Virus Anxiety Hits Canada


As though things weren't volatile enough, a new wave of virus terror is wreaking havoc on global financial markets. The novel conronavirus, COVID-19, continues to spread causing panic in worldwide stock and bond markets for the seventh day. Share prices have plummetted in Asia, Europe, the U.S. and Canada. The sell-off is fueled mostly by concern that measures to contain the virus will hamper corporate profits and economic growth, and fears that the outbreak could get worse.

Interest rates are falling sharply, hitting record lows reflecting a movement of cash out of stocks and commodities like oil, into the safer havens of government bonds and gold. In Canada, the 5-year bond yield has fallen to 1.16% this morning, down more than 50 basis points (bps) year-to-date and down 65 bps year-over-year (see chart below). Mortgage rates are closely linked to the 5-year government bond yield, so further downward pressure on mortgage rates is likely. Oil prices have fallen sharply, hitting the Prairie provinces hard. Crude oil WTI prices have fallen to just over US$45.00 a barrel compared to $62.50 earlier this year.

The Canadian dollar has also taken a beating, down to 0.7468 cents US, compared to a high of 0.7712 early this year.

The Canadian economy was already battered as today's release of fourth-quarter GDP data shows. Statistics Canada reported that the economy came to a near halt in Q4 as exports dropped by the most since 2017 and business investment declined. Household spending was a bright spot--a reflection of a strong labour market and rising wages.

Monthly data for December, also released this morning, came in stronger than expected, showing the economy had some momentum going into 2020 before the coronavirus reared its ugly head.

The weak 0.3% growth in Q4 was expected as a series of temporary factors including a week-long rail strike, manufacturing plant disruptions and pipeline shutdowns slowed growth. Even though December posted an uptick, the first quarter will no doubt be hampered by the rail blockade and now virus-related supply and travel disruptions as well as reduced tourism.

Bottom Line: Panic selling in the stock market is never a good idea. The TSX opened down more 550 points this morning following yesterday's outage. Trading on Thursday was suspended around 2 PM for technical reasons.

None of this is good for psychology or the economy.

The Bank of Canada meets next Wednesday, and clearly, their press release will address these issues. It's unlikely the Bank will cut rates in response on March 4, but if the economic disruption continues, rate cuts could be coming by mid-year.

The new stress test will be in place on April 6. If rates were at today's level, the qualifying rate for mortgage borrowers would be more than 40-to-50 basis points lower than today's level of 5.19%. This will add fuel to an already hot housing market.

 
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H-Info-June-2019

Home sales increase in July

Home buyer demand picked up across Metro Vancouver* last month, making July, a traditionally quieter month in real estate, the second highest selling month so far this year.


The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 2,557 in July 2019, a 23.5 per cent increase from the 2,070 sales recorded in July 2018, and a 23.1 per cent increase from the 2,077 homes sold in June 2019.

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I have listed a new property at 1020 49TH AVE E in Vancouver.
Experience the luxury of this opulent 9 bedrooms & 6.5 bathrooms home. Impressive features include gleaming solid wood floors, dramatic ceilings and arched opening to dining room. No expenses were spared with even recessed ceiling with chandelier in the gourmet kitchen. Also a separate wok/spicy kitchen for your convenience. Air-conditioning, heat-recovery ventilation (HRV) & sprinkler system, built in shelving, in the family room gives a great finish to the room. With 9 bedrooms, this house will be a great home for a big family. One transit to Langara College and close to shopping.
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I have listed a new property at 5515 ARGYLE ST in Vancouver.
Masterfully crafted home with a lane-way suite available! On top floor of this home, it features a spacious master's suite completed with walk-in closet and a spa-inspired en-suite with jetted tub and separate shower, 3 extra bedrooms & 2 full bathrooms! Main level of this home boasts a gourmet kitchen and a spice kitchen with high-end S/S appliances, open concept family, dinning, and living room, plus a full bathroom. One side of the lower level features a legal, 2-bed 1-bath suite. This home also comes with a 2-bed lane-way home, too! Radiant floor heating, 2 fireplaces, A/C, HRV, built-in speakers & security system. Central location, close to transit, and walking distance to Kensington Park and Jones Park. New Home Warranty in place.
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Vancouver Special! Vintage, original, beautifully & meticulously maintained by the original owner. This well kept 5 bedroom, 2 1/2 bath home with legal basement suite is located in a family oriented great neighbourhood in South East Vancouver and is directly across from Ross Park on a quiet street. Front and back gardens, 1 car garage, close to shopping, transportation and entertainment.
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Proudly introducing the newest development - Maverick


Maverick is 125 homes located in the New Whalley Entertainment District. Once completed, the New Whalley Entertainment District will be the arts & cultural hub of Surrey and home to over 3,500 residents. 


 Starting from prices:

  • Plan B 1 Bed Starting From $325,900
  • Plan C 1 Bed & Den Starting From $359,900
  • Plan D 2 Bed Starting From $429,900
  • Plan E 2 Bed & Den Starting From $489,900
  • Plan F 3 Bed Starting From $589,900
You do not want to miss this exclusive opportunity to secure your home in this elegant, yet very affordable new development. 
 
 

Want to find out more details? Call, text, or email us now for your Exclusive Preview Package!

Call or text: 604-725-0017

Email: rimpy@rimpyhothi.ca



Disclaimer: This blog and information provided are not intended to induce a breach of contractual agreement of any sort. Rimpy Hothi PREC and Rimpy Hothi, although selected as VIP REALTOR for this development, are not associated with the developer and/or Key Marketing. Image shown above is the intellectual property of Key Marketing and Key Marketing is the sole marketing firm of this development.

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