Canadian historical interest rates 1980-2018

I always find it insightful to look at where we have been. This graph illustrates the interest rate landscape of the past, nearly, 40 years. (as represented by the prime lending rate, mortgage rates have indeed been higher & lower)

right click on image to open larger format in new window.

Free markets & the Politician

Recent times have shown the inadvisability of politicians getting involved in changing markets.

In fact, I would suggest politicians should stay away from free markets, or those with heretofore limited regulation, if we want them to remain as such.

Measures taken (never timely) simply add layers of distortion. Dismantled with great difficulty at some future date when unintended consequences mount or the inflation of previous action becomes too much to bear.

The real estate market in Vancouver was naturally correcting going into the summer of 2016. Meanwhile the BC Liberals, in their infinite wisdom decide to implement a punitive 15% tax on homes purchased in the Greater Vancouver area by foreign nationals. Largely a knee jerk reaction to popular outcry. Globally, this tax was viewed as an assault on wealthy foreign nationals, not as an effective measure against rising house prices.

Managing to tax an already cooling market is one thing… alienating and offending an entire segment of the population is another. I would think it’s unwise. We will never know what the natural peak for housing prices was going to be in the Great Vancouver Area, but had it occurred, the effects would have sent an appropriate signal to investors and a cooling phase would gain strength from organic feedback.

Now we have a new & opposite form of distortion in the market; the government will step in and provide interest free loans (*be sure to read the fine print) up to $37,500 for folks that cannot afford a healthy downpayment. Does this not compound the housing affordability issue? Instead of letting the market ebb and flow, rise and fall of its own weight, we prop up and cajole.

Don’t get me wrong, I love to see my homes’ value rise, but millions of consumers’ maturation patterns are being impeded by a single and fundamental aspect of life – shelter. Contrary to popular belief, the political meddling needs to stop. Let the market take it’s course.

Debt is debt. This lovely gift from the Liberals is more debt. Plain and simple. Once again, the onus will be on the borrower, inflated by the government and backstopped by you, the tax-payer. The 6 big banks of Canada’s lending monopoly won’t hurt equitably when this unravels. Sure their dividends will decrease but they will repossess, repackage and write off. Meanwhile, an entire generation of freshly leveraged up, tired-of-going-nowhere-millennials, will feel the sting for the next decade with their underwater mortgages, foreclosures & bankruptcies.

Market cycles have a cleansing effect over time, separating the weak from the strong. When the fundamentals are stunted or encouraged you create incalculable & amplified crisis. Meddling with the natural process eliminates the chance for rebirth, for healthy growth and true long term stability. We want ebb & flow… we don’t want crisis.

— Stability does not equal the absence of volatility, volatility is necessary —

We need politicians with backbones strong enough to tell the public, you reap what you sow. Politicians strong enough to see their powerful & aging friends, lose money. Politicians with enough patience to not distort markets for votes, when the wave of consequence is sure to last decades. With enough presence of mind to see that the average citizen can find their own way into crippling debt without government encouragement.

If we can’t achieve this, we can rest assured that the next crisis will be larger than the last.




Buyers have a serious advantage in the winter months! If you’re into that sort of thing…

It might seem counter-intuitive, but moving in the winter—from house-hunting to getting all your worldly belongings from point A to point B—can actually be easier, cheaper and more convenient than any other time of the year. Here’s why it pays to move during the colder months.

Canada vs. US home price comparisons

The price of homes in Canada’s largest cities varies significantly less than south of the border, where Americans face an average anywhere from $86,000 to $3.3 million, new data suggests.

The data was released Thursday by, one of Canada’s largest real estate websites, and was created with information released by the Canada Mortgage and Housing Corporation and the Canadian Real Estate Association.

Unsurprisingly, the average cost of a home in Canada this year was highest in Metro Vancouver, at $864,556. To afford a home in that range, Canadian families must bring home an annual salary of approximately $140,000.

  • Based on the latest census, the median family income in Canada is $78,870. The infographic suggests that those earning the median income can afford a house priced between $460,000 and $490,000 – slightly more than half of the cost of the average home price in Metro Vancouver.

Outside of Vancouver, the next most expensive Canadian market analyzed is in Kelowna ($785,415), followed by Toronto ($755,755). Abbotsford is fourth, and Victoria is Canada’s sixth-most expensive city based on average home price.

While the prices seem high, a move to some cities south of the border would cost homeowners even more. For sake of comparison, the below prices are listed in Canadian dollars (see note below for more information on conversion).

Just south of Vancouver, the average home price in Seattle is approximately $977,000.

The most expensive city in the U.S. that RentSeeker looked at is Saratoga, Calif., where the median home price is $3,305,158.

Recent statistics from the U.S. list the average annual household income as approximately $72,000. A family bringing in the median annual income could afford a home between $398,000 and $440,000.

The top five most expensive Canadian and American markets are as follows:

  1. Vancouver – $864,556; Saratoga, Calif. – $3,305,158
  2. Kelowna, B.C. – $785,415; San Francisco, Calif. – $2,252,319
  3. Toronto – $755,755; San Jose, Calif. – $1,362,990
  4. Abbotsford, B.C. – $753,939; Brooklyn, N.Y. – $1,074,474
  5. Mississauga, Ont. – $640,108; Seattle, Wash. – $978,136

But heading south could also save Canadians some money, depending on where they chose to live. In some cities, like Detroit, the median home price is as low as $86,356.

