpasses Freeland’s guardrail of $40.1 billion for last year’s budget deficit. New spending initiatives were announced amounting to $24 billion over the next six years. The most significant component is accelerated incentives to encourage business investment to improve productivity. This is very similar to a program issued by Finance Minister Frank Morneau years ago.

Dominic LeBlanc has been sworn in as the new Finance Minister.
Bottom Line

Today’s Fall Economic Statement took a backseat to the news that Chrytia Freeland resigned. There is more talk of a Trudeau resignation and an early election. Liberals are suggesting that Trudeau has stayed on too long, likening him to Biden. The caucus is meeting at 5 PM today.
Dr. Sherry Cooper
Chief Economist, Dominion Lending Centres
drsherrycooper@dominionlending.ca

 

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 home sales rose again in November as new listings declined and prices rose

General Angela Calla 18 Dec

The Canadian Housing Market Strengthens Further

Home sales activity recorded over Canadian MLS® Systems rose again in November, building on October’s surprise jump.

Sales were up 2.8% m/m in November compared to October and now stand a cumulative 18.4% above where they were in May, just before the first interest rate cut in early June. Actual (not seasonally adjusted) monthly activity was 26% above November 2023.

The November increase was driven by gains in Greater Vancouver, Calgary, Greater Toronto, and Montreal and double-digit sales increases in smaller cities in Alberta and Ontario.

According to Shaun Cathcart, CREA’s Senior Economist, “Not only were sales up again but with market conditions now starting to tighten up, November also saw prices move materially higher at the national level for the first time in almost a year and a half. Normally, we might expect this market rebound to take a pause before resuming in the spring; however, the Bank of Canada’s latest 50-basis point cut together with a loosening of mortgage rules could mean a more active winter market than normal.”

New Listings

New listings edged down 0.5% month-over-month in November, building on a larger 3% decline in October. With sales also rising in November, the national sales-to-new listings ratio tightened to 59.2%, up from 57.3% in October. Between April and September this year, the measure had been in the 52% to 53% range. The long-term average for the national sales-to-new listings ratio is 55%, with a sales-to-new listings ratio between 45% and 65%, generally consistent with balanced housing market conditions.

“October and November marked the start of the long-awaited rebound in resale housing activity, with the combination of lower borrowing costs and more properties to choose from coaxing buyers off the sidelines,” said James Mabey, CREA Chair.

A little more than 160,000 properties were listed for sale on all Canadian MLS® Systems at the end of November 2024, up 8.9% from a year earlier but still below the long-term average for that time of the year of around 178,000 listings.

There were 3.7 months of inventory nationally at the end of November 2024, down from 3.8 months at the end of October and the lowest level in 14 months. The long-term average is 5.1 months of inventory, with a seller’s market below about 3.6 months and a buyer’s market above 6.5 months.

 

 

 

 

Home Prices

The non-seasonally adjusted National Composite MLS® HPI stood 1.2% below November 2023, the smallest decline since last April. The non-seasonally adjusted national average home price was $694,411 in November 2024, up 7.4% from November 2023.

 

Bottom Line

The Bank of Canada’s aggressive rate-cutting and regulatory changes that make housing somewhat more affordable have provided kindling for the Canadian housing market. While the conflagration isn’t likely to peak until spring, a seasonally strong period for housing, activity has already started to pick up. The November uptick in home prices could provide more impetus for potential buyers to move off the sidelines. The new housing initiatives go into effect today and tomorrow.

Debt-to-income ratios for Canadian households have improved as growth in disposable incomes continues to outpace borrowing. This bodes well for more robust residential real estate activity as the Bank of Canada continues to cut rates, albeit at a slower pace. We expect quarter-point rate cuts until the overnight rate, now at 3.25%, falls to 2.5% or even lower if US tariffs are introduced.

Article Courtesy of Dr. Sherry Cooper, Chief Economist, DLC

 

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. 

The Bank of Canada Cuts Its Policy Rate By Another 50 Basis Points

General Angela Calla 12 Dec

The Surge In Canadian Unemployment Keeps Another Jumbo Rate Cut In Play In December

The BoC slashed the overnight rate by 50 bps this morning, bringing the policy rate down to 3.25%. The market had priced in nearly 90% odds of a 50 bp move, where consensus coalesced. The combined slower-than-expected GDP growth and a sharp rise in the Canadian unemployment rate to 6.8% triggered the Bank’s second consecutive jumbo rate cut. Today’s move will take the prime rate down 50 bps to 5.45% effective tomorrow, reducing floating rate mortgage loan rates by a half point, easing the cost of borrowing and reducing the monthly payment increase for renewals. This should spark housing activity, which accelerated in October and November.

