BoC interest rate hikes causing concern

Steve Randall
Canadian Real Estate Wealth

Recent interest rate hikes by the Bank of Canada have increased costs for Canadian households but they may not feel the full impact for some time.

According to a blog post by Environics Analytics, the average cost of the hikes so far to average households is $2,500.

But while the immediate cost is around $1,715 annually, the additional impact is based on renewals of 5-year fixed rate mortgages. And the figures do not account for future hikes.

Article authors Isanna Biglands and Peter Miron say that the low rates over the past decade have given Canadians little to worry about but they are now starting to feel the pinch.

“With the debt service ratio increasing to 6.4 percent in 2017 it is reasonable to expect this ratio will rise to approximately 7.2 percent by the end of 2018. While this is still lower than the debt service ratios observed prior to and immediately after the financial crisis, it will force Canadians to either decrease their saving (or debt repayment) rates, lower their discretionary spending or some combination thereof,” they write.

Young, middle class most effected The rate rises will have the most impact on young, middle class families, the authors conclude.

“These younger families have not had time to build up their capital and will find their consumption and saving rates pinched, particularly by the increased interest payments on their higher mortgage balances,” they warn.

The full post can be read at www.environicsanalytics.com.

Copyright © 2018 Key Media Pty Ltd

Edmonton first for Realty One Group

Mario Toneguzzi
REM

Realty One Group, an established U.S. real estate brand, is aiming to expand aggressively across Western Canada.

Shami Sandhu, formerly broker at Re/Max River City in Edmonton, has secured the rights to Realty One Group of Western Canada and plans to expand the brand to as many markets as possible in Manitoba, Saskatchewan, Alberta and British Columbia.

“We’re willing to look at every market out there. I’ve recently been contacted from markets like Wetaskiwin and Leduc (in Alberta). I’ve had people contact me from Nanaimo, Fort McMurray and Brandon, Man.,” says Sandhu.

He says in the major markets, “my intent is to have about one office for roughly every thousand agents that are registered with the local real estate board. So for example, Edmonton’s got roughly 3,800 registered real estate agents so we’re going to have close to four offices in the Edmonton area.”

He says interest in the brokerage is very strong from two main groups – independent brokerages that see the value of affiliating with Realty One Group to grow their business, and real estate teams, who are now looking at taking their business to the next level by starting up a brokerage.

Sandhu has over 15 years of industry experience and was previously awarded Broker/Owner of the Year by Re/Max of Western Canada.

“The success of a franchise system is having the right concept and the right partner,” says Vinnie Tracey, president of Realty One Group Affiliates in Irvine, Calif. “I have known Shami Sandhu personally for 10 years. He has the pedigree, knowledge, work ethic and respect of the real estate community to make Realty One Group a major player in Western Canada.”

Sandhu says no one has disrupted the Canadian real estate market in 35 years but it’s time for a new disruptor.

“I believe Realty One Group will be very well received just like they have proven to be in the U.S. I want to show the Canadian real estate industry what we need and to remind them that it’s our agents that truly drive this business and the focus needs to be on them,” he says.

“While most of the industry is focusing on promoting themselves and shareholder value, Realty One Group maintains its focus on technology, corporate culture and a you-first focus to serving their associates.”

Sandhu says what differentiates Realty One is that it’s a 100 per cent company, meaning that its agents don’t pay a commission split. They pay a flat fee monthly or a flat fee per transaction.

“Where we’re different from the other companies in Canada, especially, is two main areas. One is corporate culture. Our organization is all about everyone having a voice. Everyone’s an equal participant in our organization. The agents are finding out what’s happening with the company the same time the broker owners are. They’re encouraged to provide feedback to the company,” says Sandhu. “We’ve been described as being very Silicon Valley, Google-esque in a way in our approach.

“A big foundation of ours is supporting collaboration and it’s all about working together. It’s not about competing against one another…there’s a lot of business out there to be had. That translates to our office design. A key element in many of our offices is the One Cafe. So instead of having an office full of 20 private offices, for example, most of our offices have fewer private offices and more of a cafe-style space – more of a collaborative space where agents get to work together and learn from one another.”

Another key point about the brand, says Sandhu, is the level of support it provides agents through tools and resources.

Realty One Group was founded in 2005 in the U.S. by owner and CEO Kuba Jewgieniew, a former stockbroker.

