It appears that many industry leaders believe interest rates are going to remain low for a while yet. Recent comments by Finance Minister, Bill Morneau, also support this prediction. The Canadian Government is counting on government bonds to remain considerably low for at least the next 2 years. We are, of course, still subject to global fluctuations, especially with our neighbouring country to the south. Despite this possibility the US central bank has reduced to concerns with respect’s to interest rate movements with their “go slow” policy still in effect. 

The Canadian Real Estate Association (CREA) posted Home resale numbers February 2016. They slightly increased their national numbers forecasts from a 1.1% decrease nationally to a slight increase of 1% overall. While the CREA felt home sales were strong enough to up their forecast for the year, the figures are really a mark of two very strong cities, Vancouver and Toronto and down turning real estate prices in Alberta, Saskatchewan Newfoundland and Labrador.  Home resale numbers from the Canadian Real Estate Association were good enough for the organization to up its forecast for the year. CREA has gone from projecting a slight, 1.1% decrease in sales to a slight, 1.0% increase.

First time home buyers or if you have not owned a home for 5 years, $750.00 tax incentive. If you bought a home last year, and you’re a first time home buyer, be sure to file for your Home Buyers Tax Credit (HBTC). The $5,000 non-refundable tax credit gives you up to $750.00 in tax benefits. Also, if you or your spouse have not owned and lived in another home in the last 5 years, you qualify for the HBTC as well. Find out more

For more information, visit www.actionplan.gc.ca/en/initiative/first-time-home-buyers-tax-credit. 

Rules changes announced yesterday by the BC Government, aims at tackling the provincial housing affordability issue. Effective immediately, a new break for purchasers of newly built homes will benefit from this change. Canadian residents who live in the new property for a minimum of one year, will save up to $13,0000 in transfer tax for new homes up to a value of $750,000. The break will be offset by an increase in the tax for homes over $2 million, from 2 per cent to 3 per cent.  “The PTT exemption for new homes up to $750,000 will help stimulate supply of new housing and provide more opportunities for home ownership across the province. This exemption is commendable, however with many new housing projects taking years to complete, it may not have the immediate impact desired by the government.” Announces the BC Real Estate Association. In addition, PTT has changed so that there is now a 3% tax on amounts over $2,000,000.00. The 3% tax is only paid on the amount over $2,000,000.00, not the full price. First time home buyers exemption will remain in place for homes under $475,000 For more information on this change, contact 1-800-687-9020 or go online at www.dreyergroup.ca

Not all mortgage brokers are created equal. Some work for banks and call themselves mortgage specialists. They can only offer the banks mortgages they represent. Independent mortgage brokers have access to over 40 lenders and up to 400 mortgage products across the country. Some mortgage brokers work alone and others have teams. Mortgage brokers with teams typically have systems and processes in place in their office to get you approved quickly. Other mortgage brokers do lower volumes. Brokers that do high volumes can have access to specialized rates, products and lenders as well as dedicated underwriters at many lenders to help you get approved. Finally, experience is also very important. The mortgage industry is complicated and has seen many changes over the past few years especially. An experienced independent mortgage broker can guide you through the mortgage process, offer solutions customized to your needs and make the process easy and smooth. If you have any questions about working with a mortgage brokers, please do not hesitate to reach out. 

Further to last week’s news, we expect interest rates to remain low for the first part of 2016.  We may see a slight increase by lenders as Ottawa is increasing their fee for insured mortgages.  Investors are also looking for higher returns.  Mortgage lenders will indeed pass this cost onto the consumer which may only equate to an extra .1%.  For example, a borrower would pay an extra $116 per year on a $300K loan.  www.dreyergroup.ca 

Latest data released by the Bank of Canada suggested that the labour market has been resilient nationwide excluding the resource sector. GDP growth to remain moderate allowing interest rates and particularly Canadian mortgage interest rates, to remain stable for the foreseeable future.