The policy rate is now at the top of the estimated neutral rate range, 2.25% to 3.25%, with more moderate rate cuts continuing into next year. However, monetary policy remains restrictive, as the 3.25% policy rate is still 125 basis points above inflation, which has declined to roughly 2%, the Bank’s inflation target.

Economists have suggested that the tone of the central bank’s press release is more hawkish than before, unsurprising following two consecutive jumbo rate cuts. The Bank continues to say that its future decisions are data-dependent and will be impacted by policy measures taken by the government. In particular, the Bank highlighted the coming GST cuts, dispersal of bonus checks and the significant reduction in immigration. These developments have offsetting implications for inflation.

Governor Macklem signalled that he anticipated “a more gradual approach to monetary policy” in his press conference. We are forecasting 25 bp rate cuts through at least the first half of next year. That would take the overnight rate down to 2.5% by early June, a huge boost to housing that will likely enjoy a strong spring season.

 

 

 

 

 

Monetary policy remains overly restrictive as the 3.75% overnight policy rate remains well above the inflation rate. We expect the overnight rate to fall to 2.5% by April or June of next year. This should continue boosting housing activity, which increased significantly in October and November.

Last week’s GDP data release showed that Canada’s third-quarter GDP grew a mere 1.0%, well below the Bank’s downwardly revised forecast of 1.5%. This, in combination with today’s employment report, bodes well for the Bank of Canada to consider cutting rates by another 50 bps seriously. However, given how aggressive they have been compared to the Federal Reserve, which will undoubtedly cut rates by only 25 bps in late December, they could be satisfied with a 25 bp cut for now.

 

Dr. Sherry Cooper
Chief Economist, Dominion Lending Centres

drsherrycooper@dominionlending.ca

 

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. 

November Jobless Rate Surges to 6.8% in Canada Despite Strong Jobs Growth

General Angela Calla 10 Dec

The Surge In Canadian Unemployment Keeps Another Jumbo Rate Cut In Play In December

Before the release of today’s Canadian Labour Force Data, the odds favoured a 25 basis point drop in the overnight policy rate when the Bank of Canada meets again on December 11th. The data showed more substantial than expected job creation, as the country added 51,000 net new positions in November compared to the expected rise of 25,000. However, nearly 90% of the job growth was in the public sector, dampening enthusiasm.

Public sector employment rose by 45,000 (+1.0%) in November and accounted for the majority of the overall employment gain in the month. The number of private sector employees and the number of self-employed people were both little changed in November.

The number of public-sector employees grew by 127,000 (+2.9%) in November compared with 12 months earlier. The increase was driven by the public-sector components of health care and social assistance (+81,000) and educational services (+48,000) (not seasonally adjusted). Over the same period, private-sector employment rose at a slower pace (+1.3%; +173,000).

Despite the sharp rise in employment, the jobless rate surged to its highest level in three years, bolstering the case for the BoC to consider another 50 bps rate cut next week. Statistics Canada said Friday that unemployment jumped 0.3 percentage points to 6.8%. The jobless rate is now the highest since January 2017 excluding the pandemic period.

Interest rates fell on the news. Traders in overnight swaps boosted the odds of a 50 basis-point cut at the Bank of Canada’s decision next week at more than three-quarters, from about a coin flip previously. The report was released at the same time as US nonfarm payrolls, which rose by 227,000 while the unemployment rate rose to 4.2%.

The report underscores ongoing labour market softness that had already convinced the Bank of Canada to ramp up the pace of rate cuts with a 50 basis-point reduction in October.

Other details in the report pointed to a slowing economy. Hours worked dipped 0.2%, posting its third decline in the past four months. Also flagging was wage inflation, which cooled considerably. After remaining very strong for months, wage inflation dipped to 4.1% in November, down from 4.9% in October and marking its slowest pace in two years.

After falling for six consecutive months from May to October, the employment rate—the proportion of the population aged 15 and older who are employed—held steady at 60.6% in November. Employment growth in the month kept pace with growth in the population aged 15 and older in the Labour Force Survey (LFS) (+0.2%). On a year-over-year basis, the employment rate was down 1.2 percentage points.

