Much has been written in the business pages of late concerning interest rates and what they will be doing in the near future. The Bank of Canada has stated that they will not increase their “prime rate” before July. This does not mean that the rate will decrease, only that there will be no increases until then.

One of the key influences on the Bank of Canada’s rate decision is the value of the Canadian dollar. The Canadian dollar has been performing well, however, our dollar’s rise is predominantly a product of the US dollar’s weakness. Our currency is closely tied to the price of commodities, particularly oil. Case in point: the price of oil popped up to $80/barrel and our dollar jumped to $0.975 US. Oil dropped to ~ $75/barrel and our dollar dropped to $0.95 US.

The Bank of Canada is stuck in a tough spot. If they increase rates to try and slow the pace of recovery or inflation, our dollar will increase in value. As our dollar increases in value, the cost of our exports increases, making us less competitive on the international market. Money markets look for a safe place to “park” money in the fear that the US greenback will fall further, with bleak economic news and a prime interest rate that is virtually giving away money for free.

So what does all of this mean for your mortgage? If you are locked-in long-term (like 5 years), you can sleep at night. If you are looking for a new mortgage, a re-mortgage or a renewal, an important change happened recently. Variable mortgages were available until 6 months ago at “prime minus”, meaning that if you had prime minus a point, your rate was as low as 1.25% - obviously extremely cheap money. The banks recently changed this and now offer only “prime plus” on variable mortgages, resulting in higher rates and as much as a 2% swing.

So today, you might be looking at 3.25% on a variable rate, but with a little shopping or with our assistance you can secure 3.9% for 5 years and 4.1% for 6 years. Now, 4%+ sounds high against 1.25%, but not bad against 3.25%.

Naturally, the first step in refinancing is to take advantage of the best rates available. There are, however, other things that can be done after you have signed your mortgage papers to reduce your cost of borrowing. Our strongest advice to our clients is to take advantage of penalty-free prepayment options. The two most popular payment options are “anniversary payments” and “double-up payment” options. Anniversary payments allow you to pay down up to 15% of your original mortgage amount at any time, once per calendar year. A key feature of this option is that the payment goes directly against the principal owing on the mortgage, greatly reducing the future interest paid. Also, most mortgages allow you to double up your monthly or bi-weekly payments as well. This second payment is also applied entirely against the principal owing and helps to reduce future interest. The impact of using these pre-payment options is that your mortgage gets paid off faster and the amount of interest you save is huge. For example, it is very common for a family to shorten the length of their amortization from 25 to 15 years simply by making use of some or all of the pre-payment options available to them.

In closing, we are committed to giving you the very best advice for your individual situation. Should you require mortgage financing advice, it would be our pleasure to help. We frequently deal with all the major lenders, and we can direct you to the best product for your needs.

The 3,411 real estate transactions registered in November 2009 were enough to surpass, by 4 per cent, the record-breaking sales levels of November 2007.

All property categories registered an increase in sales in November 2009, and all categories managed to exceed the record-breaking sales levels of 2007. Condominiums led the way with a 12 per cent increase compared to November 2007. Plex sales also increased by 2 per cent compared to November 2007. Finally, single-family homes posted a 1 per cent increase compared to 2007.

“The market is very active. Now is a good time to sell a property, and it’s also a good time to buy a property as mortgage rates are still low and the inventory of homes for sale is quite extensive, with 21,197 properties on the market in the Montréal area,” said Mr. Michel Beauséjour, FCA, Chief Executive Officer of the Greater Montreal Real Estate Board.

» See the complete interview with M. Beausejour

One of the renovation costs that frequently comes up when moving is painting. Often our clients will plan to paint part or all of their new house before they move in. By the same token, sometimes sellers will want to paint a room or two before selling to help their home show at its best. Since painting comes up at some point in most real estate transactions, we thought it might be helpful to have Dave Beaupre, from “FinDécor Painting” give a little insight on how to estimate painting costs. Here is some expert advice from Dave the painter:

So you have bought a new house, and plan to do some painting... Perhaps you are looking to add your personal touch through changing colors and décor, or it could be that the house is looking a little dingy and needs some TLC. Whatever the reason, a great time to paint all or some of your new house is right when you get it. By painting before the move in, you avoid moving furniture around, make cleaning up easy, and help to keep the cost low.

