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Archive for February, 2020

Canada’s mayors are ready to deliver if Ottawa provides the tools

Mayors from some of Canada’s biggest cities met with the federal government last week and sent a clear message: “invest in cities and we’ll deliver.”

The city leaders met with the government to propose measures that will ensure that Ottawa delivers on election promises to facilitate faster commutes, more affordable housing and other concrete outcomes for Canadians.

This first budget is a litmus test for this Parliament,” said Edmonton Mayor Don Iveson, who chairs the Big City Mayors’ Caucus (BCMC) of the Federation of Canadian Municipalities (FCM). “This is where the new government needs to show it can get things done for Canadians. That includes working with municipal governments to deliver real results on the ground.”

Housing and transit

Among the matters discussed with government ministers including PM Justin Trudeau were a program to preserve lower-cost market rental housing, while making it more energy-efficient—and growing the National Housing Strategy to build more affordable housing for Indigenous Canadians and people living with mental illness and substance use.

They also discussed climate change adaptation and transit expansion.

“Our message is that when Ottawa invests in municipalities, we deliver for Canadians. We’re ready to deliver faster commutes, more affordable housing and a richer quality of life—and by doing that, we’ll deliver the climate progress that our federal partners stressed today. This is about deepening our municipal-federal partnership to get more done,” said Iveson.


by Steve Randall 

13 Feb 2020



Mortgage growth poised to speed up further

For the first time in over four years, the Bank of Canada has changed its target for the overnight rate, which may come as a surprise to agents and even their mortgage partners.

Home-loan borrowers stepped on the gas in December as mortgage growth hit a two-year high, according to the latest figures from the Bank of Canada.

The outstanding home loans held by institutional lenders hit $1.628tn in December, a monthly growth rate of 0.74% and an annual gain of 4.9%.

The speed at which mortgage debts are increasing annually appears to be "accelerating very quickly," Better Dwelling contributing editor Daniel Wong said in an analysis.

"Canadian real estate buyers are back in full force, and pushing debt levels once again," he said.

Aside from clocking the ninth consecutive month of growth, the gains in December were the highest since March 2018. Wong said the rate at which mortgage debt is growing is close to hitting pre-stress test levels.

During the December quarter, the annualised mortgage growth was at 6.7%, the highest level since 2016. Wong said this quarterly annualised growth could point where the market is going.

"The end of the year printed some big numbers for mortgage credit growth. It's skewed a little due to the unnaturally low mortgage growth a year before. Some of this is delayed demand, which should flatten out as the year progresses," he said. "However, it's still the highest level of growth in nearly two years, preparing to climb even further."

by Gerv Tacadena  Feb 2020

Would TD Bank’s move ultimately ease the stress test?

TD Bank's recent decision to cut its five-year posted rate might set a very "action-packed" scene for Canada's housing market this spring, an expert said.

In a TV interview with BNN Bloomberg, founder Robert McLister said TD Bank's move could trigger other big banks to slash their posted rates, a scenario that could result in the easing of the stress test.

If the other big banks follow suit, the Bank of Canada would likely be compelled to lower the benchmark rate to below 5% for the first time since the stress test rules were adopted.

"And that will improve a typical borrower's ability to buy a home by about 2%," McLister said.

With this added boost in borrowing capacity, more buyers would get the confidence to participate in the housing market, heating up the already competitive space.

"The spring market accounts for a disproportionately large percentage of home sales. It's prime time in the mortgage market and this change by TD, if it's matched in short order, is going to make for a more action-packed spring market," McLister said.

McLister said an increase in demand for housing will fuel house-price growth, particularly in popular markets like Toronto, Vancouver, and Montreal.

by Gerv Tacadena Feb 12  2020