Predictions Prediction Predictions

With 2011 wrapping up, it's time for everyone to peer into their crystal ball and attempt to predict the future of real estate and mortgage rates in Canada. Below are some of last week's more notable predictions:


- The Economist says that Canada is one of nine countries whose housing market is overvalued by 25% or more “ and with prices hovering around those of the U.S. housing crisis, the article surmises a bust is imminent. The theory is dismissed by many, however, including Ben Myers of Toronto's Urbanation, who says the Economist's methodology is flawed because it's too simplistic. It also completely ignores the strength of our banking sector.


- In the wake of Canada's most recent disappointing job numbers, the Financial Post wonders if variable rates are on their way down. David Madani, of Capital Economics, believes the Bank of Canada might cut its lending rate by 0.5% starting in April due to global economic uncertainty.

- With 10-year rates at an all-time low of 4.39%, many are wondering if fixed rates might be on their way down in the short-term as well.

Confused?  You're not alone.  We will be watching the market like a hawk. 

Things to Know if you're buying a new build

There's nothing better than buying a brand new home. Not only does a new build award you the opportunity to put your own stamp on things - with your own choice of finishes and upgrades - but you also have the luxury of being the very first to experience that new house smell.
Buying a new home, however, is different than buying a resale - and there are certain things to be aware of as you head into the commitment:
-    When buying a resale home, you'd typically sign a standard form of Agreement of Purchase and Sale. With a new build, there's no such standard form. Most builders prepare their own agreements so it's important that you read yours thoroughly - and have a lawyer look it over as well. Clarify as many details as possible.

-    When it comes to financing, many builders will offer you a deal through their financial institution - likely accompanied by a few incentives. It's important to know that you don't have to use the builder's lender. Be sure to shop around - or utilize the services of a mortgage broker - to see if there are better rates to be had, or a better mortgage to suit your personal needs.

-    When acquiring financing, it's also important to make sure that your lender's mortgage commitment meets your specific time frames. A pre-sale home can take a long time to be built - the last thing you would want is for your lender's mortgage commitment to expire before the actual closing date.

-     Read up on your builder before signing on the dotted line. If the company is notorious for extensive delays, broken promises or buildings that stray far from the written plan, you can likely find that information on the Internet.

For more information on acquiring financing for a new build, give us a call – or visit http://www.cmhc.ca/en/co/buho/buho_004.cfm.