The housing market won't cool until BoC raises rates: Mortgages of Canada CEO
The COVID-19 pandemic pushed many renters to move away from major urban cities in Canada. But now as vaccine rollout pace increases and pre-pandemic normal is in sight, some will want to be closer to where there are restaurants, entertainment and businesses. Real estate experts are saying time may be running out to capitalize on the rental market if you are thinking about moving into downtown areas.
Millennials most likely to be caught in real estate bidding wars
A new poll from Toronto-Dominion Bank found that 51 per cent of prospective homebuyers in Canada under the age of 35 said they are willing to take part in a bidding war to land the home of their dreams. However, less than one in five of those over the age of 55 said they would put in an offer above asking price. John Pasalis, president at Realosophy Realty Inc., isn't surprised by the results. “For starters, more affordable homes – the ones that most millennials can actually afford – are the homes that are most likely to receive multiple offers,” he said.
Does your portfolio need a spring cleaning?
Now that tax season is over and market activity is expected to slow in the summer, maybe now is the right time for a portfolio spring cleaning. Personal Finance Columnist Dale Jackson explains why you should reassess how market turmoil during the pandemic affected your portfolio and retirement savings. Here is a to-do list on how to do just that.
Beware homebuyers, rates won't stay low forever
During a news conference on Thursday, Bank of Canada Governor Tiff Macklem addressed the unsustainable rise in home prices seen in Canada. “Counting on ever higher house prices to build home equity that can be used to refinance mortgages in the future is a bad idea," Macklem said. He warned Canadians against taking on too much mortgage debt and insisted borrowers and lenders need to understand rates won't always be at historic lows.
Canada’s mortgage stress test just got harder
The Office of the Superintendent of Financial Institutions said in a release Thursday they will be applying tighter rules to the mortgage stress test starting June 1. The new qualifying rate for an uninsured mortgage – where borrowers have at least a 20 per cent down payment – will rise to either the mortgage contract rate plus 200 basis points or 5.25 per cent, whichever is higher. The OSFI Assistant Superintendent of Regulation Ben Gully said the changes imposed are to help mitigate financial risks coming from the housing market.
“It is important to understand that the recent rapid increases in home prices are not normal,”- Bank of Canada Governor Tiff Macklem