St Patrick’s Day – Green Beer and Higher Mortgage Costs as of March 17th
The mortgage landscape in Canada has changed significantly since October 2016.
First, new standards for borrower qualification were introduced in early October, only weeks prior to government regulated implementation. The government did not converse or consult with any representatives of our industry. Nor did they provide reasonable notice - only the hard, “sledgehammer like” realization that things were going to drastically change for potential and existing homeowners. While interest rates range from 2.05% to 2.89% today, the “new” guidelines see all borrowers, with less than 20% down payment, qualifying at 4.64%. This reduces purchasing power by about 20%, thus the borrower pre-qualified in September for $300,000 is only able to purchase a home well under $250,000 today.
Secondly, rules were implemented by the government which now require institutions to pay higher costs for their portfolio of insurance, and to have increased levels of capital on reserve. This essentially means a higher cost of funds to the lender, and in turn you as the borrower. The new mortgage landscape also has tiered pricing which varies based on loan to value, amortization, insurability and colour of shingles!
Lastly, in mid-January there were also changes announced by the mortgage insurers (CMHC, Genworth and Canada Gauranty). Insurers thought it would be fun to introduce these changes on St Patricks Day, March 17th, 2017. Not very lucky for those securing mortgage approvals after March 16th! These changes see premiums rising up to 1.15% for insured purchases. As an example, if you have 10% down and are purchasing a home, your premium moves from 2.40% to 3.10%.
What does this all mean? Overall, it is more costly and complex to obtain mortgage financing. Our industry has been actively lobbying in Ottawa, and while I’m not confident any changes will be peeled back, hopefully the voice of our industry is heard and consulted moving forward.
If you or someone you know is actively searching for a property today, there will be potential savings should a contract and approval be in place by March 16th, 2017. If we can be of assistance in discussing the lending criteria and recent changes, please contact us to discuss.
Regina Market Update – January 2017
Mortgage Broker Regina – Kent Bittner
Being a leading mortgage broker Regina is something that Kent and his team take great pride in. To be a leader in the industry, it’s important to stay up-to-date and relevant on the latest market statistics relating to the housing market.
With the first month of 2017 nearly in the books, we can reflect on the year the market had in 2016 and what we can expect to see this year.
Over the course of 2016, 3,481 units were sold on the residential home market across Regina and its surrounding areas. This was a 3% jump over the 3,388 registered in 2015. Within the city of Regina alone sales in 2016 hit 2,834, a 2% increase from the previous year.
Per the Multiple Listings Service System, a 7% drop was experienced in the number of listings at the end of the year with 887 homes listed. This was the fewest amount of homes that were listed in a month since January 2014.
December 2016 saw 158 home sales across the city and the nearby areas, up 10% from December 2015. Also increasing was the total sales dollar volume for the month with a 1% gain to $49.3 million year-over-year. In Regina alone, 124 units were sold last month compared to 145 in the same period in 2015, a -14% difference.
Overall, a 3% rise occurred in total sales dollar volume for the year compared to 2015. Last year there was a total of $1.08 billion sold compared to $1.05 billion sold in 2015.
The average price for a home in Regina was $317,574 in 2016, a decrease of a mere 0.3% from 2015. Homes also sold in an average of 53 days, three days quicker than we saw in 2015.
Although there were challenges economically, the residential housing market remained steady in 2016. Sales slightly increased and we also saw minimal price hikes, largely due to the low supply of inventory.
Heading into 2017, the CEO of the Association of Regina REALTORS says that most economic and job growth predictions remain modest. We can expect to see a similar performance for the housing market that we saw in 2016 with steady sales and home prices.
If you’re looking at buying or selling a home in 2017, speaking with a mortgage broker Regina such as one from our team can give you the advantage you need.
For more information on how the team can help you, contact them today!
Regina Market Update – November 2016
As a mortgage broker in Regina, Kent Bittner makes it a goal of his to ensure that he and his team are prepared to help their clients to the best of their capabilities.
One method that Kent and his team have adopted is to review monthly market statistics that relate to Regina and the surrounding areas. This way, Bittner Mortgages can offer the most accurate, relevant advice to their clients and increase their chance of achieving ultimate client satisfaction.
In October 2016, total residential sales in Regina was dead-even with the amount sold in October 2015: 229 units. These numbers are based on Regina and its surrounding area’s Multiple Listing Service System, according to the Association of Regina REALTORS.
Overall for the month of October, 280 units were sold across all geographic areas. This was a 1% jump from October 2015 when there were 277 units sold. While a slight increase, these numbers were still down from both the five and ten-year average of 309 and 289 units, respectively, in the month of October.
When looking at Regina and its surrounding areas, the average price for a home was $291,741 in October 2016, a drop of 8% from October of last year. This number makes it one of the more affordable areas in Canada. Strictly within the City of Regina, the average sale price was $300,239. This was a 10% drop from October 2015.
Although the number of sales for all areas experienced a minimal increase, the total dollar volume recorded last month was significantly lower than it was in the same month in 2015. October 2016 had $81.6 million in sales after registered $87.7 in October 2015, a 7% fall. Additionally, Regina itself experienced a 10% drop to $68.7 million.
The drop in these numbers shouldn’t come as a surprise considering how much the average price has fallen year-over-year.
