No Change in Rate for Vancouver
(BCREA) Interest Rate – April 16, 2014
The Bank of Canada announced this morning that it is maintaining its target for the overnight rate at 1 per cent.
The Bank’s target rate has now remain unchanged for 29 consecutive meetings. In its accompanying statement, the Bank noted that inflation in Canada remains low and is expected to remain below the Bank’s 2 per cent inflation target this year due to slack in the economy and heightened retail competition. The Bank left is forecast for Canadian economic growth unchanged at 2.5 per cent this year and next, citing a strengthening global economy and ramped up business investment. The Bank also noted that recent developments are in line with the its expectations of a soft landing in the housing market, though elevated household debt remains a risk should economic conditions deteriorate.
While some expected a slightly more dovish note from the Bank given continued muted inflation and a slight rise in the dollar, the Bank remains decidedly neutral. An expected second half rebound in growth and firming inflation means that the next move for interest rates is likely higher, but the timing of that move remains uncertain. Our view remains that the overnight rate will stay at its current level until at least early 2015NeutralWhile some expected a slightly more dovish note from the Bank given continued muted inflation and a slight rise in the dollar, the Bank remains decidedly neutral. An expected second half rebound in growth and firming inflation means that the next move for interest rates is likely higher, but the timing of that move remains uncertain. Our view remains that the overnight rate will stay at its current level until at least early 2015
RENEE BERNARD (NEWS1130) – Two years ago, after hearing from over a hundred people at a lengthy public hearing, Vancouver city council approved a controversial highrise for Mount Pleasant, with conditions.
The developers have finished another round of revisions and are ready to present them at an open house Monday.
The most controversial aspect of the development for the corner of Broadway and Kingsway is the height of the condo tower, at 21 storeys.
That feature remains unchanged, but the height of the surrounding buildings will be dropped, says Chris Vollan ofRize Alliance.
“The biggest change is dropping the height of the Broadway block by 30 feet, and the Kingsway and Watson blocks by two and half feet, and the East 10th block, at one section, by 30 feet.”
Another focus has been getting each of the five buildings in the project to appear different from one another.
“The block along Watson Street will be three-bedroom townhomes, Broadway will be a brick building, the tower will be clad in wood laminate, which is really cool,” says Vollan.
Though the presentation centre for the project still isn’t complete, Vollan says they’ve already received inquiries from 100 prospective buyers.
The open house takes place at St. Patrick’s church, on 2881 Main Street, Monday, April 14, from 4:30 p.m. to 7:30 p.m.
TARA PERKINS (GLOBE & MAIL) Canada’s financial regulator is close to releasing a new set of standards for Canada’s mortgage insurers, one that the real-estate industry has worried may chill the market.
The Office of the Superintendent of Financial Institutions (OSFI) has been working on the guidelines since 2012, after it released a similar set of mortgage lending standards for banks.
The standards for banks, known in the industry as guideline B20, pushed lenders to be more cautious in areas such as credit checks on borrowers, document verification and appraisals. They also capped the amount that any individual can borrow on a home equity line of credit at 65 per cent of the home’s value.
Many industry players say the standards contributed to the decline of Canadian home sales that occurred in late 2012 and early 2013.
The real estate industry has been nervously awaiting the standards for mortgage insurers, which will be known as B21, to see whether they too will have a dampening effect on the housing market. OSFI originally indicated that a draft of the new rules would be released in early 2013, and more recently said they would be published by the end of last month. Sources now indicate they will be released as early as Friday.
Julie Dickson, the head of OSFI, said in 2012 that she does not expect the rules for mortgage insurers to have the same effect on the market that the rules for banks did. Stuart Levings, chief operating officer of insurer Genworth MI Canada, said earlier this week that he does not expect the guidelines to contain anything “dramatic.”
“They accomplished a lot with B20,” he said. “And in terms of their confidence with the way that we as insurers underwrite today, I think there’s a high degree of confidence.”
The draft that OSFI releases will be open to comment before becoming final.
OSFI began working on the latest guidelines shortly after former finance minister Jim Flaherty tasked it with overseeing Canada Mortgage and Housing Corp. (CMHC), the Crown corporation that is the country’s largest mortgage insurer. OSFI was already the watchdog for CMHC’s two private-sector rivals, Genworth and Canada Guaranty.
Mortgage insurance, which covers the lender for losses if the homeowner can’t pay, is mandatory in Canada for borrowers who have a down payment of less than 20 per cent.
Both B20 and B21 are the result of a suggestion by the Financial Stability Board, an international body made up of regulators and banking experts around the world, that all countries should review their rules for banks and mortgage insurers in the wake of the U.S. subprime crisis.
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