Daily Market Update

New figures show consumer confidence is creating first time buyers… does an interest rate rise mean falling prices?... the Calgary bidding war…and why BC may not be the place for smokers….

Happy CAAMPers
A new consumer report by the Canadian Association of Accredited Mortgage Professionals (CAAMP) makes for some positive reading. With the economy generally in good shape and interest rates low, consumers feel confident about the affordability of their mortgages and consider home loans to be ‘good’ debt. This confidence extends to first time buyers, who accounted for 55% of homes purchased last year and the report shows that property is still very much viewed as a good investment. These figures will please banks as the survey also highlights that more people are paying down mortgages faster. Read the full story.
Interest Rate Rise Means Lower Prices Right? Not Necessarily
We know how the story goes; house prices spiral up too high, the interest rate gets increased, demand slows and prices drop. That’s the theory and it does sometimes play out that way, but not always. Robert Kavcic is an economist for the Bank of Montreal, and he’s been running some numbers based on a couple of scenarios. He’s in no doubt that if the Bank of Canada decided on a 2% rate hike overnight, there would be a ‘significant correction’ in house prices. However, if that rise was, as it is likely to be, more gradual over the next 18 months or so, and incomes continue to rise, then prices may not drop. Read the full story.
Bidding Wars In Calgary
As with other major cities, the demand for property in Calgary and the surrounding areas is strong, some would say fierce… and so are the bidding wars that many buyers are finding themselves in. With popular properties attracting multiple offers, sometimes within a day of being listed, it’s increasingly common for a frenzied battle of bids to take place. Buyers are finding that making offers on more than one property at a time and playing the bidding game on all of them is becoming the only way to secure their new home. As development slows and demands heats up, this is only going to get worse and be a cause of much frustration for buyers. Read the full story.
BC = Ban Cigarettes
There’s a growing trend in British Columbia; smoke free condos. Smoke Free BC have been campaigning for a ban on smoking in buildings for a decade, and there are now 100 condo developments which are totally smoke free. It’s not clear if rules banning cigarettes in condos has, or will, extend to owned property; however in the rental market bans are becoming more widespread. The benefits to health are a large part of the trend of course, but there is also a benefit to property maintenance.  Read the full story.
US Property Market Showing Recovery
South of the border, the US real estate market picked up in April with an increase in resales of 0.4%. While this is much lower than the March increase of 3.4%, the two month upticks are the first for nine months. Demand has been slow since the middle of last year, but with increased confidence and lower mortgage rates, things are looking better. Read the full story.