The slowdown in mortgage lending is positive even though it means weaker loan growth for banks. “I think the consumer probably is taking a pause and acting in a prudent fashion, and that’s what’s driving this slowdown in the housing market,” McCaughey said. “And I think that is a good thing because, as I say, some day (interest) rates will rise back to more normal levels. It would be a good idea to have the level of total debt at a more manageable state.” 

Statistics Canada said on Wednesday that Canadian retail sales fell unexpectedly in July, suggesting Canadian consumers are no longer pulling their weight in the country’s economic recovery. The Star

The residential component was up 87 per cent in square footage and up 84 per cent in dollars.

Non-residential building was up 48 per cent in square feet and up 21 per cent in dollars, while engineering was up 16 per cent in dollars.

The residential strength corresponded with starts as reported by Canada Mortgage and Housing Corp.

The single-family-home market is expected to weaken considerably in the second half of this year, due to harmonized sales tax introductions in Ontario and B.C., as well as interest rate increases and poorer resale markets.

“What is driving the multiple-unit market remains a mystery,” says CanaData chief economist Alex Carrick in his latest report.

“New major condo projects continue to be initiated, but the inventory of unsold units is more than double what it should be, according to historical averages. A serious correction seems all but inevitable.”

In non-residential building work, commercial starts are about even with last year.

Industrial construction starts have all but disappeared (down 61 per cent in square feet and down 95 per cent in dollars). dcnonl.com

It can sometimes take weeks to organize appointments with competing mortgage lenders — homebuyers would rather spend their time house-hunting.

Brokers work directly with lenders and can quickly narrow down a list of options that suit you best.

2. Advice on your financial options.

Mortgage brokers can make recommendations and draw from available mortgage products that match your needs and help you decide what is right for you.

3. Brokers negotiate on your behalf.

Most people are uncertain about negotiating mortgages directly with their bank. Brokers negotiate mortgages every day on behalf of buyers and have a wealth market knowledge to secure competitive rates.

4. More choice means more competitive rates. We have access to a network of major lenders in Canada, so your options are extensive.

5. Ensure that you’re getting the best rates and terms. Even if you’ve already been pre-approved for a mortgage by your bank or another financial institution, you’re not obliged to stop shopping!

6. Get access to special deals and add-ons.

We do the math on which offers might be worth your attention.

7. Things move quickly.

Our job isn’t done until your closing date goes smoothly. We’ll help ensure your transaction takes place on time and to your satisfaction.

8. Get expert advice. When it comes to mortgages, rates and the housing market, we are not limited. We will explain the various mortgage terms, conditions and rates so you can decide confidently.

9. No cost to you. There is (in most cases) no charge for our services.

10. Ongoing support and consultation.

Even once your mortgage is signed and completed, we are here if you need any advice on closing details or even future referral needs.

Alex Malkhassiants is an active Mortgage Professional with Centum Inc. in in Toronto. He works with homebuyers in Toronto and surrounding areas to find the best mortgage for them. Have a question? Please call (416) 723-9383 (cell) 0r email – amalkhass@rogers.com

The monthly gain of 1.3 percent was led by a 2.3 percent increase in Ottawa, followed by 1.8 percent in Montreal, according to a report today by National Bank Financial. Overall prices rose 13.6 percent from May 2009. The index has tracked home-price changes in six Canadian cities — Calgary, Halifax, Montreal, Ottawa, Toronto and Vancouver — since February 2000.

Housing investment should slow through this year and into 2011 after spending was pulled forward by low mortgage rates and temporary tax credits, the Bank of Canada said July 22. The central bank raised its key lending rate for a second month to 0.75 percent on July 20 and said further action would be “weighed carefully” against an economic recovery.

Alexandre Malhassiants is an active mortgage professional with Centum Mortgage Inc.  and sales representative. Have a question? Please e-mail amalkhass@rogers.com or call 416- 723-9383.

The payment is not the only thing to take into consideration when choosing which will work for you. In the fixed term, you know what your payment (and rate) will be for a set period of time. For example, the five-year rate today is at 4.29% (subject to change). Your mortgage payment is based on this rate for five years and will never change. The variable rate is based on the prime rate (which can be found on the Bank of Canada website and is consistent from lender to lender) less (or in some cases plus) a set discounted rate. Today’s five year adjustable is prime (2.50%) less .75%, for a rate of 1.75%, which would result in a lower monthly payment. The risk? This payment may (and will over the five-year term) change based on the prime rate on the first of each month.