© 2017 REM Real Estate Magazine

Local buyers are driving demand for luxury condos going into 2019

Ephraim Vecina
REP

Two major demographics are mainly responsible for the current strength of the Canadian luxury condo sector, according to the 2018 RE/MAX Spotlight on Luxury Report.

“Many Canadian Baby Boomers saw the strength of the real estate market over the past two years as an opportunity to cash-in, downsize and upgrade into the luxury market for retirement,” according to Christopher Alexander, executive vice president and regional director of RE/MAX INTEGRA Ontario-Atlantic Canada Region

“We’re also seeing an emerging trend of Millennials entering the lower end of the luxury condo market, as they tap into their inheritance to invest in this popular property segment,” he stated.

Toronto and Vancouver condos priced at $1-2 million price range have sustained its healthy share of buyers over the past few years. Toronto luxury sales rose by 2% year-over-year, while Vancouver had a 6% increase.

“Local buyers are driving demand for luxury condos going into 2019, which is welcome news for developers in major city centres looking to build more properties,” RE/MAX of Western Canada executive vice president Elton Ash said, adding that overseas investors are shying away from the single-detached sector.

“The foreign buyers’ tax has impacted overseas activity, opening more opportunities for local buyers to enter the luxury market.”

Luxury single-detached sales went down by 37% year-over-year in Toronto, and 31% in Vancouver.

Copyright © 2018 Key Media Pty Ltd

Vancouver flippers play only a small part in home sales

Ephraim Vecina
Canadian Real Estate Wealth

Often blamed for overheating in major markets, flippers actually represented only a minor proportion of home transactions in Toronto and Vancouver, according to a Bloomberg analysis that looked at Teranet Inc.’s land and housing registry.

In Toronto, flipped condos represented just 1.8% of total sales for that housing type as of June 2018. This was significantly below the 4% rate a mere two years ago in April 2016.

Meanwhile, in Vancouver, only 3.4% of condo sales between April and June were those of previously sold homes – a stark contrast with the 5% ratio back in March 2016.

Thus, any federal or provincial-level measures aimed at housing speculation will do little to improve affordability in these markets, the Bloomberg analysis noted.

Flipping “has always been a very rare occurrence” in Toronto, according to RE/MAX Integra regional director (Ontario) Christopher Alexander.

“Most people buy real estate to hang onto it for at least five to seven years,” Alexander said, adding that many short-term sales are due to life-altering factors such as sudden job changes.

Vancouver’s noticeable market slowdown between 2016 and the present has also made condo flipping far less lucrative than it was, realtor Steve Saretsky stated.

“As soon as [prices] stop rising you get into a number of issues,” Saretsky explained in a phone interview. “Are you really going to try to flip it in a down market? There’s no profit to be made.”

Copyright © 2018 Key Media Pty Ltd

Domus Homes: Ovation to rise 32 storeys and offer spectacular rooftop views

Kathleen Freimond
The Vancouver Sun

Ovation is a project in development from Domus Homes in New Westminster that will feature a luxurious common area on the 32nd floor for all tenants to enjoy.

The Ovation, a 32-storey development in New Westminster, is designed to take advantage of the wonderful views and offers a sophisticated interior design that feels cosy at the same time.

A kitchen at the Ovation presentation centre has two contrasting cabinet door finishes: a dark grey wood finish and high-gloss white lacquer

The Ovation in New Westminster will feature a neutral lighting scheme of greys, creams and off-whites

Ovation

Project address: 813 Carnarvon Street

Project city: New Westminster

Developer: Domus Homes

Architect: GBL Architects

Interior designer: Cristina Oberti Interior Design

Project size: 204 homes

Bedrooms: One-, two-, and three-bedrooms and two-level city homes

Unit size: 482 to 1,344 square feet

Price: One-bedrooms from the low $400,000s; two-bedrooms from the mid $600,000s; three-bedroom sky homes from the low $1,100,000s; Two-level city homes from the low $800,000s

Construction: Spring 2022

Sales centre: 1001 Columbia Street, New Westminster

Sales centre hours: by appointment

Phone: 604-553-8004

Website: OvationNewWest.com

In a nod to New Westminster’s arts and cultural community, Domus Homes is setting the stage for plenty of applause with Ovation, its new 32-storey development in the city’s historic downtown.

One of the development’s showstoppers is expected to be the amenity level on the 32nd floor. Half the space is dedicated to indoor amenities, including a sky lounge, fitness zone, chef’s kitchen and dining room, while the other half comprises outdoor amenities that include a hot tub, bocce court and a large outdoor lounge and barbecue area, says Richard Wittstock, principal at Domus Homes.

