Growing debt threatens economic stability: BOC
With household debt-to-income ratios in Canada at historical highs, the Bank of Canada is warning both borrowers and financial institutions to practice caution, particularly when it comes to mortgage lending.
"Financial institutions need to carefully consider the aggregate risk to their entire portfolio of household exposures when evaluating even an insured mortgage, since a household defaulting on an insured mortgage would likely be unable to meet its other debt obligations," the central bank's financial system review said.
On the borrower side, the bank stressed the need for households to "assess their ability to service these debt obligations over their entire maturity, taking into account likely changes in both income and interest rates." The warnings can be seen as a response to the current views that Canada could be heading toward a housing bubble.
Some good news in the report came on the topic of liquidity, with the Bank of Canada saying Canada's major banks have increased their stock of liquid assets and reliance on stable funding sources, "bolstering" their ability to provide credit during periods of stress. The report also said market-based funding is improving and that conditions in the international financial system have improved considerably since the last financial system review in June.
Thinkg of Buying or Selling your home or investing in real estate in Mississauga, Brampton and region of peel, please visit www.AceTeamRealty.com or call us at 416-618-9753.
Greater Toronto Area Home Sales Remain Strong in November
December 3, 2009 -- Greater Toronto REALTORS® reported 7,446 sales in November – slightly more than double the November 2008 result when GTA home sales had dipped markedly due to the economic downturn. Year-to-date sales were up 14 per cent compared to the first 11 months of 2008.
“This year in the GTA home sales will be in line with the healthy levels experienced between 2004 and 2006,” said Toronto Real Estate Board President Tom Lebour. “Increased resale home transactions in the Toronto area and country-wide played a key role in pushing the Canadian economy out of recession in the third quarter.”
The average price for November transactions was up 14 per cent year-over-year to $418,460. The average price year-to-date was up four per cent to $394,464.
“Very strong annual growth rates for sales and average price should be expected through the first quarter of 2010, because we will be comparing the current recovery to the housing market decline experienced last winter,” according to Jason Mercer, TREB’s Senior Manager of Market Analysis. “As we move into the spring, growth rates will move to more sustainable levels.” have been high relative to listings,” according to Jason Mercer, TREB’s Senior Manager of Market Analysis. “Watch for listings to rebound in 2010 as home owners react to the strong sales and price growth experienced in the latter half of this year.”
Median Price
In November, the median price was $353,800, from the $312,250 recorded during November of 2008.
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Mortgage Rate are dropping again
After a sudden increase in mortage rates couple of weeks ago, both the variable and Fixed rate Interest rates for 5 years term have dropped in last few days. These mortgage rates continue to be at a historically low level. If you are thinking of purchasing in next few months, now is the time to apply and get pre-approved and lock-in the lowest interest rates.
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3.25% |
3.64% |
3.64% |
1.75% |
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* Rates may vary provincially and are subject to change without notice.
Rates Last Updated: Friday, March 12, 2010.
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Buyers and Home Owners should take advantage of this present market conditions. If you are paying high interest Rates on your mortgage or have equity in the house and want to consolidate your debts to reduce your monthly payments, now is the time.
Please call us at 416-618-9753