The Bank of Canada opted to raise the target for its overnight interest rate this morning 25 basis points  to 1.25 per cent.  In the statement accompanying the decision, the Bank cited recent strong economic data and rising inflation as motivations for the rate increase. The Bank expects growth in the Canadian economy to slow to 2.2 per cent in 2018 and 1.6 per cent in 2019 with consumption and new home construction contributing less to growth than in years past.  With the economy returning to full-capacity, inflation is forecast to remain at 2 per cent over the medium term.  The Bank also flagged risk to its outlook from ongoing NAFTA negotiations and noted it would remain cautious in considering future interest rate adjustments.

With the Canadian unemployment rate hitting a 40-year low and inflation ticking higher in recent months, the Canadian economy would seem to be operating at full capacity. That argues for a more hawkish approach to monetary policy in order to bring interest rates closer to what the Bank estimates would be neutral for the economy, that is, a level in which the economy is neither running too hot nor too cold.  While today's rate increase was widely anticipated, it did come earlier in the year than previously expected and likely signals further rate increases to come in 2018.  Canadian mortgage rates have already moved higher in anticipation of Bank of Canada tightening, which means a much tighter borrowing environment in 2018, particularly given newly implemented mortgage qualifying rules for low-ratio buyers.

“Copyright British Columbia Real Estate Association. Reprinted with permission.”

Have you ever considered renting out a room to a student or renovating
your basement into a self-contained rental apartment?
It’s a big decision. There are many pros and cons to consider.
On the pro side, renting can provide you with additional income. An extra
few hundred dollars a month can go a long way towards paying down your
mortgage or splurging on an exotic summer vacation.
Creating rentable living space in your home — for example, an “in-law suite”
featuring a kitchenette and bathroom — may also increase your property’s
market value.
On the con side, you’ll have more costs and responsibilities as a landlord.
For example, you might need to purchase extra insurance because basic
home insurance policies typically do not cover rental units, even if you’re
just renting out a room. You’ll also be responsible for dealing with repairs
sometimes in the middle of the night.
Also, if you’re not careful about the renter you choose, you might end up
with a “problem tenant”. For example, you could have a tenant who is
consistently late on rent payments or simply stops paying. That can be
stressful.
If you’re deciding whether or not to rent, be sure to check local laws and
regulations. Many jurisdictions have very strict rules regarding renting out
space in a residential property, and those rules change frequently. Make
sure you get the latest information.

Your neighbourhood has a lot of features that can help sell your home
faster. Unfortunately, buyers don’t usually notice those features just by
driving around. So, you need to make sure they get all the information they
need about your neighbourhood.
For example, say homes don’t go on the market often in your area. That’s
an indication that the quality of life in the neighbourhood is so good that no
one wants to leave! In real estate we measure the area’s “turnover rate”,
and it’s handy data to have when listing your home.
Another bit of data that buyers can’t simply see is the local crime rate. But,
most police departments keep those statistics. If your neighbourhood has a
low crime rate, that’s an obvious plus to sellers.
Demographic data can also be helpful when selling your property. If your
neighbourhood has a lot of families, for example, that’s going to be
appealing to buyers with kids.
Even local development plans can play a role in making your home more
attractive to buyers. If a new ramp to a major highway is in the works
nearby, getting to work is going to be easier. That’s a big benefit to
commuters.
Other types of data that can help sell your home include:
• Planned local construction.
• Proposals for neighbourhood improvements. (For example, a new
playground.)
• Rates at which local property values are increasing.
Any information that shows the advantages of living in your area is going to
be useful when selling.
By the way, this is the kind of information we put together to provide to
prospective buyers when selling your home. Contact us today for more info!!