The proportion of long-term unemployed people has increased along with the unemployment rate. In November, 21.7% had been continuously unemployed for 27 weeks or more, up 5.9 percentage points from a year earlier.

The labour force participation rate—the proportion of the population aged 15 and older who were employed or looking for work—increased by 0.3 percentage points to 65.1% in November, offsetting a cumulative decline of 0.3 percentage points in September and October. The participation rate was down by 0.5 percentage points on a year-over-year basis.

Bottom Line

Monetary policy remains overly restrictive as the 3.75% overnight policy rate remains well above the inflation rate. We expect the overnight rate to fall to 2.5% by April or June of next year. This should continue boosting housing activity, which increased significantly in October and November.

Last week’s GDP data release showed that Canada’s third-quarter GDP grew a mere 1.0%, well below the Bank’s downwardly revised forecast of 1.5%. This, in combination with today’s employment report, bodes well for the Bank of Canada to consider cutting rates by another 50 bps seriously. However, given how aggressive they have been compared to the Federal Reserve, which will undoubtedly cut rates by only 25 bps in late December, they could be satisfied with a 25 bp cut for now.

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. 

December 2024 Newsletter

General Angela Calla 3 Dec

Welcome to the December issue of my monthly newsletter!
As the end of the year approaches, I wanted to have one more check-in with you and provide some final tips for 2024! Scroll down and check out my favourite home and finance resolutions, along with some tips for decluttering your home in preparation for 2025. Have a great month!

Resolutions for Your Home and Finances

As the new year approaches, it’s a natural time to reflect on our personal goals and set resolutions for the months ahead. Your home and finances are key areas where small, intentional changes can lead to big improvements in security, stability, and quality of life.

Here are some resolutions to get you started!

Create a Realistic Home Budget

A well-planned budget is essential for financial peace of mind. Whether you’re new to budgeting or want to refine your approach, creating a realistic budget helps prioritize spending, track bills, and put money toward meaningful goals.

  • Identify Fixed and Variable Expenses: List out fixed costs, like mortgage payments, utilities, and insurance, as well as variable ones, such as groceries and entertainment.
  • Set Savings Goals: Include savings as a “non-negotiable” in your budget, earmarking funds for home repairs, investments, or emergencies.
  • Track and Adjust: Track spending throughout the month and adjust where necessary. Financial apps like Mint or You Need a Budget (YNAB) make it easier to stay on course.

Set Goals to Build Home Equity

Building home equity is a key path to increasing net worth. Whether you’re planning to sell or stay in your home long-term, building equity can offer financial flexibility and security.

  • Make Extra Mortgage Payments: Even a small additional payment toward your mortgage principal each month can shorten your loan term and reduce interest costs. A biweekly payment plan is another effective method to pay down the principal faster.
  • Consider Strategic Home Improvements: Invest in upgrades that boost home value, like kitchen and bathroom remodels, or energy-efficient upgrades like new windows or solar panels. Prioritize improvements that add the most value to your property.

Develop a Plan to Pay Down Debt

Paying down debt (especially after the holidays!) can help free up cash flow. It is key to focus on high-interest debts first, such as credit cards, to maximize your payments.

  • Use the Debt Avalanche or Snowball Method: The avalanche method involves paying off high-interest debts first, while the snowball method focuses on smaller debts first. Choose the one that best fits your motivation style
  • Consider Refinancing or Consolidation: If you have a high-interest mortgage or multiple debts, refinancing or consolidating might reduce interest rates, making debt repayment more manageable
  • Celebrate Milestones: Paying off debt can feel challenging, so celebrate progress. Every milestone achieved brings you closer to financial freedom.?

Commit to Energy Efficiency to Lower Bills

Saving on energy costs can have a significant impact on your budget, especially in colder or warmer months. Simple changes around the home can save you money while benefiting the environment!

  • Invest in Smart Thermostats: A programmable thermostat can automatically adjust heating and cooling based on your schedule, saving energy when you’re not home.
  • Switch to LED Lighting: LED bulbs use significantly less energy and have a longer lifespan than traditional bulbs.
  • Insulate Windows and Doors: Adding weatherstripping to doors and windows keeps drafts out, making your heating and cooling systems more efficient.

