How to get less stressed about mortgage stress

If you suddenly couldn’t work, what’s the one expense you’d regret giving up the most? The roof over your head would have to be high on the list, right?

Data from realestate.com.au shows that 58% of those with a home loan are more concerned about the cost of their mortgage than any other expense, increasing to 63% among young families.

An even larger percentage placed smaller ongoing costs, such as petrol (72%) and electricity (77%), over other chief money concerns.

But while most of us can relate to the frustrations of the rise and fall of gas prices and the fluctuating nature of our energy bills, mortgage stress can be a little more serious, especially when you have your own family unit depending on you.

Defined by the Australian Bureau of Statistics as the result of spending more than 30% of your household income on mortgage repayments, mortgage stress can become exacerbated by illness or job loss.

Home security affects the safety and happiness of those we love the most. So if we’re worried about the cost of our mortgage – and how the hell to pay it off should the worst happen – what steps can be taken to ease the mind?

Life and income protection insurance

A recent survey by life insurance company NobleOak found that buying a home and taking out a mortgage were the biggest life events to prompt taking out life or income protection insurance. Having a baby on the way spurred a further 38% into action.

Income Protection provides you with a monthly income to replace your salary if you’re unable to work due to serious illness or injury. Once your waiting period has elapsed, it will pay a set amount each month for the duration of the benefit period selected. You can insure for up to 75% of your pre-tax income, explains NobleOak CEO Anthony Brown.

“Having income protection insurance can help ensure your family will not be left with a major financial burden if you’re left without an income if you were to become sick or incapacitated and unable to work. It can be used to pay for monthly mortgage payments, and to also cover things like household expenses and children’s education essentials.”

BCREA Housing Market Update Q1 BC Housing Forecast Update (Feb 2012)

Hi All,

The BC Real Estate Association has now published their latest report on the BC Real Estate Market and also gives their views on the latest Forecasts for 2012 & 2013.



Kind Regards
Trish Cenci
Tel 250 864 1707
Email trishcenci@shaw.ca

BCREA Reports Home Sales Rise Outside Lower Mainland

Hi All,

Thought you would like to see that there is better news from BCREA today on housing sales for January 2012.

Vancouver, BC – February 15, 2012. The British Columbia Real Estate Association (BCREA) reports that the dollar volume of homes sold through Multiple Listing Service® (MLS®) in BC dipped 7.6 per cent to $2.1 billion in January compared to the same month last year. A total of 3,976 homes traded hands on the MLS® over the same period, down 3.9 per cent. The average MLS® residential price was 3.8 per cent lower at $527,219 compared to January 2011.

“Increased market activity outside the Lower Mainland in January was offset by fewer sales in Vancouver and the Fraser Valley,” said Cameron Muir, BCREA Chief Economist. MLS® Residential sales rose 7 per cent to 1,620 units outside the Lower Mainland, while declining 10 per cent to 2,356 units in Vancouver and the Fraser Valley.

“While provincial sales activity was down in January from year ago levels, consumer demand has posted modest improvement since last fall, driven by low mortgage interest rates and gradually improving economic conditions,” added Muir.

Kind Regards 

Trish Cenci 

Tel 250 864 1707 

Email trishcenci@shaw.ca

Better News for Kelowna Real Estate in 2012 Q1 Housing Market Forecast from BCREA

Hi All,

To keep you up to date with the  latest BC Real Estate Forecast I have attached BCREA's report issued today.

It offers better news for Real Estate in the Central Okanagan, with higher sales and a modest increase in average MLS ® Price forecast for the next 2 years.

Average Performance for Housing Market in 2012
BCREA 2012 First Quarter Housing Forecast Update

Vancouver, BC – January 27, 2012. The British Columbia Real Estate Association (BCREA) released its 2012 First Quarter Housing Forecast Update today.

“Modest economic growth at home and abroad is expected to limit growth in consumer demand both this year and in 2013,” said Cameron Muir, BCREA Chief Economist.

BC Multiple Listing Service® (MLS®) residential sales are forecast to increase 2.1 per cent from 76,817 units in 2011 to 78,400 units this year, increasing a further 2.7 per cent to 80,500 units in 2013. The 15-year average is 79,000 unit sales. A record 106,310 MLS® residential sales were recorded in 2005.  

"While European sovereign debt concerns and a sluggish US economy will continue to impact consumer confidence, strong demand in the bond market is expected to keep mortgage interest rates at or near record lows for most of 2012,” added Muir.

Home prices in most BC markets are forecast to experience little change over the next 24 months as the supply of homes for sale more closely matches consumer demand. The average MLS® residential price in the province is forecast to edge down 2.2 per cent to $548,500 this year and remain relatively unchanged in 2013, albeit increasing 0.8 per cent to $553,000.

To Read the full report please view http://www.bcrea.bc.ca/docs/economics-forecasts-and-presentations/housingforecast_.pdf

Kind Regards
Trish Cenci
Tel 250 864 1707
Email trishcenci@shaw.ca

Kelowna Real Estate Forecast for 2012 - clues in the latest TD Bank Economic forecast?

Hi All,

For those of you who read my blog regularly, you will know that I am always trying to make sense of the economic headlines and relate them to the Kelowna Real Estate market.

I have just been reading the TD Bank's latest quarterly Economic Report. They are predicting that the European Financial crisis, is going to continue to have an effect on the Global Economy and will in turn have an impact on our own economic growth.

Highlights of the TD report 

•  Canadian economic momentum over the second half of 2011 has been better than expected, led by a rebound in exports. Economic growth is projected to be 2.4% for the year as a whole. 

• In 2012, an escalation of the European financial crisis and a deepening recession in the region will exert a significant drag on the global economy.  Canada will be negatively impacted through weaker commodity prices, confidence and export growth. Labour markets will also soften as a result. 

• Canadian economic activity is expected to improve in late 2012 and into 2013.  Still, high household and government debt, rising interest rates and slowing housing activity will limit the speed of Canadian real GDP growth. 

• Overall, since our last forecast in September, TD Economics has shaved 0.2 and 0.4 percentage points off its Canadian growth forecast for 2012 and 2013 respectively. We now expect real GDP growth of 1.7% in 2012 and 2.2% in 2013.  The limited change to the 2012 annual growth reflects the momentum heading into next year. 

To read the full report go to http://www.td.com/document/PDF/economics/qef/qefdec11_can.pdf

So how does that affect Kelowna Real Estate?

Slow economic growth in B.C. and low employment gains, particularly in full-time employment, in the Okanagan Valley, will impact consumer confidence.

As we have seen previously, this is bound to have effect in the numbers of people committing to make real estate purchases - particularly in the 'move up', recreational and investment area of the market.

Even though we are continuing to see low interest rates in the forecast, if consumers don't feel confident about their job security and incomes, they will be less likely to be spending.

I therefore continue to offer the view that house prices will remain flat during the first half of next year.

Economic forecasters are predicting things will improve towards the end of next year, and as they do, that is the time we should start to see modest home price rises in this area, providing we don't see a large influx of listings, which will keep us heavily in 'buyers market' territory.

As I said in my report at the beginning of this month, we have some really good things happening in the Valley - the Hospital expansion, growth in UBCO and Kelowna International Airport together with the retail expansion in West Kelowna. So despite all the doom and gloom, we do have reason for some optimism in this area.

With the World Economy being in such a fragile state, however, my predictions are written in sand, not in stone!!

Kind Regards

Trish Cenci

Tel 250 864 1707