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BLOG / NEWS Updates
Positive News for First-Time Homebuyers…
We welcome the Conservative Governments announcement today proposing to increase the RRSP Home Buyers Plan (HBP) withdrawal up to $35,000 from the current $25,000 for first-time homebuyers. If implemented, a couple buying a home together would have access to an extra $20,000 of their RRSPs to help with their down payment and other expenses relating to their home purchase. Borrowers are considered first-timers if, in the past four years, they have not lived in a home that they or their current spouse/common-law partner owned. (See Conditions.) As you may be aware, CAAMP regularly visits both federal and provincial government officials. This announcement is in line with the kind of recommendations that CAAMP makes during meetings with officials in the Ministry of Finance Office and the Prime Ministers Office. The government respects our industry-leading research and sees your association as a positive resource. Our latest research report released in June A Profile of Home Buying in Canada prepared by CAAMP Chief Economist Will Dunning shows withdrawals from RRSPs (including via the HBP) accounted for 10% of down payment funds for first-time buyers. If put into action, this proposed HBP withdrawal increase would go a long way in helping first-time homebuyers across Canada. Todays announcement follows Stephen Harpers first big-ticket promise of his campaign: another tax break for home renovations made earlier this month. Taxpayers would be able to claim up to 15% of the cost of permanent substantial renovations to homes, condos and cottages. The tax credit would apply to renovation costs between $1,000 and $5,000, allowing a taxpayer to get back up to $600 per year. We look forward to more positive housing-related announcements from other campaigns leading up to the fall election.
Bank of Canada increases overnight rate target to 1 per cent
The Bank of Canada is raising its target for the overnight rate to 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent. Recent economic data have been stronger than expected, supporting the Banks view that growth in Canada is becoming more broadly-based and self-sustaining. Consumer spending remains robust, underpinned by continued solid employment and income growth. There has also been more widespread strength in business investment and in exports. Meanwhile, the housing sector appears to be cooling in some markets in response to recent changes in tax and housing finance policies. The Bank continues to expect a moderation in the pace of economic growth in the second half of 2017, for the reasons described in the July Monetary Policy Report (MPR), but the level of GDP is now higher than the Bank had expected. The global economic expansion is becoming more synchronous, as anticipated in July, with stronger-than-expected indicators of growth, including higher industrial commodity prices. However, significant geopolitical risks and uncertainties around international trade and fiscal policies remain, leading to a weaker US dollar against many major currencies. In this context, the Canadian dollar has appreciated, also reflecting the relative strength of Canadas economy. While inflation remains below the 2 per cent target, it has evolved largely as expected in July. There has been a slight increase in both total CPI and the Banks core measures of inflation, consistent with the dissipating negative impact of temporary price shocks and the absorption of economic slack. Nonetheless, there remains some excess capacity in Canadas labour market, and wage and price pressures are still more subdued than historical relationships would suggest, as observed in some other advanced economies.
Canadian home sales fall further in July
According to statistics released today by The Canadian Real Estate Association (CREA), national home sales declined further in July 2017. Highlights: National home sales fell 2.1% from June to July. Actual (not seasonally adjusted) activity in July stood 11.9% below last Julys level. The number of newly listed homes edged back by 1.8% from June to July. The MLS Home Price Index (HPI) was up 12.9% year-over-year (y-o-y) in July 2017. The national average sale price edged down by 0.3% y-o-y in July. Julys interest rate hike may have motivated some homebuyers with pre-approved mortgages to make an offer, said CREA President Andrew Peck. Even so, sales activity continued to soften in the Greater Golden Horseshoe region. Meanwhile, sales and prices in Montreal continue to strengthen. All real estate is local, and REALTORS remain your best source for information about sales and listings where you live or might like to. July marked the smallest monthly decline in Greater Golden Horseshoe home sales since Ontarios Fair Housing Plan was announced in April, said Gregory Klump, CREAs Chief Economist. This suggests sales may be starting to bottom out amid stabilizing housing market sentiment. Time will tell whether thats indeed the case once the transitory boost by buyers with pre-approved mortgages fades. Click here to continue reading