REAL ESTATE / BOOKS
Economist forecasts low rates to continue
T
by Carlito Pablo
he chief economist of the trade association of B.C. and Ontario credit unions expects interest rates to remain low for some more time. Bryan Yu with Central 1 Credit Union anticipates that the Bank of Canada will raise its interest-setting rate only toward the end of 2022. Yu doesn’t see the bank “pulling the trigger too quickly”. “Our view is that the bank is going to be more patient,” Yu told the Straight in a phone interview. The low cost of borrowing has been one of the main drivers of the housing market in Canada—and B.C., in particular. The bank slashed its overnight rate three times in March 2020 to its lowest level of 0.25 percent. The move was intended to contain a feared economic fallout in the face of the COVID-19 pandemic. Variable mortgage rates are inf luenced by the bank’s overnight rate. Up until March 2021, the bank has maintained that it will hold the rate until 2023. However, the institution indicated in April that a hike may be forthcoming earlier, in 2022, after certain economic targets are met in the second half of that year. In July 2021, Central 1 released its interest-rate forecast, which predicted that the current rate of 0.25 percent will go up to 0.5 percent in the fourth quarter of 2022 and to 0.75 in the first quarter of 2023. Yu said that the Bank of Canada will likely want to first see a stable economic
White drenches the Sunshine Coast with wisdom and humour by Charlie Smith
Our view is that the bank is going to be more patient. – economist Bryan Yu
Central 1 Credit Union’s Bryan Yu doesn’t think that the Bank of Canada will “pull the trigger”.
recovery before hiking rates. Meanwhile, yields on the five-year Government of Canada bonds are also expected to increase. This means an uptick in five-year fixed mortgages that constitute the most popular mortgage product in the country. “We will see, I think, some modest movements in the five-year rates over the course of 2022,” Yu said. Overall, the economist doesn’t expect rate increases that would shock the housing market. “It’s still going to be a low-rate environment,” Yu said. In a May 5, 2021, outlook report for the B.C. housing market, Yu wrote that higher mortgage rates would “quickly cool the market”. However, a “sharp hike in rates is unlikely given ongoing economic uncertainties, excess economic slack and anchoring
of the Bank of Canada’s policy rate at current levels for the coming year”. In the interview, Yu noted that even a higher-than-anticipated increase in interest rates can be handled by borrowers. “They have been stress-tested at a relatively higher rate than their actual contracted rate,” he said. Yu was referring to tighter mortgage rules introduced by the federal Office of the Superintendent of Financial Institutions and the Department of Finance. Starting June 1, 2021, insured as well as uninsured mortgage applications should qualify at either the benchmark rate of 5.25 percent or the rate offered by the lender plus two percent—whichever is higher. The previous qualifying rate was 4.79 percent. The new rules are meant to ensure that borrowers can afford higher payments should financial circumstances change. With the more stringent rules in place, Yu said, borrowers have a “lot of wiggle room” should interest rates increase more than expected. g
BOOKS
HERE ON THE COAST
By Howard White. Harbour Publishing, 205pp, softcover
d EVERY ONCE IN a while, I come across a book that makes me feel like a fraud. Here on the Coast: Reflections From the Rainbelt is one of those books. That’s because the author, Harbour Publishing founder Howard White, is so damn clever and knowledgeable that he leaves the rest of us wondering why we even bother pecking on a keyboard for a living. In this collection of 50 stories from the Sunshine Coast, the Stephen Leacock Memorial Medal for Humour winner pokes fun at everything from the name of the region—it’s actually pretty rainy—to the desire of realestate hustlers to name streets in ways that attract more buyers. There are also deeply informed and amusing essays on the folly of a fixed link to the Sunshine Coast and incomprehensible spelling conventions applied by scholars to Indigenous place names. Elsewhere in the book, he delves into the real-estate value locked up in boats that people rarely use. Then there’s a funny tale about a guy who detests travelling that comes with a surprising conclusion. Along the way, White dishes up delicious servings of Sunshine Coast history. This is B.C. writing at its finest—so conversational, so profound, and so utterly unpretentious. No wonder they gave this guy the Order of Canada. g
105 - 1611 E 3RD AVE I $499,000
219 1500 PENDRELL ST I $499,900
1 bed, 1 bath, 635 SF garden-level, SE corner unit Recently renovated w/ HW floors, butcher block counters & great light fixtures, plus plenty of storage Secured separate underground parking, feels like its own private parking w/ storage jut out Well-managed building that is pet & rental friendly Just off “The Drive” close to coffee shops, shopping, grocery stores, restaurants & transit
1 bed, 1 bath, 645 SF Garden level condo in the West End
PREVIEW: THURS Aug 12th, 6 - 7pm OPEN HOUSE: SAT Aug 14th, 2 - 4pm
4
THE GEORGIA STR AIGHT
AUGUST 12 – 19 / 2021
S TONEHOUS E
Suite fts. a large 15’ x 10’ living room w/ skylight. King size bedroom & insuite laundry. The 13’ x 10’
TEAM R E A L E S TAT E A D V I S O R S
Heat, HW & rec. facs incl. in reasonable maint fees Bldg fcrs live-in caretaker, fitness centre, squash court & a lushly landscaped common roofdeck.
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private patio is a visual extension of your living area I parking & 1 storage included. 2 Pets welcome here.
PREVIEW: FRI Aug 13th, 10 - 11:30am OPEN HOUSE: SAT Aug 14th, 2 - 4pm
604 255 7575
Sutton West Coast Realty I 301-1508 W Broadway
