Monday, October 13, 2014
Maria Mak- Burnaby Real Estate Agents - REBGV - September 2014 Housing Market Update
Thursday, October 2, 2014
Maria Mak. Burnaby Real Estate Agent - Why the Bank of Canada will keep interest rates low
On September 3, 2014, the Bank of Canada announced that it was holding its trend-setting overnight lending rate at one per cent. The overnight rate has not moved in four years. It’s likely that it will remain where it is for some time yet. Why?
1. Inflation is on target
Inflation recently increased and is tracking close to the Bank’s two per cent target. However, the Bank believes the increase reflects temporary factors and cited evidence in support of this in its policy rate announcement. As a result, it does not see interest rate hikes as being necessary to rein it in. Instead, the Bank thinks inflation will keep itself in check as temporary factors dissipate.
2. Uncertainty remains high
While the U.S. economic recovery appears to be back on track after a dismal first quarter, European economic growth has faltered due in part to its trade sanctions with Russia. This means low interest rates are still needed to support Canadian economic growth while question marks loom about the outlook for global economic growth, demand for Canadian exports, and Canadian economic growth.
3. Canadian exports need help from the currency exchange rate
The Bank rate announcement noted that “Canadian exports surged in the second quarter.” The reasons cited were strengthening U.S. investment and “the past depreciation of the Canadian dollar.” Hiking interest rates too soon would result in a stronger loonie and dampened Canadian exports. The Bank is counting on stronger exports to lift business investment and economic growth.
4. Higher exports have not yet translated into stronger investment or hiring
The Bank was pleased to see the pickup in exports but noted, “While an increasing number of export sectors appear to be turning the corner toward recovery, this pickup will need to be sustained before it will translate into higher business investment and hiring.” As such, interest rates will need to remain stimulative in order to entice firms into increased investment and hiring even if exports remain strong.
Housing market
With these reasons in mind, interest rates are unlikely to rise in the near future. One notable change in language in the September 3 announcement was the removal of any references to a soft landing in the housing market. The Bank said that the housing market has in fact remained stronger than previously anticipated and that risks associated with household imbalances have “not diminished.”
That said, it is possible that stronger U.S. growth, a surge in exports, and the current strength of the housing market could all reflect a rebound from weak performances this past winter, which was unusually harsh.
As such, the Bank said that it remains “neutral with respect to the next change of its policy rate,” and will wait for new information as regards their outlook and assessment of risks to economic growth
and inflation.
As of September 3, the advertised five year lending rate stood at 4.79 per cent, unchanged from the previous Bank rate announcement on July 16, and down 0.55 percentage points from the same time one year ago.
The next interest rate announcement will be on October 22 and will be accompanied by an update to the Monetary Policy Report which contains the Bank’s outlook for the economy and inflation, risks to its economic projections, and an update to its estimate for potential Canadian economic growth.
Source: Canadian Real Estate Association
Saturday, September 20, 2014
Maria Mak.Burnaby Realtor-B.C. to tighten standards for home inspectors
VANCOUVER — By the end of next year, home inspectors will have to meet a standard set of professional criteria to be licensed in British Columbia.
Housing Minister Rich Coleman said Friday the improved requirements will help safeguard home buyers who rely on the inspections for making what is likely the largest investment of their lives.
Consumer Protection B.C. will set the education and training requirements and be responsible for testing and licensing home inspectors.
“At the end of the day, buying a home is one of the biggest purchases somebody ever makes, and we’ve always been very supportive of any move toward consumer protection in this area,” said Tayt Winnitoy, vice-president of operations for Consumer Protection B.C.
In 2009, B.C. became the first jurisdiction in Canada to require licences and insurance for home inspectors, and there are now about 440 licensed in the province.
A few months later, a North Vancouver couple won an unprecedented award in the civil lawsuit they brought against their home inspector.
Three years earlier, Manuel Salgado and Nora Calcaneo bought a home for $1.095 million.
They paid $450 for an inspection, which found a number of structural deficiencies. The inspector, Imre Toth, estimated the repairs would cost them $15,000 to $20,000.
They closed the deal.
When the bill came in, it totalled $213,000.
They filed suit against Toth, the sellers and the real estate agents, but settled with the previous owners and dropped their claim against the agents.
Justice Grant Burnyeat said Toth’s estimate was “woefully inadequate.”
The purpose of the inspection is to provide a homebuyer with expert advice about any significant deficiencies, the judge wrote.
“I have no hesitation in coming to the conclusion that the plaintiffs relied upon the report received by Mr. Toth to decide whether they would purchase the property,” he wrote.
“Plainly, if prospective home purchasers did not believe that they could secure meaningful and reliable advice about the home they were considering purchasing, there would be no reason for them to retain an inspector to inspect that home.”
Currently, inspectors must pass regular examinations to obtain and keep their licence but there are four different associations that can licence, each with its own evaluation process.
In a survey by the provincial Office of Housing and Construction Standards, 78 per cent of home inspectors felt the requirements for a licence are too lax.
“It is clear ... that action is needed to increase consumer protection and to address the challenges in the current model,” the report said.
The Canadian Association of Home and Property Inspectors — one of the four groups that license inspectors — said non-existent standards improved with the 2009 regulations, but loopholes remain.
Winnitoy said home buyers can rest assured that the inspectors they’re dealing with now have met minimum training and education requirements.
“What we see now and what we’re looking forward to is a deepening and an improving of the framework to help ensure that there’s a level playing field for all home inspectors and a clear set of expectations for consumers to have.”