Live and Work in BC

BC is a great place to work and live. The province had the lowest unemployment rate in Canada in March at 4.7 per cent. There are 79,400 more people employed in B.C. in March 2019, compared to March 2018. In GREATER VICTORIA, the unemployment rate remained the second lowest in the country at 3 per cent, an improvement from the 3.2 per cent registered in February. Only Guelph, Ontario has a lower unemployment rate at 2.2 per cent.

References: https://www.timescolonist.com/business/capital-region-b-c-have-rock-bottom-unemployment-rates-1.23782824

What will $678,000 buy you in downtown Victoria vs downtown Vancouver?

In downtown Victoria, it will buy you a “Heritage Style”, 2 bedroom, 2 bath townhouse built in 2001, on a no exit street and a short walk to Cook St. Village, Beacon Hill Park and the ocean.





In downtown Vancouver, $678,000 will buy you a 585 sq. foot, 1 bedroom, 1 bath condominium a short walk from downtown, with a nice city and water view.



Which city offers better lifestyle choices? My vote is “Victoria”.

Across the Water in Vancouver

Metro Vancouver’s once red-hot real estate market has cooled down. The number of home sales in March is the lowest they have been for the last 18 years. “Compared to last year, we’re down 32 percent,” explained Phil Moore, president of the Real Estate Board of Greater Vancouver (REBGV).

“After three or four years of a very robust market and escalating prices, this certainly seemed to be a year of transition. We went from more of a sellers’ market, to a balanced market, and now — a buyers’ market.”

Reference: https://globalnews.ca/news/4818696/metro-vancouver-housing-sales-hit-nearly-20-year-low

Inverted Bond Yield Curve – What Does it Mean?

A yield curve is a graph that depicts yields on all Canadian bonds ranging from short-term debt such as one month to longer-term debt, such as 30 years. Normally, shorter-dated yields are less than longer-dated ones.

The curve, in a normal market environment, is upward sloping as bond investors are likely to get higher rates in a longer-term market environment as opposed to short term. That's because the perceived risk in a longer-term environment is higher. In rare instances, this yield curve starts to get inverted, meaning longer-dated yields are lesser than shorter-dated yields. While this often foretells weakening economic conditions, the current decline in the bonds market is good news for Canadian fixed-rate mortgage borrowers with rates heading lower. At the very least, this risk means the Bank of Canada will remain cautious of increasing interest rates. A growing number of analysts believe the Bank of Canada's next move on rates will be a cut and that will be good news for variable rate mortgage borrowers too.

Reference: https://www.canadianrealestatemagazine.ca/market-update/lower-mortgage-rates-as-bond-yield-inverts-255835.aspx?utm_source=Pinpointe&utm_medium=20190401&utm_campaign=CREW-Weekend&utm_content=3AB553C5-4FBB-49B5-8918-4AF4FE09BBAB&tu=3AB553C5-4FBB-49B5-8918-4AF4FE09BBAB

More Real Estate Options for Singles

According to the 2016 census, nearly four million Canadians lived alone in 2016, up from 1.7 million in 1981. People choosing to live alone accounted for 28.2 per cent of the 14.1 million households, more than couples with or without children, single-parent families and multiple family households. Some of the reasons include people marrying later, divorcing more, surviving spouses and staying single longer.

Interestingly, the growth in solo living has coincided with the rise in condominium construction. Twenty-eight per cent of people living alone resided in these types of accommodation, either owned or rented, said Statistics Canada, up from seven per cent in 1981.


Source: https://www.timescolonist.com/growing-trend-of-solo-living-creating-opportunities-for-businesses-1.23656141?utm_campaign=magnet&utm_source=article_page&utm_medium=related_articles

What’s Changed with the Home Buyer’s Plan?

Currently, first-time home buyers can withdraw up to $25,000 from their RRSPs tax-free to purchase or build a home.  These withdrawals must be repaid over a 15-year period or included in the individual’s income if not repaid.  The Budget proposes to increase the withdrawal limit to $35,000 for individuals ($70,000 for a couple).  It also proposes to extend access to the Home Buyer’s Plan to individuals who experience a breakdown of a marriage or common-law partnership, even if they are not purchasing a first home.

Reference: http://www.mondaq.com/canada/x/793700/tax+authorities/Highlights+Of+Canadian+Federal+2019+Budget

Mortgage Stress Test in Canada

Why do we have the Stress Test (B-20 Mortgage Stress Test) in Canada and where did it come from?

Banks are regulated because their safety and stability is fundamental to our economy. That provides us with confidence knowing money we deposit today will be available to us when we need it, and the banks the ability to lend through every economic cycle. The global financial crisis in 2008 was a stark reminder of just how much damage excessive risk-taking by banks and a loss of public confidence in the banking system can do to the real economy.

In Canada, OSFI – Office of the Superintendent of Financial Institutions - is the federal regulator of our banks. Their mandate requires them to protect the interests of depositors and other creditors while allowing financial institutions to compete and take reasonable risks. Canadian banks did not suffer nearly the impacts of the global financial crisis that other countries did, due in part to regulations that prevented banks from taking on risky investments at a time when so many other banks around the world felt the risky investments were not only prudent, but necessary. OSFI issued their first version of B-20 in 2012. At that time, the role that weak mortgage underwriting had played in the global financial crisis was clear, and OSFI proactively set out clear expectations for strong mortgage underwriting in Canadian banks.

The prevailing sentiment that house prices would only go up and interest rates would only go down was, in OSFI’s view, contributing to an over reliance on collateral value and not enough scrutiny of a borrower’s ability to repay a loan, particularly if conditions were to change. OSFI decided such speculation needed to be reined in, which led to changes to B-20 in January 2018; the most significant of those being the stress test. The stress test requires a borrower be qualified for their mortgage with a buffer of affordability built in to ensure they can continue to pay their mortgage if conditions change.

Those conditions could be a rise in interest rates that increase their payment obligation, or they could be a loss or reduction of income or an increase in other, non-mortgage expenses. It is a safety buffer that ensures a borrower doesn’t stretch their borrowing capacity to its maximum, leaving no room to absorb unforeseen events.