Happy Family Day everyone!

Whether young or old; near or far our wonderful families make us who we are.

It’s been some time since I last put together a Sunday Dock Read, and there’s a good reason for that. We’ve been caught up in a whirlwind: preparing the cottage for winter, navigating through a bustling holiday season, and braving flu season. Somehow, we’ve managed to reach the midpoint of February already. But amidst all this, we’ve accomplished a significant milestone – our new website, www.huronmortgages.ca, is finally live! Over time, it will serve as the central hub for all things related to financing, Canadian Real Estate, and updates from yours truly!

Mortgage rates will fall in 2024

In late 2023, there was a glimmer of hope as the Bank of Canada Governor hinted at potential interest rate drops for the upcoming year. However, despite this optimistic outlook, industry experts caution that even with a decrease in rates, achieving affordable housing may remain challenging for many individuals.

The next Bank of Canada rate announcement is scheduled for March 6th, and I’ve maintained a positive outlook, anticipating a 0.25% rate drop. However, it’s disheartening to realize that without a significant reduction in the Consumer Price Index (CPI), the Bank may opt to keep the key rate unchanged to avoid disrupting the progress made in curbing inflation. Nevertheless, there remains a slight possibility that we may witness the first 0.25% rate cut during this announcement.

Additionally, the BOC must exercise caution to avoid significantly tilting the balance and triggering a prolonged downturn in the housing market, which could lead to a contraction in employment.  

Are Variable Rates the Answer for your Mortgage?

Here’s how we collaborate to make the right choice:

1. Exploring the potential advantages and drawbacks of variable and fixed mortgage rates.

2. Understanding the factors contributing to the recent increase in variable rates following the 2024 rate pause.

3. Evaluating why opting for a variable rate could lead to long-term savings.

4. Discussing the rationale behind lower penalties associated with variable rates compared to fixed rates.

5. Reviewing the success of Fixed Rate products over the past 24 months.

6. Explaining the significance of amortization and term and how borrowers can leverage them to their advantage.

As soon as you can Schedule a call via email with your Mortgage Agent (Mathew.Monks@MiGroup.ca) and completing a brief 5-minute Application (https://apply.invismi.ca/?wid=41002591) is the recommended approach. 

Thereafter we’ll schedule a time for our discussion, our primary goal is to tailor the most suitable product for your family’s needs and suitability. 

Suitability sets Agents apart from Banks, as Banks are limited to offering their own in-house Mortgage Products, while Agents can access a wide range of lending options to ensure borrowers achieve the best financial outcome possible.

Canadian Housing Hints at Signs of Recovery

In 2024, Canada’s housing market will be heavily influenced by interest rates. At the start of the year, things might be slow, and prices might be lower because the Bank of Canada is keeping interest rates high, making it hard for many people to buy homes. 

But, around the middle of Q2, we will see interest rates go down, which will make things pick up speed in the housing market, especially when people feel more confident about buying. 

However, even with lower interest rates, it might still be tough for some people to afford homes. It might take until later in 2024 or even into 2025 for there to be better opportunities for buyers, especially for those buying a home for the first time and might not have as much money to spend.

As sales look up, more people might decide to sell their homes. Also, if homeowners are surprised by high mortgage renewal payments, they might also decide to sell. If lots of people start selling, it will balance out the number of homes available to buy and the number of people looking to buy them. This could help prevent prices from going too high. Over the past few years, there have been more homes available to buy after hitting very low levels during the pandemic.

Highlights:

• National home sales were up 3.7% month-over-month in January.

• Activity in January 2024 surged 22% compared to January 2023.

• Newly listed properties increased by 1.5% compared to the previous month.

• The MLS® Home Price Index (HPI) dropped by 1.2% from the previous month but remained 0.4% higher than the same time last year.

• The actual national average sale price increased by 7.6% compared to January of the previous year.

National gains were once again led by the Greater Toronto Area (GTA), along with Hamilton-Burlington, Montreal, Greater Vancouver and the Fraser Valley, Calgary, and most markets in Ontario’s Greater Golden Horseshoe and cottage country.

3 Trends to Be Attentive to In 2024

Deal Volume

Canada’s Real Estate sector is in the midst of what some are calling the “era of the epic staring match,” with the market flanked by high interest rates, limited capital availability, and uncertainty surrounding property valuations, all of which are dampening deal activity.

Is Artificial Intelligence revolutionizing Real Estate faster than expected? 

