Average home prices edge higher as sales up 11.5 per cent from year ago
May 15, 2012
Home sales in April gained 0.8 per cent compared with March, boosted by strength in Toronto and Calgary, the Canadian Real Estate Association said Tuesday.
On a year-over-year basis, the association said there were 49,480 homes sold in April, up 11.5 per cent from 44,370 a year ago when sales slowed following a tightening of mortgage lending rules that came into effect in March 2011.
The average home price in Canada in April was up 0.9 per cent from a year ago at $375,810.
“It bears repeating that the national average price was skewed higher last spring by record level high-end home sales in Vancouver’s priciest neighbourhoods, and that a replay of this phenomenon was not expected this year,” said Gregory Klump, CREA’s chief economist.
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Toronto StarWhat is Mortgage Flexibility Really Worth?
May 14, 2012
In the car world it’s rare to find BMW performance at a Kia price.
The mortgage world isn’t that different. Mortgages with the most options and flexibility typically cost more.
Fortunately, most folks don’t need a souped-up mortgage. They just need the right combination of options at the lowest rate.
In the quest for cost savings, important mortgage features – like refinance flexibility and prepayment privileges – are often sacrificed for a cheaper rate. People do that if it’s too hard to quantify what a mortgage feature might actually save them.
But mathematically speaking, it’s usually possible to estimate the benefit of a mortgage feature and then project if it’s worth paying a higher rate for it. Doing this requires reasonable assumptions and a bit of math, but it’s something mortgage planners do all the time.
In that spirit, below you’ll find some general estimates of what different mortgage features are “worth.” By worth, I mean: how much extra a typical borrower should be willing to pay for a feature, in terms of a higher interest rate.
If 3.19 per cent is the lowest rate in the market, a feature that’s worth 0.10 percentage points, for example, means you should be willing to pay 3.29 per cent to get that feature.
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Globe & MailToronto housing bubble talk dismissed
May 9, 2012
The head of Canada’s biggest bank and one of the country’s leading developers said the housing market is not in a bubble, even as one economist said Toronto is caught in a “condo craze.”
Canadian housing starts rose to the highest since September 2007 last month, led by multiple-unit projects, Canada Mortgage & Housing Corp. said yesterday. The annual pace of home starts rose 14 percent to 244,900, Ottawa-based CMHC said.
Participants at Bloomberg’s Canada Economic Summit in Toronto said talk of a housing bubble is overblown.
“When we look at the overall marketplace, there might be pockets of vulnerability but we remain quite comfortable,” said Gordon Nixon, chief executive officer of Royal Bank of Canada “Frankly, I’d like to see the rhetoric come down a little bit.”
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Toronto Star