Review Your Insurance Policies and Coverage

Insurance is a key element of financial security, but it’s easy to forget about it until something goes wrong. As you head into the new year, this is a great time to make sure you’re fully covered!

  • Assess Homeowners and Mortgage Insurance: Review coverage limits and ensure your policy covers potential risks, including natural disasters if you live in high-risk areas.
  • Shop for Better Rates: Contact your provider for discounts or shop around for new rates. Bundling policies, like home and auto insurance, can often yield savings.
  • Update Beneficiaries and Coverage: Life circumstances change, and your insurance should reflect that. Update your beneficiaries, adjust coverage, and ensure policies align with your financial goals.

Setting resolutions for your home and finances doesn’t have to be daunting! Start with small, actionable goals to help transform your finances – and your mindset – for 2025!

12 Tips for Decluttering Your Space

Decluttering can bring a sense of calm and order to your space, especially as the holiday season approaches.

 

Here are some practical tips to help get organized:

  1. Start Small and Set Achievable Goals: Avoid overwhelm by breaking down the decluttering process into manageable steps. Set realistic goals, such as dedicating just 15 minutes a day to tidying up. Begin with a small area—like a single drawer or shelf—and gradually expand to larger spaces as you build momentum and confidence.
  2. Use the “One-In, One-Out” Rule: For every new item you bring into your home, make it a rule to remove an old one. This simple habit keeps your space from accumulating unnecessary items and helps maintain a balanced, organized environment.
  3. Sort and Categorize with Purpose: Sorting items as you go makes it easier to stay organized and keep track of where everything belongs. Use boxes or bins labeled “Keep,” “Donate,” “Sell,” and “Recycle/Trash” to give each item a clear destination. This method ensures that you can tackle everything in one go without second-guessing.
  4. Focus on Essentials and Joy: When deciding what to keep, ask yourself, “Does this item serve a purpose, or does it bring me joy?” If the answer is no, it’s probably time to let it go. Focusing on essentials and things that spark joy can help you make more meaningful decisions about what truly belongs in your home.
  5. Digitize Paper Clutter: Free up physical space by scanning or photographing important documents and storing them digitally. Use cloud storage or an external hard drive to keep these files secure and easily accessible. This practice reduces paper clutter and provides a backup in case of loss or damage.
  6. Declutter in Layers for Lasting Results: Tackle clutter in layers to avoid feeling overwhelmed. Start with the most obvious items—like broken or rarely used belongings—and gradually work your way through more sentimental or difficult-to-decide items. Revisiting each area multiple times helps you refine your space down to the things you truly need or cherish.
  7. Adopt a “Capsule” Mindset for Clothes and Accessories: Build a capsule wardrobe by focusing on versatile, high-quality clothing pieces that you love and regularly wear. Store out-of-season items separately to keep your main closet neat and functional. This approach simplifies decision-making and can make daily routines smoother.
  8. Set Up Regular Decluttering Routines: Make decluttering a habit by scheduling quick, regular clean-ups—a few minutes each day or a larger session every month. Consistency prevents clutter from building up over time and helps you maintain a tidy, organized space effortlessly.
  9. Involve the Whole Family: Encourage family members to declutter their own spaces and lead by example. Demonstrating the benefits of a tidy, organized home can inspire everyone to participate, making the whole process faster and more enjoyable.
  10. Treat Your Space as “Prime Real Estate”: View the most visible and accessible areas of your home as “prime real estate.” Reserve these spaces for the items you use and love the most, and relocate or discard things that aren’t worth taking up valuable room.
  11. Embrace Simple Storage Solutions: Use baskets, bins, and clear containers to keep your belongings organized and out of sight. Labeling containers makes it easy to find what you need at a glance, keeping everything in order while reducing visual clutter.
  12. Reevaluate Seasonal Items Regularly: After each season, go through holiday decorations, seasonal clothing, and other temporary items to decide what’s worth keeping. Donate, sell, or discard anything you no longer use. This ongoing process will help prevent excess accumulation year after year.

 

These tips can help you create a cleaner, more peaceful environment and build habits to stay organized in the long term. Happy decluttering!

Economic Insights from Dr. Sherry Cooper

There is an unprecedented disparity between the economic and financial situation in the US and Canada. The Canadian economy is far more interest-sensitive than the US and, therefore, slowed more dramatically in response to the Bank of Canada’s restrictive policy to bring inflation back to its 2% target level.

