Beth Marks

Bank of Canada update on rates and forecasts

Beth Marks — Mon, 08 Mar 2010 23:05:00 GMT

The Bank of Canada maintains interest rates

OTTAWA– March 2nd, 2010 – As was widely expected, the Bank of Canada held its benchmark overnight lending rate steady at 0.25 per cent at its setting on March 2, 2010. The trend-setting Bank rate, which is set 0.25 percentage points above the overnight lending rate, remains at 0.5 per cent.

The Bank acknowledged that economic growth and inflation have recently picked up by more than it previously expected. In its most recent Monetary Policy Report published in January 2010, the Bank predicted that the Canadian economy would grow by 3.3 per cent and that core inflation would be running at 1.6 per cent in the fourth quarter of 2009. In actuality, the Canadian economy expanded by five per cent on an annualized basis, and the core rate of inflation hit two per cent year-over-year in December 2009.

The Bank recognized that the “ongoing global economic recovery is being driven largely by strong domestic demand growth in many emerging-market economies and supported in advanced economies by exceptional monetary and fiscal stimulus, as well as extraordinary measures taken to support financial systems.”

However, financial markets will focus attention on the change in language compared to the Bank’s recession-era announcements. In its March 2nd announcement, the Bank indicated that “the main macroeconomic risks to the inflation projection are roughly balanced.” This marks the first time in over a year in which it judges that the risks to inflation were tilted to the downside.

The Bank also restated its commitment to keep its trend-setting overnight lending rate on hold until the second half of 2010, conditional on the outlook for inflation.

“Financial markets, however, will look past the Bank’s conditional commitment and increase bets that the Bank will move to raise rates before then,” said CREA’s Chief Economist Gregory Klump. “This will result in upward pressure on the Canada-U.S. currency exchange rate, thereby making the Bank’s assertion ‘that the persistent strength of the Canadian dollar and the low absolute level of U.S. demand [will] continue to act as significant drags on economic activity in Canada’ something of a self-fulfilling prophecy.”

"Interest rates will rise, but increases will be small and spread out over time. The Bank expects economic growth to rely on domestic demand once temporary government stimulus spending measures expire. Raising interest rates too soon and by too much runs the risk of choking economic growth," added Mr. Klump.

As of March 2nd, the advertised five-year conventional mortgage rate stood at 5.39 per cent. This is down 0.4 per cent from one year earlier, and stands 0.1 per cent below where it stood when the Bank made its previous interest rate announcement on January 19, 2010.

Improving credit market conditions have enabled lenders to reintroduce discounts off posted mortgage interest rates. Discounts of about one percentage point can be negotiated, depending on lender-client relationship.

Canadian Real Estate Association disappointed by bureau tribunal filing

Beth Marks — Mon, 22 Feb 2010 04:08:00 GMT

CREA DISAPPOINTED BY BUREAU TRIBUNAL FILING

OTTAWA, Ontario – February 8, 2010 – The Canadian Real Estate Association (CREA) learned today that the Competition Bureau filed a Notice of Application with the Competition Tribunal against CREA.

“CREA views the Commissioner’s decision as surprising and disappointing,” said Dale Ripplinger, President of CREA. “We do not agree with the Bureau’s position that certain CREA rules are anti-competitive, either as a matter of fact or as a matter of law. CREA’s rules allow for innovative business models and provide a broad range of choice for consumers.”

In good faith, CREA engaged in settlement negotiations with the Competition Bureau for several months in an effort to arrive at a consensual resolution. Unfortunately, the parties were unable to reach an agreement. This is very disappointing, since CREA has consistently indicated - right from the outset - that it has always been prepared to work with the Competition Bureau to revise its rules to clarify the way the rules operate.

Last week, CREA advised the Commissioner of Competition that CREA had made the business decision to move forward with rule changes to address the issues raised by the Bureau, whether or not a settlement with the Bureau could be reached.

“In making these clarifications on a proactive basis, CREA believes that it is fully addressing the Competition Bureau’s concerns, while ensuring the accuracy and quality of MLS® information that Canadians have come to trust and REALTOR® compliance with a code of ethics” said Ripplinger.

