Photo: Kat R/Flickr

In January, the Bank of Canada’s decision to bring down the already low key interest rate of one per cent to 0.75 per cent blindsided many economists who were predicting a rise in rates in 2015. But will Stephen Poloz, the Governor of Canada’s central bank, lower the rate even further in his upcoming announcement on Wednesday, March 5th?

The interest rate shakeup came after years of steadiness: the one per cent rate had gone unchanged from September 2010 until early 2015. The January rate cut was framed as a way to help cushion the blows to the economy, such as the declines in employment and income that are expected to accompany falling fuel prices.

Speculation about another rate cut in March was rampant early last month when Carolyn Wilkins, Senior Deputy Governor, made a speech at the Ottawa Economics Association.

“Our inflation-targeting framework gives us flexibility on the timing to achieve the inflation target while also taking into account other important dimensions of the economy – such as financial stability and the economy’s potential,” she said.

“Stifling the rebuilding phase of the recovery could mean lost economic opportunity. That being said, if potential output growth turns out to be lower than we think, we have the tools to bring inflation back to target.”

The reference to the “tools,” namely the overnight lending rate, was interpreted as a sign that the central bank was willing to lower the rate yet again if the economy continues to falter.

In the daily snapshot of economic trends and events for February 24th, the Bank of Montreal (BMO) noted that oil prices declined three per cent that week. Sal Guatieri, Senior Economist, stated this “would also aggravate Canada’s economic slowdown…giving the Bank of Canada another reason to cut rates next week.”

But a speech made by Poloz at the University of Western Ontario in late February changed many analysts’ predictions for March.

“Our decision to lower the policy interest rate last month was intended to take out some insurance against both sets of risks. It gives us greater confidence that we can get back to full capacity and stable inflation by the end of 2016, instead of sometime in 2017, and it will cushion the decline in income and employment, as well as the rise in the debt-to-income ratio, that lower oil prices will bring,” said Poloz.

“The downside risk insurance from the interest rate cut buys us some time to see how the economy actually responds.”

Today, the Bank of Montreal said the governor’s speech “quashed expectations of another cut in March.” However, they haven’t ruled out further cuts in the future.

“We now look for an April rate cut assuming the data weaken, oil prices fall further or the Canadian dollar strengthens (absent an accompanying rise in oil).”

TD Economics echoed the belief that the rate will remain the same in March thanks to the governor’s speech. Economist Brian DePratto pointed out that crude oil prices “have recovered somewhat” and “it appears that a rate cut next Wednesday is not set in stone.”

Can You Trust Yourself to Buy and Sell your Home Properly Without a Realtor?

The Canadian real estate market continues to hum along. You may be one of the many people out there who have decided to take the plunge and become a homeowner, or maybe you are looking to sell your home. 

Your friends have tried it, so maybe you decide to go the route of a private sale of your home, embarking on your property search using the tools such as MLS, rew.ca or craigslist to help you. But what happens when you find that the process stalls and that you are not getting what you want out of the situation?

Has the promise of technology and ease been exaggerated in your case? Could the narrow exposure that your private sale offers keep potential buyers from even knowing about your home? And what about when you find your dream home…but can’t make an appointment to see it without a realtor to represent you in the process?

These are just some of the scenarios that can stand in the way of you buying or selling. If you find yourself in these situations, perhaps it is time to find yourself a good realtor.

For a quick overview of why realtors are invaluable for buying and selling your home, check out the infographic below.

Little-Known Factors That Could Affect Your Home Sale

Realtors offer experience and a network of connections that can be hard to find if you are embarking on this process alone. 

EXPOSURE

A realtor has a large network of associates, colleagues and mechanisms that will allow you to sell or buy faster and with better results. If selling, your property will be exposed to many more potential buyers through the power of mls.ca, as well as through other important channels such as social media, the agent’s home website and company website, and through word of mouth through the agent’s network of peers. 

 “Realtors have access to the Multiple Listing Service (MLS), which they can access 2 days before the new listings are available on the public MLS website. And having access to the sales history of the property, tax assessment, recent price adjustments, sales history in the area and other critical information can be vital in negotiating the best price for clients.”

KNOWLEDGE

A real estate agent will bring his/her experiences to the table. They are privy to much more data and information than we could obtain through private channels. For example, if you are a young family looking for a great neighborhood to raise your children, a realtor can help you find the perfect area. They do so by using their knowledge regarding the schools, parks, shopping and other amenities in the area.

A real estate agent can also help their buyer make informed decisions about all aspects of the building or structure that they potentially could own, such as any problems with structural integrity, liens on the property, strata rules and regulations etc. Finally, when it comes to the negotiating and legal side of buying or selling, a realtor has all the skills and paperwork needed to ensure that you are making the best and most confident decision possible.

SUPPORT

When you hire a realtor, they are at your call to help you view that home you love in a timely manner so that another buyer doesn’t snap it up. They are there to negotiate the price on the sale of your home so that you get the best amount possible, and the same goes for when you finally decide to put that offer in on your potential new home.

 “one of the most important key points (that a realtor brings to the table) is honesty and integrity.”

Conclusion

Though many sales take place as a result of website and social media exposure, the majority of real estate transactions continue to occur thanks to the powerful channels of communication between agents. In fact, if you are thinking of buying or selling a home, hiring a realtor may be the wisest decision that you will make. 

The promise and ease of the online world for buying and selling a home has shifted the power firmly in the hands of you, the consumer. Realtors are no longer the gatekeepers to vital home information they once were. However, the numbers don’t lie. 

Despite the advances in technology and availability of alternative sales model options, Canadian realtors continue to play a dominant role in the buying and selling of homes in Canada. 

