Fall/Winter 2019

The Calendar has rolled into November, it’s officially Fall/Winter 2019. Justin Trudeau is still our prime minister and the Bank of Canada governor is still Steven Poloz.  The real estate market is still strong however we have seen some slowing and a shift closer to a buyers market. The Bank of Canada recently announced the key lending rate will remain unchanged while the US Fed moved to lower theirs.  The Bank of Canada’s decision here is  little perplexing given they are expecting the economy to slow even further. The Bank of Canada could be looking at cutting rates as early as their next meeting.

2019 has been a year of change and I expect that trend to continue as we round out the year.  As always, in every market there is opportunity.  Sellers in a slowing market will feel the tightening.  But we have a lot of positives as well. Recent years saw exceptional growth in prices, likely meaning your still making gains and you can reap the rewards as a buyer in the same market.  It’s just a shift in thinking.  Cheep interest rates with 5 year fixed rates that still start with a 2 is great news and offers would be buyers an opportunity to participate affordably, and current homeowners the ability to  secure a cheap rate and layout their plans for the future.

The Liberal government has promised to make home ownership more affordable for first time buyers. However the current first time home buyers incentive program does little to help. If they were serious about making things more affordable they would look at bringing back 30 year amortizations, re-thinking the stress test,  and putting an end to money laundering in Canadian real estate that has been propping up prices.  All things that can be done without using tax payer dollars to fund them.

For now interest rates remain very attractive for both fixed and variable rates.  The variable could get cheaper if the Bank of Canada moves lower in the coming months. Fixed rates are a different scenario as they are closely tied to the bond markets.  Higher yields generally mean higher fixed interest rates.  In recent weeks we have seen strong yields and interest rates have inched up a little,  we”ll have to monitor this trend moving forward.

Wish you all the best this coming season,  Get out there and enjoy it!

Dan Macor