Tag Archives | Interest Rates

Long-term Fixed Mortgage rates vs Short-term Rates

There is a compelling case to be made for not locking in a long-term fixed mortgage rates. Brokers often tout their 5-year rate, but it can honestly be a disservice to their clients and can hinder potential home re-sales with large penalty payout fees. A simple calculation of interest paid year-by-year will mostly likely show a substantial savings by going short-term mortgage rates rather than long-term.  A 5-year fixed mortgage rate can be a good strategy, but it is not the only strategy.When buying a home, it’s always a good idea to seek a second opinion about mortgages before choosing one option over the other. If you are with a bank, speak to a mortgage broker and if with a broker, talk to your bank. In any case, don’t hesitate to call Elke at 403-295-3336 if you have questions!

The latest Calgary Real Estate Market Stats can be found on our blog or visit our Website for Real Estate News on Calgary Market Trends.

 Selling Calgary Group     Elke Babiuk
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Calgary Housing Market Recovery Continues – Feb 2011

Market Graph photoAccording to figures released by CREB® (Calgary Real Estate Board) on March 1, 2011, for the second month in a row, single family home sales in the city of Calgary increased over the previous month and those of February 2010. The rise in sales points to a gradual recovery in Calgary’s housing market.

The number of single family home sales in the month of February 2011 were 1,169, compared to last month when sales were 791 — an increase of about 48%. The number of condominium sales for the month of February 2011 was 468, up from the 302 condo transactions in January.

Year-over-year, the number of single family homes sold in February 2011 in the city of Calgary increased by 13% since last year. Condominium sales saw a decrease of 13% from last year.

“The convergence of affordability, low interest rates, a good selection of inventory and improved confidence in the Alberta’s energy sector is building the foundation for a sustainable housing recovery,” says Sano Stante, president of CREB®. “Sales of single family homes priced below $400,000 are driving the gradual recovery, with the expectation that as the year progresses we should see the sales shift to homes priced in the mid range of the market.”

The average price of a single family home in the city of Calgary in February 2011 was $461,786, a 2% increase from last month, and a 1% increase from February 2010. The average price of a condominium in the city of Calgary in February 2011 was $290,145, a 1% increase from last month and a 3% increase over last year.

The median price of a single family home in the city of Calgary for February 2011 was $400,000, showing a slight increase from January 2011 when the median price was $390,000. This was a 3% decrease from February 2010, when the median price was $411,000. The median price of a condominium in February 2011 was $267,000, showing a 5% increase from January 2011, when the median price was $255,000, and remained virtually unchanged from February 2010, when it was $265,900.

“The Bank of Canada announced today that interest rates will remain unchanged until summer to encourage continued economic growth in Canada. Steady interest rates combined with stable housing prices indicate current affordability levels in Calgary will persist throughout the first half of 2011,” says Sante.

Single family listings in the city of Calgary added for the month of February 2011 totaled 2,268, an increase of 15% from January when 1,965 new listings were added, and an increase of 5% from February 2010, when 2,154 new listings came to the market.

Condominium new listings in the city of Calgary added for February 2011 were 971, an increase of 12% from January 2011, when 870 condo listings were added to the market. This is a decrease of 12% from February 2010, when new condominium listings added were 1,109.

“Improvements in the energy sector will translate into growth in employment and net-migration in Alberta and Calgary. This will boost consumer confidence and ultimately improve housing demand.” says Stante.

 Selling Calgary Group     Elke Babiuk
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Canada Housing Market Stabilizing

According to CMHC’s Housing Market Outlook, Canada Edition, First Quarter, Canada’s Housing Market is Stabilizing.

“Housing starts will moderate in all areas of Canada except British Columbia and Alberta. In 2011, starts are forecast to increase by 1.6 per cent in B.C. and will remain steady in Alberta.”

“Measures recently announced for government-backed mortgage insurance will moderate housing starts activity. Some potential buyers will have to save a larger minimum down payment in order to qualify for mortgage insurance and thus postpone their purchase. Alternatively, some potential buyers may buy smaller, less expensive homes. The new measures, however, are only a few of the many factors that will affect the new housing market.”

