The Bank of Canada announced this morning that it is lowering its target for the overnight rate by 0.25 percentage points to 0.5 per cent. In the press release accompanying the decision, the Bank emphasized that while this additional stimulus is required to help return the economy to full capacity given a contraction of GDP over the first half of the year, vulnerabilities associated with household imbalances could edge higher.
Although core inflation remains close to the Bank's 2 per cent target, growth in the Canadian economy has stagnated. Today's rate cut should help to partially offset the negative impacts of low energy prices in the parts of Canada hardest hit by the dramatic decline in oil prices and oil and gas activity while providing further stimulus to regions like British Columbia that are enjoying more robust growth. For housing, the impact in markets like Vancouver or the Fraser Valley that are already experiencing very strong demand may be relatively muted. For other markets that been more negatively affected by low energy prices, including some areas of Northern BC, this may help spur housing demand.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
If you own a car, you know there’s more to the cost-of-ownership than just finance payments and gas. You also need to budget for maintenance and repairs. If your car is older, those costs are going to be higher. That’s just common sense.
The same is true of your home. It’s wise to budget for anticipated repairs and maintenance. Otherwise, you might be caught by surprise when you find that your furnace stops working and needs to be replaced. That can easily be a four-figure expense.
Experts recommend that you set aside 1% of the value of your home for repairs and maintenance. For a $500,000 property, for example, that would be $5,000. That is, of course, merely a rule of thumb. If your home is older, you may need to budget more.
Another recommended method is to budget $1 a square foot. If you have a 2,500 square foot home, that would be a budget of $2,500. Again, that number would need to be higher for older properties.
When budgeting, consider things that are getting old and will likely need to be replaced within the next three years. Examples include roof shingles, furnace, A/C unit, deck, fence, plumbing, and windows. Depending on the size and model, a new A/C unit will cost at least $5,000. Anticipating that expense will help you plan accordingly and avoid the shock of an unpleasant and costly surprise.
Keep in mind that budgeting $2,000 for repairs and maintenance doesn’t mean you’ll actually spend that money this year. But, if needed, the budget will be there, and that’s peace-of-mind.
For more info, contact the Dion-Ivans Real Estate Team today!!
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