“The concept is to enable everybody in the building to enjoy the spectacular views from the top of the building. There are 360-degree views of the [Fraser] river, mountains and bridges. New Westminster is really known for having amazing views and we wanted to make that available to everybody – from the people who buy the least expensive suite to the most expensive suite,” he says.

The site will also accommodate a small rental building for seniors who have worked in the performing arts and related industries. This building is the result of a partnership with Performing Arts Lodges (PAL) Vancouver to build a 66-unit seniors’ rental building, PAL New Westminster.

Ovation will be situated at 813 Carnarvon Street, close to the New Westminster SkyTrain station and surrounding shops, the Columbia Square Mall and the New Westminster Quay, and Wittstock believes the location is a major advantage.

“We started with an incredible location and then, working with GBL Architects, we think we’ve created something really special,” he says. “The building’s architecture features vertical and horizontal elements working together. Ribbons of concrete and metal stretch up the building and then over the roof and back down,” he says.

The southwest corner of the site receives the most natural sunlight, Wittstock says, and to enhance the Carnarvon Street streetscape, the plan includes a wide sidewalk and ground-floor retail and restaurant space that will include outdoor seating.

“From there, we’re also creating a sidewalk that connects up to the park behind our site. The park is being rebuilt to commemorate the original New Westminster Chinatown in this area,” he adds.

The 204 units planned for the tower will include one-, two- and three-bedroom homes and two-level city homes, ranging in size from 482 to 1,344 square feet.

The interior design, by Cristina Oberti Interior Design, features two colour palettes, Light and Dark.

“The schemes are designed to feel modern and timeless,” Oberti says. “The Light scheme is very neutral and is made up of a combination of creamy off-white surfaces. The cabinets and flooring are in a muted warm grey wood finish, and the countertops are pure white quartz.”

The Dark palette, presented in the two-bedroom show suite at the sales centre at 1001 Columbia Street, is the bolder option, Oberti says. In this scheme, the kitchen features two cabinet door finishes: the lower cabinets are in a dark grey wood finish, while the upper cabinets have a high-gloss white lacquer finish.

 “The combination adds contrast while also brightening up the space. It gives the kitchen a graphic punch,” she says.

In the kitchen at the sales centre, the large three- by nine-foot peninsula – with a waterfall edge – shows the pure white quartz countertop. It also accommodates the undermount stainless steel sink and chrome Grohe faucet that add a little sparkle to the space.

The major appliances include a five-burner 30-inch Bosch gas cooktop with a slide-out range hood and a large-capacity Bosch wall oven. The 36-inch Fisher & Paykel refrigerator with french doors is integrated, as is the Bosch dishwasher.

The sales centre also features a second kitchen based on a one-bedroom unit. Showing the Light palette, this kitchen has a 24-inch Bosch gas cooktop and a 24-inch single-door Blomberg refrigerator. The large island in this vignette doubles as a dining space with one end free of cabinetry to accommodate seating while the other end contains a Bosch dishwasher.

Both the Light and the Dark schemes feature full-height kitchen backsplashes in a marble finish.

“I personally always love a full-height kitchen backsplash. The marble finish gives the kitchens a very sophisticated and modern look,” Oberti says.

In the ensuite bathroom, the white quartz countertop and the continuous surface of marble-look 24- by 12-inch porcelain tiles on the floor and walls (including the shower with its glass enclosure) give the space a fresh and spa-like ambience.

In the main bathroom, the countertop is a grey quartz while the dark grey floor tile complements the dark wood cabinetry. White 24- by 6-inch wall tiles provide the contrast.

Wittstock says Ovation has attracted a lot of interest from a range of buyers, including many first-time buyers.

“We think the two-bedroom homes will appeal to young professionals and the city homes are going to appeal to the families, while the sky homes will appeal to downsizers and professional couples,” he says.

Most units include a parking space in the four levels of underground parking. The development also offers Modo Co-op care-share benefits, including two Modo vehicles and parking stalls.

© 2018 Postmedia Network Inc.

Professional Standards Manual

other

2. Acting For Sellers

(k) Advertising Requirements – View Entire Section

(VI) Internet/Social Media Advertising

One of the primary purposes of the Council’s advertising rules is to ensure that consumers accessing a licensee’s advertising are aware that they are dealing with a real estate licensee and know the name of the brokerage with which that licensee is engaged.  This is particularly important for internet and social media advertising given the worldwide exposure of this advertising medium. 

