Sooner Than You Think

Over and Done

Mark Carney, the Bank of Canada’s governor, says we’re done, all conditions are off the table so folks you can expect mortgage rates to go up sooner than expected.

He Said

According to Jeremy Torobin’s report in the Globe and Mail, Carney is “signalling that it (BOC), could raise interest rates as early as its next policy decision June 1.”

Torobin quotes BMO’s Doug Porter who says “A June rate hike is now likely”, and “marks a dramatic change in tone by the Bank”. Porter “doesn’t rule out possible 50-basis-point moves.”

In the Know Projections

  • Scotia Capital – 1.5% by end of summer, rising to 3% summer of 2011
  • BMO – 1.5% by the end of 2010
  • CIBC – 1.25% by the end of Oct. 2010

Report Here

About Larry Yatkowsky

Larry is a recognized real estate expert. A veteran professional, his experienced counsel leads Vancouverites in his west side community to place their trust in a man passionate about his work. Uncompromising ethics bring a balanced approach to realizing your real estate dreams.

When Life Moves You - contact Larry:

*Disclaimer: Statistics Courtesy REBGV. While believed to be accurate they are not guaranteed.
**Numbers provided may vary as they are dynamically posted by the REBGV.

Reader Comments:

John1 Says:
April 20th, 2010 at 11:21 am

…And the hits keep coming. A 50 basis point move upwards would be huge. I’m sure the bank will be busy the next month with people locking in their variable rates.

RavingBull Says:
April 20th, 2010 at 7:24 pm

holycrow

where are the sales?

Larry, could this market go into free fall in the weeks ahead?

RavingBull Says:
April 20th, 2010 at 7:32 pm

New Listings 385
Price Changes 132
Sold Listings 133

RavingBull Says:
April 20th, 2010 at 7:32 pm

Larry,

You have alluded to it. Actually, your analysis has been superb.

So, what do you make of it then?

is this a Jeez Louise point in time?

Vrengd Says:
April 20th, 2010 at 8:35 pm

It’s been two years of dog barks but nobody ever got guts to raise interest rates,It will never happen unless Bernanke raise it first.There were two passengers to go on train when train finally showed up they start saying to each other,you first and so on unless the train left them on plate form.

Larry what makes you to come to conclusion?
Always put question mark on your post that way you may look better but not better than realtor.

Vre never goes down.

April 20th, 2010 at 8:55 pm

@Ravingbull
define freefall

April 20th, 2010 at 9:01 pm

@Vrengd
I think that Carney has decided to get on the train. It might be Barnake who is left at the station or maybe he is just at the wrong platform.
VRE never goes down – you might want to reconsider that statement if you look to last year at this time.

RavingBull Says:
April 20th, 2010 at 9:07 pm

Define freefall:

– psychologically, when the masses unlearn the myth that Vancouver prices do not go up forever

– when thousands of homes go into foreclosure over the course of a handful of months

– where MOI screams higher, breaking into double digits by summer

– where screams permeate the night sky as new owners realize they are ‘underwater’ with a mortgage larger than their home value

– where divorces ratchet up as couples with granite countertop disintegrate under financial stress

you know, stuff like that.

RavingBull Says:
April 20th, 2010 at 9:10 pm

when the city of Vancouver takes out a huge new mortgage to subsidize the cost of low income housing on the back of ‘market rent’ on half the units they had up for subsidy, and the whole olympic village blows up in their face

freefall is when thousands and thousands of construction workers are out of work by fall

freefall is what happened in:

California (7th largest economy in the world)
Most of the USA
Ireland
UK
Spain
Dubai

You know, places that had housing bubbles, where the locals felt that ‘this time/place is different” despite rents not rising with ‘values’

you know – freefall!

April 20th, 2010 at 10:21 pm

@ravingbull
whew! ok then!
I think you have covered everything except Volcanoes, finding only one sock in your drawer as you prepare for your dinner date, and running out of beer. 🙂

The problem, is that while we can and do make presumptions we will not know that we are in a real estate freefall (the traditional understanding) until after it is well in stride. Some time after the beginning which could be a number of weeks, will we then be able to say ‘yes there is trouble here’.

