The big banks have cut their prime rates after RBC became the first to make a move. The bank had already reduced its mortgage rate but the prime rate cut will also make a difference to other loan products. It stopped short of passing on the full 0.25 per cent reduction that the Bank of Canada made to its lending rate last week and cut 0.15 per cent. While borrowers may be rejoicing at the lower costs of their loans, for savers it’s not such good news; some lenders have already trimmed back the interest paid on savings and investment accounts, by the full 0.25 per cent of course.
Condo sales cancelled as developer decides on rentals
Purchasers of condos in Toronto have found that the homes they were expecting have been cancelled as developers opt to build rental apartments instead. The Star reports that two condo projects have been switched from sales to rentals in the last few weeks leaving purchasers with no condos and little in terms of compensation. In one case, 181 buyers paid their deposits three years ago and have just been told that the sales have been cancelled. Under Ontario condo law purchasers are entitled to the return of deposits plus interest at the Bank of Canada base rate minus two per cent; with low interest rates that doesn’t amount to much. Experts say that this is a situation that buyers need to be aware of and advise that sales contracts must be read carefully. Read the full story.
2014 was a tough year for Ottawa’s commercial market
Commercial real estate in Ottawa struggled in 2014, according to a report from Colliers International. Oliver Tighe, director of valuation and advisory services, said: “The Ottawa commercial real estate market has had a tough year, as evidenced by a 16 per cent decrease in total transaction volume in 2014 compared to 2013 for all asset classe. The multi-family asset class is the only category that has remained positive through 2014, posting the highest number (42) of transactions, in comparison to all other assets that hovered in the low twenties range.” Colliers forecast that this year should see a substantial uptick in transaction value and volume, but says that owners with older properties may need to upgrade their buildings to stay competitive against new supply.
Large rise in new home sales in U.S.
December saw a double-figure rise in sales of new homes in the U.S., according to new data from the Department of Housing and Urban Development and the U.S. Census Bureau. The number of newly-built single-family homes was up by 11.6 per cent to a seasonally-adjusted annual rate of 481,000. The northeast corner of the U.S. saw the biggest hike in sales, with a rise of 53.6 per cent.