🎓 Exciting Announcement! 🎓

We are thrilled to share the wonderful news that our eldest son has been accepted into Arizona Christian University's Bachelor in Business Administration program with a Major in Entrepreneurship! What's more, he has been awarded a baseball scholarship to continue playing as a catcher for the well known ACU Firestorm team.

We couldn't be prouder of his accomplishments and the bright future that lies ahead. Please join us in wishing him all the best as he gears up for this exciting adventure, with his move to Arizona scheduled for August.

Budget 2024 housing highlights: capital gains inclusion rate on secondary homes rises to 66.7%

Housing was a key priority in today’s federal budget, though it came as no surprise given the array of housing-related policy announcements unveiled in recent weeks.

The 2024 budget included $52.9 billion in new spending plans, which will result in a projected deficit of $39.8 billion this fiscal year before gradually declining to $20 billion by 2028-29.

Many of the budget’s commitments are focused on easing the affordability challenges facing young Canadians, particularly when it comes to achieving homeownership.

Conversely, many of the new tax announcements are aimed at wealthier Canadians.

Change to capital gains inclusion rate

One new measure unveiled today that will impact some real estate transactions was the increase to the capital gains inclusion rate. This applies to annual gains above $250,000 for individuals and to all gains for corporations and trusts.

The new rate rises from 50% to 66.7% for dispositions on or after June 25, 2024, including sales of non-principal residences (such as vacation homes or investment properties).

The budget reaffirmed that sales of principal residences “will remain fully exempt from the tax on capital gains.”

Roughly 4.4 million Canadians (11%) own at least two homes, according to 2023 research from Royal LePage.

Let’s say you own a second vacation home that you originally bought for $200,000 and you sell it for $500,000. The profit you made from the sale is $300,000.

Under the previous tax rules, you would include 50% of your $300,000 gain in your taxable income for the year. That means you would pay taxes on $150,000 of your profit.

With the new tax rules, the capital gains inclusion rate has increased to 66.7%. This means you now have to include 66.7% for annual gains above $250,000. This means you still include 50% of the first $250,000 and 66.7% of your next $50,000 gain in your taxable income, meaning you would pay taxes on $158,350 of your profit.

Taxable amount for the first $250,000: 250,000 × 0.50 = $125,000Taxable amount for the next $50,000: 50,000 × 0.667 = $33,350Total taxable amount: $158,350

Other housing announcement highlights

The Liberal government unveiled numerous initiatives and policy announcements in the past several weeks. This included the release of its 28-page housing strategy entitled ‘Solving the housing crisis: Canada’s Housing Plan.’

Among some of the highlights of those announcements:

30-year amortizations for some first-time buyers: Starting August 1, the maximum amortization will be raised from 25 to 30 years for first-time buyers purchasing a new-build property with a down payment of less than 20% (an insured mortgage). The government also proposed changes to the Canadian Mortgage Charter that would allow permanent amortization relief for qualifying existing homeowners.
Increase to the Home Buyers’ Plan limit:Starting today, first-time buyers will be able to withdraw up to $60,000 (previously $35,000) from their Registered Retirement Savings Plan (RRSP) tax-free for the purchase of their first home. This includes an extension of the grace period to start repaying the loan by an additional three years.
Additional protections for renters in the form of a Canadian Renters’ Bill of Rights. This includes the launch of a Tenant Protection Fund and leveraging rental payment history to improve credit scores.
Housing Accelerator Fund increase: A $400-million top-up to this $4-billion fund.
A plan to build 3.87 million new homes by 2031, including 2 million net new homes in addition to the 1.87 million homes that the Canada Mortgage and Housing Corporation forecasts will be built by that year.
The launch of Canada Builds, a program that combines federal low-cost loans with provincial and territorial investments to scale up the construction of rental homes on under-utilized lands.
$10 million invested in the Skilled Trades Awareness and Readiness program to motivate high school students to pursue careers in the skilled trades.
$50 million directed to the Foreign Credential Recognition Program, specifically to support residential construction and assist skilled trades workers in building more homes.
$90 million for the Apprenticeship Service, to create apprenticeship opportunities to train and recruit the next generation of skilled trades workers.
Modernizing housing data: $20 million for Statistics Canada and CMHC to modernize and enhance the collection and dissemination of housing data, including municipal-level data on housing starts and completions.
Cracking down on mortgage and real estate fraud: The government said it plans to consult with the mortgage industry on developing income verification toolsthrough the Canada Revenue Agency.

