Nothing like kicking off the week with a Bank of Canada rate announcement! There wasn’t much drama to be had, though, as it was confirmed the target for the overnight lending rate would remain at one per cent for the time being. The lack of movement was hardly a surprise – after all, experts have said a hike isn’t likely until late in 2013 – so it looks like we’ll all keep enjoying these record-low borrowing costs for some time yet.
Are We Taking These Bargain Basement Rates for Granted?
At this point, there hasn’t been an increase to the overnight lending rate since September 2010 – the longest period of time since the 50’s where we haven’t experienced a rate change. Economists have consistently warned that when rates do finally rise, it’s going to blindside home owners who’ve become too complacent with borrowing costs. But evidence in one of Canada’s biggest housing markets points to the contrary; sales in the Greater Toronto Area have actually decreased year over year. While some of this can certainly be attributed to the cooling effects of those CMHC rule changes (you can’t take advantage of a low rate if you can’t afford a down payment in the first place), there are other factors behind Toronto’s market neutralization.
Homeowners are Also Resistant to Change
Transactions overall have been sliding on a year-over-year basis since June. September saw a spike in average price and has since moderated – but new listings (and therefore sales) have dropped dramatically.
The culprit? Homeowners are simply choosing not to sell at such soft housing prices, opting instead to ride out these lows in hopes of returning sellers’ market conditions. Toronto isn’t the only city of holdouts either – Vancouver’s sales are also a full 30.3 per cent below the 10-year average for the month of November, according to the Financial Post.
How to Get More for Your Home in a Buyer’s Market
Not everyone has the option to wait out unsavoury selling prices. If you need to put your home on the market now – and are desperate to claw back some of your original investment – there are a few measures you can take to up that asking price.
Renovations: This could be as major as modernizing the kitchen, or as simple as refreshing the fixtures or replacing the carpet or flooring. Even a fresh coat of paint can do wonders in the eyes of buyers looking for a move-in-ready home.
Curb Appeal: Treating your home’s facade to a facelift can make it stand out among its peers on the street. Invest in small landscaping projects such as revamped flower beds or bushes. If there’s a deck, ensure it’s in good shape, and freshly stained or painted.
Keep the Cold Out: An energy efficient home that costs less to heat can be a selling point. Replace or enforce existing window treatments and sealings, door frames, etc.
It’s the Little Things that Count: If a major renovation is out of the question, shift your attention your home’s handles and hardware. Ensuring they’re modern and unique can improve on the home’s entire appearance.
Best in Show: Never underestimate first impressions! A few simple touches can have a big impact on a showing. Ban clutter from sight, switch on some brighter bulbs, and perk up the rooms with fresh cut flowers. You can even bring in some rented furniture to make the space even more appealing.
RateSupermarket.ca Week in Review
There were no record breakers this week, but the five-year fixed mortgage rate is still at an attractive low at 2.84, up from 2.78 per cent. Ten-year fixed also increased slightly, reaching 3.79 per cent from last week’s 3.77 per cent. Variable rates, like the Bank of Canada rate, mainly stayed put this week, with only three-year dropping from 2.8 per cent to 2.65.