The jobless rate in Canada has reached 6.5%, well above the level in the US, and job vacancy rates have plummeted. Wage inflation has been sticky at 4.9% but will likely edge downward in response to excess supply in the labour market.

Inflation accelerated to 2% y/y in October, compared to the cycle-low 1.6% in September, mainly because gasoline price deflation slowed. The odds of another 50 bps rate cut by the central bank—on the heels of a jumbo cut in October—have diminished, but a 25 bps cut is in the bag.

Market-driven interest rates in Canada are well below those in the US, owing to weaker economic activity and lower inflation. US interest rates surged on the news of the Trump election victory. Ten-year US Treasury yields rose sharply to a post-election high of nearly 4.5% on the presumption that with a Republican majority in the House and the Senate, Trump will move ahead with tax cuts, tariffs and deregulation. Trump has also threatened to limit the independence of the Federal Reserve.

Canadian long-term yields have risen far less since the election. Short-term interest rates are also lower in Canada than in the US. The Bank of Canada has eased monetary policy four times for a total decline in the overnight policy rate of 125 bps, compared to only one rate cut of 50 bps by the Fed. This unprecedented divergence bodes well for a rebounding housing market in Canada.

Housing activity picked up in October and early November in response to the surge in new listings, giving potential buyers a broader range of choices and lower interest rates. The steepening yield curve portends more significant declines in variable mortgage rates—tied to the prime rate, which declines with every cut in the overnight rate, than fixed rates, which move with longer-term bond yields.

The Bank of Canada, concerned about a weakening Canadian economy, will continue to cut the overnight rate at every meeting between now and mid-2025. By then, the policy rate will be roughly 2.5%, half the level at the peak in BoC tightening. This will likely trigger a robust spring housing season.

There is plenty of pent-up activity in the Canadian housing market as buyers have waited for lower interest rates and home prices, and sellers have been reticent to list their properties, hoping for a housing recovery. This is beginning to turn around as every easing move by the Bank of Canada boosts economic activity, particularly in the interest-sensitive housing sector.

 

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. 

55+, Equity-Rich But Cash-Poor?

General Angela Calla 28 Nov

I’d like to share some important information about reverse mortgages, a financial tool that is often misunderstood but can provide incredible benefits for Canadian homeowners aged 55 and older.

There’s a lot of misinformation surrounding reverse mortgages, so let’s set the record straight:

  1. Myth: The bank will own my home.
    Truth: You remain the homeowner and keep the title.
  2. Myth: I’ll owe more than my home’s worth.
    Truth: Reverse mortgages in Canada have safeguards to ensure you won’t owe more than the home’s value.
  3. Myth: It’s only for people in financial trouble.
    Truth: Many clients use reverse mortgages for smart financial planning, such as funding retirement or helping loved ones.

The Benefits of a Reverse Mortgage

A reverse mortgage allows you to:

  • Access up to 55% of your home’s value, tax-free.
  • Stay in the home you love without monthly mortgage payments.
  • Use the funds however you like—renovations, travel, helping loved ones with tuition or a down payment or supplementing retirement income.

A Real-Life Example

Let me introduce you to Mark and Susan, a retired couple who found themselves house-rich but cash-poor. They loved their home of 30 years and didn’t want to downsize, but they needed funds to cover rising living expenses and help their granddaughter with tuition.

Through a reverse mortgage, Mark and Susan unlocked $250,000 from their home equity, tax-free. They were able to:

  • Cover their granddaughter’s tuition without dipping into their savings.
  • Make long-overdue home renovations.
  • Enjoy a worry-free retirement with financial flexibility.

When their home is eventually sold, the loan will be repaid, and their children will still inherit the remaining equity.

Could This Be Right for You?

If you’re curious about how a reverse mortgage might fit into your financial plan, we’d be happy to connect to discuss your options.

Let’s chat! Simply reply to this email, or feel free to call us at 604-802-3983 to set up a no-obligation consultation.

Looking forward to helping you make the most of your retirement!

P.S. Know someone else who could benefit from this information? Feel free to forward this information to them!