Our Top Presale Picks

Click for more information, pricing and downpayment structure.  Contact us for private viewings.

1.  Pkwy by Bosa in Surrey

2.  Azure in Langley

3.  Fraser Mills in Coquitlam

4.  Reign at Metrotown

5.  Stowa in Surrey

6. Scale in Langley

7.  Ethos at Metrotown

Spring Home Renovation Tips: Refresh And Renew Your Space

As the snow melts and the days grow longer, the arrival of spring brings with it a sense of renewal and rejuvenation. For many homeowners, it’s the perfect time to tackle home renovation projects that not only enhance the aesthetics of their living spaces but also improve functionality and efficiency. Here are some essential tips to help you refresh and renew your home this spring:

1. Plan Ahead: Before you dive into your renovation projects, take the time to plan. Decide on the areas of your home that need the most attention and prioritize projects based on your budget and the time you have available. Consider both aesthetic updates and practical improvements that can increase your home’s value.

2. Focus on Curb Appeal: Spring is the ideal season to enhance your home’s exterior. Simple updates like painting your front door, replacing old house numbers, or adding fresh landscaping can make a significant impact. Consider pressure washing your siding, driveway, and walkways to remove winter grime.

3. Refresh Your Paint: A fresh coat of paint can breathe new life into any room. Spring’s natural light can help you assess which areas of your home could benefit most from a repaint. Opt for light, airy colors to reflect the season and make your spaces feel larger and more inviting.

4. Update Your Lighting: As the days get longer, natural light changes the ambiance of your home. It’s a great time to reassess your lighting fixtures and consider upgrades or additions that enhance the brightness and mood of your rooms. Energy-efficient LED lights can also help reduce your electricity bills.

5. Optimize Your Outdoor Space: With warmer weather on the horizon, focusing on your outdoor living area is a wise move. Whether it’s repairing your deck, setting up a new patio area, or planting a garden, these renovations can extend your living space outdoors and provide a serene retreat.

6. Tackle the Clutter: Spring cleaning is a pivotal part of the season. Use this time to declutter and organize your home. Consider adding new storage solutions or reorganizing existing ones to maximize space and functionality.

7. Think Green: Incorporating energy-efficient updates can lead to long-term savings and contribute to a healthier planet. Consider double-pane windows, enhanced insulation, or eco-friendly materials for your renovation projects.

8. Hire Professionals When Needed: While DIY projects can be rewarding, some renovations require a professional touch. Hiring experts for electrical work, plumbing, or structural modifications ensures safety and adherence to local building codes.

Spring is a time of new beginnings, making it the perfect season to refresh and renew your home. By planning carefully and focusing on both aesthetics and functionality, you can create a more comfortable, efficient, and beautiful living environment. Remember, small changes can make a big difference, setting the stage for a year of enjoyment in your freshly updated home.

Attn: Small Businesses

Whalley Little League's Annual Event

Looking to get some exposure for your business in Surrey.  This is event is earning its reputation in town. 

Click here for sponsorship info.

Top 10% Team with the Vancouver Real Estate Board

We just wanted to say a huge thank you for always supporting and trusting us. We could not have achieved this recognition without you.

BC Government Budget Affecting Real Estate

 BC Government Unveils New Housing Measures in 2024 Budget 

The BC Government has recently introduced a range of new housing measures in its 2024 budget, aimed at addressing the ongoing housing crisis in British Columbia.

