February 14th, 2011 | News Releases
Consistent with the new mortgage insurance parameters announced by the Government of Canada on January 17, Canada Guaranty will implement the following product and guideline changes effective March 18, 2011.
- Maximum Amortization Reduced to 30 years
Mortgage loans greater than 80% loan-to-value will be subject to a maximum amortization of 30 years (previously 35 years).
- Refinance Advantage™ Reduced to 85% LTV
Canada Guaranty’s Refinance Advantage™ product will have a maximum loan-to-value of 85% (previously 90% LTV).
NOTE: Mortgage applications submitted prior to this effective date will be subject to the current insurance parameters. Exceptions will be considered for borrowers who have provided a legally binding purchase and sale, financing or refinance agreement dated prior to March 18, 2011.
Should you have any questions regarding the new mortgage insurance guarantee parameters or how they will affect Canada Guaranty’s specific product guidelines, please contact your dedicated Account Executive or speak with a member of our National Underwriting Team at 1.877.244.8422.
Maria Pimenta
Senior Vice-President, Sales & Marketing
Canada Guaranty Mortgage Insurance Company
Phone: 416.640.8937 | maria.pimenta@canadaguaranty.ca
February 8th, 2011 | Mortgage and Housing Market Reviews
October – December 2010
(Download to view complete PDF)
The Canadian economy posted positive indicators of growth in early 2010; however, the optimistic sentiment deteriorated in the latter part of the year when growth slowed; causing previously optimistic economic predictions to be slightly downgraded.
Factors to consider for early 2011 will continue to be the Bank of Canada’s monetary policy in the form of low rates, business recovery and the associated increase in employment and consumer sentiment which will drive domestic recovery in the form of spending and investment.
Economic recovery of the United States in the form of job creation and reinvestment of business continues to be a dominating factor while the stress of the European financial markets will continue to play a role in worldwide recovery.
The real estate market remained moderate in the month of December with a total of 37,452 sales (seasonally adjusted). This represents a 0.55% decrease versus the previous month, however was slightly higher than the 10 year average for sales in December.
Listings remained at a relatively flat level for the final month with only a 0.60% gain to end December with 67,849 listings.
With the end of 2010 came positive news as real estate statistics indicated a balanced market. At 52.4%, the percentage of sales-to-listings remained steady in December, 5.9 months supply of inventory remained on the market and prices showed a slight increase as consumers continue to demonstrate demand.
The Canadian residential home price increased 2.1% over December 2009 to finish the year at $344,551. The leader in Atlantic Canada continues to be Newfoundland, which posted a 14.0% increase in home prices (vs. December 2009) and concluded 2010 with an average price of $255,517.
Neighbours in the Atlantic region had varying results in the final month of 2010 (vs. December 2009) as the province of Nova Scotia posted a 5.9% ($211,971) increase in sales price and New Brunswick a decrease of 3.9% ($142,813 December 2010).
Although sales results were slightly depressed in December in the influential markets of Toronto and Vancouver, price appreciation was present in most major eastern markets.
Toronto ended 2010 with an average price of $433,887 a 5.3% increase over December 2009. In addition, sales as a percentage of listings was weighted towards sellers at 57.2%; 4.8% above the national average.
Provincial price increases versus 2009 varied in the Eastern and Central regions, from 10.3% (Manitoba, $222,132) to 7.5% (Ontario, $342,245).
In British Columbia and Saskatchewan, 2010 ended with price appreciation rates of 5.7% ($523,990) and 1.3% ($241,971) respectively. This created renewed pressure on affordiability within both provinces as the population continues to manage increaseing prices and modest job recovery.
Real estate markets in Alberta continued to struggle with recovery as the average provincial price decreased in 2010 by 2.8% to a value of $341,999.
The Prairie and Western markets continue to have resale inventory above the national averages; ranging from 8.0 months (British Columbia) to 6.1 (Saskatchewan). This influence, combined with slow employment recovery in Alberta, have resulted in affordability concerns continuing to modestly dampen demand and price recovery. GDP posted a modest 0.2% increase in October 2010 compensating for the previous month’s losses.
The increase was led by natural resource extraction, which posted a 2.4% gain during the month. This sector also witnessed an impressive 9.9% increase in support activities, which assists with production and output of extracted resources.
The home resale sector entered positive territory in many national markets, increasing the output measurement of real estate agents by 5.1%. The fate of new home builders was unfortunately opposite with residential building posting a 1.7% decline.
At 7.6%, the employment rate ended the year on a positive note as the economy added an additional 22,000 jobs in December. This is a 2.2% increase over December 2009 and signifies a gain of 369,000 positions during the year.
The self-employed sector continues to decrease while the private sector gains momentum. On an annual basis, the private sector grew by 3.1%, public sector 4.2% and the self-employed sector lost 3.9%.
The notable gains in manufacturing and transportation employment assisted Ontario and Quebec in employment gains and economic recovery with their provincial unemployment rates falling to 8.1% and 7.6% respectively. The national employment leader continues to be the province of Newfoundland, which added an additional 2,500 positions in December to end the year with a 4.6% growth rate (vs. December 2009).
With inflation staying within acceptable parameters and moderated economic growth, the Bank of Canada has maintained an overnight rate of 1.0%, translating into a “bank” or prime rate of 3.0%.
Considerations for the Bank of Canada in 2011 will continue to be the strength of the Canadian dollar, pace of export recovery, rate of growth within the U.S., and global economic conditions.
APPENDIX
|
Canadian Home Prices
|
|
Market
|
Average Price
December 2010* ($)
|
Y-Y % change
|
|
Newfoundland
|
255,517
|
10.6
|
|
Prince Edward Island
|
144,327
|
10.0
|
|
Nova Scotia
|
211,971
|
5.9
|
|
New Brunswick
|
142,813
|
-3.9
|
|
Quebec
|
256,106
|
7.4
|
|
Ontario
|
343,257
|
3.6
|
|
Manitoba
|
232,648
|
15.3
|
|
Saskatchewan
|
241,971
|
1.3
|
|
Alberta
|
341,999
|
-2.8
|
|
British Columbia
|
523,990
|
5.7
|
*not seasonally adjusted
Source: CREA
Disclaimer:
This report is provided by Canada Guaranty. It is for information purposes only and may not be appropriate for other purposes. The report does not provide material information about the business and affairs of Canada Guaranty and its affiliates. The information contained in this report has been drawn from sources believed to be reliable, but is not guaranteed to be accurate or complete. The report contains information that contains economic analysis and views, including future economic and market performance. These are based on certain assumptions and other factors, and are subject to inherent risks and uncertainties. The actual outcome may be materially different. Canada Guaranty and its affiliates and related entities are not liable for any errors or omission in the information, analysis or view contained in this report, or for any loss or damage suffered.
