|Happy New Year! I hope everyone enjoyed the holidays and managed to spend some quality time with your loved ones!
I wanted to start off as I do every New Year, by thanking all of my clients, family, friends, and business partners for all your support over the past year. I am truly grateful for the trust that you put in myself and my team, and your support is what keeps us working hard every day to provide the best experience in the industry for our clients. Thank you very much, and we look forward to opportunities to provide top-notch mortgage services again this year!
Here are a few hot topics this month in the Real Estate and Mortgage Industry.
Wrapping Up A Record Breaking Year for Housing Market
If you have read any of my updates over the past year, it should be no surprise that 2019 was a record breaking year for the Ottawa housing market. Breaking records in both the number of units sold and the average sale price, the housing market in Ottawa showed no signs of slowing down in 2019. Here are some highlights from the Ottawa Real Estate Board for December:
- Members of the Ottawa Real Estate Board (OREB) sold 761 residential properties in December, compared with 660 in December 2018, an increase of 15.3%. December sales included 534 in the residential property class, up 13.9% from the previous year, and 227 in the condo class, up 18.8% from December 2018. The 5 year average for December is 720.
- Total number of condo units sold for 2019 was 18,622, compared with 17,467 in 2018, an increase of 6.6%. Residential property class sales were up 4.7% with 14,038 properties sold compared with 13,411 in 2018.
- December average sale price for condo class properties was $310,675, an increase of 11.5% from a year ago. The average sale price for residential class properties was $500,306, an increase of 10.3% from December 2018.
- Year-end figures show an average sale price of $486,590 for residential class properties in 2019, an 8.9% increase from 2018, and $304,203 for condo properties, up 9.3% from last year.
With historically low supply, yet higher unit sales than previous years, days on market continues to decline, especially in certain pockets of the city. It is widely expected that Ottawa will continue to experience limited supply and reasonably increasing average prices this year.
There are certainly some challenges for those in the market for a new home, particularly with the limited supply of homes available, but overall 2019 was a very strong year for the Ottawa real estate market!
Interest Rates This Month
There continued to be some upward pressure on fixed interest rates this month. The Bank of Canada hinted at its December meeting that it did not foresee the need to cut rates in the near future, which created a spike in bond yields. The December jobs report showed a significant amount of jobs gained for December, however, this came after a month of significant job losses. For the time being, however, these couple of things have forced some increases in fixed rates.
Where exactly rates are headed in 2020 is difficult to say, but while there will surely be some fluctuation, as there always is, most economists expect rates to remain low, with the most likely scenario being the Bank of Canada holding rates steady through the year.
As always, we have some great offers available for our clients. We have 5 year fixed rate terms available as low as 2.64% for high ratio mortgages, and as low as 2.84% on conventional mortgages. If you know of anyone we can help with the best mortgage available, please send along our contact info.!
Below is a list of the best rates on the market:
1 yr fixed – 3.19%
2 yr fixed – 3.14%
3 yr fixed – 2.69%
4 yr fixed – 3.09%
5 yr fixed – 2.64%
5 yr variable – 2.85%
January Mortgage Minute
Dealing with Debt
At a recent conference I attended, a head economist from one of Canada’s major banks presented some interesting facts on Canadian household debt. In case you weren’t aware, the average Canadian household debt, compared to household income, is currently at record levels. So, it’s no surprise that insolvencies and mortgage delinquencies are on the rise as well, both increasing roughly 10% in the past year. It also seems that Canadians’ attitudes towards debt have shifted as well, and Canadians are more comfortable carrying debt than they have been in the past. In some cases perhaps we have been a little too comfortable with debt, and it puts some people in a difficult financial situation. In many cases, debt is a result of a difficult situation we may have run into. In other cases, it may be a matter of not watching our spending as well as we should. In any event, that fact is that many of us are dealing with debt, regardless of how we ended up there.
Of course these are averages and they don’t represent everybody’s situation, but if you happen to have some debt that you have been carrying, we can help you save HUGE amounts of interest in many cases and help to pay your debt off much faster by consolidating that debt into your mortgage.
Here is a quick example of how consolidating debts into your mortgage can help you save:
- Consolidating $10,000 in credit card debt at an interest rate of 18%, and building into your mortgage at an interest rate of 3%, would save you roughly $7,200 in interest over 5 years.
- Consolidating $20,000 in student loans or lines of credit at an interest rate of 9%, and building into your mortgage at 3% would save you roughly $5,900 in interest over 5 years.
Not only is there interest savings by consolidating debts into your mortgage, but there are other benefits as well, such as:
- Reduced payments which can help with your monthly cash flow
- Forced principle re-payment so you are paying debts down each month, as opposed to paying just the interest on them.
As property values have increased significantly over the past couple of years, most homeowners have enough equity in their home to be able to refinance their mortgage and consolidate debts. f you’re struggling with debt you are carrying, please contact us today! We can find a solution to help save you money and to pay down your debts faster!