Despite Minister Flaherty’s concerns, many banks are beginning to push new super low mortgage rates to bump up real estate purchases. From luxury real estate, medium markets, and subprime mortgages borrowers are seeing large savings across the board.
These ultralow interest rates can be great for borrowers, but what does it mean for Canada’s economy? But the cooling housing market, new mortgage rules in place and fears that the market is about to collapse, many lenders find ultralow interest rates are the only way to compete. While nationally 3% interest rates are historic lows, many analysts say that attaches could fall further in the next 12 months.
Housing Interest Remains Low
Many Canadians just don’t want to buy a home right now – with the real estate market cooling, credit harder to get, and inventory falling, there’s plenty of reasons not to get involved with real estate. Some markets are currently seeing an uptick in sales; this is mainly in Vancouver and Western Canada.
The rest of Canada, however, is seeing a much lower sales volume when compared with last year. No one wants to bet big when they can lose big too. In the interest rates so low, inflation could be around the corner.
Tempting Borrowers Back with Low Rates
Ultralow interest rates offered by lenders are just the latest in a long line of ways that lenders are trying to get borrowers to come back. Some frustrated lenders are even offering high parity home equity loans and home equity lines of credit – but most just don’t want to borrow right now. The recent poll showed that less than 17% of Canadians want to buy a home the next two years – down from almost double that a year ago.
Finance Minister Flaherty has condemned the move by some banks to continue to lower interest rates – with the prime rate floating between 3-4% for the last 2 years, some banks have lowered it to 2.75%. The finance minister, in a move many economists have decried, changed the mortgage lending rules earlier last year to crack down speculation. In a statement earlier this week that if mortgage lenders continue to offer such low rates it could destabilize the economy.
Network Solutions is a domain name registrar that has been in the business from the last 30 years. Apart from domain name registration services, the company also offers web hosting and email marketing. There are a number of Network Solutions coupons available online to get great discounts on its services.
Housing Market Returning to Pre-1998 Levels
Since 1998 the housing market is boomed, but what goes up always comes back down. Many analysts are saying that the Canadian housing market, real estate, and even luxury homes will soon return to pre-1998 appreciation levels. This will drop growth rates to 2% per year; in the last 5 to 10 years Canadians have seen double-digit increases in appraisal values each year – especially in Toronto and the surrounding markets.
What does this mean for the Canadian economy? The new mortgage rules passed last year may have come at just the right time. Cutting down on speculation, keeping interest rates low, and many other factors may keep us from an American style housing crash.
The Goodale Miller Team is the #1 team in Canada for Century 21 8 years running. Specializing in Oakville luxury real estate, including luxury Oakville homes for sale, infill building lots, condominiums and more. You can view their website here: http://www.goodalemillerteam.com/