BC Home Flipping Tax: Starting January 1, 2025, a new tax will be implemented on the sale of residential properties within two years of purchase, targeting speculative real estate practices. This move is expected to contribute to stabilizing housing prices and increasing the availability of affordable homes. Exemptions to the home-flipping tax will be available to people who face unavoidable life changes, including death and divorce, job relocation or loss, and people who are adding to B.C.’s housing supply.

Enhanced Property Transfer Tax Exemptions: Significant improvements have been made to make home ownership more accessible. The First Time Homebuyers’ Program has been expanded, with increased thresholds allowing more buyers to benefit from tax exemptions. This includes full exemptions for homes valued up to $835,000 and partial exemptions for those up to $860,000, potentially saving buyers up to $8,000. Furthermore, buyers of newly built homes valued up to $1.1 million will enjoy reduced costs, encouraging the purchase of new properties.

Bare Trust

New trust reporting rules came into effect December 31, 2023, which apply to bare trusts in Canada.  If you have co-signed a mortgage for a home where you hold at least 1% of the title, and you are not living in that home, these new rules apply to you. 

Most commonly, these new rules will apply to parents who have co-signed for their children's mortgage and, subsequently, hold 1% of the title of that home.  If you do not file a T3, the penalty can be as much as $2500 or 5% of the fair value of the property held in trust.

If these rules apply to you, you have until April 2, 2024 to file a Schedule 15.  Please contact your accountant for further assistance in making your filing.

Click here to watch a video about this

Another Presale in my portfolio!

I'm thrilled to announce that we've included a 4th presale in our portfolio. A junior 2bdrm unit for $635,900. Here are the five compelling reasons behind this decision.

Attractive Investment Terms: With only a 10% down payment and an expected completion in 2028, this presale offers favorable terms compared to our other units completing in 2024 and 2025.

Rapid Appreciation in Property Value: Downtown Surrey concrete condos have shown a remarkable increase of $100/sqft in the last two years. Using a conservative estimate of a similar increase over the next four years, my initial investment is poised to grow by an impressive 92%.

Strategic Timing for Family Use: By 2028, we anticipate having two adult children, providing the option for them to potentially reside in the property. This not only adds a personal touch but also presents an opportunity to save on property transfer taxes.

Flexibility with Assignment: The presale comes with the advantage of a zero assignment fee for the 1st 75 units sold. This allows us the flexibility to potentially assign the contract for a profit before completion, with the only cost being the administrative fee.

Sentimental Value and Evolving Area: The property's proximity to Whalley Ballpark, which his is close to my heart. Furthermore, the evolving nature of the area suggests limitless potential for growth and development.

For more presale opportunities, feel free to give me a call.  I'll share the pros and cons.

Speculation And Vacancy Tax

Residential property owners in the designated taxable areas declare every year for the speculation and vacancy tax, even if there is no change to your information. You must complete your declaration by March 31.

When a property has more than one owner, each person on title needs to make a separate declaration, even if the other owner is your spouse or relative. There may be special circumstances to consider such as a deceased owner or an owner who is out of town during the declaration period.

The fastest and easiest way to declare is online. If you cannot declare online, you can declare over the phone. 

February is Here!! Last chance for income tax savings for 2023!!!

As many of you know, February is the last month to work on getting those income tax deductions for the last year!

Many people have developed annual financial patterns that are lowering their income tax on a regular basis, while saving on building up retirement assets. 

My recommendations;

1) If cashflow is fairly consistent through out your calendar year, I would recommend finding a way to contribute monthly to RSP Accounts for your financial future;

2) If your cashflow is rather lumpy at times or it is not always clear how much income you might earn in a given year, usually lump sums can add flexibility, or allow top ups to a base savings.

3) How much savings is recommended of one's net income for retirement? The rule of thumb these days, is about 10% of Net Income. 