Although the rate in the variable options is lower, the qualification rules are strict. When applying for a five-year fixed-rate mortgage, you would have to qualify on the rate on 4.29%. With the variable rate, consumers have to qualify at the Bank of Canada benchmark rate, which is set weekly on Mondays. Currently that rate is 5.99%. So, when qualifying for a mortgage, the fixed vs. variable rate may make or break your approval based strictly on the “qualifying” rate. Lenders need to make sure that when a consumer chooses the adjustable-rate mortgage, that they will still be able to make the payments if and when the rate rises. This is why the qualifying rate is higher.

To make sure that you have reviewed ALL of your mortgage options, speak with a mortgage broker. We are not limited to one specific financial institution’s rules and rates. You need to make sure you have discussed your rate and product options to make an educated decision.

Alexandre Malhassiants is an active mortgage professional with Centum Mortgage Inc.  Have a question? Please e-mail amalkhass@rogers.com or call 416- 723-9383.

DBRS expects housing prices to fall and acknowledges that the soaring trajectory of consumer debt is worrying. But the debt-rating firm’s study nonetheless paints a picture of a home lending business that is on much more stable footing than the one in the U.S. before its bust.

For that reason, any housing correction in Canada is likely to have a muted effect on the financial sector, nothing like the systemic problem that the U.S. downturn created by crippling banks and mortgage insurers.

“You’re not likely to have factors supporting further [home] price increases; you could have factors leading to price corrections, but they shouldn’t be anywhere near the scale we’ve seen in the U.S.,” said study author Jerry Marriott, who specializes in rating mortgage-backed bonds for DBRS.

“There are just some fundamental characteristics of the Canadian market that make lending in Canada less risky than in the U.S. – a combination of the fact that the banks have continued to use prudent underwriting and maintained better capital ratios.”

The report echoes the conclusions of major banks such as Canadian Imperial Bank of Commerce and Toronto-Dominion Bank. They also call for moderate cooling in house prices after their long runup, as more homes come on the market and higher rates and prices force some buyers out of the market.

CIBC World Markets economist Benjamin Tal said this week that prices might fall by as much as 10 per cent in the next two years, but that a “violent” correction like the United States experienced remains unlikely. TD Bank recently put out a report predicting prices could fall by 2.7 per cent in 2011.

If a correction happens, Mr. Marriott said that it’s unlikely Canadian banks will have to foreclose on many mortgages, saving Canada from one of the factors that exacerbated the U.S. plunge, when banks seized homes and tried to sell them at vastly reduced prices.

Laws in Canada are more lender-friendly, forcing people to keep paying mortgages, and banks were more careful about who they lent to.

Canadians are also less likely to end up under water – owing more than their home is worth – because they generally have more equity in their homes. For the decade and a half leading up to the U.S. housing bust, U.S. borrowers had “consistently” less equity than Canadians, by 8 per cent on average, DBRS found.

What’s more, DBRS argues that while Canadians are racking up debt at a fast pace, they are nowhere near as indebted as some analysts assert, and much less in hock than Americans, so should better be able to handle the stress of higher rates or a housing correction.

While the widely watched measure of debt-to-personal-disposable income shows that Canadians are more indebted than Americans, DBRS argues that the gauge should be adjusted to reflect differences in the two countries, such as the fact that Americans pay lower taxes but have to pay health-care bills out of pocket.

When that’s taken into consideration, at “the end of 2009, Canadian households remained financially less leveraged by 10 per cent to 45 per cent compared with U.S. households,” the report said.

“The Canadian market has been doing just fine, but it is not without risk, and [showing that] is what we’re trying to do in this study,” Mr. Marriott said. CTV.ca

The online survey of more than 2,500 homeowners also found that 68 per cent “feel there is a strong chance they will pay off their mortgage sooner than required” and 27 per cent said they have “already taken steps to pay down their mortgage through lump-sum payments or through increased regular payments, ” according to the federal agency.

Meanwhile, CMHC said its annual survey found that 89 per cent of first-time homebuyers used the Internet to get information about mortgages and 84 per cent researched mortgage terms and conditions online.

The Toronto Real Estate Board reported 4,353 existing home sales, up 70 per cent from the same time last year, when the market was in recession.

But sales were also strong enough to break the mid-month peak set in March of 2006 by 16 per cent, according to the board.

“The spring-like weather in the first half of March brought the first green sprouts of the recurring spring market,” said board president Tom Lebour.

The average price for March mid-month transactions was $440,153, up 20 per cent over last year.