Homes took slightly longer to sell in October 2016 than they did in October of last year. Last month, the average number of days that a home spent on the market was 44 days, two longer than the average recorded in October 2015.
Active listings and new listings both saw year-over-year decreases as well. The number of active listings fell 10.5% to 1,107 while the number of new listings dropped by 13.3% to 339 units.
Although some of the statistics may seem alarming to some, the Manager of Operations and Members Services at the ARR isn’t worried. The sales numbers are for the most part the same as October 2015 and simply continuing a trend that we often see this time of year.
A lower number of listings and a decrease in sales are common in the Fall and Winter months and, although the area was below the five and ten-year averages in terms of sales last month, a lower amount of listings could encourage buyer demand in 2017.
How the next few months play out in the area will need to be monitored closely to see if we are experiencing the usual trend or if there is more we should be concerned about.
If you’re interested in buying or selling a home in the area, contacting a Regina mortgage broker like Kent Bittner can give you the advantage you need.
Contact Bittner Mortgages today to ensure you get the right mortgage for your home!
Interest Rates – What’s All the Noise About?
It seems that a great deal of the buzz in Saskatchewan as of late has been largely surrounding our beloved Riders and their surprising moves, the falling Loonie and the sliding price of oil. 2016 has started out with large losses related to all three of these headlines. I won’t dive too deep into the discussion of whether the Green and White could have signed the fan favourites, Dressler and Chick, as that’s a whole discussion that, in my opinion, involves a great deal of unknowns regarding what they were offered, our overall salary cap position and whether there are others already on their way to Saskatchewan as replacements. I will say, however, that they both were great members of our community and they represented our team and province over the years with elite performance, hard work and respect for others both on and off the field. Here’s hoping their stats don’t include multiple touchdowns and sacks when they inevitably face the Riders with their respective new squads.
Amongst these recent headlines, interest rates have also managed to draw some attention. Traditional media and various social media platforms have created enough noise to warrant the general public taking note and asking questions to those of us in the industry. The Royal Bank made noise in early January by announcing that they were raising mortgage rates. They were increasing most terms by 0.10%. This is a small increment and would normally go with much less attention than it generated with RBC’s move to start 2016. It fueled anticipation that lenders were going to raise rates for all terms and follow the lead of the largest Canadian Bank. In fact, the opposite happened with some broker channel lenders; we have had new fixed term reduced rate specials announced since the press grabbed the RBC announcement. Where will these fixed terms move in the coming months? While there is no certainty, I expect any movement in either direction to be minimal. They can’t go much lower, but also economic drivers dictate that they should not move upwards by any large increments in the foreseeable future.
Today the Bank of Canada captured the attention of the business media and thus Canadians were made aware of the meeting to announce any changes to the bank’s key overnight lending rate. In the days prior to the announcement, economists were split quite evenly with respect to those predicting a rate decrease versus those who felt the rate would hold at its current level. Just like the weather, it’s tough to predict economic events with any certainty.
The announcement this morning was in fact to maintain the target overnight lending rate at its current level, ½ %. This decision to hold steady was based on a variety of factors in the Canadian economy. More details surrounding the driving factors can be found at http://www.bankofcanada.ca/2016/01/fad-press-release-2016-01-20/ . The rate announcement means that consumers with variable rate mortgages and lines of credit will see no change in their interest rates. The Prime lending rate for our Chartered Banks is at 2.70% and today’s market options for variable rates are as low as 2.25%. The mortgage rate discussion on Fixed vs Variable is one that should be had with an industry professional to ensure all factors are being considered.
Kent Bittner | Owner/Broker |
Dominion Lending Centres – Bittner Mortgages
PH: 306.569.7050 | TF: 1.877.566.7049 | F: 306.546.4060
Bank of Canada Maintains Rate
As we head towards an election in October, the Canadian economy is being heavily discussed amongst households from coast to coast. Interest rates decreased twice in 2015, and there has even been mention of the “R” word – recession. Data can be analyzed in various ways, and the argument of whether we are or are not in a recession is a moot point, in my opinion. Canada has survived tough economic times with strength and resilience relative to many other nations worldwide. The weakness in the resource sector, in particular oil, has been a huge factor in the weaker economic data as of late.
Many economists predicted in late 2014 that interest rates would rise by mid 2015. Like the weather, global and domestic economies are tough to forecast, and rates decreased in January instead, moving earlier and in the opposite direction (hopefully the Saskatchewan weather reacts similarly in January 2016!) Our Dominion Lending Centres Chief Economist, Dr Sherry Cooper, gives a thorough overview of what backed the Bank of Canada’s decision today and what we might expect 12-24 months out re: interest rates within our country. Please click the following link for more details:
How does this all apply to mortgage rates and other borrowing? Variable rates and line of credit rates are unlikely to move in the next 12-18 months. Fixed rate mortgages are driven by somewhat different benchmarks and could move in either direction, regardless of the Bank of Canada. If you’d like to discuss how this affects your individual scenario now or into the future, please feel free to arrange for a meeting or call 306.569.7050 to discuss.
Kent Bittner | Owner/Broker |
Dominion Lending Centres – Bittner Mortgages
PH: 306.569.7050 | TF: 1.877.566.7049 | F: 306.546.4060