$1,000,000 Savings paying 5%, is $50k per year without erosion

$500,000 Savings paying 5% is $25k per year without erosion

$250,000 Savings paying 5% is $12,500 per year without erosion

Also don't forget that you can borrow funds out of your RSP to use towards your home purchase down payment (first time buyers). If for whatever reason you have been unable to set funds aside, then consider using an RSP loan.

Anti Bullying Day!

We stand united against bullying!

It's Anti-Bullying Day, a time to raise awareness and promote kindness, acceptance, and respect. Together, let's create a culture of empathy and support, where everyone feels safe to be themselves. Join us in spreading kindness and standing up against bullying today and every day!

#AntiBullyingDay #Canada #KindnessMatters 🤝💙

Fully charged for 2024!

We recently returned from a delightful 12-day family vacation in Hawaii, and it was truly an exceptional experience. Our eldest song had the opportunity to participate in a baseball prospect camp at the University of Hawaii, seamlessly aligning with our vacation plans.

During our stay, we did multiple hikes, visited tourist attractions including an unforgettable  fun-filled day at the Polynesian Cultural Center which concluded the night with the best Luau. Interestingly, our favorite activity turned out to be both simple and least expensive – boogie boarding in 4-6 foot waves.  Sometimes the simplest joys make the best memories!

Now that I'm fully charged, I'm ready to work!  With the interest rates remaining steady, it's looking positive in the real estate world.

How updated is your Will?

As we have begun a new year, it is a good time to reflect and consider our lives and see many changes and updates with our extended families and friends. This is also a great time to consider how up-to-date, your Will is. If this is something that was crafted many years ago, it should probably be reviewed to ensure that the Will is current.

These things are very easy to push off to another time, however the fact is that none of us knows how much time we have, no matter our age.

I would encourage you to think about this and set a goal to review this or craft this for the very first time in 2024!

While there are free and or low cost Will kits available online and in stationary stores, I highly recommend the professional services of a lawyer who will ask you lots of questions about your situation so that your Will can be prepared with your specific circumstances and needs in mind.

I've been a licensed financial advisor since 2016.  For the 1st quarter, my insurance team and I are committed to reviewing insurance policies to ensure you have adequate coverage.  For those who do not have any insurance, we can sit down and find out your options.

Five-year fixed mortgage rates are falling as government bonds drop

A downward trend in some Canadian fixed-mortgage rates may be welcome news for eager homebuyers, but real estate experts warn that housing affordability challenges persist.

Rates for a five-year fixed mortgage have declined with a drop in government bond yields, which set the lending rates for home mortgages, RATESDOTCA real estate expert Victor Tran explained in an interview.

"We’ve been on a downward trend on fixed mortgage rates for a few months now," Tran told BNNBloomberg.ca on Thursday.

He linked the falling mortgage rates to a decline in the government bond market that has been ongoing for the past few months, as the market anticipates central bank interest rate cuts on the horizon. Tran said he expects mortgage rates to fall further if the trend continues.

"There will be further rate drops to come if this continues and variable rates are also likely to drop next year," he said.

'STILL TOO EXPENSIVE'

The decline in rates is encouraging for potential homebuyers, Tran said. But he added that most people are waiting for rates to fall further before making a move.

"Rates still remain too high in Canada and for most people it’s still too expensive and unattainable to own a home at these levels," Tran said.

Toronto realtor Davelle Morrison said she’s observed the same trend as Tran.

"I haven’t seen buyers jumping at these lower rates yet," Morrison, broker at Bosley Real Estate, told BNNBloomberg.ca in a Thursday interview.

She added that most buyers anticipate getting into the market when rates are lower.

2023 to an end...

As we conclude 2023, our gratitude extends for a remarkable year and your unwavering support. In my 21 years within the industry, this has been the most challenging market. Nevertheless, it stands out as a year dedicated to our focus on growth and training. Your support has been crucial. Thank you for being an integral part of this journey. Looking ahead, 2024 has some positive forecasts already.   Wishing you continued success and growth in the upcoming year! If you have specific questions or need guidance on any aspect of your business plans, feel free to ask.