Just as in print advertising, the name of the brokerage must appear in a prominent and easily readable form on all internet and social media advertising vehicles, including each individual page, e-mail, online discussion group or bulletin board, etc.

For social media advertising, licensees must include the name of their related brokerage on their profile screen.  Using Twitter or Facebook as examples, only the licensee’s main profile screen is required to contain the name of the licensee’s related brokerage. It is not required that each ‘‘tweet’’ or ‘‘post’’ contain the name of the brokerage. The rationale is that once a licensee’s profile has been accessed, the name of the brokerage is displayed, and it is known that the individual is a licensee. It is the site visitor, with that knowledge, who then chooses whether to follow the licensee’s ‘‘tweets’’ or asks to become a ‘‘friend’’, going forward. This is rather like licensees introducing themselves to a consumer at an open house; they identify themselves as a real estate licensee and present a business card with the name of their brokerage displayed. Licensees do not have to reintroduce themselves at each subsequent meeting if the consumer decides to maintain contact with them, as the consumer already knows, via the first introduction, with whom he or she is dealing.

The following example displays an acceptable Facebook page. It includes:

• clearly displayed brokerage name
• the name of the licensee
• team name
• name of the personal real estate corporation
• a qualifying statement about the “Top selling real estate team” claim
• a qualifying statement about the “List with us and we’ll donate $2000 to a charity of your choice” promotion

The same rationale applies to a video blog posted on a licensee’s website. Provided that the name of the licensee’s brokerage is prominently displayed and easily readable on the website where the video is posted, it is not required that the licensee include the name of his or her brokerage on each blog segment. However, if a licensee posts a video blog on any other website, such as YouTube, the name of the brokerage must be in the title or description of the video.

The following example displays an acceptable YouTube page. It includes:

• clearly displayed brokerage name
• the team name
• a description of the team
• a qualifying statement about the “Top selling real estate team” claim
• a qualifying statement about the “List with us and we’ll donate $2000 to a charity of your choice” promotion

Guidelines for Common Online and Social Media Websites

Facebook: Profiles have limited characters but the name of the brokerage/personal real estate corporation/team can be displayed as a graphic in the cover photo. Better yet, a Facebook page has unlimited characters so it is easy to comply and have the page look very professional. If you are, in any way, using Facebook to ‘advertise’, your page and profile must include the name of your brokerage. If you don’t want the public (or the Council) to scrutinize your Facebook page, be sure your privacy settings are set appropriately.

Twitter:  The Twitter bio section has room for your name plus that of your brokerage. Or you can include your brokerage name in the background of your Twitter page. You do not have to add the name of your brokerage to each tweet.

Google +: Like Facebook, you can put the name of your brokerage in the cover photo or in your profile photo.  Keep in mind that the posts are the first thing displayed, not the “About” section. So if you don’t have your brokerage name in the cover photo or profile photo you will have to have it on all your posts.

YouTube:  On the “Your Channel” section of YouTube, you can put your brokerage name in the “About” section. On the “You Tube” video page you can put the name of the brokerage/personal real estate corporation/team in three areas – the “Title”, “Description” or in the intro to your video.

Craigslist and Kijiji:  It is important to ensure that the name of your brokerage is prominently displayed and easily readable on any Craigslist and Kijiji posting.

Foreign Language publications: Translations of brokerage names into other languages is not acceptable. The licensee name of the brokerage/licensee/personal real estate corporation/team must be reflected as registered by the Council.

Pinterest:  Should you post any photos on Pinterest that have to do with the real estate that you are marketing, you should include your brokerage name on the photo itself to avoid a contravention if, for example, your photo is re-pinned on another person’s board.

QRL Codes: It is important to ensure that the name of your brokerage is prominently displayed and easily readable on the link that is provided by the QRL code.

© Copyright Real Estate Council of British Columbia

CMHC report shows a return to a stable market

Steve Randall
Canadian Real Estate Wealth

Conditions of overvaluation are easing nationwide and there is improvement in the vulnerability of the hottest markets.

CMHC has published its latest Housing Market Assessment and says that even in four markets where overvaluation is detected – Vancouver, Toronto, Victoria, and Hamilton – house prices are returning to levels that are supported by housing market fundamentals such as income, mortgage rates, and population.

This shift does not eliminate overall vulnerability in these hot markets though.

