Eric Yung Mortgage Consultant
4830 Nanaimo St V5R 5G9 Vancouver, BC, Canada

Another Record-Setting Month For Canadian Housing! CMHC forecasted back in May that the national average sales prices will fall 9%-to-18% in 2020 and not return to yearend-2019 levels until as late as 2022. Instead, the national average sales price as of August has posted a 18.5% gain. Housing strength is largely attributable to pent-up demand by households that have maintained their level of income during the pandemic. The hardest-hit households are low-wage earners in the ...accommodation, food services, and travel sectors. These are the folks that can least afford it and typically are not homeowners. The good news is that the housing market is contributing to the recovery in economic activity. #vancouver #realestate #mortgage #interestrates

Steady as she goes, mate! Bank of Canada holds rates at 0.25%. Mortgage rates are likely to stay low until 2021. With the world economy on shakey grounds, central banks around the world needs to maintain a low lending rate in order to stabilize the asset prices. With mortgage rates now hovering around south of 2%, many are taking advantage of the low rates by buying, switching or refinancing their home. This should increase the supply of money, making people feel wealthier,... and stimulating demand/consumption. What will happen from here? Governments around the world are trying to minimize the impact of COVID by providing financial support for businesses and their citizens. At the end, it will depend on what people do with their money, in aggregate. If they fear another downturn = save up and don't spend = deflationary = real estate goes down If they are optimistic about the economy = spend money and invest = inflationary = real estate goes up Looking at Vancouver at least, it seems like the latter is happening. Maybe the 2nd wave will change that when it happens, or... if it happens. Only time will tell.

Canadian Economy Took a Record Nosedive in Q2 However, it doesn't matter where we have been, but where we are heading. Looking ahead, while road to recovery may looks questionable, continuing financial aid and interventions (lower rates) will provide a floor for the housing market. Too many voices have said they are waiting for the drop, this only means there are still a lot of demand waiting. If a drop were to come, it may not be what you think. #foodforthought #justmyopini...on #vanre #mortgage #vancouver https://dominionlending.ca//canadian-q2-gdp-growth-plunge/

With Record breaking job losses, stock market rallies 27% from its lows on March 23, gas is 85 cents per litre, you maybe asking yourself.... What the Heck is going on in this world? The coronavirus is putting the economy into a standstill. Fundamentally breaking the system, a system that's fuel by debt. With government printing fiat money to re-inflate the prices, buying up assets such as treasuries, bonds, mortgage back securities, their "all in" approach to give people con...fidence back into the system. And it's WORKING, for now! What does this mean in the Canadian real estate market? Short term, we will experience downward pressure from the force selling (airbnb that's making no money, bankruptcies, foreclosures). Until the pandemic is control, price movement will be down. In the long term, the massive printed confetti, I mean money, will create an upward pressure on hard assets such as gold and real estate. It's a good time to keep an eye on the market. Talk to your realtor and look for distressed sales. Don't over-leverage, make sure your income isn't affected and you are able to sustain the mortgage payments. Depends on your time horizon, this could be one of the buying opportunities you've been looking for. This is all only my own opinion. Please take it with a grain of salt. I don't think the sky is falling, and I DO think our government will not let the system collapse, or the housing prices for this matter. They will ensure they print enough money to keep this system in order... because there is no alternative.

WHY ARE MORTGAGE RATES RISING? - Cost of funds for banks are increasing - Mortgage bonds earn only 1%, cash is king - Bond yield needs to increase to attract new investment, which are used to fund mortgages... To understand why rates went up, above are some of the factors. Will we see further increase in mortgage rates? Certainly. Will the higher rates be sustain, probably not. We will see.

BOC just cut rates from 0.75% to 0.25%! Think about it, we were just at 1.75% a little more than a month ago! BOC and US FED are not dumb, they didn't cut rates so you can save money. They needed to PUMP more money into the system by lowering rates. BUT WHY are Mortgage rates are going UP! Simple, Liquidity! Mortgage back securities (from the documentary: THE BIG SHORT) is getting sold left and right because banks needed to raise cash. As people cashout their investments, ba...nks are experiencing a liquidity squeeze! Low liquidity doesn't mean no liquidity. Banks are still willing to lend, but no longer at the 2.19% that we saw just a couple of weeks back. PRIME rate is most likely not going anywhere anytime soon, so people who had variable discount rate > prime - 0.5% are in a really good place right now. Rates maybe as low as 1.45% right now for some of these folks. We will see. I am glad some of my clients took the deep discount variable rate last 2 months. Until liquidity normalizes (stock market stabilizes), rates will continue this way for the next little while. Fixed rates going up, variable rate premium increases. Good thing is... when we see the light at the end of this tunnel, real assets should go up, as our currency will be devalued from all that money pump. Real asset = gold, silver, real estate.