Both TD and Royal have pulled their discount mortgage rates that were planned to be available until the end of the month: 2.99%, four year, fixed rate.  This offer was in response to BMO’s five year, fixed rate, 2.99% which was limited to a two week period. 

 The banks are stating slim lending margins for the reason they halted the offer.  Increasing speculation of inflation has brought on a two month high bond rate, reflecting the subsequent increase in the cost of funds.   

TD and RBC have increased the fixed rate to 3.39%.  Much of this is in response to the improving US outlook, which has caused some upward pressure on the banks borrowing costs.  Variable rates still remain extremely low at 2.99% or lower. 

The trick is to pick the product that best suits your financial scenario without overextending yourself.  Do your homework and make decisions based on solid information. 

Read The Globe & Mail's article : http://www.theglobeandmail.com/globe-investor/canadian-banks-call-truce-in-easy-money-mortgage-battle/article2331673/  

So you've already decided that home ownership is a priority. Alright, where to get started?

Here and Now by assessing what you spend vs. what you earn. The process, Budgeting, is a necessary step (did someone say evil?) Knowledge is power and in many cases individuals are shocked when they go through the process and figure out where they are financially...you may be fortunate and be pleasantly surprised.

A realistic budget to forecast your spending for the year will help with long term financial planning, will help you get a handle on how much you can save and ensure you make it to your goal of home ownership.

An inheritance would be nice, well fabulous actually, but for most of us it’s a day-to-day balance between needs, wants and "well I really shouldn't have".

Check out Gail Vaz-Oxlade's web site. It includes a budget worksheet and directions! http://www.gailvazoxlade.com/resources/guide_to_building_budget.html

It's your money and you can do with it whatever you like, but be aware that:

• It's easier to spend when you use plastic and there are a number of financial institutions banking on it.
• You need to prioritize your expenses and live within your means. If in debt, pay off high interest obligations first, then use that payment amount to pay off the next most expensive debt until its retired (and hopefully you aren't).
  Consider consolidating debt at a lower rate of interest.
• From time to time you should re-assess your lifestyle, if you live in a city do you really need the expense of a car? Do you purchase a daily Starbucks, lunch, meet friends for a drink?
• Saving bonuses will get you to your goal faster. Note: Once you purchase a home, related expenses will use up 35-40% of your monthly cash flow.
• Look for ways to do things more economically, use the library for books and movies, use coupons, buy on sale, look for deals on sports equipment, toys etc at garage sales.
• Borrow from your RSP. Click here to see our article.
• Finally, stash that money in a tax-free savings account.

A new Home Price Index ( The MLS® Home Price Index or the MLS® HPI) has been launched based on single family, townhouse/row unit, and apartment unit sales activity in Greater Vancouver, Fraser Valley, Calgary, Greater Montreal, and Greater Toronto. The players include the Canadian Real Estate Association, the five boards of the cities listed above and Altus Group. 

 What will it do for us?

Too new to tell at this point... the data will get added into the mix and will help us provide our clients with more accurate "historical" picture of the city and neighbourhood of interest, as well as the type of home they are looking for. We understand the structure compensates for swings in average and median home prices that result from changes in the mix of home sales and are "open to misinterpretation". Gregory Klump, CREA’s Chief Economist said "The MLS® HPI overcomes this shortcoming, and does a better job of tracking Canadian home price trends than any other measure."

The index will provide clients and REALTORS with a more timely and accurate gauge of home values the five markets. Data will be available for: single family homes, which are further split into 1-storey, and 2-storey single family homes; townhouse/row units; and apartment units.

We will be able to look at composite changes, compare markets and look at month-over-month changes in sales of single family homes etc.  Data for these housing types are also available along detailed neighbourhood lines in each of the markets.

What does it tell us today?

Home prices edge higher in January - February 6

The index remains 5.2 per cent above levels for January 2011. Led by Toronto (7.6%), all five of the markets tracked posted year-over-year increases. The index was also up from year-ago levels in all housing categories, led by two-storey single family homes (6.7%).

More at http://homepriceindex.ca

As a Realtor, my response to that has been that Toronto (proper) has been very resilient to the economic shifts (high demand, not enough supply). Depending on where you live and what type of property you own will determine how the value of that product is affected (if we go through another recession).

If you bought a condo unit in a high rise where there are hundreds if not thousands of them just like yours, well then what's to distinguish yours from the next one?  Also too the other major red light to look for is how many of the owners are end users versus investors?  End users are much more vested in looking after the building and running a healthy corporation.

On the flip side, if you own a condo in a boutique building or conversion loft, then it is more unique and will continue to have much more demand. Or a home in a great Neighbourhood close to a park, public transit, shops and cafes, these too are amenities high in demand which will continue to be at the top of the urban buyers "must have" list.

Realtors know where to invest and what to buy. Take advantage of our skills and call us to help you make your sound investment in real estate.

Adrienne

From The Globe and Mail: Low Interest Rates May Shield Housing Market From Bubble 

The Canadian bank regulator is going to find out. They are stepping in to assess lending practices and determine if over time, these loans could actually be paid back or not.

The fear is that lending standards have become increasingly liberal. For example, borrowers not having to prove their income before getting a loan.

Did you have to prove your income before getting your loan?  Is your debt servicing 40% or more than your disposable income? 

