Give your roof some TLC to avoid big problems down the road

General Robyn McLean 27 Nov

Some great tips from our friends at PillarToPost on keeping your roof in tip top shape!
Man cleaning out gutters

Your Roof & Drainage Checklist

You may not think about your roof and gutters very much, if at all. But it’s important to give them a checkup and some TLC to prevent big problems down the road.

  • Clean leaves and other debris from gutters to prevent clogs and pooling water. You may need to do this more than once a year if you have very heavy leaf fall.
  • After cleaning the gutters, run water through them from your garden hose to make sure the downspouts are clear and the water is channeled away from the foundation.
  • Check gutter sections for alignment and adjust them if necessary. Make sure seams between the sections are watertight.
  • Downspout extensions, available at hardware stores, can be used to carry water away from the home. Use these only where they won’t pose a tripping hazard.
  • Use binoculars to check the roof for missing or damaged shingles and flashing. If you notice any issues, have the roof inspected and any repairs made by a qualified professional before the snow!

Holiday & Winter Fire Safety

General Robyn McLean 26 Nov

Some great tips for keeping your family & home safe this winter from our friends at PillarToPost!

Mother and son enjoying Christmas lights

Help keep your loved ones and your home safe during the holidays with these smart precautions.

  • Check holiday light strands for damaged or broken wires and plugs. Enjoy indoor lights only while someone is home and turn them off before going to bed.
  • Keep live Christmas trees in a sturdy, water-filled stand and check daily for dehydration. Dried-out trees are dangerous and should be discarded immediately.
  • Always use non-flammable decorations both indoors and outdoors.
  • Be sure to keep space heaters away from bedding, curtains, paper — anything flammable. Never leave space heaters unattended while in use.
  • Children should not have access to or be allowed to use matches, lighters or candles.
  • Candles add lovely ambience to your holiday home. They need to be placed in stable holders and kept away from flammable items, drafts, pets and children or use an LED candle for peace of mind.
  • Busy with holiday cooking and baking? Kitchen fires are the leading cause of house fires. Keep an all-purpose fire extinguisher within easy reach and know how to use it.

We hope you enjoy a happy and safe holiday season!

October Data Confirm That Housing Is in Full Rebound

General Robyn McLean 18 Nov

Market update by Dr. Sherry Cooper, Chief Economist Dominion Lending Centres

October Data Confirm That Housing Is in Full Rebound

Statistics released today by the Canadian Real Estate Association (CREA) show that national home sales rose for the eighth consecutive month. Activity held steady in October at the relatively robust September pace following a string of monthly increases that began in March. Existing home sales are now almost 20% above the six-year low reached in February 2019, but remain 7% below the heights reached in 2016 and 2017 when many fretted over a housing bubble (see chart below).

Housing activity in roughly half of the local markets rose offset by the other half that fell. Higher sales in Greater Vancouver (GVA), the neighbouring Fraser Valley and Ottawa offset a monthly decline in activity in the Greater Toronto Area (GTA), particularly in Central Toronto, and Hamilton-Burlington.

Actual (not seasonally adjusted) activity rose 12.9% year-over-year. Transactions were up from year-ago levels in 80% of all local markets in October, including all of Canada’s largest urban markets.

All was not rosy, however. “It’s a full-blown buyer’s market or on the cusp of one in a number of housing markets across the Prairies and in Newfoundland,” said Gregory Klump, CREA’s Chief Economist. “Homebuyers there have the upper hand in purchase negotiations and the mortgage stress-test has contributed to that by reducing the number of competing buyers who can qualify for mortgage financing while market conditions are in their favour.”

New Listings

The number of newly listed homes fell by 1.8% in October, with the GTA and Ottawa posting the most significant declines. Almost a third of all housing markets posted a monthly decrease of at least 5%, while about a fifth of all markets posted a monthly increase of at least 5%.

Steady sales and fewer new listings further tightened the national sales-to-new listings ratio to 63.7%. This measure has been increasingly rising above its long-term average of 53.6%. Its current reading suggests that sales negotiations are becoming more and more tilted in favour of sellers; however, the national measure continues to mask significant regional variations.
Based on a comparison of the sales-to-new listings ratio with the long-term average, just over two-thirds of all local markets were in balanced market territory in October 2019, including the GTA and Lower Mainland of British Columbia. Nonetheless, sales negotiations remain tilted in favour of buyers in housing markets located in Alberta, Saskatchewan and Newfoundland & Labrador.

The number of months of inventory is another important measure of the balance between sales and the supply of listings. It represents how long it would take to liquidate current inventories at the current rate of sales activity.

There were 4.4 months of inventory on a national basis at the end of October 2019—the lowest level recorded since April 2017. This measure of market balance has been retreating further below its long-term average of 5.3 months. While still within balanced market territory, its current reading suggests that sales negotiations are becoming more tilted in favour of sellers.

