I want to start off by letting you know I am very
excited about changing to Dominion Lending Centres Expert Financial
brokerage. I was getting very frustrated with Northwood and the support
was just not there. In the few days since I have switched over I already
have access to more tools and better information than ever before. I can
also offer some great new products, but more on that later.
On the economic and regulatory front... Well what can I say it has been a crazy few months. The new rules are kicking in for mortgages making it harder to qualify for the larger amounts of old. The government's stated goal is to keep us from burying ourselves in debt paying for the houses, and by implication freeing up money for us to spend on other stuff so we can keep the economy going. If we have big mortgages and no spare money there is not much left for toys, extras, renovations and nights out. There is a plan, it just may not have been yours.
The flip side of this is that Canada is now on the radar and housing prices are cheap by "world class" city standards. Sometimes we have to be careful what we wish for. So now foreign buyers are part of the game and when the dollar weakens they have more available cash to buy properties because many hold USD.
I will write more about the new rules in the next issue, in the meantime here is a link it an article. CBC Business
What we know may affect 2017 from 2016 - Brexit, the refugee crisis in Europe, Trump, and oil prices, among others.
Where we are now.
Job number for December look great, this means more people working in full-time jobs and as "the slack" is absorbed there will be less pressure to keep rates low. Also, November saw a trade surplus for Canada, this is good because it means more money in than out, suggesting a strengthening across many industries.
The US the economy is still stronger than here, and the Fed may keep raising rates, if we do not raise rates, or things do not get stronger it may lead to a drop in the Canadian dollar. If Trump does what he says he will, then there will be a whole lot of stimulus in the US, this is why the bond markets have started to push mortgage rates higher, as people sell off the bonds in anticipation of the higher US deficits.
We can expect to keep seeing higher mortgage rates, and while these rates are still historically extremely low the 20 somethings have been used to something even better, in fact we have all developed a fondness for these low rates, but some remember the 16%+ days and some just the 6% days, so rates below 3% is still a pretty good deal. I just though a little perspective was in order when I talk about rate increase, instead of 2.39% we are going to 2.69 - 2.89%.
Job number for December look great, this means more people working in full-time jobs and as "the slack" is absorbed there will be less pressure to keep rates low. Also, November saw a trade surplus for Canada, this is good because it means more money in than out, suggesting a strengthening across many industries.
The US the economy is still stronger than here, and the Fed may keep raising rates, if we do not raise rates, or things do not get stronger it may lead to a drop in the Canadian dollar. If Trump does what he says he will, then there will be a whole lot of stimulus in the US, this is why the bond markets have started to push mortgage rates higher, as people sell off the bonds in anticipation of the higher US deficits.
We can expect to keep seeing higher mortgage rates, and while these rates are still historically extremely low the 20 somethings have been used to something even better, in fact we have all developed a fondness for these low rates, but some remember the 16%+ days and some just the 6% days, so rates below 3% is still a pretty good deal. I just though a little perspective was in order when I talk about rate increase, instead of 2.39% we are going to 2.69 - 2.89%.
I look forward to seeing what happens with NAFTA and
the world in general, I am both amused and concerned at the puppet strings
being pulled by Putin in the US, and seeing the vaunted US democratic ideals
being played like a concert piano by a Cold War KGB veteran, and the allies
Trump (whether he realizes it, or not) is putting in place to destabilize the
global dynamic and not just the national one. How that will play out on
global trade and economics will be a brand new area of study with very little
precedent. In the meantime, I am hoping only normal events and
trade matters affect what lies ahead.
