Source: RateSuperMarket.ca
Last week, the mortgage qualifying rate of the Bank of Canada (BoC) reached 5.44 per cent with a prime rate at 3.00 per cent. This meant a minor increase from the trend observed last month.
The mortgage market in Alberta remained balanced and we could observe minor corrections in the three and five-year variable rate. According to the report from May 14th, the five-year variable rate climbed again to 3.00 per cent, while the fixed rate for the same period dropped to 3.19 per cent. The three years fixed mortgage was 2.94 per cent and variable rate stayed at 3.20 per cent. The lowest rates were obviously kept for one-year fixed mortgage rates, with 2.49 per cent. The variable rate for the 1-year period was 3.00 per cent.
The CIBC Household Credit Analysis report released Wednesday brought interesting news about the Alberta arrears rate. It stated that the level for Alberta is the highest in the whole country. In January 2012, the rate in Alberta was 0.7 per cent, while the average number for Canada was only 0.4 per cent.
“This reflects the fact that, on average, homeowners in Alberta are younger and less established,” stated the report. The same report also openly stated, “As for the housing market (Table 1), there is no debate about the fact that the market is overshooting. The only question is what will be the nature of the adjustment.”
The benchmark price for property sale in Alberta was $358,988, which was the third highest number after British Colombia and Ontario. The average housing price for the whole country was $367,821. It’s hard to predict if there will be any housing price corrections any time soon, since Alberta has much land available to keep spreading the city outward and the housing demand is not as high as in the most overheated areas of Vancouver and Toronto. In terms of mortgages, both Harper’s government and BoC stated that they do not plan to change the mortgage rates so any homebuyers can take advantage of current low interest rate of both types of mortgages and invest into a property.
