Latest Toronto Mortgage News

In the Newsroom Section of the All Toronto Mortgages website you find the latest Toronto mortgage news. You will also find mortgage news in my blog.

June Mortgage Update

TORONTO, June 04, 2008 - June is prime real estate season with for sale and open house signs springing up like dandelions. With this traditional buzz in real estate activity comes specials and discounts from different lenders trying to maximize market share during this busy time of year. So this is a great period to use the services of a mortgage broker as they are aware of these specials and can do the leg work for you. As well, many of these offers are coming from non traditional bank / brick & mortar type lenders that only a mortgage broker can access.

Did you know many insurance companies fund mortgages? We also have Dutch ( ING ) and Australian ( Macquarie Financial ) lenders now offering product within Canada. As well, there are billion dollar mortgage only companies offering a suite of mortgage options. So there is no need to just deal with the big five banks your parents and their parents mortgaged with.

Also of note is the next Bank of Canada rate announcement due Tuesday, June 10th. With Statistic Canada’s reporting last week an unexpected decline of the Canadian economy in the first quarter of this year, the first in five years, many experts are suggesting that is further fuel for governor Mark Carney to lower the bank prime rate another ¼ point. This could mean variable mortgage rates in the 3 % range.

So this a good season for mortgage shopping.

Michael Pezzack, AMP*

Mortgage Agent

alltorontomortgages

Michael Pezzack

Mortgage Consultant

tel: 416-850-2642

fax: 416-850-2643

cell: 416-358-1295

toll free: 1-866-644-4613

Scott Henson

Mortgage Consultant

tel: 647-238-8232

fax: 416-850-2643

toll free: 1-866-644-4613

		Steady GTA Resale Housing Market in May TORONTO, June 4, 2008 -- The Greater Toronto Area resale housing market recorded 9,411 transactions in May, Toronto Real Estate Board President Maureen O’Neill announced today. On a year-over-year basis the GTA average price increased four per cent to $398,148 in May from the May 2007 average of $382,787. Prices increased three per cent in the City of Toronto to $434,271 from $422,163 during the same period a year ago, while in the 905 Region there was a five per cent increase to $374,629 from $355,341 last May. “Price gains show that real estate continues to be a solid investment for the consumer,” said Ms. O’Neill. “We are confident about the market because employment in the GTA continues to be strong and interest rates remain low. As long as consumers have the financial resources to buy homes and a variety of choices to manage carrying costs, the market should remain stable.” “May’s sales figures represent a 16 per cent decline in the GTA from the record month a year ago when 11,146 sales were recorded,” said Ms. O’Neill. “More than 9,000 properties changing hands still represents considerable market activity.” In the City of Toronto, there were 3,711 sales, down 19 per cent from last May’s 4,578 sales and down 6 per cent from May 2006. In the 905 Region, 5,700 transactions were recorded, which represents a 13 per cent decline from the 6,568 sales during the same period a year ago but up 4 per cent from May 2006. “The Toronto Land Transfer Tax has been in effect for four months and the decline in sales has been running for the same time period,” said Ms. O’Neill. “We’re keeping a close watch on the effect of this new tax.” Two specific areas North of Toronto experienced increased sales activity in May. In Uxbridge (N16) sales were up 10 per cent, while Stouffville (N12) saw a 12 per cent increase in sales, driven mainly by detached home transactions. Housing Starts to Slow in 2008 OTTAWA, May 15, 2008 — New home construction will begin to slow in 2008, but remain high by historical standards, according to Canada Mortgage and Housing Corporation’s (CMHC) second quarter Housing Market Outlook, Canada Edition report. Higher mortgage carrying costs will be a catalyst for the decrease in residential construction to 214,650 units in 2008, from 228,343 in 2007. As a result, 7 of the 10 provinces will register a lower number of housing starts in 2008 than in 2007. “Strong economic fundamentals such as continuing high employment levels, rising incomes and low mortgage rates will provide a solid foundation for healthy housing markets this year,” said Bob Dugan, Chief Economist for CMHC. “Most of the pent-up demand that built up during the 1990s has now been fulfilled and residential construction activity will gradually move in line with Canadian demographic fundamentals. These factors will continue to exert downward pressure on housing starts, which will decline to 199,900 units in 2009.” Existing home sales, as measured by the Multiple Listing Service (MLS®), are expected to fall by 8.5 per cent in 2008 to 475,900 units. In 2009, the trend will continue with a decrease to 465,000 units (-2.3 per cent). Despite a slowdown of MLS® sales, demand remains strong by historical standards. For 2008 and 2009, MLS®price growth will remain above inflation. Prices will reach $323,000 (+5.1 per cent) in 2008 and $333,500 (+3.3 per cent) in 2009. At the provincial level, the Ontario economy is expected to improve slightly during 2008 and this will help sustain housing demand across the province. New home construction activity will be moderate between now and the end of 2008. Housing starts will move up to 72,175 units in 2008 from 68,123 units last year given an increase in new condominium projects; however starts will decrease to 65,000 units in 2009. The average MLS® price in Ontario rose by 7.6 per cent in 2007. For 2008 and 2009, the increases will be more modest at 3.5 per cent and 2.4 per cent respectively. As Canada’s national housing agency, Canada Mortgage and Housing Corporation (CMHC) draws on over 60 years of experience to help Canadians access a variety of quality, environmentally sustainable, and affordable homes — homes that will continue to create vibrant and healthy communities and cities across the country. For more information, call 1-800-668-2642. The term MLS® stands for Multiple Listing Service and is a registered trademark of the Canadian Real Estate Association (CREA). Bank rate cut again in January More cuts on the way The Bank of Canada cut its benchmark overnight lending rate to four per cent on January 22nd, and raised chances for further cuts in the near future. The trend-setting Bank rate, which is set 0.25 percentage points above the overnight lending rate, now stands at 4¼ per cent. Fallout from the subprime lending meltdown in the U.S. caused the Bank to slash its forecast for economic growth and inflation. Assessing the Canadian economy, it said the domestic economy will remain strong but a high Canadian dollar will undercut exports and overall economic growth. “The subprime lending meltdown is putting upward pressure on interest rates, so the Bank of Canada and the central banks of other nations will be leaning against the wind until the mess is sorted out,” said CREA Chief Economist Gregory Klump. “Since the meltdown will keep financial markets in turmoil for some time, the Bank all but said it would lower interest rates again in early March.” When the Bank decided to lower interest rates on January 22nd, the advertised conventional five-year conventional mortgage rate stood at 7.49 per cent. This is 1.09 per cent above where it stood at the beginning of last year. Competition among mortgage lenders remains stiff, which continues to help many borrowers negotiate discounts from advertised rates. However, fallout from the sub-prime mortgage debacle in the U.S. has caused credit conditions to tighten in financial markets, which is resulting in smaller discounts off advertised mortgage interest rates. Steady interest rates were factored into the CREA MLS® 2007 market forecast issued in November 2007. “Sales activity will stay strong and reach the second highest level on record this year. Prices are also forecast to continue rising. Additional cuts to mortgage interest rates is good news for housing affordability and Canadian housing demand,” Klump added. (CREA 22/01/2008)

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