Buyers and realtors alike are leveraging AI to streamline home searches and sales. Virtual staging, once a pricey ordeal, now costs around $40 per picture, making it more accessible than ever. From customized home searches to automated listing creation, AI is reshaping the industry landscape. Yet, while AI offers convenience, it also poses risks, such as potential legal exposure for realtors. As technology advances, the next frontier could be immersive virtual reality property tours, providing a new perspective on home exploration.

The Industrial, Commercial and Investment Real Estate will be the Industry Front-runners.

Industrial Real Estate remains a top choice, though there’s a more cautious outlook for the year ahead. Despite concerns about the rapid pace of rent growth slowing down, the sector still offers opportunities, fueled by strong fundamentals like low vacancy rates. Multifamily residential housing faces challenges, but its solid fundamentals, especially in niche areas like student and senior housing, continue to attract interest. Surprisingly, necessity-based retail properties, particularly grocery-anchored developments, are gaining favor due to strong population growth in the surrounding communities.

Canadian Real Estate 101 – Exploring the 4 Stages of the Yearly Cycle

The Real Estate market operates in a cycle comprising 4 stages, each lasting 3 months. Understanding these stages can aid buyers and sellers in making informed decisions. Below are the stages and recommended actions for each:

Stage 1 – January to March: Heightened interest in home buying, but lower inventory. Buyers should expect rising prices and act quickly. Sellers can list their properties but should avoid extensive renovations.

Stage 2 – April to June: Spring sees a surge in home sales. Buyers may find more options but face increased competition. Sellers have a prime selling opportunity.

Stage 3 – July to September: Summer brings a slowdown in sales with stabilized prices. Buyers have more negotiating power, but sellers are eager to close deals.

Stage 4 – October to December: Winter months witness a decline in price growth and seller confidence. Buyers may find lower-priced listings but face reduced seller activity. Sellers willing to negotiate may attract committed buyers.

The US Election and it’s Impact of Real Estate

The impact of the US election on Real Estate is a topic that garners significant attention with each electoral cycle. It’s widely acknowledged that changes in political power can have far-reaching effects on various sectors of the economy, including Real Estate. However, predicting the precise impact on property markets in different states requires a nuanced understanding of multiple factors.

Traditionally, there’s a simplistic narrative that associates higher property prices with Democratic-leaning states and lower prices with Republican-leaning ones. Yet, this oversimplification overlooks the complex interplay of factors such as urban-rural dynamics, demographics, and local housing policies.

Despite this complexity, it’s undeniable that the upcoming 2024 election has the potential to influence Real Estate trends in significant ways. While political shifts undoubtedly play a role in shaping housing markets, the outcomes are shaped by a myriad of factors including policy changes, economic conditions, and decisions made by various stakeholders. As we approach the 2024 elections, it’s essential for industry participants to closely monitor developments and be prepared to adapt to the range of possibilities that may unfold in the housing sector.

Just Buy a Boat Already!?

Ahoy, Swashbucklers!! 

Imagine this: retiring early and sailing the seven seas, sipping cocktails under the sun, and swapping tales with fellow adventurers. Sounds like a billionaire’s fantasy, doesn’t it? But hold onto your captain’s hat, because meet Angelyn Burk, 53, and her first mate Richard, who are living the ultimate cruise ship dream on a budget!

For just around $100 a night (depending on the cruise, matey), they’re gallivanting from ship to ship, embracing the sailor’s life with open arms. Their journey began in May 2021, and they’ve waved goodbye to the dull shores of landlubber existence ever since. Angelyn’s passion for cruising ignited way back in 1992, forever changing their retirement plans.

By hunting down deals through loyalty programs and selling their home, their dream became shipshape. Cruising at $100 per night adds up to a cool $36,500 a year – far cheaper than the mortgage costs back in Tukwila, Washington.

And the perks? No grocery bills, no lawn to mow, just endless waves and gourmet meals served with an ocean view. Smooth sailing indeed!

Their secret to cruising smoothly through life? Years of penny-pinching and wise investments. With just two suitcases between them, they glide from port to port, picking up whatever they need along the way.

So, if you ever dream of life at sea, remember with a little frugality and a lot of wanderlust, turning a cruise ship into your forever home is entirely possible! Hoist the anchor and set sail for adventure! Arrr!

Mathew.Monks@MiGroup.ca

www.huronmortgages.ca