12 Day of Christmas Giveaways

We are excited to launch 12 Days of Christmas on Dec 13.  This year, we are collaborating with 12 businesses.  Please follow us on IG @mylyne.associates or FB Mylyne & Associates for our daily draws.

BC Says No to AirBNB

B.C. has put in place new legislation to help municipalities regulate short-term rentals on sites like Airbnb, which provincial and municipal leaders say is affecting the availability and price of long-term housing.

The new rules passed their first reading on the BC Legislature Monday and include increasing fines for hosts breaking local municipal bylaw rules to $3,000 per infraction, per day, from $1,000.

All short-term rental platforms will also be required to share data with municipalities to improve local enforcement, although no private information about hosts will be released publicly.

In addition, all short-term rental platforms will have to include the business licenses and registration numbers of listings where they are required by a local government and must remove listings without those requirements quickly.

The province says the new rules, which will come into effect in stages from now through late 2024, are meant to create a minimum regulatory standard for housing available for rent for fewer than 90 days.

Read the entire article here: Click Here

Congrats to our Halloween winners!

We're on a thrilling mission to uplift our community!  This month, we summoned the magic of Halloween, igniting the spirits of over 200 families at a spooky Coquitlam event.  And in a thrilling twist, we had an impromptu trick-or-treat surprise for adults and kids in Fraser Heights.   Together, we're making magic in our community!"  Congrats to  our winners!

BC Says No to AirBNB

B.C. has put in place new legislation to help municipalities regulate short-term rentals on sites like Airbnb, which provincial and municipal leaders say is affecting the availability and price of long-term housing.

The new rules passed their first reading on the BC Legislature Monday and include increasing fines for hosts breaking local municipal bylaw rules to $3,000 per infraction, per day, from $1,000.

All short-term rental platforms will also be required to share data with municipalities to improve local enforcement, although no private information about hosts will be released publicly.

In addition, all short-term rental platforms will have to include the business licenses and registration numbers of listings where they are required by a local government and must remove listings without those requirements quickly.

The province says the new rules, which will come into effect in stages from now through late 2024, are meant to create a minimum regulatory standard for housing available for rent for fewer than 90 days.

Read the entire article here: Click Here

Home prices definitely have come down....

With home prices currently on the decline, now is the time to seize a golden opportunity for real estate investments. Whether you're looking to buy your dream home, invest in properties, or to get out of renting these reduced prices can work in your favor. Don't miss out on this favorable market trend!

Click here to view listings

Thanksgiving Giveaway Winner

Team Thankful video and winner announcement

Congrats to our Thanksgiving Giveaway winner - Katerina Babelo.  Thank you for those who partcipated.  

12 ways to Save Money effectively by making small changes

It's crucial to be mindful of your finances and find ways to save money. Here are 12 tips to help you save during these challenging times:

1. Create a budget: Develop a comprehensive budget that outlines your income and expenses. This will help you understand where your money is going and identify areas where you can cut back.

2. Cut unnecessary expenses: Review your expenses and eliminate non-essential items or services. Cancel unused subscriptions, reduce dining out, and prioritize essential purchases.

3. Cook at home: Eating out can be expensive. Instead, prepare meals at home using cost-effective ingredients. Plan your meals in advance, make a shopping list, and avoid impulse purchases.

4. Reduce energy consumption: Lower your electricity and heating bills by turning off lights when not in use, using energy-efficient appliances, adjusting your thermostat, and insulating your home.

5. Minimize entertainment expenses: Look for affordable or free entertainment options such as local community events, parks, and libraries. Take advantage of streaming services instead of expensive cable packages.

6. Shop smart: Before making a purchase, compare prices online, use coupons or discount codes, and consider buying used or secondhand items. Delay non-essential purchases to avoid impulsive buying.

7. Save on transportation: If possible, use public transportation, carpool, or walk/bike instead of driving. Maintain your vehicle properly to avoid costly repairs and conserve fuel.