Painting before you move is a great idea, and there are two main reasons why you may wish to hire a professional painter to do the work for you. The first is simple - you may not have the time or the know-how to paint on your own. The second is that the “window of opportunity” between houses is often short, and a professional painting crew can get the job done quickly and cleanly to suit your needs.

Naturally you are wondering... how much will painting add to the cost of the move? Well, here is a quick and easy way to approximate the cost:

Typically this sort of costing is done using a cost per square foot of surface area. The idea is to find your painting surface in square feet and multiply by the cost. Here are a couple of examples:

Example A:

You have just bought a 1600 square foot “cottage” and would like to paint the whole interior (a 2-storey house with 800 square feet per floor). The calculation would be:

2 (floors) x 800 (square feet/floor) x 3.5 (to obtain the wall & ceiling square footage) x $0.60 (the average cost per square foot) = $3,360 to paint the house.

Example B:

You would like to paint a single bedroom in your new house. (10’ X 15’) The cost would be:

10’ x 15’ gives and area of 150 square feet. 150sf x 3.5(to obtain the wall & ceiling square footage) x $0.60 (the average cost per square foot) = $315 to paint the room.

Tip:

The 3.5x factor is the key to estimating the cost. However, if the ceiling paint is in good condition and does not need to be painted, the 3.5x factor can be replaced with 2.5x and you’ll end up with the cost for all the walls but not the ceilings.

Of course, these are guidelines, but the numbers are accurate enough that you can rely on them. These valuations provide a rough guide and typically include good quality (Benjamin Moore) paints. If you are planning to use eco-friendly or specialized high-end paints, this can add as much as 15 to 20 percent. Similarly, this is for the average paint job. If the job includes some more complex tasks (like wainscoting throughout) or is not standard (like cathedral ceilings), you might need to add some safety cushion or call an expert to get a more concrete figure.

Finally, remember to book your painter in advance. Normally 2 to 4 weeks is fine but 4 to 8 weeks is recommended in the busier summer season. Once the keys are yours, the right way to start is to do a walk through with your painter to confirm the price and set expectations. This is an important step in succeeding with your paint project and the right time to communicate what is type of detail and quality are expected.

I hope the above “primer” will get your paint project started on the right foot.

Yours truly,

Dave-The-Painter
FinDécor Painting Inc.
514-966-0966

» For more paint related topics, please visit FinDecor's website and blog at: www.findecor.ca

We are proud to announce our support of the “Road II Rock Racing” cycling team. Deakin Realty has signed on as a 3 year supporter of the team made up of 17 elite cyclists who compete throughout Quebec and Ontario. The team posted some impressive results this season and is looking forward to continued success in 2010.

» Click here to visit the team's website

Sales in the Montréal Metropolitan Area increased by 5 per cent in September 2009 compared to September 2008, according to the Greater Montréal Real Estate Board's MLS ® statistics. Property prices also continued to climb, with a 7 per cent increase in median price for single-family homes. This improvement in market conditions can be attributed to continued low interest rates and a gradual recovery in the local and regional economy.

"September 2009 was the best September on record for the Montréal market. We're seeing a balanced market now, so both buyers and sellers are benefiting," said Michel Beauséjour, Chief Executive Officer of the GMREB.

In terms of sales, single-family homes led the way with an 8 per cent increase in September 2009 compared to the same month last year, while condominium and plex sales increased by 1 and 3 per cent, respectively.

As for prices, the median price of single-family homes and condominiums increased by 7 per cent in September 2009 compared to September 2008. Plexes also stood their ground, with a 5 per cent increase in median price.

Montréal's real estate prices have continued to increase slowly but steadily, once again confirming that Montreal is not only a desirable place to live, but also a solid investment so far as real estate is concerned.

Please do not hesitate to contact us should you require information on your local market conditions, and watch our blog for market updates and forecasts in the coming months.