Stephen Poloz named Canada’s next central bank chief – Financial Post
After months of anticipation, Finance Minister Jim Flaherty shocked many by announcing that Stephen Poloz would be taking over Mark Carney’s position as Governor of the Bank of Canada. Most news sources had predicted Flaherty would appoint Tiff Macklem, the bank’s senior deputy governor, as his current position leaves him as the most obvious choice. However, Flaherty believes Poloz is the strongest candidate, as he brings a previous 14-year stretch at the Bank of Canada as well as years working abroad – including stints at the International Monetary Fund in Washington and the Economic Planning Agency in Tokyo. “Mr. Poloz has significant knowledge of financial markets and monetary policy issues and extensive management experience. We are confident Mr. Poloz will make an outstanding contribution to the work of the Bank and uphold its reputation as a leading central bank,” said David Laidley, Chair of the Special Committee of the Board of Directors.
Stuck in traffic: How mortgages could ease congestion – CBC News
A recent Pembina Study found that 80 per cent of residents in the Greater Toronto Area would give up the suburban lifestyle (big house, big car), in order to live in one of the walkable and transit-friendly neighbourhoods in the downtown core. Unfortunately, this tends to be more of a dream than a reality for most people, especially first-time buyers, as downtown property comes at a high cost. Continue reading
Finance official questions link between cooling housing market and mortgage rules – The Globe and Mail
Canada’s deputy minister of finance, Michael Horgan isn’t convinced there is a link between the new tighter mortgage rules, introduced in July of this year, and the recent cooling in the housing market. “There’s some evidence that the housing market…is cooling and slowing at the moment,” he said in a rare public speech at Carleton University. Horgan went on to say that “it’s too early to make the direct link.” These comments are likely a response to economists who have already claimed that policy changes have impacted the housing market, including Benjamin Tal of CIBC and Gregory Klump of the Canadian Real Estate Association. The deputy minister of finance agrees that there is likely some cause and effect at this point, but attributed most of the market cooling to Canadians starting to reign in their debts. Jim Flaherty echoed his deputy’s comments, stating that the full impact of the mortgage rule changes have yet to be felt.
No U.S.-style housing market meltdown for Canada: CIBC – Calgary Herald
While there are a number of concerns regarding Canada’s current housing market, a U.S.-style housing market meltdown is not one of them. A report released on Tuesday by CIBC World Markets revealed that, despite Canada reaching the record debt-to-income ratio the U.S. had in 2006, the Canadian economy plus tighter mortgage lending rules are much better than what the U.S. was faced with before its crash. Benjamin Tal, deputy chief economist at CIBC, says “house prices in Canada will probably fall in the coming year or two, but any comparison to the American market of 2006 reflects deep misunderstanding of the credit landscapes of the pre-crash environment in the U.S. and today’s Canadian market.” Currently, one major concern is current home prices and the recent slowing of sales, which could result in a price adjustment.
A recent poll by CIBC revealed that Canadian mortgage owners believe they will be mortgage-free by 55. But some Canadians have found it’s possible to be mortgage-free sooner if extra steps are taken when making their monthly payments. From the poll, those who have paid off their mortgages in full said they did so by the age 48, seven years earlier than the Canadian expectation! These mortgage-free Canadians used the following strategies to say goodbye to their mortgage sooner.
- 52% made annual lump sum payments when possible
- 42% increased the amount of their regular mortgage payments
- 40% increased the frequency of their mortgage payments
The Canadian Imperial Bank of Commerce (CIBC) is one of the biggest banks in Canada, controlling 13.6% of Canada’s $1.1 trillion dollar mortgage market. Recently, CIBC conducted a poll of over 1000 people across the nation asking for opinions on mortgages. The results yielded a few interesting points.
A) 50% of Canadians said they would choose a fixed rate mortgage today
The spread between fixed and variable rates have shrunk considerably from April 2011 to April 2012 which helps explains why this number is up 11% from last year’s results. Let’s examine how the spread between discounted 5-year fixed rates and 5-year variable rates have changed over the last year.*
*data sourced from Ratehub.ca
A year ago today, the 5-year variable rate was largely favourable to its fixed counterpart due to the large spread. This is a far different cry from how the rates stack up against each other today, where the spread has shrunk to 34 basis points. Plus, it is widely predicted interest rates will increase in the next year (more on that below).
Welcome back to the Ratehub Bank Battle Series: Best Mortgage Campaign. The tournament has seen Scotiabank and RBC advance to the second round so far. The purpose of this Bank Battle is simple – the best mortgage campaign wins. Each competitor will be measured with their latest mortgage ad video available on the web.
Why is this important? There are 5.7 million home owners in Canada representing over a trillion dollars in mortgage business. We are evaluating the latest attempt of each bank to capture market share because mortgage interest is profitable business and more dollars are being put into it every year by house-hungry consumers.
Note: The last time these two banks squared off, it was in the finals of our Mortgage Calculator Battle.
The Challenger in the blue corner: The Canadian Imperial Bank of Commerce (CIBC), based out of Toronto, Ontario.
The Challenger in the red corner: ING Direct by way of Amsterdam, Netherlands.
CIBC’s Marketing Theme:
“Switch Your Mortgage”
ING Direct’s Marketing Theme: