My Mortgage Blog

The housing market has dominated the headlines since the global financial crisis of 2008. Rumours of huge rate hikes never materialized and are only now starting to moderately rise. The market didn’t crash – and it likely won’t. Prices have continued to increase in large urban centres. Despite the most recent changes and the new stress test coming into effect on January 1, 2018, Canada’s housing market will soldier on and will still be the topic of conversations.

Since 2011 we have seen changes come into effect to restrict mortgage lending in Canada -- all in an effort to curb the market.

However, the housing market continues to be a vital component to the success of the Canadian economy. In many respects, this sector has helped to stabilize a faltering economy.  By allowing consumers an opportunity to purchase by taking advantage of low interest rates or to tap into their equity for either spending or investing purposes, the mortgage channel has contributed positively to consumer spending and confidence. 

Housing market activity is influenced by many factors. According to a June 2017 report by Mortgage Professionals Canada some of the most important factors have become more positive. 

Consumer confidence, for example,  is growing. For the past year, the rate of job growth in Canada is estimated at 1.8%, which exceeds the 1.1% rate at which the adult population is growing – this means more people are employed.

Another factor is the stock market. Rising stock markets add to consumer confidence and also reflect improved confidence. The main Canadian index (TSX 300) is up by 4% compared to a year ago.  In the US, the S&P 500 is up by about 12% and the Dow Jones is up by about 15%. 

As a country, we are fortunate to have weathered the global recession and we have managed to grow through the most recent “technical” recession. The change to the mortgage rules does indicate that a number of potential homebuyers, especially first-time homebuyers, will be negatively affected. However, many of these homebuyers will make adjustments so that they can buy a less expensive property or buy at a later date.

There is still a strong belief that real estate in Canada is a good long-term investment and agreement that mortgages are “good debt”. Ninety-one per cent of Canadian homeowners are happy with their decisions to buy their homes.

As we close out 2017 and head into a new year, now is a great time to put our heads together and develop an action plan to help you fulfill your dream of homeownership, whether it's your first purchase or second or third.

So let's talk.

Happy Holidays...