Mortgage Rate Outlook Panel

Our panel of mortgage experts share their views on Canadian mortgage rate trends each month by answering this question: What is your outlook for Canadian mortgage rates over the next 30-45 days?
View this month's answers below.

December 2011

Mark Kocaurek
Senior Vice President, ING Direct
Dr. Ian Lee
Director at Carleton University
Dan Eisner
President, True North Mortgage
Stella Cellucci
Mortgage Agent, Centum Mortgage Professionals
Panel Consensus
Our panel's final verdict for this month's fixed, and variable mortgage rates.
FIXED RATES
Down
VARIABLE RATES
Unchanged

Summary

Can fixed mortgage rates get any lower? This month our panel members aren't ruling out a decrease to fixed rates in the short term. At the same time, they feel quite strongly that variable mortgage rates will stay at current levels well into 2012.

Fixed Rates: Down

With no quick fix on the horizon for the European debt crisis, the global economic outlook continues to be pessimistic causing downward pressure on longer term bond yields. Couple this with decreased demand for home loans during the busy holiday season, and it is likely that fixed mortgage rates will stay low or even drop further over the next 30-45 days.

Variable Rates: Unchanged

Recent GDP numbers were surprisingly strong, inflation is near the target range, and a global economic meltdown could be on our door step. The last thing Governor Mark Carney wants to do is shock consumers during the busy holiday buying season with news of an interest rate increase. As a result, our panel members agree that the Bank of Canada will hold rates steady at their next meeting.

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FOR IMMEDIATE RELEASE Victoria Real Estate Board Wins Three National Awards - VREB News release available in  PDF format.PDF 42 KB
   

December 5, 2011

Stable and Balanced Real Estate Market Predicted for 2012

Carol Crabb, 2012 President of the Victoria Real Estate Board, says that stable and balanced market conditions are expected to continue in the Victoria area housing market in the New Year. Crabb noted that real estate sales have been generally higher in recent months compared to last year and with little change anticipated in interest rates balanced market conditions should continue for the foreseeable future. "Despite global economic uncertainty, the local real estate market has shown remarkable stability. The Victoria area remains a destination of choice for many people and there is every expectation that stable market conditions will continue in the coming months," said Crabb.

Crabb added that while the number of properties available for sale has been declining in recent months from record highs over the summer, prices should remain stable with little significant change for the foreseeable future.

The 2012 Board of Directors is as follows: Carol Crabb -- President; Dennis Fimrite -- Past President; Shelley Mann -- President Elect; Mike Nugent -- Secretary-Treasurer. Other Directors are Tim Ayres, Guy Crozier, Mike Holmes, Wendy Moreton and Andrew Plank.

The 2012 Directors take office effective January 1.


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Is there such a thing as a best time of year to sell a house? Certainly, seasonal factors come into play when trying to sell a home, but there are other things to consider as well, like the tug and pull of supply and demand, as well as unique local market conditions.

 

No matter when a home goes on the market, one should take a few things under consideration that will likely affect not just the ability to sell a property, but more importantly the ability to get your asking price. Timing, it seems, is everything.

 

 
The Economy
 

While the economy does not follow the predictable ebb and flow of the seasonal changes in real estate and in buyer attention, the economy, it’s state and it’s prospects boil down to property values, and consumer confidence. When the economy is under fire, people are nervous about their jobs. There is generally a reluctance to spend, accumulate debt or make major purchases.

The market will tell you what a home is worth. The problem is, during an economic downturn, the market may value your home lower than you had hoped, or than from when you started.

That may succeed in removing a number of buyers from your pool. For those that must buy a property though, the economy will play less of a factor in the decision to purchase, but it may give them power at the bargaining table, and it may be more difficult to get the desired price. Interest rates figure into this as well. The lower they are, the more your pool of buyers may increase as well, as the cost to borrow comes down and people, in theory can borrow more.
 
Springtime
 

In a country like Canada, where there are four distinct seasons, seasonal influences play a large part in creating good selling conditions.

Wintertime brings with it a series of challenges, among them the weather, holiday distractions and lack of interest from buyers.

When the snow thaws though, and greenery re-emerges from the ground, buyers tend to re-emerge as well. The spring tends to be the peak of the market, simply because the timing suits people in general. The weather is more favourable, properties generally can be better displayed, and moves and property closings can more reasonably be managed through the summer months, so for those with families relocating is less disruptive.

According to data, home sales begin in February, with closings peaking through late May, June, July and August- and this has been a consistent trend since the early 2000’s. For sellers then, they will likely have the opportunity to engage more traffic and interest in their homes.
 
Patience is a Virtue
 

While the springtime may typically be a more optimal time to sell, there will typically be more competition on the market. Sometimes, if a seller is flexible on their dates, it may be advisable to wait until the spring market to list, simply because of the flood of buyers onto the market. Often, a property will sell for more, and sell much faster because of volume.

As there will be more properties on the market, the seller really needs to take time to make their property stand out, using the slow winter months to actively prepare their homes to list. For some, it can take weeks, or even months to de-clutter and re-organize their properties to best reflect the space, and the positive attributes.

Advise sellers that, even though you may list in the spring, the selling process begins now- behind the scenes. Think staging before selling.

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