Some good news for buyers was that new listings improved by 34 per cent over last year.

“Look for double digit price increases to cease later in 2010, as new listings rebound from the low levels experienced in 2009,” said Jason Mercer, TREB’s senior manager of market analysis. “Increased listings will give buyers more choice, resulting in less upward pressure on home prices.”

If you want to know more about Toronto real estate, call sales representative and mortgage agent Alexandre (Alex) Malkhassiants, Right at Home Realty,  with all your questions: (416) 723-9383 (cell).

The messages were conveyed in the Bank of Canada’s latest interest-rate statement, which kept its record-low benchmark rate of 0.25% as is and pledged to keep it there until July. But most bank watchers took note of subtle changes in the statement, compared with previous rate announcements, and there was enough there for them to begin the countdown to rate hikes.

“I suspect [governor] Mark Carney and company are starting to feel the urge to tighten — not a strong urge now, but an urge nevertheless,” said Michael Gregory, senior economist at BMO Capital Markets.

Among the key changes was a declaration from the bank that the risks to its inflation outlook are “roughly balanced,” and no longer “tilted slightly to the downside” — language that suggests deflation is no longer a concern and that price increases are creeping up to a level that may prompt a response. (The central bank sets its interest rates to ensure inflation remains at 2%.)

The wording change may appear trivial, “but it is nonetheless significant as it reflects an economic backdrop that continues to improve at a much faster pace than what the bank had envisaged,” said Paul-André Pinsonnault, senior fixed-income economist at National Bank Financial.

The rate statement emerged a day after economic data indicated the Canadian economy grew at a robust 5% annualized pace in the final three months of 2009, blowing past market expectations for a 4% gain and the central bank’s original 3.3% forecast. Economists say the fourth-quarter performance has set the stage for another robust gain, of perhaps 4% or more, for the first three months of 2010.

Meanwhile, recent data indicate that both the headline and core inflation rates have moved much closer to the 2% level than the central bank had expected. Under the bank’s forecast, the 2% level would not be reached until the third-quarter of next year.

In the statement, the central bank acknowledged economic activity has been “slightly higher” than its own projections, with the 5% gain in the fourth quarter powered by “vigorous domestic demand” and a recovery in exports.

Using the adjective “vigorous” caught the eye of some analysts, such as Mr. Gregory. “That implies a strong unleashing of demand pent-up during the recession, with the credit creation process critical to this unleashing.

“In other words,” he added, “low interest rates are doing their job in stimulating demand — perhaps, increasingly, too well.”

Mr. Pinsonnault noted the bank also dropped any reference to “considerable” excess supply, an indication, he said, that the slack in the economy is being absorbed at a faster pace than the central bank anticipated.

The consensus remains that the central bank will wait until July to begin raising rates, but the bank used Tuesday’s statement to begin building its case. There are two more scheduled rate decisions between now and then, with one April 20 and then June 1.

“What we saw [Tuesday] was one of many steps aiming at moving away from dovish statements to relatively more hawkish ones. This gradual movement comes naturally well before an actual tightening in monetary policy,” said Sébastien Lavoie, economist with Laurentian Bank Securities.

His firm believes rate increases will begin in the third quarter, but he said the odds have increased that the first hike will be in July as opposed to September.

How much, and how rapidly, the central bank raises rates beginning in July is up for debate, with economists estimating increases of 100 to 150 basis points in the second half of 2010. Financial Post

If you want to know more about Toronto real estate, call sales representative and mortgage agent Alexandre (Alex) Malkhassiants, Right at Home Realty,  with all your questions: (416) 723-9383 (cell).

There were 3,555 sales through MLS during the first half of this month, compared to 2,0044 during the same period in 2009. This month’s activity was even 7.7 per cent higher than the previous record in 2006.

“Home ownership demand remains strong in the GTA, as households remain confident that economic recovery is at hand and that ownership housing will continue to be a quality long-term investment,” says Tom Lebour, president of the Toronto Real Estate Board.

Accordingly, the increased activity has led to higher prices as well. The average price for February mid-month transactions was $429,997, up 18 per cent from 2009. That’s also drawn more sellers out hoping to cash in. New listings with the Toronto Real Estate Board’s boundaries were up 15 per cent to 6,212.

The board’s senior market analyst Jason Mercer says double-digit price increases wil continue through the first quarter of the year.

“However, as new listings continue to increase,  creating a better supplied market, we will see the annual rate of price growth moderate into the single digits,” says Mercer.