Re/Max released their Canadian Home-buying Trends Survey for 2013-2014 just this past Tuesday. It looked at a number of prospective homebuyers that are considering getting into the homeownership market within the next two years. Almost 20 percent of those in that category were single, another 42 percent couples with families making up 38 percent.
The report also found that roughly 22 percent were first time homebuyers, 32 percent were pursuing their second home and the remaining 47 percent had already made multiple purchases.
Elton Ash, who is Re/Max’s Western Canada executive vice-president, noted that real estate buyers are more savvy and financially prudent than in times past. The state of the world economy, along with tougher financing rules for mortgages here at home, has created a more conservative outlook. Most Canadians are avoiding, or at least minimizing the excesses of the past.
Looking at Alberta, the survey discovered that...
Edward Jones, a financial firm, just commissioned a new survey of Canadian spending habits. What they found is that quite a few people are taking a rather cavalier attitude towards discretionary spending habits. The fixed amounts going out the door for the most part are accounted for by at least 29 percent of the population. This includes the rent, a mortgage or car payment. But 32 percent of those surveyed did not track any of their expenses.
Statistics Canada figures notes that the debt to income ratio for Canadian households came in at 164.6 percent during 2012’s third quarter. Translated, it means that for every $100 in net income, $65 was already allotted to debt.
Edward Jones’ Senior Product Manager for Retirement Planning, Michelle Kay-Scott, noted that it is this failure to keep track of spending and expenses that may be the root of the debt problem. If you know where your money goes, from the mortgage to a casual night out, you can figure out what your normal...
Those in the know now expect that Canada’s real estate market will not endure the predicted bubble, but rather will weather a softer landing. The market is still seeing a bit of a slowdown, largely due to the change in mortgage lending rules set down this past July. But according to RBC, Royal Bank of Canada and other leading bankers a serious downturn such as that seen in the United States in 2008 is not likely.
That 2008 crash affected not only the United States’ economy but contributed to the global economic situation. Caused by an increase in mortgage rates that affected sub-prime mortgages and the resulting defaults, it was an economic disaster with effects still being felt in some places.
Canada does have a few sub-prime mortgages, but not nearly as many as in the United States. In addition, Canada’s real estate prices have seen a steady increase, with a few exceptions, one being the first few months of the 2008-2009 recession. Some of the...
When investing in real estate no one really wants to think about risk any more than they have to. But it is best to know the potential problems and risks that you take when you sign on that dotted line. Here are some to pay special attention to.
Looking at Economic Risk
Canada’s economy and the real estate market are in good shape, much better than that of other global markets. Foreign investors are increasingly turning to Canada as a place to safely invest funds. Domestic investments are also doing well. Still there are risks to consider.
One is the interest rate. Right now and throughout 2013 the rate is expected to remain low. The rate has been low for quite a while and we need to avoid becoming complacent. Eventually things will start inching up. For now the Bank of Canada’s governor Mark Carney has decided to leave the rate at one percent. The risk is that when the rate starts to go up, it will go up too quickly and do some serious damage...