So, are you planning to use a Realtor the next time you buy or sell a home?

Photo: Sergio Russo/Flickr

It’s only mid-February, but 2015 has already proven to be full of shocks and surprises for the Canadian economy and the impact is being felt in the country’s housing market.

The steep decline in oil prices caused organizations monitoring the housing market to readjust their forecasts and backpedal on predictions for 2015 and 2016 in a relatively short period.

In November, the OECD predicted that the Bank of Canada would raise its overnight lending rate by May 2015. Many other analysts agreed that a rate hike would likely occur before the end of 2015. Instead, the central bank cut the overnight rate a quarter per cent to 0.75 per cent on January 21st.

As late as mid-November 2014, Calgary was still described as one of Canada’s “red hot” markets, along with Toronto and Vancouver. According to the Calgary Real Estate Board’s latest report, home sales were down 38.9 per cent and new listings were up 39 per cent year-over-year in January. The Globe and Mail published a story on February 4th profiling the negative effects of the oil price slide on the city’s luxury market in late 2014 and early 2015. Clearly the sentiment in the market is less than sunny.

On the heels of the latest release of housing starts data from the CMHC, we combed through some recent reports published by Canada’s major banks to get a reading on the current outlook from market experts.

Read on for a rundown on what the banks’ economics teams are looking at now and down the line for the country’s housing market:

Royal Bank of Canada

• RBC has had a lot to say on housing in 2015, thus far. In its housing forecast for 2015 and 2016 published in mid-January, RBC downgraded its annual projection for the Alberta resale market in light of oil price declines. The bank said it expected resales to fall by 6.5 per cent in the province in 2015 — a blow to the Alberta market, but not “a knock-out punch.” This report was published prior to the Bank of Canada rate cut and the release of housing sales and price data for January.
• On February 9th, the bank released an update to its Canadian housing forecast for 2015 and 2016, necessitated by the surprise overnight rate cut, a dimmer view on oil prices in 2015 and a weak Canadian dollar.
• In the update, the bank said that home resales and prices will benefit from low interest rates on the national level, but market performance will vary tremendously on a regional level with Ontario, BC, Manitoba and Quebec benefiting and Alberta, Saskatchewan and part of Atlantic Canada seeing sharper drops in sales and prices in 2015. The largest decline will be in Alberta, RBC predicted, where resales are now projected to drop by 16 per cent in 2015 and 2.6 per cent in 2016.
• In a research note published yesterday, economist Laura Cooper wrote that the slowing in housing starts in Canada’s energy-dependent regions “failed to materialize” in January, referring to the CMHC data that showed housing starts increasing month-over-month nationwide, with Alberta showing pronounced strength.
• Even so, Cooper concluded that housing activity across the country will gear down in 2016 with an interest rate hike expected at some point that year.

Bank of Montreal

• Reacting to the CMHC’s release of housing starts data for January, BMO economist Benjamin Reitzes called the regional breakdown “a bit curious” and noted that the Prairies were “a surprising source of strength.” Reitzes was quick to point out, however, that starts in the region, particularly Alberta, will likely follow declining home sales within the next few months.
• Reitzes wrote that starts in Central Canada and BC are expected to maintain last year’s levels while some deceleration is expected from 2014′s pace on the national level.

TD Bank

• Like most economists, TD was surprised by the strength of the Canadian housing market in 2014, but forecast a softening in sales and prices in the cards for 2015 and 2016. In a quarterly economic forecast report from December 2014, the bank said that it expected the Bank of Canada to remain on hold until October 2015 while describing falling oil prices as “a dark cloud on the horizon.”
• In a report published on February 9th following the release of housing starts data from the CMHC, economist Randall Bartlett explained that the strength seen in the Prairies “likely reflects momentum from a strong year in housing demand overall in 2014 as opposed to renewed strength.”
• Bartlett also said that January housing starts do not reflect the Bank of Canada overnight rate cut and that the subsequent drop in lending rates should keep the Canadian housing market “more buoyant than would otherwise be the case.”

Scotiabank

• The bank’s last major comment on the Canadian housing market came from economist Adrienne Warren on January 15th, before the surprise Bank of Canada rate cut announcement. Warren wrote that low borrowing costs, moderate economic growth and favourable demographics will continue to support national housing demand in 2015. She acknowledged that slumping oil prices impact economic fundamental in Western Canada.
• Responding yesterday to the CMHC’s housing starts data, Scotiabank’s economics team were surprised to see construction activity maintaining its strength in Alberta despite “softness in home prices” and large spike in new listings for December. In the note, the economists were tight-lipped on how they saw things shaking out in oil-producing regions in the next few months, though they said it would be a story they’d watch carefully in the months ahead.
• Scotiabank is expected to release a comment on CREA’s January home prices and sales data set to be released later this month.

The hottest Vancouver-area developments in the first month of the new year included Kitsilano condos, Main Street townhomes and a Surrey high-rise.

10. West 10th and Maple by Pinnacle

9. The Oxford by Allaire and The Airey Group

8. Midtown by PortLiving

7. Uptown by Bosa Properties

6. The Independent by Rize Alliance

5. Glasshouse Lofts in Queensborough by Aragon

4. The Amazing Brentwood by Shape Living

3. SOLO District by Appia

2. Citti by CM Bay Properties

1. Black+Whites on Foster by Intracorp

The handsome rowhouse-style townhomes of Black+Whites on Foster are now on sale in Coquitlam. Priced from the low $500,000s, the spacious homes are inspired by 1930s New York architecture and feature private front doors, landscaped yards, attached parking and over-sized windows. Want in? Visit the sales centre and show home today at 548 Foster Avenue.