Housing Market to stay very stong through Spring 2010

Looks like Canada's housing boom will continue throughout the Spring. The inevitability of rates rising sometime later this year, combined with historically record rates on both the variable and fixed rates have kept Canadians on the hunt for properties. Other factors include buyers hoping to get into the market before the tighter mortgage rules come into effect April 19th, and the HST in July.

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The effects of our rising Canadian Dollar

Financial experts are saying that even with the Canadian dollar hitting par with the US, it may not slow down the inevitable rate increases that are planned by the Bank of Canada later this summer.

David Rosenberg, chief economist at Gluskin Sheff + Associates says "The Bank of Canada has had ample opportunity to talk the money markets out of pricing in a series of interest rate hikes beginning this summer,"

A strong dollar, which slows down our domestic trade to the US is supposed to slow our economic recovery by keeping inflation below the target 2% rate, thus keeping interest rates low. I guess we will have to wait and see.

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Young Canadians lead home buying this year

If you're between the ages of 18 and 24- you're the age group expected to lead the way in home buying this year in Canada.
This according to a new survey done by Royal Bank; they found that 15% of Canadians in this age group are very likely to buy this year, almost double that of last year. And 35% of young Canadians are intending to buy a home due to "good real estate prices and low interest rates".

Canadian Press says " It's a marked shift in the attitudes of younger Canadians, who have tightened their budgets over the past few years to cope with tough jobs markets and the recession."

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Sales better than expected during the Olympics

We won't know for a while what the long-term impact the Olympics will have on the housing market in the lower mainland, but real estate activity during the month of Feb was better than expected.
The Real Estate Board recorded 2,473 sales this February, almost 30% higher than January and close to double the 1,480 sales from last February.

Read the full article from the Vancouver Sun here

Bank of Canada keeps historic low rate

Bank of Canada has kept the overnight rate at the historic low of .25% (prime rate 2.25%). The key factors for the decision was positive 4th quarter growth in 2009, as well as the high CDN dollar that is keeping exports to the US very low. They don't expect a rate increase until at least July 2010. Please click the link for the full Globe and Mail article.

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Bank of Canada announcement Tuesday

The Bank of Canada is making an announcement on Tuesday March 2nd and it won't be that mortgage rates are going up, yet. Forecasters expect the Bank to Canada to keep their promise of no rate increases until June 2010 and keep the current overnight rate of .25%. But rates are still expected to rise near the end of the year.

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New mortgage rules announced for insured mortgages

New Changes to mortgage insurance Rules takes effect April 19th.

Federal Finance Minister Jim Flaherty announced prudent changes to mortgage insurance rules intended to come into force on April 19, 2010.

• All borrowers must meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term
• The maximum amount one can withdraw in refinancing their mortgage will be reduced to 90% from the current 95% of the value of one's home
• Non-owner occupied properties(rentals or investment properties) will require a minimum down payment of 20%, this is a change from the minimum 5% down.
  

There were no changes to down payment requirements or length of amortizations for owner-occupied residences.

*picture courtesy of Financial Post