Paul’s Quarterly Newsletter – April 2024

Let’s talk about housing!

Why should you consider buying a home now?

Let's face it, interest rates are still high. Inflation isn't under control, yet. The economy appears to be getting weaker. Jobs growth has been declining.

Here's a couple points to maybe help you reconsider:

1. The Bank of Canada (BOC) has held the prime rate steady for the last several meetings. They've made several hints that they will eventually start to lower the rates in 2024. The prime rate actually doesn't have a strong correlation with fixed rate mortgages. Fixed rate mortgages are tied to bond rates yields - which have been dropping since autumn of last year. If you have a variable rate mortgage - you are waiting for the prime rate to drop.
2. There are a lot of buyers currently sitting on the sidelines waiting to jump back in. Added to that are strong immigration numbers. This creates a large pool of buyers. Once interest rates start to decline, these buyers will act. This will result in pressure pushing the price higher on homes.
3. There is still limited inventory available (at least in our area). As of April 9th, there are only 347 homes for sale in Barrie (across all classes). Only 208 are detached homes.
4. Affordability. We know interest rates will begin to decline. Consider a shorter-term mortgage so you can ride the rates down. Remember, with every mortgage payment you make - you are building equity in your home. That does not happen with rent.

Curious about your home’s value? Want to talk about strategies? Effective ways to build a down payment? What if you have a house to sell? What are the first steps? We can chat, and I'll outline every step of the way. Buying or selling should not be stressful. I'll do my best to make sure it isn't!

First Home Savings Account (FHSA)

This is a new program that the federal government introduced recently.  Many financial institutions have just released their versions of this program. As the name implies, it is a savings vehicle for First-time Home buyers.  The “Plan” works similar to RRSPs in the sense that you may be eligible for tax savings on your contributions.  Most Canadians know that you can withdraw RRSPs if you are a first-time buyer.  However, your RRSP needs to be repaid – and you don’t receive tax deductions on the repayments.  With a FHSA, you can receive a tax deduction on the contribution.  When you are ready to purchase your first home, you can withdraw the funds on a tax-free basis.  The bonus? You do not need to pay back the funds.  So, new contributions can go into an RRSP and receive new tax deductions.  If you know anyone working on buying their first home – reach out to me and I can provide you with more information on how the plan works.

Insurance Reviews

We often sit down regularly to review our investment portfolios, but when was the last time you reviewed your insurance portfolio?  Did you buy term insurance years ago?  Has it renewed?  Do you still require insurance?  Maybe not as much, or maybe more?

Our lives change and so do our insurance needs.  Sometimes even rates and premiums change. For this reason alone, reviewing your current policies can potentially save you some money.

Feel free to reach out to me to chat about your insurance and financial needs.  We can arrange a quick phone call, a Zoom meeting, or an in-person meeting and have a cup of coffee. I’m always willing to review your information, and if there are opportunities to improve your portfolio, I can make suggestions, or let you know you’re on the right path.

My contact details are below!

Enjoy the rest of the spring! If you have questions about the housing markets or your personal finances, I’m here to help!