8. Negotiate bills and expenses: Contact your service providers, such as internet, cable, or insurance companies, and negotiate for better rates or discounts. Many companies are willing to work with customers during tough economic times.

9.  Reduce debt: Pay off high-interest debt as quickly as possible. Prioritize your payments and consider consolidating or refinancing loans to get better interest rates.

10. Build an emergency fund: Set aside a portion of your income each month into an emergency savings account. Having a financial cushion can help you deal with unexpected expenses without going into debt.

11. Avoid unnecessary credit card debt: Minimize the use of credit cards and pay off the balance in full each month. If you must use credit, do so responsibly and consider low-interest options.

12. Increase your income or Passive income: Explore ways to boost your income, invest in passive income investments or taking up a side hussle, freelancing, or monetizing a hobby. Use your skills or talents to generate additional revenue.

Remember, saving money requires discipline and conscious decision-making. By adopting these tips and making small changes to your lifestyle, you can make a significant difference in your financial well-being.

On the bright side...

In a down real estate market, there's a bright side for everyone. For buyers, it's like a sale—home prices are lower, making it more affordable to own a place. You can also negotiate better terms and deals because sellers are keen to make a sale.  The big challenge is surpassing Bank of Canada's stress test.  This is where we need to sit down and discuss how you can save for a larger down payment and reduce debt to income ratio for a stronger financial footing.  Now, sellers, don't worry! There are still buyers around, and less competition means your home can shine more. You have a chance to showcase your property better. It's a balanced market, where both sides can benefit. So, let's see the positive and make the most of it!

Some Of The Things Home Owners Should Be Doing To Prepare For The Upcoming Winter

Here is a quick list of my top 10 home "To Do" items to get ready for fall and winter

1. Clean gutters and down spouts from leaves

2. Have your furnace serviced and replace the filters

3. Book an appointment to have snow tires put on

4. Check flashlight batteries and survival gear and be prepared for power outages

5. Ensure patio chair cushions have been properly dried before storing away

6. Consider fall fertilizer as well as buy and plant bulbs for color in the spring

7. Clean the dryer vent from back of dryer to where it exits your house

8. Final cleaning of the barbeque

9. Cut back your perenials

10. Replace batteries in home smoke detectors

Shocked By Your Mortgage Renewal Offer?

If your mortgage is up for renewal in the next six months, you are probably coming off a nice low interest rate that you have enjoyed for the last few years.

Chances are that you are aware that rates have been climbing steadily over the last 24 months and your renewal rate will be substantially higher than the rate you last negotiated.

Some lenders are forecasting that rates may continue to increase and are calling up borrowers asking them to renew early. That may seem like they have your best interest at heart but to do this you have to give up your current low rate for the balance of your term.

Don't be fooled by this tactic of renewing early into a less than stellar, higher-than-you-pay-now rate.

What we recommend is to lock in a rate today that is good for four months by committing to moving your mortgage to a new lender, stay with your current lender with the current low rate until your mortgage renewal date, then make the move. We will get the new lender to offer the guarantee that in the next four months, if rates come down, you can request the new lower rate.

Have you ever considered buying a presale?

Click here for our Presale Tour info

You're invited to this Saturday's PRESALE TOUR with Mylyne & Associates. We have exclusive access to 4 of the hottest presales in Surrey:

District Northwest: 10249 King George Blvd, Surrey, BC V3T 2W6

Lucent: 10239 King George Blvd, Surrey, BC V3T 2W6

Pura: 13734 104 Ave, Surrey, BC V3T 1W5

Sequoia: 10522 King George Blvd, Surrey, BC V3T 2X2

WHEN: The tour will start @ 12PM, Saturday (August 5)

WHERE: District Northwest Presentation Centre

RSVP:  presales@mylyne.com

PRESALE ADVANTAGES:

Buying a Presale is Easier Than Buying an Existing Home:

Buyer’s are frustrated with low inventory levels of existing homes for sale on the Vancouver MLS system. In most categories there is a very limited choice of homes for sale. Whenever a good home becomes available there is often competition from other buyers and multiple offers are common on resale homes. In many ways buying a condo presale is a lot easier than competing against multiple offers because there are many units for sale in the building at one time.

