If you haven't heard, the First Time Home Buyers Incentive (FTHBI) plan will be cancelled effective March 21st. This was a shared equity program with qualifying criteria that was so difficult to meet, that this program never really took off. Only 33% of the budget earmarked for the program was used and there were just 23% of the expected first time buyers who received funds. My point is that you can likely pass by any headlines around the removal of this program - it won't have any impact on buyers in your client list.
There is a lot of discussion around inflation and where it is headed in the coming months. Much of this is starting to feel like folks trying to fill space and provide content, in lieu of having something more interesting to talk about. We could talk about expectations in the US and how they will correlate to Canada - that inflation is a self-fulfilling prophecy - that shelter costs continue to be the biggest contributor to Canadian inflation numbers and that 400,000+ new permanent residents expected by year end will increase demand for goods, services and housing.
But I think we can keep this simple. Every indication is that inflation is headed in the right direction - that we will see rate reductions in 2024 - that the earliest BoC policy rate reduction is likely early summer - and that real estate will continue to be top of mind of all Canadians because it's part of our culture and the threat of rate increases is largely in the rear view mirror. Finally, that we are early in what should be a two year slide in rates - but that the rate premium on any mortgage rate under 3 years is silly at the moment, so 3 yr fixed rates, or variable with the right discount off Prime and the right risk tolerance, are the likely best approaches for those taking a new mortgage at present.
FYI - the next BoC rate announcement is April 10 and the current implied chance of 'no change' in rate for that meeting is 77% - with a year end 2024 policy rate 1% lower than it is now.
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