Wow! The first decade of the 21st Century is behind and the second lays ahead with all the potential and promise one could hope for! When I look back at the last 10 years, I realize how much has changed, both for me personally, professionally and in the industry. As a career banker, if you had told me back then that I would leave the safety and security of a corporate employee to branch out on my own and build my own client base and book of business I would have laughed and thought "No way could I or would I do that..." But here I am, heading into my third year as an Independently licensed Mortgage Agent and couldn't even consider going back to the mandates and restrictions of the financial system.
I am so grateful for all the love and support I've received throughout this journey from my existing friends and family and all the new people that have come into my life as a part of this journey. To each and every one of you I say Many Thanks and Much Love!
The past ten years have definitely seen a massive change in the way we buy and finance our homes. With the fallout of the 2008 sub-prime mortgage crisis, we have seen major regulatory changes that have greatly impacted the ability of many existing and potential homeowners to buy and finance properties, especially the younger generation and first-time homebuyers. The biggest challenges have come in the form of the stress test and reduced amortization allowed. The requirement to qualify for a mortgage at rates well above 5% as opposed to actual rates of below 3% has pushed many potential buyers out of the market and served to "somewhat" dampen demand.
Real Estate values continue to rise despite these lending restrictions and this comes mainly due to lack of inventory as the amount of affordably priced and moderately sized homes that appeal to first time homebuyers are in short supply.
The good news is that the Government seems to be acknowledging these challenges and we have started to see new policies and programs put in place to assist such as the CMHC First Time Homebuyer's Incentive which was launched in September of last year. We also head into the New Year with a mandate from the Prime Minister to the Finance Minister to re-evaluate the existing restrictive policies and come up with suggestions on programs that can be eliminated or eased. In my personal opinion, the best ways to assist those struggling with obtaining financing would be to ease the stress test by eliminating it from switches and transfers, allowing borrowers to explore alternative lenders and products and not be handcuffed to their existing mortgage company; re-introduce a 30 year amortization to high-ratio purchases, helping to keep payments manageable; and come up with a better method of setting and adjusting the stress test rate that moves a bit more fluidly with actual rates.
We are seeing historically low interest rates with the Bank of Canada holding the overnight rate steady throughout 2019. Increasing pressure to drop rates due to global trade pressures is predicting a drop in that rate in the early part of this year so homeowners can look forward to continued low rates! Predictions from both CMHC and two of Canada's largest Real Estate Brokerages anticipate real estate values to increase by between 3% and 6% over the year, however, this will be very location dependant based on the local market.
Overall, I believe 2020 will bring us a strong year in Real Estate and I am looking forward to working with all of the new and existing clients that come my way to help them realize their homeownership dreams and goals!