Many of us recall the glory days of variable mortgage rates - prime less 0.95 or even prime less 1.1%. As such, many clients who now want a variable mortgage are reluctant to commit to a five year term today - in case the discount improves soon.
Street Capital recently came out with a one year ARM (adjustable rate mortgage) at a kick-ass rate of prime less 0.25%.
So for those of you waiting for deeper discounts, now you can have your cake and eat it too !
Essentially it's a free call on the market for a year.
Wednesday, January 27, 2010
Monday, January 18, 2010
Canadian real estate market on fire
A tale of two real estate markets
In Canada, damn our winters, it’s always been tough to sell a home this time of year.
Not listing your house in the winter has even turned into a real estate rule of thumb. Traditionally, the market just dries up.
So you can imagine the surprise of many realtors today when news broke that Canada had its best-ever December for home sales. Best. Ever.
“Sales activity in 2009 came in like a lamb and went out like a lion,” Canadian Real Estate Association (CREA) president Dale Ripplinger told the Star.
According to the CREA’s numbers, 27,744 existing homes were sold last month, up 72 per cent from December of 2008.
Not only was the average sale price up for December ($337,410, an increase of 19 per cent) versus last year’s stats, but for the whole year as well ($320,333, an increase of 7.7 per cent from ‘08).
So, what’s all this about?
For starters, economists warn the emerging market is “getting dangerously close to bubble territory,” according to the Star.
“Cooler heads recognize that many of the recent gains reflect temporary factors that could fade by summer,” said CREA Chief Economist Gregory Klump.
Still, though, listings in December were up 4.8 per cent from 2008 – the first year-over-year gain in 2009 – and the response from Canadian home buyers is tough to dispute.
This data is interesting, of course, because things aren’t quite the same south of the border.
While Canada’s real estate market shows signs of strength in the winter months, all accounts point to the opposite in the U.S.
The country’s Pending Home Sales Index plummeted 16 per cent in November, at least – a sign surely pointing to a further drop in December.
Check out the visually dramatic dip here.
By Jason Buckland, MSN Money
Posted at 05:29 PM | Permalink
Saturday, January 16, 2010
Be pessimistic to live optimistically
I read this interview of Gail Vaz-Oxlade in today's Saturday Star - and it really resonated with me. Her mantra is simple yet practical advice for all. The part I liked best was when Gail says you should NOT pay off all your debts before you begin to save.
So with thanks to the Star and Nancy J. White for the reprint of the original interview, here it is.
January 16, 2010
Nancy J. White
Will you be able to manage financially when the caca hits the fan?
That's the concern of Canada's blunt-talking personal finance writer, Gail Vaz-Oxlade. She's the host of the television show Til Debt Do Us Part on Slice and author of a new book, Debt-Free Forever: Take Control of Your Money and Your Life.
Vaz-Oxlade, 50, the mother of two teenagers, lives in Brighton. She spoke to the Star about priority shopping, the long-term pain of credit and the lure of pretty sandals.
Q: Have you ever been in, as you call it, "Debt Hell"?
A: No, never. Debt is an anathema to me. It's impossible for me to imagine spending money I haven't yet earned because I'm always aware caca can happen. It's important that I keep my financial life stable so I can deal with s--- when it hits the fan.
Q: Bit of a pessimist are you?
A: I'm actually incredibly optimistic. My mantra is, "Plan like a pessimist so you can live like an optimist."
Q: How did you get to be a money maven?
A: I fell into it. I started as an educational consultant for the financial services sector, went into freelance writing, book publishing and then television.
I'm self-educated on money. So I am living proof that all you have to be is interested and committed to be able to know what the hell is going on.
Q: What's the most common debt sinkhole people fall into?
A: The most problematic one is consumer debt – credit cards, lines of credit, buy-now-pay-later, all the stuff related to "I want it, I buy it." Adding to that is heaps of people buying more home than they can afford. A small change in their circumstances leaves them turning to other forms of credit to make ends meet.
