Blog
Bond Rate at Lowest Level in 2010
2010-08-16 | 10:57:08
The recent drop in fixed rates will cause penalties to increase due to higher interest rate differentials. If you are refinancing or breaking your current mortgage, make sure you re-check your penalties now.
Fixed rate mortgages today are running from 3.87-4.09%.
Variable rate mortgages are running from prime less 0.60-0.70%, depending on terms
Next meeting of the Bank of Canada is September 8th, 2010
Where to Buy: Barrie Made the Top 10 List
2010-08-16 | 10:53:09
When investing in real estate, sometimes it’s necessary to look beyond your own backyard. The Real Estate Investment Network (REIN), a national organization of investors, has compiled what it says are the top 10 Canadian cities in which to invest. Few are major cities and some are surprising. Don Campbell, president of REIN, as well as one of the researchers on the study, says the results are based on factors such as planned transportation improvements, or if the area’s average income, population growth and job growth are increasing faster than the provincial average.
Oddly enough, nothing east of Ontario shows up on the list, and while Mr. Campbell says cities like Halifax, Saint John and Moncton “still provide decent returns,” the top cities are ones that will outperform the national average between 2010 and 2015.
1. Calgary
Calgary is “poised to outperform the average by a wide margin,” says Mr. Campbell, making it the top-ranked city.
After two years of declining average resale housing prices, the Canada Mortgage and Housing Corp. has predicted they will increase year-over-year in 2010.
The REIN report credits the downturn to a much-needed correction, and that it was “economically impossible for the [Calgary] market to continue at the pace at which it was heading.” But now that it is coming out of the recession, along with economies elsewhere, Calgary’s strengths in producing food, fuel and fertilizer will boost its growth.
“Calgary is in a unique economic and geographic position to take advantage of the direct and indirect jobs this increase in demand will create,” says Mr. Campbell, who adds that with strong in-migration and renewed affordability, the city provides a good buying window for long-term investors.
2. Kitchener-Waterloo-Cambridge, Ont.
REIN refers to Canada’s Technology Triangle as the “economic Alberta of Ontario.” That means KWC is not only seen as the economic engine of the new Ontario economy, but also that it “will outperform all other major regions in eastern Canada,” Mr. Campbell says. For indicators, he points to job growth, student growth and a new light rapid-transit system.
3. Edmonton
Edmonton sits near the top of the report’s list because of its future potential. Calling it a “perennial overachieving market,” REIN says the city is a “growing market, [with] an increasing population, and a forward-looking leadership.”
It will also be the main benefactor of energy development in Western Canada, says Mr. Campbell, resulting in a “very affordable, strong rental market with strong in-migration from across Canada.” Major infrastructure improvements, such as the ring road and LRT expansion, will be key.
4. Surrey, B.C.
British Columbia’s second-largest city is growing so fast it could become even bigger than Vancouver.
“Just a decade ago, it was known as the punch line to many a joke,” Mr. Campbell says. But with two border crossings to the United States, links to five major highways, deep sea docks and four railways, Surrey is a prime location to do business, he says.
Although there may be a strong rental market, it’s a city that requires a closer examination, taking “neighbourhoods and even the street’s characteristics into consideration when deciding where to purchase,” REIN warns.
5. Maple Ridge & Pitt Meadows, B.C.
The Translink and Gateway Project infrastructure improvements have made these B.C. towns the “most accessible regions in [Vancouver’s] Lower Mainland,” the report says. They’ve come a long way, Mr. Campbell says. The unofficial motto of Maple Ridge used to be “You can’t get there from here.” As a result of poor infrastructure in the past, property values have been historically low in this area. But with the improvements, it’s predicted an additional 400 business will move into the area, REIN says, improving the demand for both residential and commercial property.
6. Hamilton, Ont.
“The perception no longer matches the reality of Hamilton,” Mr. Campbell says. “The city’s leadership, as well as local business owners, have transformed what was once a rough-and-tumble steel town to a city with economic vitality, diversification and population growth.” REIN applauds Hamilton’s leadership as being innovative in revitalizing the city, adding Hamilton
“has beaten its overall building permit value for the second year in a row.”
7. St. Albert, Alta.
“Long thought of as a satellite of Edmonton, St. Albert is poised to be the biggest benefactor of the new Edmonton Ring Road,” says Mr. Campbell, who adds that as the transportation access improvement is completed, the city will begin to experience “a flood of not only new residents, but also the relocation of companies and jobs into town.” Other attributes of the city include consistently low vacancy rates, high rents and strong property value increases. It also helps that the city has “turned itself into a major retail centre for the northern region while adding to its industrial and commercial job base,” REIN says.
8. Barrie & Orillia, Ont.
These two cities have been shedding the perception of being just cottage country and have become a “hot bed for growth,” Mr. Campbell says. University and college expansion campuses have brought new life to the area, and the addition of Go Train access has made them viable commuter towns for the Greater Toronto Area, REIN says. For investors, this all adds up to healthy property appreciation, a respectable vacancy rate of 4.7% and the youngest residents on average in a given Census Metropolitan Area (CMA).