National measures of market balance continue to mask significant regional variations. The number of months of inventory has swollen far beyond long-term averages in the Prairie provinces and Newfoundland & Labrador, giving homebuyers an ample choice in these regions. By contrast, the measure is running well below long-term averages in Ontario, Quebec and Maritime provinces, resulting in increased competition among buyers for listings and providing fertile ground for price gains. The measure is still well centred within balanced market territory in the Lower Mainland of British Columbia.

Home Prices

The Aggregate Composite MLS® Home Price Index (MLS® HPI) rose 0.6%, marking its fifth consecutive monthly gain. Seasonally adjusted MLS® HPI readings in October were up from the previous month in 14 of the 18 markets tracked by the index. (Table below)

Recently, home price trends have generally been stabilizing in the Lower Mainland and the Prairies. While that remains the case in Calgary and Saskatoon, home prices in Edmonton and Regina continue to decline. By contrast, home price trends have started to recover in the GVA and the neighbouring Fraser Valley.

Meanwhile, price growth continues to rebound in the Greater Golden Horseshoe (GGH). In markets further east, price growth has been trending higher for the last three or four years.

Comparing home prices to year-ago levels yields considerable variations across the country, with mostly declines in western Canada and mostly price gains in eastern Canada.

The actual (not seasonally adjusted) Aggregate Composite MLS® (HPI) was up 1.8% y-o-y in October 2019, the biggest year-over-year gain since November 2018.

Home prices in the GVA (-6.4%) and the Fraser Valley (-4.2%) are still below year-ago levels, although declines are becoming smaller.

Elsewhere in British Columbia, home prices logged y-o-y increases on Vancouver Island and in the Okanagan Valley (3.1% and 2%, respectively) while having edged marginally higher in Victoria (0.5% y-o-y).

Calgary, Edmonton and Saskatoon posted price declines in the range of -1.5% to -2.5% on a y-o-y basis in October, while the gap between this year and last year widened sharply to -6.8% in Regina.

In Ontario, price growth has re-accelerated well ahead of overall consumer price inflation across most of the GGH. Meanwhile, price growth in recent years has continued uninterrupted in Ottawa, Montreal and Moncton.

Bottom Line

This report is in line with other recent indicators that suggest housing has recovered from a slump earlier, helped by low mortgage rates. The run of robust housing data gave the Bank of Canada another reason– along with healthy job gains and higher wage rates — to hold interest rates steady. However, the central bank has become more cautious in its outlook. Bank of Canada Governor Stephen Poloz, one of the few central bankers to resist the global push toward easier monetary policy, acknowledged he’s begun to consider the merits of joining other countries in lowering borrowing costs.

At a press conference after the Bank of Canada’s decision to keep the current 1.75% policy interest rate unchanged for an eighth straight meeting, Poloz said his governing council discussed the possibility of implementing an “insurance” cut to counter the global economic headwinds. But, the council decided against it because of the potential costs to such a move. These include driving up inflation already at the central bank’s 2% target and fueling household debt levels that are among the highest in the world.

“Governing Council considered whether the downside risks to the Canadian economy were sufficient at this time to warrant a more accommodative monetary policy as a form of insurance against those risks, and we concluded that they were not,” Poloz said. The Bank of Canada “is mindful that the resilience of Canada’s economy will be increasingly tested as trade conflicts and uncertainty persist.”

Dr. Sherry Cooper
Chief Economist, Dominion Lending Centres

Learn how to get financially healthy

General Robyn McLean 15 Nov

Excellent advice from our friends at Home Trust

Every November, a spotlight is shone on financial literacy in Canada, encouraging consumers to take charge of their finances. Financial Literacy Month is an ideal time for people to consider their financial health and educate themselves about such topics as creating a budget, borrowing responsibly and avoiding overextending their credit.

Begin with budgeting

The Financial Consumer Agency of Canada recommends that everyone start with a budget, which is a plan that keeps you on track in terms of how much you’re spending versus how much you’re earning. A budget is key to making sure you don’t overspend and gives you a roadmap for developing a savings plan. It’s especially important for people who have trouble paying off debts, who want to plan for big purchases such as a car or house, or those needing to save for retirement.

Before you develop a budget, it’s a good idea to first track your expenses for a couple of months to see where your money is going. Separate these expenditures into items that you need, such as groceries, mortgage payments or rent, and items you want, such as dinner out or a new pair of shoes.

Once you have an idea of what you’re spending, see if you’re covering your expenses and have something left over. Budget calculators are handy tools to help track spending. If more money is going out than coming in, you need to look where you can cut expenses and/or increase your income, otherwise, you’ll be well on your way to accumulating debt.

Have a plan to pay down debt

Despite best intentions, Canadians spend more than they earn. Household debt levels are up and the debt-to-disposable-income ratio is on the rise, according to Statistics Canada. The average Canadian owes nearly $1.79 for every $1 of household disposable income.

High debt has many side effects. One of them is stress. According to a survey by the Canadian Payroll Association, 40 percent of respondents said they felt “overwhelmed” by the amount of money they owe. Financial stress can also lead to serious health issues, such as heart disease and high blood pressure, as well as anxiety and depression.