Q: Credit cards: The minimum payment is tempting for ...?
A: Oh God. What happens is that you make your lender really, really rich. You go out to dinner and spend $100 and put it on your credit card. It was a great evening. You go home. You poop. Dinner's gone. The balance stays on your credit card for the next 10 years because you're just paying the minimum. That's immediate gratification with big-time, long-term pain.
Q: How many credit cards do you use?
A: I have two: a MasterCard I put everything personal on and a Visa for everything business. Both are paid in full the minute they are due.
Q: Should a person pay off debts before starting to save?
A: No. I'm one of the few people to say that. Savings is a habit. If you don't establish the habit, you never will. There's always a reason not to save, so you need to establish the habit.
Q: You say, "Don't make shopping emotional." Don't you ever shop to make yourself feel better?
A: No, never. I shop because I need or want something. It goes on my list that I carry in my head. I say to myself, "I need a set of bed sheets." I prioritize. Nothing I need or want is more important than the sheets. If I see sheets I like that are more expensive than I expected, I think, "What else am I willing to give up to have that?"
I live in a nice home. There's nothing around my home I don't want. People have clothes hanging in the closet with the tags still on. The stuff I have I use and enjoy. I invested in a pair of shoes to look at because they're so pretty.
Q: You bought shoes just to look at?
A: People buy tchotchkes. I wanted to look at these shoes. They make me happy. They're very strappy green sandals with a small heel and a big green daisy on the front. I've worn them maybe three times, but I bought them to look at.
Q: How much?
A: $39.99.
Q: Yeah, yeah. $39.99.
A: [Laughter] Sorry.
Q: Gail, what's your most recent splurge?
A: Audible.com just had a sale. I listen to a lot of books because of all the driving I do and my eyes aren't what they used to be. I saw the sale and bought myself 22 books. That's my big treat.
Q: Dumbest money mistake you ever made?
A: Marrying my first husband.
So with thanks to the Star and Nancy J. White for the reprint of the original interview, here it is.
'Plan like a pessimist (to) live like an optimist'
January 16, 2010
Nancy J. White
Will you be able to manage financially when the caca hits the fan?
That's the concern of Canada's blunt-talking personal finance writer, Gail Vaz-Oxlade. She's the host of the television show Til Debt Do Us Part on Slice and author of a new book, Debt-Free Forever: Take Control of Your Money and Your Life.
Vaz-Oxlade, 50, the mother of two teenagers, lives in Brighton. She spoke to the Star about priority shopping, the long-term pain of credit and the lure of pretty sandals.
Q: Have you ever been in, as you call it, "Debt Hell"?
A: No, never. Debt is an anathema to me. It's impossible for me to imagine spending money I haven't yet earned because I'm always aware caca can happen. It's important that I keep my financial life stable so I can deal with s--- when it hits the fan.
Q: Bit of a pessimist are you?
A: I'm actually incredibly optimistic. My mantra is, "Plan like a pessimist so you can live like an optimist."
Q: How did you get to be a money maven?
A: I fell into it. I started as an educational consultant for the financial services sector, went into freelance writing, book publishing and then television.
I'm self-educated on money. So I am living proof that all you have to be is interested and committed to be able to know what the hell is going on.
Q: What's the most common debt sinkhole people fall into?
A: The most problematic one is consumer debt – credit cards, lines of credit, buy-now-pay-later, all the stuff related to "I want it, I buy it." Adding to that is heaps of people buying more home than they can afford. A small change in their circumstances leaves them turning to other forms of credit to make ends meet.
Q: Credit cards: The minimum payment is tempting for ...?
A: Oh God. What happens is that you make your lender really, really rich. You go out to dinner and spend $100 and put it on your credit card. It was a great evening. You go home. You poop. Dinner's gone. The balance stays on your credit card for the next 10 years because you're just paying the minimum. That's immediate gratification with big-time, long-term pain.