 

 

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 Inflation increased to 2.0% y/y in October–up from 1.6% in September owing to a smaller decline in gasoline prices

General Angela Calla 27 Nov

October Inflation Rose to 2.0% As Gasoline Price Declines Were More Muted

The Consumer Price Index (CPI) rose 2.0% year-over-year in October, up from a 1.6% increase in September. Gasoline prices fell to a lesser extent in October (-4.0%) compared with September (-10.7%). The all-items CPI, excluding gasoline, rose 2.2% in October, the same growth rate as in August and September.

The smaller decline is partly attributed to a base-year effect, as prices fell 6.4% month over month in October 2023, stemming from lower refining margins and weaker global oil consumption.

On a monthly basis, prices for gasoline were up 0.7% in October, following a 7.1% decline in September.

Slower rise in shelter prices

Shelter price growth continued to ease in October, rising 4.8% year over year, compared with a 5.0% increase in September. Slower price growth in the mortgage interest cost index in October (+14.7%) compared with September (+16.7%) applied downward pressure on the shelter component. Mortgage interest costs have been decelerating year-over-year since September 2023, following a peak in August 2023 (+30.9%).

Similarly, rent prices grew at a slower pace in October, increasing 7.3% on a year-over-year basis, following an 8.2% gain in September. Nova Scotia (+5.2%) and Manitoba (+6.5%) decelerated the most. Although slowing, rent prices continue to increase and remain elevated. Compared with October 2021, rent prices increased 21.6%.

 

The central bank’s two preferred core inflation measures also quickened, averaging 2.55% yearly pace, faster than expectations and up from 2.35% a month earlier. According to Bloomberg calculations, a three-month moving average of those measures rose to an annualized pace of 2.8% from 2.1% in September.

After the release, overnight swaps traders trimmed their bets for a second consecutive large rate cut to about one in three, from a little less than a coin flip previously.

Bottom Line

The first acceleration of headline inflation in five months may bolster a case for the Bank of Canada to reduce borrowing costs gradually. After officials stepped up the pace of easing in October with a half-point cut, the next and this year’s final rate decision is on Dec. 11.

Still, Tuesday’s inflation print didn’t eliminate bets for another jumbo rate cut. That’s because the central bank had already expected a bump along the road, with consumer prices hovering around 2%, as policymakers keep cutting rates to boost economic growth.

When Governor Tiff Macklem and his officials delivered their outsize rate cut last month, they said they wanted to see a pickup in growth and demand. Preliminary industry-based data point to 1% annualized GDP growth in the third quarter, below the central bank’s 1.5% estimate. Final expenditure-based gross domestic product data is due at the end of this month.

The November employment report, released on December 6, is another critical data point for the central bank. The unemployment rate has been steady at 6.5% for the past two months. A meaningful rise in the jobless rate could encourage the Governing Council to go another 50 bps lower at their next meeting. That and GDP figures (released on November 29) will be watched closely to game the Bank of Canada’s next move. A 25 bps cut in the overnight policy rate is in the bag. A 50-bps cut is less likely.

Either way, the overnight policy rate, now at 3.75%, will be cut to roughly 2.5% by the middle of next year. This will continue to spur housing activity and could augur for a robust spring housing season.

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. 

 

Navigating Your First Home Savings Account (FHSA)

General Angela Calla 19 Nov

A First Home Savings Account (FHSA) is a powerful tool to help you save for your first home while enjoying tax benefits. Here’s what you need to know about contributing, tracking, and maximizing your FHSA participation.

Contribution Basics

  • Year One Contribution Room: When you open your first FHSA, you can contribute up to $8,000 in that year.
  • Annual Participation Room: Each year after, you’ll gain another $8,000 of contribution room, plus any unused room from the previous year, capped at $8,000.
  • Lifetime Contribution Limit: The total you can contribute over your lifetime is $40,000.

Example: If you only contribute $5,000 in the first year, the remaining $3,000 carries forward, giving you up to $11,000 of contribution room the next year.

Read the full details HERE

 

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. 

Latest Bank of Canada Rate Announcement & What It Means for You

General Angela Calla 23 Oct

This morning, the Bank of Canada made its highly anticipated announcement, confirming a 50 basis point decrease in interest rates.  Bank Prime is expected to follow from its current 6.45% down to 5.95% for most banks.  We are here to explain exactly what this means for you and how you can benefit from these changes.

 

How Does This Impact You?

• For those with an adjustable-rate mortgage, this decrease could lower your monthly payments on a $500,000 mortgage by approximately $150 a month.

