There is no doubt after this past week that 2020 is a year of changes. The impact of global markets, Covid-19, and whispers (in the shadows) of recessionary trends, we have seen significant market action that affects every Canadian (even if they do not want to deal with it!).
For the impact on the real estate market, this Spring will be one to watch. Will it go up, will it go wild, or will it be average? Opinions vary, and it depends on who you listen to, what their interest is, or if their livelihood depends on it!
However, two policy changes will make certain groups of consumers very happy if not relieved.
The first is a significant announcement about the changes to the Stress Test rules that will allow insured mortgage applicants to qualify for approximately 5% more mortgage money, starting April 6, 2020.
The second piece of good news for those looking to get into the real estate market happened this morning. The Bank of Canada announced that it was lowering the overnight lending rate to 1.25 percent from 1.75 percent. We are waiting for the lenders to digest this news and adjust their mortgage rates accordingly. This is the first change to the overnight lending rate since October 24, 2018.
What is also interesting when comparing the two most recent statements by the Bank of Canada (today and January 22, 2020), is the new comments in their message this morning:
As a result of its revised near-term outlook, the Bank's Governing Council noted that it "stands ready" to adjust monetary policy further if required to support economic growth and keep inflation on target.
The next policy announcement is April 15, 2020 and BofC will be coordinating with other G7 central banks and fiscal authorities as it "closely" monitors economic and financial conditions."
For Canadians, this means everyone is on alert and watching what will happen to markets, including real estate and stock markets. Our 2020 market is gearing up to be an interesting one, as buyers and sellers ponder their next move. For some, this is quite literal!
For my prequalified mortgage clients, I am watching for announcements that will benefit your applications, including the change in the stress test calculations on insured mortgages, effective April 6th. As these roll-out, you will be contacted directly with updates.
If you are looking to prepare yourself for making a move in the British Columbia, Canada real estate market, our custom service will smooth the process out for you and prepare you for whatever Mr. Market throws at us this year. This is also a perfect time for an annual review of your current mortgage to find out how these changes might alter your options.
Contact me at 778.246.2547 to book an appointment today if you are looking for professional guidance and a mortgage in your best interest!