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50,000 GIFTS: The 23rd annual Christmas Wish Breakfast in Vancouver drew donations of more than 50,000 toys and other gifts for needy children this year. Photo: Pan Pacific
The British Columbia Real Estate Association forecasts that residential sales across the province will decline 12 per cent from 85,028 units in 2009 to 74,950 units this year, before increasing 6 per cent to 79,700 units in 2011. “Consumers are responding to a double-dip in mortgage interest rates,” said Cameron Muir, BCREA Chief Economist. “While housing demand waned in the province through the spring and summer, the added purchasing power from low borrowing costs combined with gradual improvement in the BC economy has trended home sales higher in recent months.” “A moderate increase in B.C. home sales is expected next year coinciding with employment and population growth,” added Muir. “However, the 79,700 unit sales that are forecast for 2011 are well below the ten-year average of 85,500 units.” A record 106,300 MLS residential sales were recorded in 2005. The average MLS residential price across B.C. is forecast to climb 7 per cent to just over $498,000 in 2011.
Lender urges end to 35-year mortgage loans
TD Bank CEO Ed Clark, told a recent mortgage conference that the government should cut the maximum mortgage amortization from 35 years to 25 years. “We see a world in which low interest rates and excess liquidity has created asset bubbles all over the world,” Clark told reporters. Clark says Canadians have been following a policy of: “‘Don’t save. Take a longer period to spread out your payments.'” “I don’t think that’s good public policy,” Clark said. The idea of reducing amortizations has been floated before, most recently this year when it was speculated that the Finance Department might cut the maximum amortization to 25 years. The government last changed amortizations two years ago. At that time, they were cut back from 40-years to 35-years on high-ratio mortgages. However studies show that, in almost all cases, people who take 35-year amortizations plan to pay off their mortgage much quicker. In fact, the average Canadian gets rid of their mortgage in 1/2 to 2/3 of their original amortization, according to insurer sources. In other words, due to pre-payments, people pay off their 35-year mortgages in far less than 35 years. Realtors also note that ending the 35-year amortization would allow less first-time buyers the opportunity to purchase. So far there is no indication that the federal government is moving to shorten the maximum amortization period.
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