The Commissioner's press release states that CREA's rules restrict consumer choice and prevent innovative business models. That is simply false. CREA is disappointed that the Bureau would make this statement in view of the months of discussions about CREA's rules and CREA's consistent position that its rules are not intended to and do not restrict any business models.

The real estate industry in Canada is highly competitive and thrives on small businesses with independent agents, brokers and franchises conducting a wide variety of transactions every day. CREA currently has more than 98,000 members operating independently across the country to compete for consumer business, offering a wide array of services and pricing structures.

“CREA’s interest and that of its members is to ensure consumers have choice, that they are protected during one of the most significant transactions they will undertake, and that the integrity of the MLS® system is preserved for the benefit of REALTORS® and the Canadian public” added Ripplinger.

About The Canadian Real Estate Association
The Canadian Real Estate Association (CREA) is one of Canada's largest single-industry trade associations, representing more than 98,000 real estate Brokers/agents and salespeople working through more than 100 real estate Boards and Associations.

New Mortgage requirements on the way

Beth Marks — Fri, 19 Feb 2010 23:29:00 GMT

OTTAWA -- Amid warnings about "reckless" housing speculation and overextended homebuyers, Finance Minister Jim Flaherty said Tuesday the federal government would make it tougher for people to get a mortgage.

He said at a Tuesday morning media conference that Ottawa would require all borrowers meet standards for a five-year fixed-rate mortgage, even if the buyer wants a variable rate mortgage. This measure would apply to all first-time buyers. Homeowners with insured mortgages are not affected, unless they choose at a later date to extend the amortization or look to refinance.

Other rule changes unveiled would affect people looking to refinance their mortgages -- lowering the maximum amount that can be withdrawn to 90% from 95% -- and place a 20% minimum down payment for government-backed mortgage insurance on non-owner-occupied properties. This would affect people looking to buy condo units or duplexes for rental income. Previously, only a 5% down payment was required.

But Mr. Flaherty said the changes, to take affect April 19, were not meant to stop a possible housing bubble, as some warned was upon us unless Ottawa was prepared to act.

"There's no clear evidence of a housing bubble, but we're taking proactive, prudent and cautious steps today to help prevent one," Mr. Flaherty said.

The existing home sale market has been on a tear, largely powered by historic low rates. Last April, the Bank of Canada cut its benchmark policy rate to 0.25% and pledged to keep it there until this July in order to stoke economic growth.

Eric Lascelles, chief economist at TD Securities, said the Canadian housing market should continue on a "turbo-charge" ride until the April 19 implementation date, "then cool sharply, and then resume a more modest rate of ascent. In theory, home prices should take a mild hit immediately, as the number of Canadians capable of financing a home will dip slightly. The market's expectation for rate hikes should be scaled back modestly as housing slows and the need to address it via monetary policy fades."

Mr. Lascelles added the move will likely add to Canada's already sterling reputation among currency and bond traders that the country "gets it" in terms of financial regulation.

Mr. Flaherty said the measures would "have some stabilizing effect on the housing market. And stability is a good thing."

He said the changes should still make housing affordable for first-time homebuyers. His main concern, he added, was that Canadians were at risk of overextending themselves as interest rates are at historic lows and are bound to climb.

"This will help Canadians prepare for higher interest rates. One must always guard against the temptation take on more financial risk simply because interest rates are lower."

Further, he said data emerged indicating people were engaging in "reckless speculation" by buying multiple condo units and not choosing to live in them. As a result, the Minister decided to move before the March 4 budget, when many people speculated changes might be introduced.

"We are encouraging people to build equity [in their home] over time, using home ownership as an effective way to save – rather than as a vehicle for quick cash," he said.

The changes "will discourage the kind of reckless real estate speculation that could drive prices to unsustainable levels which does not serve Canadian homebuyers."

The decision to adopt new mortgage rules emerged after nearly a week of dire warnings from prominent Canadians -- such as money manager Stephen Jarislowsky and former Bank of Canada governor David Dodge -- that the housing market was on the verge of possible trouble, as price increases were not sustainable and present mortgage rules were too lax.

