After a tumultuous few years precipitated by the oil sector’s plummet, Alberta appears to have risen from the grave with a housing sector unhampered by issues plaguing other major cities.
Housing mobility in Calgary and Edmonton is not cumbered by unaffordability like it is in Vancouver and Toronto, and that will remain unchanged this year, even with B-20 in effect.
“Calgary and Edmonton housing prices haven’t jumped like they have in Toronto and Vancouver,” said Collin Bruce, a mortgage broker and franchise owner of DLC
Mortgage Mentors. “Affordability is a lot better here. Even at 20% down, we’re not finding many clients are affected by B-20. We don’t see too many people buying to their max.”
It could, however, become troublesome under certain circumstances.
“But with refinances, that may be something—for people carrying unsecured debt, refinancing under B-20 could be a problem.”
Bruce says that since the changes to bulk insurance, insured mortgage rates are a lot lower than they are at some charter banks, adding it appears the latter are keeping rates close to insured conventional rates.
He has also noticed monolines faring quite well, even under B-20—a decidedly different outcome than the one many predicted when the regulatory changes were announced a few months ago.
and First National, two big monolines, have done a great job of becoming competitive on the conventional side too,” said Bruce. “After the bulk insurance changes last year, it seems like the insured mortgage rates we’re getting are a lot lower at the monolines than most of the charter banks. It seems like the charters are keeping their rates closer to what their conventional rates are, where the monolines have a lot bigger difference between insured and conventional, and I think that’s good for the broker market on insured piles this year.”
Bank’s and TD Bank’s insured rate is 3.14% for five years, and ATB is 3.29% over the same span. MCAP and First National, however, offer rates below 3%.
For Bruce’s team, whose clientele is largely comprised of insured mortgage holders, 2018 is shaping up to be a strong year. They deal with a lot of first-time buyers, as well as people moving into their second homes.
Oil prices are up once again in Alberta, and employment is strong. Provided that continues, Bruce believes the worst is behind Alberta.
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