• If you’re approaching your mortgage renewal, now is the time to reassess your options. This rate change opens up the opportunity to secure a lower rate and save thousands over the life of your mortgage.

• Looking to buy? This rate cut, combined with recent federal mortgage changes, could improve your qualification chances and increase your purchasing power, just as the market presents unique buying opportunities with more inventory.

 

Read the official press release from the Bank of Canada here

 

The next rate announcement is scheduled for December 11th, so this is the perfect window to review your current mortgage strategy. We’re here to help with:

 

• Mortgage reviews to ensure you’re maximizing savings

• Refinancing or renewals to secure the best available rates

• Home purchase options for buyers looking to take advantage of this favorable moment

 

As your Mortgage Broker, one of the many benefits for ANY mortgage is as rates continue to decrease, we do a full look back upon closing to ensure the lowest rate while protecting your credit.

Additionally, if you’d like to review other financial strategies outside of your mortgage, such as retirement planning, wealth protection, or tax strategies, we’re happy to introduce you to our trusted financial planning partners. This holistic approach can help you build and protect wealth for the future.

Please don’t hesitate to reach out if you have any questions or would like a personal review of your mortgage options. We’re here to ensure you get the best outcome!

 

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. 

More Good News On The Canadian Inflation Front

General Angela Calla 17 Oct

The Consumer Price Index (CPI) rose 1.6% year over year in September, the slowest pace since February 2021 and down from a 2.0% gain in August 2024. The main contributor to headline deceleration was lower year-over-year gasoline prices in September (-10.7%) compared with August (-5.1%). The all-items CPI, excluding gasoline, rose 2.2% in September, matching the increase in August for this measure.

Although the rate at which prices increase has slowed, price levels remain elevated. Compared with September 2021, the CPI rose 12.7% in September. Canadians continue to feel the impact of higher price levels for day-to-day basics such as rent (+21.0%) and food purchased from stores (+20.7%), which increased during that same 3-year period.

The CPI fell 0.4% in September after a 0.2% decline in August. Lower gasoline prices led to both the monthly and yearly movement in September. On a seasonally adjusted monthly basis, the CPI remained unchanged at 0.0%.

 

The central bank’s two core inflation measures remain sticky. Both measures were unchanged in September (see chart below). According to Bloomberg calculations, a three-month moving average of those measures fell to an annualized pace of 2.1% from 2.3% in August.

According to Bloomberg News, “After the release, traders in overnight swaps upped their bets that the Bank of Canada will opt for a larger rate cut at next week’s decision, putting the odds of a half-percentage-point reduction at about 75%. Previously, the odds were around 50%.” The Canadian dollar weakened further on the news relative to the greenback. The loonie has fallen for ten days, the longest streak since 2017. Canadian debt rallied across the yield curve, outperforming US Treasuries and pushing the two-year Canada benchmark yield to 3.03% and the 5-year bond yield to 2.92% by mid-day.

Tuesday’s data marks the first time since February 2021 that inflation is below the central bank’s 2% target and is the ninth straight month of headline rates running within its target range.

With inflationary pressures continuing to ebb and policymakers focusing more on preserving economic growth, the data give the central bank options to reduce rates quicker after cutting borrowing costs at 25 basis points at the past three meetings.

Bottom Line

While the September employment data were stronger than expected, Q3 GDP growth is slated to be roughly 1.8%, well below the Bank of Canada’s 2.8% forecast. Today’s inflation report is the last important data point before the Bank meets again on October 23. Late last month, BoC Governor Tiff Macklem warned that growth may be below policymakers’ previous expectations in Q3.

Excluding shelter costs, the consumer price index rose 0.4% from a year ago compared to 0.5% in August. Mortgage interest costs and rent remained the most significant contributors to the annual inflation rate change. However, rent prices increased at a slower pace in September, rising 8.2% versus 8.9% in August. Tuition fees, priced annually in September, also grew slower, increasing 1.8% compared with 2.5% last year.

Regionally, inflation is now at or below 2% in every province, with prices rising slower in September than in August in all ten provinces. The central bank will release new economic forecasts in the Monetary Policy Report next week. Macklem has said,  “decisive monetary policy action and the unblocking of supply chains” means “uncertainty about costs and inflation are much lower today than two years ago”.

Article courtesy of Dr. Sherry Cooper, Chief Economist – DLC

 

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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