“For the ninth consecutive quarter there continues to be a high degree of overall vulnerability at the national level, however, we are seeing conditions of overvaluation easing for Canada as a whole,” said Bob Duggan, CMHC’s chief economist. “Tighter mortgage rules, rising interest rates and weaker growth in inflation-adjusted personal disposable income—likely led to reduced demand for housing, resulting in the decline of house prices.”

The HMA is for 15 CMAs and uses data as of the end of June 2018 and market intelligence as of the end of September 2018.

The highlights Nationally,  the moderate rating of overvaluation is maintained, as a longer period of improved alignment between house prices and fundamentals is required for overvaluation to be deemed low.

However, evidence of overbuilding remains high in Edmonton, Calgary, Saskatoon, and Regina. That means those markets continue to receive a moderate degree of vulnerability in the overall assessment.

A low degree of overall vulnerability is sustained for Ottawa, Québec City, Moncton, Halifax and St. John’s where house prices continue to follow the path of fundamentals.

Montréal’s resale market is close to overheating, creating significant upward pressure on prices as a result of a sharp tightening between supply and demand.

In Winnipeg, evidence of overbuilding as well as the degree of overall vulnerability changed from low to moderate, reflecting increases in the inventory of newly completed but unsold units.

Copyright © 2018 Key Media Pty Ltd

Prices easing but Canada’s housing market still ‘highly vulnerable’: CMHC

Joanne Lee-Young
The Vancouver Sun

Home sales and prices are coming down in Vancouver, but it is still an overheated market, according to a Canada Mortgage and Housing Corporation’s latest look at stability in real estate markets across the country.

“Metro Vancouver’s housing market remains highly vulnerable despite softening prices in the resale market,” said Eric Bond, CMHC’s Vancouver-based analyst.

“There are imbalances even though prices are declining for properties in different segments, in the most recent quarter, because home price growth over the past few years has significantly outpaced local income growth.”

The CMHC’s Housing Market Assessment report released Thursday looked at overheating, price acceleration and overvaluation.

Overheating in the Vancouver market “was first detected” in the last quarter of 2015, according to the report.

Now, the sales-to-new-listings-ratio, which is a way of measuring the balance between demand and supply, is below the 75 per cent threshold designated by the CMHC to trigger an overheating warning.

However, the agency is maintaining Vancouver’s market is overheated because the CMHC model has a “persistence” rule defined by there being a trigger in at least one quarter in the previous three years.

Also, even though the overall sales-to-new-listings ratio for Metro Vancouver has been dropping in 2018, the agency says they have varied widely depending on market location and type.

In the third quarter of 2017, the sales-to-new-listings ratio for single-detached homes ranged from the lowest in West Vancouver of six per cent to a high of 32 per cent in Port Coquitlam. A year later in the third quarter of 2018, it dropped to four per cent in West Vancouver, but saw a much larger drop to 14 per cent in Port Coquitlam.

For condos, there were some steep changes in sales-to-new-listing ratios from 51 per cent in the third quarter of 2017 to 16 per cent in 2018 in Langley, and 40 per cent to 16 per cent in Surrey.

The report first identified price acceleration in the Vancouver market in the second quarter of 2016. Its definition is based again on a significant price increase in at least one quarter in the previous three years and says that “rapid short-term price gains can attract investors and promote speculative activity that pushes prices further upwards.”

“Price growth has slowed considerably so far in 2018 and has turned negative over the past six months in most areas. Declining prices for detached properties in particular are due to high inventories that have accumulated due to sustained declining sales volumes.”

Lastly, when it comes to overvaluation, there is still “high evidence” that in the second quarter of 2018 “current price levels are higher than the estimated values from price models based on demand and supply fundamental factors such as population, income and financing costs.”

There are signs that in the second quarter of 2018 price levels started to move down below the threshold for determining overvaluation and closer to “the actual values of an array of price measures.”

However, “the rating is maintained because the indicator has been above the threshold for at least two quarters over the past year.”

“High price levels coupled with rising mortgage rates since the second half of 2017 continue to stretch home affordability in (Vancouver.)”

© 2018 Postmedia Network Inc.

Lead generation amounts to 10% of your business

David Greenspan
REM

The roller coaster of marketing ideas continues to take over the real estate industry. As we search for new ways to get business, it seems that the easy answer is to spend money on a technology-based tool – such as a new website, social media, chatbots or any type of online advertising. Why? Because this new world of “lead gen” is what’s going to make the big difference in the amount of business you will do in a year. Or will it?