9. Red Deer, Alta.
In the centre of the Edmonton-Calgary corridor, Red Deer is not close to either. But REIN suggests reviewing city plans, as there will be a lot of hidden opportunities. “The whole central Alberta region has witnessed very strong population and job growth, as well as a real estate market that has continually outperformed most other regions of the country,” Mr. Campbell says. He adds that with a continually expanding industrial and commercial job base, Red Deer is in a good position to “take advantage of the inevitable growth in demand for food, fuel and fertilizer.”
10. Winnipeg
Winnipeg is often left off the real estate investment radar, but Mr. Campbell says it’s a good city for “consistent economic performance — not too high during booms and not too low during downturns.” But people should stick to buying top-quality properties. REIN also notes that housing prices, after dipping last year, are back to double-digit increases, which could “lead to an influx of inventory on the market.” But with one of the lowest vacancy rates in the country, at 1.2%, there is room for movement. Another positive factor for the city is international immigration is expected to increase under the provincial nominee program being undertaken by the government.
Written By: Jesse Kinos-Goodin, Financial Post · Sunday, Aug. 8, 2010
Bank of Canada Announcement
2010-07-20 | 07:35:58
Bank of Canada Announcement: Prime Rate increase...
2010-06-01 | 13:33:53
Well it finally happened, the Bank of Canada raised it's rate by 1/4% this morning. This is the start of an upward trend with them.
Mortgage Rate Update...
2010-05-18 | 08:31:00
I just want to provide a head up for anyone who may be in the market for an upcoming mortgage and who may not be watching the Bank of Canada announcements or long term rate predictions. If you haven't been following them closely, they are still near the lowest in History however this will not last much longer!!
My office, Neighbourhood Dominion Lending Centres, looks at rates from 50 different lenders: Banks, Trust Companies and Credit Unions in Canada everyday, and we follow rates and trends very closely. One thing I can tell you for certain is that RATES WILL DEFINATELY BE GOING UP, and some industry professionals think substantially.
It may be worthwhile to have a quick look at your existing mortgage, to see if it makes sense to refinance or renew early. We're finding that even when there is a penalty for paying out your mortgage early, you can typically lower your payments and save thousands of dollars of interests over the term.
The other important thing work considering is refinancing your mortgage to pay off debt. It seems like today EVERYBODY HAS THEIR SHARE OF DEBT, whether it is on credit cards, personal loans, or lines of credit.
Most consumer debt is at a much higher interest rate, so we can probably consolidate it all into a single payment, save you several hundred dollars per month on your payment, and SAVE you thousands of dollars in interest. Why make several different payments each month and throw away tons of money in unnecessary interest when rates are so good?
Please feel free to contact me for a second opinion on your mortgage and make certain you have the best rate and mortgage available.
-Cory Kline
cory@ndlc.ca or 705-720-1001 ext 226
Greek Crisis- Interesting Article
2010-05-18 | 07:56:17
NORTH AMERICAN & INTERNATIONAL ECONOMIC HIGHLIGHTS
At this time it is important to put the Greek situation in perspective. Will we be talking about Greece 12 months from now? Clearly, no one can predict how the stock and bond markets will react in the coming weeks to developments in Europe. After all, as we all know, in this kind of situation the market is driven by emotions (panic?), not fundamentals. It is not enough to say that the impact of the crisis will be limited due to the fact that Greece is an insignificant player in the global economic arena. After all, Thailand which originated the Asian debt crisis of 1997 is not exactly an economic giant. The more important focus should be on the shape of the global economy at the eve of the crisis. And in this context note that the crisis is occurring in an environment of a recovering global economy while the EU's bailout of Greece implicitly guaranteeing the debt of larger economies such as Spain and Italy. The drivers of global growth now include China and India, which are less vulnerable to Europe's downturns. At the same time, Latin America and Southeast Asia enjoy much stronger government finances and more moderate exchange rate. These factors reduce their sensitivity to economic shocks. Furthermore, Greece, Portugal and Ireland don’t have the trade or capital market gravity of their larger European neighbors. The Greek crisis will end up being an important event in the history of sovereign debt, but its impact on the global economy will be minimal. More important focus should be on the fact that the crisis is an exaggerated preview of what we should expect to see down the road from other countries. After all, Greece is not the only country that is facing a mountain of debt. Yes, the magnitude is different but the direction is the same. In Greece, they call it austerity measures, in North America it will be called reduced spending and higher taxes. The point is that fiscal policy will work as a clear negative for overall economic growth. In Canada, for example, a government that was responsible for no less than 40% of overall economic growth during the past decade will start acting as a negative for economic growth in the second half of 2010 and beyond. The fiscal drag in the US will be much more significant. Accordingly, while the Bank of Canada will probably proceed with its plans to raise rates come June or July, theupcoming fiscal challenge suggests a very gradual approach. As for the stock market, any significant sell-off in the coming weeks should be seen as a buying opportunity.
Benjamin Tal
Senior Economist
http://research.cibcwm.com/res/Eco/EcoResearch.
next »