
China Home Sales Continue to Rise in Latest Sign of Recovery
China’s home sales rose for a second month in March, according to a private data provider, signaling a recovery after policymakers expanded support for the sector.
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China’s home sales rose for a second month in March, according to a private data provider, signaling a recovery after policymakers expanded support for the sector.
(Bloomberg) -- More US banking turmoil, wider economic fallout, the Federal Reserve losing its inflation focus and even a “financial crash” are among a panoply of dangers troubling economists gathering by Lake Como.
“You can’t just stick a place on the market and keep your fingers crossed.”
UK house prices fell at the sharpest annual pace since 2009 after surging interest rates increased the cost of borrowing, one of the biggest mortgage lenders said.
China Vanke Co., the nation’s second-largest developer by sales, arrested an earnings slump by posting 22.6 billion yuan ($3.3 billion) in annual profit, underscoring the divide between private firms and those with state support amid a liquidity crisis.
Mar 1, 2021
BNN Bloomberg
,CIBC Deputy Chief Economist Benjamin Tal said many Canadians aren’t prepared for a shock to their mortgage rates as a result of volatility in the bond market.
In an interview Monday, Tal warned that upward pressure on rates could catch Canadian mortgage-holders flat-footed, even though underlying rates remain near historic lows.
“It’s all about the speed at which rates are rising. And, if we see another 30-, 40-, 50-basis-point increase in rates, that will be translated directly into mortgage rates in Canada. I would be very concerned,” he said, “because this market is not ready for a brief 100-basis-point increase in mortgage rates, by any stretch of the imagination. So, we have to be really careful when it comes to the housing market.”
The typical mortgage rate is closely tied to the yield on five-year government bonds, as most home loans carry a five-year duration. Yields on a Canadian government five-year bond have more than doubled over the course of the last month, rising to 0.83 per cent in a surge that has not been seen since 2010.
That upward rate momentum has prompted a pair of Canadian lenders - TD Canada Trust and Bank of Nova Scotia - to hike their five-year fixed rates, according to mortgage-tracker RateSpy.com. The posted five-year fixed rates at the Big Six Canadian lenders range between 4.59 and 4.79 per cent, with TD advertising the lowest lending rate of the group.
Further exacerbating the potential issue is that the fate of the Canadian bond market - and by extension, mortgage rates - is largely outside the control of domestic forces. Canada can be buffeted by developments south of the border, with the Bank of Canada estimating American macroeconomic news alone could account for more than 25 per cent of the variation in longer-term yields.
Tal said that outsized impact of American developments should garner plenty of caution when it comes to mortgage-market developments on this side of the border.
“We are price-takers. We cannot control the five or the 10-year rate,” he said.