Victorians spending more than half of their income on home ownership costs

Times Colonist- The cost of owning a single-family bungalow in Greater Victoria climbed for the fifth consecutive quarter, says a new housing affordability report from the Royal Bank of Canada.

According to RBC Economics, ownership costs — the proportion of median pre-tax household income required to service the cost of mortgage payments, property taxes and utilities — for a single-family bungalow in this city in the second quarter hit 50.5 per cent of household income. That was considerably above the national average of 42.9 per cent…

Victorians spending more than half of their income on home ownership costs

Wealth effect is anything but

Ottawa Citizen- There is something about our stock portfolios and homes being worth more that makes us want to spend.

“It’s called the wealth effect. If you feel you have more, you are more willing to spend more,” says David Onyett-Jeffries, an economist with Royal Bank of Canada.

“When people see their house value increase, they are more willing to spend because there is less requirement to save. They view these assets as being marketable and gaining value.”

Statistics Canada said this week that household net worth increased by 1.3% in the first quarter to $6-trillion — a fourth consecutive quarter of improving wealth. Household net worth has recovered 96% of what was lost during the recession…

Wealth effect is anything but

Debt, seniors don’t mix

Financial Post- If your finances are so fragile that you must borrow to stay afloat in old age, you have no business retiring. Better to keep working until you’re debt-free.

This newspaper devotes much newsprint to investing and the name of the game is to be on the receiving end of dividend flow and interest payments, not the one paying out interest. If the latter, you’re vulnerable — to rises in interest rates, layoffs, market crashes or unforeseen emergencies. Those still working have the flexibility to respond to such changes. Once you’re a retiree dependent on a fixed income you are, as the term suggests, in a fix.

Lee Anne Davies, head of Royal Bank of Canada’s retirement strategies, is on record saying that carrying debt in retirement is "not necessarily a bad thing." She argues modern families are more complex than the stable two-parent families Boomers grew up with. Separation and divorce, step-children, his-and-her careers all contribute to the financial stress. Add in greater longevity and it’s clear not all couples will go the distance together in old age.

There may be no other choice for some in this situation, but most planners agree carrying debt should be a last resort…

Debt, seniors don’t mix

Royal Bank hikes mortgage rates again

Financial Post- Royal Bank of Canada is leading the charge to higher mortgage rates, boosting the cost to new homebuyers for the third time in less than a month.

The country’s biggest bank said Monday it is lifting the rate on most mortgages by 15 basis points.

After hikes of 60 basis points and 25 basis points respectively, Monday’s hike brings the rate on Royal’s five-year closed fixed-rate mortgage to 6.25%.

When Royal hiked rates in late March and earlier this month, the other big banks followed suit soon after.

The banks say they are raising mortgage rates because their own cost of funding is going up ahead of expected rate increases from the Bank of Canada and U.S. Federal Reserve this summer…

Royal Bank hikes mortgage rates again

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