Frank Techar, president of personal and commercial banking at Bank of Montreal, said the bank supports Ottawa's moves, although adding the lender does not believe the country faces a housing bubble.

"Given the prospect of higher interest rates and the recent run-up in housing prices in some markets across Canada, the measures announced today are prudent," Mr. Techar said in a statement.

He said the bank "for several months now" has been encouraging Canadians to stress test their financial budget using a mortgage payment based on a higher interest rate.

The Department of Finance in 2008 said Canada Mortgage and Housing Corp. would limit amortizations to 35 years and offer loan insurance on only 95% of the loan value. The government's housing agency had offered mortgage insurance on loans worth as much as 100% of the home value and amortization periods of as many as 40 years since 2006.

Homebuyers with a down payment of less than 20% of the property's value are required to obtain government-backed insurance in exchange for financing.

Canadian home prices and resales will grow to records this year, boosted by low interest rates, the Canadian Real Estate Association said in a report last week. Canadian new home prices rose 0.4% in December from November, the sixth straight gain, according to government figures.

As recently as two weeks ago Mr. Flaherty said there was "no substantial concern" about the emergence of a housing bubble after meeting with private-sector economists. And in an interview with the Financial Post in late December, he said there was "no evidence" of asset bubble in real estate.

In an address last month on behalf of a deputy governor, Bank of Canada advisor David Wolf dismissed talk of a housing bubble in Canada as "premature," warning that calls for higher interest rates now in an effort to temper real-estate markets would be akin to "dousing" the economic recovery with cold water.

However, the Bank of Canada said addressing housing excesses was best left in the hands of the Minister of Finance, through regulatory changes such as the ones announced Tuesday.

Testimonials

Beth Marks — Tue, 12 Aug 2008 23:34:00 GMT

From the Joles Family

My husband and I would like to commend Beth Marks on her professionalism and integrity during the sale of our home and acreage.

One of the biggest challenges for us when selling our 40 acre property was having an agent who was knowledgeable. Beth spent many hours with us walking the acreage and learning what it was all about. Beth was also present at each and every showing of our home; this was very efficient as she was able to answer any questions that were had on the spot. It saved hours of calling back and forth from client to realtor.

Beth was very respectful of our home and property when showing and always gave us a timely ‘heads up’ before a viewing.

Beth also provided us with copies of all advertisements of our home and property and kept us informed of all enquiries.

Thanks for everything Beth! Your services were very much appreciated.

The Joles Family

From Cindy Hamblin & Shane Rilling

Just a quick note to thank you for all your guidance, advice and support with the purchase of our home. You couldn't have done a better job!

From Edythe Bobey

I am very pleased Beth sold my property in the Coldstream. Beth proved to be very knowledgeable with the intricacies of the real estate market and very thorough with every aspect of the sale. Within two days of my phone call, the property was listed and REALTORS were visiting. Beth advised within a two week period that she had an offer which was within my asking price range. Of course I was delighted.

I am still amazed at the speed and finesse of this very charming lady who went out of her way and beyond any expectation to have everything go smoothly and I greatly appreciate her efforts. I would certainly recommend her to any buyer or seller!

From Ron & Dawn Schneider:

You have been the perfect realtor and new friend - we so enjoyed your easy way and your professionalism. As you know our search for the perfect home has been a very stressful time for us but with your character and humour you helped eliminate the problems. Beth, we appreciate the time and effort that you put in to our home search - we never took your time and good work for granted - please know that - you went beyond what was normally expected and I hope our anxieties didn't mask our appreciation!

From Bo at Investek:

"I refer my clients to Beth so when it came time for me to purchase my own properties I only thought it logical I practice what I preach. I gave Beth my wish list, she zeroed in on the location that I specified and watched the market for me I didn’t have to waste days viewing several properties. She listened, she did her research, and she provided sensible and reliable service. When I refer my clients to Beth, I speak from experience.

Thanks Beth for working with me and my clients as a Team!"

Bo Jurcevic

From Corey Tomiye:

"First let me say when it comes to looking after your clients best interest and your integrity there is no one out there that is better!"