2008 has been an interesting year for the real estate and mortgage markets. House prices have come down from their 2007 highs, fixed interest rates are the lowest since 2004, and the bank prime rate is at 3.50% its lowest level in 50 years. So what does 2009 have in store for the real estate and mortgage markets? Below are our predictions.
We feel that the western market particularly Alberta will continue to be fundamentally strong. With a stronger than average job market despite the current economic times, the real estate market should show some strength throughout the year. We also feel housing prices will start to stabilize. In addition, due to a low interest rate environment not seen since 2004 (the beginning of the boom), we should see more buyers looking to enter the market again.
Fixed rates: Fixed rates have recently been lowered by all the lending institutions and the best 5 year fixed rate is currently 4.89%. Due to the current economic state, we believe that there is potential for fixed rates to decrease 0.10% to 0.25% in the first half of 2009. For the remainder of the year, rates should stay unchanged with an increase projected in mid 2010. Current fixed interest rates are returning to levels not seen since the pre 2004 housing boom. Thus the real estate market going forward will be stronger than the market seen in 2008.
To view our current rate sheet please click the following link:
http://www.yourmortgagecontact.com/rates.aspx
Variable rates: On December 10, 2008 the prime lending rate was lowered to 3.50%, which was a decrease of 0.50% from previous levels. The next rate announcement by the Bank of Canada is scheduled for January 20, 2009 and it is widely expected that once again the prime lending rate will be decreased by 0.25% to 0.50%. We also expect the prime rate to be lowered potentially another 0.25% to 0.50% throughout the year. Please note the lenders may not pass any Bank of Canada rate cuts to the consumer prime lending rate. For example, the last rate announcement only 0.50% of the 0.75% rate cut was passed onto the consumer banks prime lending rate. Currently the best variable mortgage pricing is prime plus 0.60% (4.10%), however most lenders have adopted a pricing of prime plus 1.00% (4.50%). We also predict the prime rate to increase rapidly in 2010 to control inflation.
To view our current rate sheet please click the following link:
http://www.yourmortgagecontact.com/rates.aspx
2009 should be an excellent year for you to get the mortgage you deserve. Whether you choose to go with a fixed or variable mortgage, 2009 is shaping up to be an optimal time to purchase a new, second, rental or vacation property, renew your existing mortgage or refinance your current property.
Please contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our website: http://www.yourmortgagecontact.com/ and apply today.
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Please click here if you would like to make any comments about the current or past newsletters as we appreciate any feedback. Also watch for our new and improved website in Spring of 2009.
WISHING YOU ALL A PROSPOROUS 2009