The average home price in the Las Vegas area is only $377,934 Canadian.

The least expensive medians of the cities looked at are as follows:

  1. Fredericton – $159,370; Detroit, Mich. – $86,356
  2. Moncton, N.B. – $235,961; Memphis, Tenn. – $213,219
  3. Trois-Rivieres, Que. – $248,503; Columbus, Ohio – $246,127
  4. Sherbrooke, Que. – $251,387; Oklahoma City, Okla. – $263,562
  5. Winnipeg – $284,799; Indianapolis, Ind. – $273,096

RentSeeker looked at a sample of cities across Canada and the U.S. based on highest populations but did not list costs in the Canadian territories because the information was not readily available through the CMHC.

Canadian prices in the infographic are in Canadian dollars, and American prices are listed in U.S. dollars. For the sake of comparison, all U.S. prices have been converted to Canadian dollars in the article above, based on an exchange rate of US$0.74 per C$1 as of Thursday afternoon. Prices have not been converted in the infographic below.

The above story has been edited to reflect that the Vancouver housing price is an average of all types of homes across the Metro Vancouver area. A previous version of this article stated incorrectly that the price was the median for detached homes only.

Affordability in Canada

This report, provided by the Conference Board of Canada & described as, “A new vision for housing in Canada” gets to the point of housing affordability. It’s worth the read, even a glance.


South Okanagan historical sales volume

The best way to figure out where we are headed sometimes is to look in the review mirror. Where have we been? This is a look at the total volume of transactions back to 1980. As you can see, the peak year for the number of transactions have been 2007, 2015 and beaten again in 2016. Since the 2007 peak we had a massive decline in both the number of transactions & naturally, the overall sales $ volume. It had been a similar period of correction to the 1980 decline, with the number of transactions cut by 50%. Although following a different path to decline, what took 3 years to bottom from 1980, took us 6 years this time around.

As can be seen from the trend line, we are now above the trending number of sales per year. This indicates a robust market and one that is ‘operating on all cylinders’. This effective and efficient market has not always been the case and we are bound to fluctuations.

Previous times of below trend activity such as the 1998-2001 slowdown & even further back to 1986 (which was more of a recovery period) shows insightful periods of contraction!

We have hit a period of pent up demand where both the number of transaction & sales $ volume increase substantially. As of October 2016 we continue to experience a mismatch; buyers without the appropriate product to sell them.

It’s currently a healthy and stable market right now, a great time to be selling & for that matter, buying if you know what you’re after. Given demand, the overall supply of homes for people to view is narrow! (right click graph below & open in new window for full image)

sales volume

South Okanagan historical real estate prices

Here are historical real estate prices for the South Okanagan dating back to 1980. It gives perspective to how out of control things got leading up to 2008 & what has ensued since!

Also included in the graph is the M2 money supply of Canada, which is the broadest measurement of money circulating in Canada & a good indicator of inflation. I believe, this tends to correlate well with backstopping real estate prices, as can be seen in the graph. We have advanced significantly from 2013 (up 25% to Oct 2016) and I feel we have burnt up much of the price acceleration for now. I believe a significant moderation is still a years time away for our region.

I hope you find this informative! (For larger image, right click and select open in new window)

Historical Prices

Welcome changes to real estate assignment regulations in BC

Changes to Assignments in Real Estate Contracts

On May 10, the BC Government amended the Real Estate Services Regulation to require changes in the way the assignment of real estate contracts are addressed.

Effective on May 16, 2016, unless otherwise instructed by their clients, real estate contracts prepared by licensees must state that the contract cannot be assigned without the written consent of the seller, and that any profit from an assignment goes to the initial seller. This applies to both residential and commercial transactions, with the exception of development units (as defined in section 1 of the Real Estate Development Marketing Act –

To make compliance as easy as possible for REALTORS®, BCREA will amend the related standard forms to include the following paragraph: The Seller and the Buyer agree that this Contract: (a) must not be assigned without the written consent of the Seller; and (b) the Seller is entitled to any profit resulting from an assignment of the Contract by the Buyer or any subsequent assignee.

It’s important to note that buyers and sellers still have the ability to amend or entirely strike out these provisions. The point is that including this information creates an opportunity for both parties to decide how they want assignments handled.

BCREA is also helping to ensure consumer awareness of the changes. On May 10, BCREA published a news release, and the Association is also supporting the Council’s efforts to help ensure consumers are aware of these changes.

BCREA is the professional association for more than 20,000 REALTORS® in BC, focusing on provincial issues that impact real estate. Working with the province’s 11 real estate boards, BCREA provides continuing professional education, advocacy, economic research and standard forms to help REALTORS® provide value for their clients.

To demonstrate the profession’s commitment to improving Quality of Life in BC communities, BCREA supports policies that help ensure economic vitality, provide housing opportunities, preserve the environment, protect property owners and build better communities with good schools and safe neighbourhoods.

BC Real Estate breaking sales records!

Prices in South Okanagan have risen 10% year over year while the number of listings remains tight, down 20% from this time last year: read more, here 


Property Transfer Tax Act 2016 Changes!

Real Estate Board of Greater Vancouver – Property Transfer Tax

Times Colonist– Budget adjusted MSP rates, cuts property transfer tax

The Vancouver Sun– B.C. budget offers help to buyers of new homes

British Columbia -Understanding Your Taxes, Property Transfer Tax

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