It is said that most people know between one and five Realtors. Yet with that knowledge, Realtors are still spending their money chasing leads, also known as “strangers”. It is also said, and I can attest through my own research of bluntly asking the question hundreds, in fact probably thousands of times, that 90 per cent of Realtors get 70 to 90 per cent of their business from people who know, like and trust them. These same people who probably already are, and if not, definitely should be, on your contact list.

Now, I am not saying that online lead gen does not work.  I am saying that before getting all caught up in spending big money with the hopes of making it back from strangers, you must do three things:

1. Recognize where your business comes from and whether this new tool is best suited to connect with that audience.

For example, if all of your business is coming from people you know, why spend a whole bunch of money advertising to people you don’t know? Instead, do an even better job of marketing to the people you do know and have a diligent process to ensure you’re keeping your database up to date at all times.

This database is your gold mine. Even any new people you meet from any source should always be going into this list. Work it the right way, make more money. That is your goal every day.

2. Analyze your marketing budget and determine if you’re focusing at least 70 to 90 per cent of it on the audience who delivers 70 to 90 per cent of your income.

Ask yourself whether you can afford to try this new bright shiny tool for the amount of money it costs, and the amount of time it will take to convert this new lead.

Just spending the money to get the lead is not enough, you need to plan and budget to market to these people during the “conversion” process, and you need to do the same during the pre and post “nurturing process”. If you get repeat and referral business from your list, then if you do get this new lead and you do convert them into a client, you will need to budget to market to them after the fact as well.

3. Recognize that relationships take time to build.

When meeting someone who may be this new “online lead”, your goal is always to develop the know you, like you, trust you factor before trying to lock anyone into a contract. Think about it. You’re not the only person who got that “new lead” from that exact same person (lead). So why should they choose you? Just because you got their info online? Why not the other salesperson who also got their information?

The key is to develop the relationship so they like you more. That’s where business comes from. So, it’s up to you to get past the tech and get involved. That will make all the difference in the world. The process for obtaining a client is the same as it has always been. Tech can help but cannot be the only tool you use. Remember, once you get the deal, you now have a relationship, you are now both real people. Online is no longer enough.

Although technology has given us new tools, and it has helped speed the process for many aspects of the business, has this business really changed? It is still and always will be a people business. Technology is helpful, but it can be expensive, and more time consuming than imagined.

Stop making yourself work so much harder than you should because you decided to spend more money than you should. Focus on the right audience, deliver the right message across the right channel, remember that this is and always will be a people business. Don’t get caught in the hype without proper planning and budgeting. Be smarter. You will spend less, work easier and make more.

© 2017 REM Real Estate Magazine

BoC to introduce another 3 rate hikes of 25 basis points

Steve Randall
Canadian Real Estate Wealth

The Bank of Canada’s decision to increase interest rates to 1.75% Wednesday was not a surprise to many, but an omitted word is perhaps more so.

Dr Sherry Cooper, chief economist of Dominion Lending Centres says it was interesting that Governor Stephen Poloz did not continue to say that rates would rise “gradually”.

“Market watchers will certainly note this omission,” she says. “For the first time in years, the Bank has acknowledged it expects to remove monetary stimulus from the economy entirely.”

Dr Cooper says that the policy of the BoC is now to increase interest rates to a ‘neutral stance’ of between 2.5% and 3%. That will require another three rate hikes of 25 basis points over the next year or so.

Household debt is a concern Although the economy is moving in the right direction, the BoC remains concerned about Canadian oil prices, especially with constrained pipeline capacity.

Then there is the issue of rising household debt.

In the BoC’s Monetary Policy Report is states: “Higher mortgage rates and the changes to mortgage guidelines are affecting the dynamics of housing activity. Housing resales responded quickly to the new mortgage guidelines, and the level of resale activity is expected to continue on a lower trajectory than before the changes. New home construction is shifting toward smaller units, although stronger population growth is estimated to raise fundamental demand for housing.”

Although the level of high loan-to-income ratio mortgages has declined which the BoC says has “reduced household vulnerabilities”, Dr Cooper points out that the bank remains concerned about the “sheer size of the outstanding debt”.

This, she says, is bank double speak for three more rate rises.

Canada’s big banks have all reacted to Wednesday’s BoC decision with increases to their prime lending rates.

Copyright © 2018 Key Media Pty Ltd