Q: How many credit cards do you use?
A: I have two: a MasterCard I put everything personal on and a Visa for everything business. Both are paid in full the minute they are due.
Q: Should a person pay off debts before starting to save?
A: No. I'm one of the few people to say that. Savings is a habit. If you don't establish the habit, you never will. There's always a reason not to save, so you need to establish the habit.
Q: You say, "Don't make shopping emotional." Don't you ever shop to make yourself feel better?
A: No, never. I shop because I need or want something. It goes on my list that I carry in my head. I say to myself, "I need a set of bed sheets." I prioritize. Nothing I need or want is more important than the sheets. If I see sheets I like that are more expensive than I expected, I think, "What else am I willing to give up to have that?"
I live in a nice home. There's nothing around my home I don't want. People have clothes hanging in the closet with the tags still on. The stuff I have I use and enjoy. I invested in a pair of shoes to look at because they're so pretty.
Q: You bought shoes just to look at?
A: People buy tchotchkes. I wanted to look at these shoes. They make me happy. They're very strappy green sandals with a small heel and a big green daisy on the front. I've worn them maybe three times, but I bought them to look at.
Q: How much?
A: $39.99.
Q: Yeah, yeah. $39.99.
A: [Laughter] Sorry.
Q: Gail, what's your most recent splurge?
A: Audible.com just had a sale. I listen to a lot of books because of all the driving I do and my eyes aren't what they used to be. I saw the sale and bought myself 22 books. That's my big treat.
Q: Dumbest money mistake you ever made?
A: Marrying my first husband.
Tuesday, January 12, 2010
Bank of Canada takes stance on housing bubble
Bank of Canada takes stance on housing bubble
Tuesday, 12 January 2010
A Bank of Canada official called talks of a Canadian housing bubble premature in a speech in Edmonton Monday, adding higher interest rates are not the solution to cooling the current surge in housing demand and prices. "If the bank were to raise interest rates to cool the housing market now - when inflation is expected to remain below target for the next year and a half - we would, in essence, be dousing the entire Canadian economy with cold water, just as it emerges from recession," said David Wolf, an advisor to Bank of Canada governor Mark Carney. "As a result, it would take longer for economic growth to return to potential and for inflation to get back to target." The central bank's comments came on the heels of the CMHC's latest report on housing starts, which showed a 6.6 per cent jump in urban starts across Canada compared to November. They also follow federal finance minister Jim Flaherty's recent comments about introducing new rules to cool the housing market. In his speech, Wolf said housing bubbles are usually caused by credit expansion as opposed to temporary factors like low interest rates and pent-up demand, and these factors cannot continue to sustain the high numbers of sales and prices seen in Canada over the past few months. Wolf also said the central bank is monitoring the housing market closely, adding it required "vigilance, not alarm."
Tuesday, 12 January 2010
A Bank of Canada official called talks of a Canadian housing bubble premature in a speech in Edmonton Monday, adding higher interest rates are not the solution to cooling the current surge in housing demand and prices. "If the bank were to raise interest rates to cool the housing market now - when inflation is expected to remain below target for the next year and a half - we would, in essence, be dousing the entire Canadian economy with cold water, just as it emerges from recession," said David Wolf, an advisor to Bank of Canada governor Mark Carney. "As a result, it would take longer for economic growth to return to potential and for inflation to get back to target." The central bank's comments came on the heels of the CMHC's latest report on housing starts, which showed a 6.6 per cent jump in urban starts across Canada compared to November. They also follow federal finance minister Jim Flaherty's recent comments about introducing new rules to cool the housing market. In his speech, Wolf said housing bubbles are usually caused by credit expansion as opposed to temporary factors like low interest rates and pent-up demand, and these factors cannot continue to sustain the high numbers of sales and prices seen in Canada over the past few months. Wolf also said the central bank is monitoring the housing market closely, adding it required "vigilance, not alarm."
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