Important questions to ask yourself in order to stay on top of your finances and not put yourself in a vulnerable financial scenario.

Regular assessments of your finances is highly recommended to make sure you are making the right decisions and not over extending yourself.

As we are extremely low on product right now, it is a good time to consider de-leveraging and selling an investment property in order to pay off your loans or lines of credit.

From The Globe and Mail: Bank Watchdog Targets Condo Speculators 

It's really unfortunate that the government has decided to end the Eco retrofit program two months early. The natural resource minister just made the announcement saying that they will no longer be accepting new applications.

They are saying that other initiatives will be put into place but they do not seem to be "homeowner" specific rather geared towards builders and industrial practices, which in my opinion, sounds like a large portion of the money is going back into administration.

Homeowners who were making upgrades through the program were saving an average of 23 percent on their energy use, which in turn help cut greenhouse gas emissions.

The Tories state fiscal responsibility for ending the program which shocked Eco conservatives and homeowners.

Personally, my husband and I were about to embark on a major renovation in which we planned to do an Eco test before and then utilize the program to get money back on items such as a new furnace, windows and insulation. We had worked out at least $6,000 back from the program. That's a big chunk that will have to be factored into our bottom line. The incentive to get it done sooner than later has been washed out the window along with our heat!

Adrienne

From The Globe and Mail: Tories Close Energy-Saving Program

It is the people, types of housing, amenities and terrain that make a neighbourhood special. We love Toronto’s neighbourhood focus and are happy to help you navigate, search and find a home that is right for you, whether it be within a certain school district or a block from your favourite Starbucks.

The Toronto Real Estate Board (TREB) recently realigned Toronto’s neighbourhoods to correspond with those of the City of Toronto and have renamed many to reflect the changes. Although somewhat confusing if you live in one of Toronto’s historically well known neighbourhood pockets that are now integrated under a larger umbrella, there are synergies that make sense as potential buyers will be able to correlate demographic data collected by the City with the “TREB” defined neighbourhood under consideration. In some cases popular neighbourhood names have been retained, for example “Cabbagetown”, the “Annex”, “Roncesvalles” etc. remain. In other cases neighbourhoods such as “Liberty Village” have been split (along Atlantic Ave.) with the East portion now part of “Niagara” and the West portion part of “South Parkdale”.

Previously TREB used a numbering system that was confusing to those unfamiliar with their system. Now Buyers (and their Real Estate Reps) searching for a home in a particular pocket may need to take a few minutes to determine that, for example, “Sunnylea” and “Norseman” are now part of “Queensway- Stonegate”. Having done that, additional information will be available to help them hone-in on the perfect home.

A sampling of the information offered by The City of Toronto can be found on their “Well Being” website (http://www.toronto.ca/wellbeing). The site is currently under evaluation and they are looking for ways to improve the information and how it’s delivered. The purpose of the site is to “help evaluate community well being across Toronto’s 140 neighbourhoods providing facts that will assist in monitoring our city’s economic and social wellbeing”. Have a look, the demographic information may be useful to you or to someone you know.

The Farquhar Advantage Team has lived and worked in Toronto for over 30 years and are familiar with both its history and neighbourhoods. So if you are looking for a neighbourhood that will suit your lifestyle, give us a call, we would be pleased to help.

Homeowner’s can’t resist the allure of low interest rates, 2.99% fixed.  Good or bad? 

http://www.theglobeandmail.com/report-on-business/economy/housing/flaherty-keeping-wary-eye-on-housing-market/article2305544/

As we continue to take advantage of the lowest ever interest rates, there is concern that the amount of household debt Canadians are taking on will soon catch up with them when interest rates go up.  Bank of Canada is predicting that they will remain low throughout 2012, but will be directly affected by how things go with the European debt crisis and the economy of our neighbours to the South. 

De-leveraging and putting away some money on the side are two good plans in order to make sure that when the tide does change, you are not going down with the ship.  Be aware of all of your monthly expenses and don’t let the low interest rates entice you to make risky decisions that could burn you in the end.  

Consumer confidence in the housing market is expected to carry through into 2012 therefore squashing the idea of a widespread correction in the Toronto real estate market. Momentum has been slow to get going in the past two weeks, but we suspect that it will start to pick up closer to February and coupled with the stimulative effect of low interest rates, the market is likely to continue to expand, although at a slower pace.

Consumer’s expectations should be slightly more moderate compared with the pre-recessionary hot and fast climbs. We had previously experienced 3-6% increases year over year in the hot Toronto neighbourhoods, but now are more likely to experience slightly shy of 3% increases throughout 2012.

Consumer will still continue to see real estate as a sound investment, especially in the right location. It takes us back to the old real estate motto “location, location, location”.

Violets are like old family friends, a multi-generational flower that not only have a place in memory, but also look fabulous in a modern planter or layered in white pots on a glass table. In perfect conditions they show their true colours over and over again. I remember variations of purple, pink and white both at my mother's and grandmother's homes. I currently have a heathy indigo blue beauty that does well under our bathroom skylight.

To learn more about their history and habits check out Home By Designs current article at: http://article.homebydesign.com/pages/article/HBD_DEC_11_07/272191/index.html

or visit the Canadian association at: http://www.avsc.ca/