Having a plan to pay down debt is important. Once you have a list of all your debts, how much your payments are and interest rates on each, decide on how you will pay them down. Look at your budget and see what time frame is possible and decide what debts to pay off first. Some people choose to start with the highest interest debt first. Others might choose to start with the smallest debt, to establish a sense of accomplishment and motivate them to tackle the rest.

It’s also important to talk to your creditors to discuss your financial situation. You might be able to get lower interest rates, extend your repayment terms so that your monthly payments are smaller or consolidate your debts, which lets you pay off more, high-interest debts with one regular payment at a better rate.

Understanding credit scores

The amount of debt people have and how well they manage it directly impacts their credit rating and ability to borrow at good rates. Creditworthiness is what traditional financial institutions weigh when considering a mortgage or loan application. One of the first things they do is look at credit scores and credit history. The better these two are, the lower your interest on any debt you do incur will be, and the sooner you can pay off your debt.

Your credit score is a number that ranges from 300 up to 900 and it is based on such criteria as:

  • Payment history (Do you pay on time? Are you periodically or always late?)
  • Credit utilization ratio (This refers to how much of your available credit you are using, and experts recommend less than 30 percent)
  • Length and history of accounts (Do you have a variety of credit accounts?)

Over time, you want to build and maintain a good credit score. Some tips to get that score up include paying bills on time, paying more than the minimum amount, getting your balance down and having a variety of credit. You can learn more about rebuilding your credit history here.

If you have no credit history at all, or have weaker credit, you can opt for a secured credit card, which is a credit card that’s backed with a cash deposit as security. Using it can help raise that credit score.

Commit to financial fitness

Financial health affects all aspects of life, so it’s important that you’re able to manage your money instead of it managing you. The federal government has many educational tools and information sheets to help you improve your financial literacy.

Whatever your personal situation is, there is likely help to be found. For instance, while lenders use credit scores to assess your creditworthiness, that score is just a guide so it’s important to investigate solutions for your unique debt or credit concerns.

Bank of Canada now has a clearer path to a rate cut

General Robyn McLean 14 Nov

Some great insight into Canada’s interest rate environment from our friends at FNat!

Nov 11, 2019
First National Financial LP

The Bank of Canada has remained – somewhat defiantly – on the sidelines yet again, but it is feeling the pressure to get back into the game and one obstacle has now been removed.

The bank held its benchmark rate at 1.75% for an eighth straight setting.  At the same time it has clearly signalled it may not be able to hold that line much longer.  In its quarterly Monetary Policy Report (MPR) the bank pointed directly at trade conflicts (such as the U.S. – China tariff war) as the key cause of a global economic slowdown.  Growth has fallen to its lowest level since the financial collapse in 2007.  Around the world more than 35 other central banks have already cut rates in an effort to keep growth from stopping altogether.

The U.S. Federal Reserve has made three cuts in the past several months.  That has boosted the strength of the Canadian dollar which makes the country’s exports more expensive on the world market.  Given that the central bank has been counting on more business investment and spending to pick up the economic slack as debt-burdened consumers switch from spending to saving and repaying their loans, headwinds for exports and business are unwelcome.

The BoC, however, is not concerned that a drop in interest rates will trigger a renewed frenzy of debt-funded consumer spending.  It is satisfied that the biggest component of household debt – mortgages – have been stabilized by the B-20 regulations.  And another big obstruction has been removed.  The federal election is over so the bank can operate without risking the appearance of political favouritism.

Mortgage-free or diversity?

General Robyn McLean 5 Nov

Some food for thought from our friends at First National. 

Canadians put a high priority on paying off their mortgage debt – sometimes maybe a little too high.

Paying off debt is always a good move.  Wanting to be mortgage free is a laudable goal.  Making it your only goal may not be as sound.

Traditionally paying off your mortgage as quickly as possible has been seen as one of the best routes to financial success.  Interest rates used to be higher.  Some will remember that nasty period in the ‘80s and ‘90s when they were in double digits.  Even the 5% and 6% rates in place just before the Great Recession make today’s rates seem cheap.  So it can make more sense to take your focus off of your home and mortgage and view them as part of a more diversified investment strategy.

Over the past 10 years stock markets have tended to deliver rates of return that are markedly higher than mortgage interest rates.  By diverting some money away from your mortgage you could invest through RSPs or TFSAs.  It has been shown that people who start investing when they are young end up wealthier later in life.

Of course markets do fluctuate and some people prefer the stability of the “guaranteed return” that comes with paying down a mortgage.  It is a form of enforced saving.  There is also a sense of security that comes with mortgage free home ownership in the case of job loss or a sudden drop in income.

There is also protection in diversification.  Because you have expenses that go beyond your mortgage, having a collection of smaller assets can be useful.  If money gets tight you could sell a lesser investment in order to pay other bills.

While it is never a bad plan to pay down your mortgage faster, it is always a good plan to diversify and spread around your assets and your risks.  As the old expression says, “Don’t put all your eggs in one basket.”

Nov 4, 2019
First National Financial LP