“MLS® sales will decline in 2011
“After moderating in the first half of the year, sales of existing homes through the Multiple Listings Service® (MLS®) have rebounded since July 2010. On an annual basis, MLS® sales will edge lower in 2011. As is the case for housing starts, we have generated a range of forecasts for MLS® sales that reflect different economic scenarios. For 2011, we forecast that MLS® sales will be between 398,500 and 485,500 units. In 2012, MLS® sales will be between 406,300 and 519,700 units. CMHC’s point forecast is 441,500 MLS® sales this year and 462,900 next year, compared to 446,577 units sold in 2010.”

“Balanced to sellers’ market conditions
“By the second quarter of 2010, the resale market returned from sellers market conditions back into balanced market territory across most markets in Canada. During this time, new listings increased while existing home sales moved lower. Recently, MLS® sales have regained strength and markets have moved back towards sellers conditions. Consequently, the average MLS® price increased by the fourth quarter of 2010, with the average MLS® price of an existing home at $343,516 compared to $339,155 in the final quarter of 2009. For 2011, the average MLS® price is expected to move up modestly to $348,900 while 2012 will see a further increase to $358,200.”

For More information regarding the “Risks to the outlook” and “Trends Impacting Housing” like Mortgage Rates, please see CMHC’s report Housing Market Outlook, Canada Edition – First Quarter


Housing Activity to Move in Line with Demographic Fundamentals in 2011 – Ottawa, February 17, 2011

After trending lower in the second half of 2010, housing starts are forecast to stabilize at levels consistent with demographic fundamentals in 2011 and 2012, according to Canada Mortgage and Housing Corporation’s (CMHC) first quarter Housing Market Outlook, Canada Edition.1

Housing starts will be in the range of 157,300 to 192,900 units in 2011, with a point forecast of 177,600 units. In 2012, housing starts will be in the range of 154,600 to 211,200 units, with a point forecast of 183,800 units.

“Modest economic growth will continue to push employment levels higher this year and next. This, in conjunction with relatively low mortgage rates, will continue to support demand for new homes. Housing starts will remain in line with long term demographic fundamentals over the course of 2011 and 2012,” said Bob Dugan, Chief Economist for CMHC.

Existing home sales will be in the range of 398,500 to 485,500 units in 2011, with a point forecast of 441,500 units. In 2012, MLS® sales will move up and are expected to be in the range of 406,300 to 519,700 units, with a point forecast of 462,900 units.

Mr. Dugan also noted that the existing home market will remain in the balanced to sellers’ market range in 2011 and 2012. As a result, growth in the average MLS® price is expected to remain in line with economy-wide inflation in 2011 and 2012.

1. The forecasts included in the Housing Market Outlook are based on information available as of January 17, 2011. Where applicable, forecast ranges are also presented in order to reflect economic uncertainty.


January 2011 Housing Starts: Ottawa, February 8, 2011
The seasonally adjusted annual rate1 of housing starts was 170,400 units in January, according to Canada Mortgage and Housing Corporation (CMHC). This is up from 169,000 units in December 2010. According to final figures, actual housing starts for 2010 totalled 189,930 units, with activity moderating towards demographic fundamentals by the final quarter of 2010.

“Housing starts moved slightly higher in January because of an increase in rural starts,” said Bob Dugan, Chief Economist at CMHC’s Market Analysis Centre. “Single-detached and multiple starts showed a moderate decline.”

The seasonally adjusted annual rate of urban starts decreased by 1.7 per cent to 146,900 units in January. Urban multiple starts moderated by 1.5 per cent in January to 82,900 units, while single urban starts moved lower by 2.0 per cent to 64,000 units.

January’s seasonally adjusted annual rate of urban starts decreased by 19.0 per cent in the Prairie Region, by 7.9 per cent in British Columbia, and by 1.0 per cent in Québec. Urban starts increased by 13.3 per cent in Atlantic Canada and by 10.3 per cent in Ontario.

Rural starts were estimated at a seasonally adjusted annual rate of 23,500 units in January.

Click links for CMHC News Releases: Feb 17-2011, Feb 8-2011, Jan-2011 Dec-2010 Housing Report

 Selling Calgary Group     Elke Babiuk
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