December 2012 Miscellaneous Economic Fundamentals

Ally

Research Assistant
Registered
Mar 24, 2009
16,745
70
48
Langley
#2
The mortgage gamble





The difference between fixed and variable rate mortgages has never been so small, yet the debate rages on over which is the better buy. The Globe and Mail`s Rob Carrick recently wrote an article in defense of variable mortgages, saying that it`s still the cheaper option. Technically he`s right. You can get a five-year fixed rate for around 3% whereas you can find a variable mortgage for about 2.6%. What he fails to mention is that you`re taking on a big risk for a very small reward.




In 2010, when it seemed like another economic collapse was imminent, the spread between variable and fixed rate mortgages was about 170 basis points. Today`s it`s closer to 30. In fact, a friend of mine recently got a five-year fixed rate mortgage for 2.89%, which is a mere 29 basis points above a variable rate. Such deals are easy to find across the country.





Read the full article here.
 

Ally

Research Assistant
Registered
Mar 24, 2009
16,745
70
48
Langley
#3
Under-insured house can spell ruin






You`ve purchased the coveted house, you`ve converted the old cellar into a basement suite and maybe even gone the extra mile with radiant-heat floors in the bathroom and a gas fireplace in the living room.





Read the full article here.
 

Ally

Research Assistant
Registered
Mar 24, 2009
16,745
70
48
Langley
#4
Real estate risks that'll topple you




The most successful investors, in any sector, are those that refrain from wearing rose-coloured glasses, writes investing veteran Paul Kondakos. Instead they ask the hard questions and look for the weakness in their prospective investment in order to make fully informed decisions.




So, here, according to Kondakos, are the key risks investors in multi-unit residential properties have to be aware of: (1) Economic Risk, (2) Political Risk and (3) Property Specific Risk.




And here are the strategies he proposes to mitigate those risk, where, of course, possible.







Generally speaking, Canadians are in an extremely enviable position economically. Our real estate market has not only survived, but thrived, while other markets have collapsed around us. Even though foreign dollars are investing in Canadian real estate as a safe haven, investing can still be a risky proposition.





Read the full article here.
 

Ally

Research Assistant
Registered
Mar 24, 2009
16,745
70
48
Langley
#5
Condo ownership: 6 questions to ask before buying





According to Nathalie Clement, director of Via Capitale du Mont-Royal, here are 6 important questions to ask before choosing the right co-ownership property for you:






1). Is the property `divided` or `undivided`?





A condominium, or condo, is considered to be a divided property, meaning that each unit is independent of the others and has its own cadastral number.



Read the full article here.