Time to Save:

Some Buyers want the ability to lock in their home and then have months or years to save until completion.

Presale Contracts Are Usually Assignable:

Many investors buy presales with the hope of assigning (flipping) the contract at a profit before completion. Note: that not all presales are assignable and the developer will charge an assignment fee. 

Rental Income on Newer Buildings Is Higher:

Investors who intend to hold onto the property and rent it out anticipate the rents will be higher on a new building.

Rising Market Appreciation:

Investors can leverage a relatively small deposit with the hope that the home will be worth more on completion than what they agreed to pay in the contract.

Can't make it, no problem.  We can inform you when we we launch our next Presale tour.

Canadian Real Estate Industry Downgrades Home Sales Forecast

Canada’s real estate industry is lowering expectations for the market going forward. The Canadian Real Estate Association (CREA) revised its home sales forecast lower for the remainder of the year. They also see 2024 being slower than previously anticipated, as demand slows without central bank stimulus. 

Canada’s Real Estate Industry Revises 2023 Sales Lower

Expectations for existing home sales continue to fall. CREA’s latest forecast shows a 6.8% drop to 464,000 homes sold by year-end. A drop was expected, but the latest forecast update is nearly 30,000 sales lower than expected 3-months ago. Demand remains close to historical volume, but just isn’t picking up as the industry had hoped. 

Canadian Real Estate Slowdown Expected To Continue Next Year

Home sales are forecast to grow further next year, but it also got a downward revision. Sales are forecast to climb 11.2% to 516,000 homes in 2024. Once again, this was a downward revision of 45,000 units from the forecast 3-months prior. 

CREA Expects 75,000 Fewer Sales Than They Did 3 Months Ago

Together, the downward revision reveals how rapidly the industry’s view of the market is changing. The latest forecast drops combined 75,000 home sales, a big shift that reveals higher interest rates are helping to temper excess demand. 

Yes, excess demand. Canada’s central bank used record low rates, and quantitative ease, to intentionally stimulate housing demand. It may have been justified in 2020, but traditionally stimulus isn’t used when record demand is present. Roughly 250,000 excess home sales were driven by the stimulus in Canada. Even the BIS, the central bank for central banks, attributed rapid home price growth to keeping rates too low for too long, driving excess demand.  

Higher rates are reducing home sales, and CREA is slowly coming to that realization. While it appears that higher rates are penalizing sales, the downward revision mostly just brings sales back to typical levels.

Inflation Goes Down From 4.1% to 2.8%

The rise in consumer prices decelerated again in June, but costs for shelter and food are still putting a strain on Canadian's wallets, evidence that bringing inflation down to target remains a tricky balancing act for the Bank of Canada.

The consumer price index (CPI) was up 2.8% last month, Statistics Canada reported on July 18, falling a couple of ticks below the 3% increase economists surveyed by Bloomberg had expected. That was down from 3.4% in May and marked the first time the inflation rate has fallen within the Central Bank’s target control range of 1 to 3% since March 2021.

The decline was driven by a 21% drop in gasoline prices for the month, which was largely the result of base-year effects; last year, prices at the pump shot up amid increasing global demand for crude oil.

In June 2022, inflation hit its peak above 8% and has come down as the Central Bank hiked interest rates at almost every policy meeting since March of last year — taking a brief pause in March and April of this year.

“Inflation has fallen into the Bank of Canada’s target range, but there are signs pointing to slower progress from this point on,” Royce Mendes, economist and managing director at Desjardins Capital Markets, wrote to clients in a note on July 18th.

Discounting gasoline, the headline inflation figure would have been 4% in June, down from 4.4% in May. Statistics Canada said elevated grocery prices, up 9.1%, and mortgage interest costs, up 30.1%, contributed the most to the overall increase of 2.8%.

Full Article Here