– Do prices go up forever – Really, does anyone actually believe that statement? Will they drop to levels seen 20 years ago? The answer to that is not likely unless – the entire world falls into a massive depression the magnatude of which exceeds the 30’s. Could we see a 15% to 30% correction – sure it’s happened before. Will it bounce back? Sure that has happened before too and if you have enough time it’ll be ok.

I would like to think there are enough checks and balances in place in this country to preclude what has happened to our brothers and sisters to the south but it needs noting that those folks have and continue to play with different rules. With that said, I’ve been wrong many times before so you never know! Bottom line is that we will all survive. It just might not be as pretty as we might have anticipated.

– Will we have thousands of foreclosures – There will be some but, …. the east seems to be firing up the job engine so I don’t feel a real estate correction will result in an extraodinary number of foreclosures.
– Re new owners – you might hear screams from marginal buyers when the hot water tank or roof need replacing however, I think most Canadians are pretty resourceful and will put their heads down and carry the load. At least, I would like to believe that is the case.
– Divorces – there have been some studies in the US on this issue and yes their market failure has been noted as an instrumental cause. A sidebar is that many continue to live together as it proves less costly than separating.
– As to our civic politicians – I simply have no idea why they are doing what they do. The on-going ramble of back yard chickens, in fill housing while they still require you to fill in a basement with dirt and the Olympic village are amongst so many other things adding up as a leathal combination for an election loss. All of which makes my head hurt.

Vrengd Says:
April 20th, 2010 at 10:24 pm

If re was down last year how come it is up right now?

Do you think people start making more money during recession while losing their jobs?

Re never went down in 2008 it was just a decline in highend sales so the graph picked up as sales start pouring in.

April 20th, 2010 at 10:51 pm

@vrengd
interesting perspective. it seems however, you have forgotten about government intervention and the never before seen low interest rates that dug that “down” market out of the hole.

As to your statement that the market ‘never went down in 2008…” Actually, it was 2009 but, let’s not quibble.

Vrengd Says:
April 20th, 2010 at 11:08 pm

Do you think buyer were looking for lower interest rates to buy properties over the list prices?

Bargain for lower interest rates and higher offering prices does not creat solid line into perfect directions.

Anyway VRENGD was my opinion through 26 friends living in different parts of Vancouver and survey is based since 2007 till now for Vancouver housing prices.

Have a good very good night.

April 20th, 2010 at 11:22 pm

@Vrengd
“Do you think buyer were looking for lower interest rates to buy properties over the list prices?”
No! I think the low interest rates facilitated that ability for people to buy. It also allowed them to pay more than the asking price. Was it the wise thing to do? We are about to determine that answer in the months and years ahead.

buffbutler Says:
April 20th, 2010 at 11:35 pm

Congradulations Larry on your first troll 😛

April 20th, 2010 at 11:55 pm

@buffbutler
awe shucks thanks. 🙂 someone you know?

interested observer Says:
April 21st, 2010 at 2:54 am

“someone you know?”

AKA satv et al

you’d do better with a sock puppet
in regards to intellectual discourse

interesting that he’d show up here at this
juncture…. party must be truly over

John1 Says:
April 21st, 2010 at 3:05 pm

I’m no economist, but how dangerous would a .5% BoC rate increase be? I mean, the US isn’t raising their rates anytime soon and the dollar has been at (or around) par for a while now. If the dollar climbs further ahead of the USD, exports would surely be effected.

“Do prices go up forever – Really, does anyone actually believe that statement”

Sadly, I’m afraid a lot of people really do.

April 21st, 2010 at 4:40 pm

@John1
0.5% isn’t much but to some, sadly it’s a do or die for others.

“Sadly, I’m afraid a lot of people really do.” – Does this mean there really is a Santa Claus?

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