Real Estate Blog for Buyers & Sellers
Your Lower Mainland and BC REALTOR® for home, investment & life!
Michele Has News On Interest rates, Poutine and More
November 2, 2022 | Posted by: Michele Cummins
Warning! This is an automated transcription of the show which means there will be spelling mistakes throughout, Including Michele's name!
Curtis Pope:
Saturday morning that means it was time for the company's Real Estate Group show with local Rockstar realtor Michelle Cummings and myself Curtis Pope. Good morning, Michelle. Morning, Curtis. And how are you doing this fine day now that you're back from Quebec?
Michele Cummins - PREC:
Pretty good. Pretty good. Actually, I really loved Quebec City. And we had such a great show last week with the three guests that we had on and I've never been to Quebec City and I really really loved it. And I had Quebec poutine
Curtis Pope:
you did you sent me photos and my daughter was so jealous because poutine is a food group to Cassidy I kid you know, when she was in elementary school one time like grade two, they asked her her favorite fruit and she said gravy. And the teacher went no, Cassidy that's that's not a fruit because you're right. It's a vegetable. What was her comment? The teacher thought it was so funny. I'm like, No, it's a food group to her. That's so cute. Yeah. And she'll tell you where the best poutine czar she's like a connoisseur. I should have asked her where the best place was. Well, she hasn't been to Quebec and she's very jealous. And she says next time she's coming in your carry on.
Michele Cummins - PREC:
Okay, next time I'll bring a carry on to make sure she can go
Curtis Pope:
in stuffer. And she'll go with you. So Halloween
Michele Cummins - PREC:
is this
Curtis Pope:
weekend? It's All Hallows Eve. Yes,
Michele Cummins - PREC:
I see you're dressed up in your jersey,
Curtis Pope:
I got my conductors do not take that off now because the Canucks were not playing so well. And then I wore my jersey because I broke this out go and maybe on part of the problem because I haven't been wearing my jersey while I have four or five of these but this particular jersey, my Baray jersey, I put it on and they won Thursday night. And I feel it's because I was wearing this jersey, so I'm gonna wear it every day. It's because of you. It I've been the problem. The reason that Canucks not but winning is all on me.
Michele Cummins - PREC:
On Monday, on actual Halloween day, I'm going to we're going to have our monthly luncheon with our group and I'm going to dress up as a raincoat as a raincoat. Yeah, because we're gonna do a corn maze. For the first time I've ever done a corn maze. We're gonna have lunch do a corn maze and it's gonna be raining so why not dress up like a raincoat?
Curtis Pope:
A rain on Halloween? What are the odds? You know, I look back to my childhood and how many years I had to wear a winter coat overtop of my Halloween costume was pretty much every year. You were probably a little better off in Southern California.
Michele Cummins - PREC:
Yes, I'll wow the sacks of candy I would come home with it was unbelievable. But in Montana, the first night of snow in Kalispell and Lakeside area where I lived for a few years. Halloween night was always the first night of snow I don't know why but the years I lived there it was always Halloween night it snowed.
Curtis Pope:
Makes sense. So once a lot more like Canada, I mean here it usually rains, or it's cold. But you know whenever I think of California and Halloween, I just think like 80 I think the weather's like that. And there's some little alien in a bedsheet walked around getting Reese's Pieces. Yeah,
Michele Cummins - PREC:
a few aliens. So okay, so have you ever done corn maze? Um, yes. Okay, um, because I'm trying to decide I was looking on the reviews Google man's farm or man farms or fantasy farms in Chilliwack, or the Green Acres. Chilliwack corn maze. i Yeah, I'm like, I don't know which one
Curtis Pope:
I I have no idea. You know, I did one many years ago. remember which one it was but um, you know, the the good thing about a corn maze is if you really get stuck, you can just push your way through. I mean, they don't like that. Because it kind of wrecks the maze. But
Michele Cummins - PREC:
well, you know what, Monday is the last day of all the corn mazes so it's probably going to be okay if
Curtis Pope:
there you go. So you should be fine no matter where you go. And then maybe next year on your palatial estate. You can have Richard planted corn maze for you. Oh,
Michele Cummins - PREC:
that would be fun. We are surrounded by corn farms. actually interesting. I know nobody there does that. But that's something to think about. Maybe I'll get my neighbors to make amaze next year.
Curtis Pope:
I can do it on the hill. Yeah, maybe not maze on the hill. Maybe too steep.
Michele Cummins - PREC:
So if you or anybody wants to trick or treat on Monday early, maybe with your kids like
Curtis Pope:
I'm sure I'm sure but I'm not that short. I can't quite pull it off.
Michele Cummins - PREC:
We are giving away candy at our office in Riyadh three Max admission downtown the one way from three to five actually all the kind of downtown stores will most likely most of them be given away. treats that day. So Monday from three to five. Come on down.
Curtis Pope:
Very cool.
Michele Cummins - PREC:
So last week, was a lot of fun this week.
Curtis Pope:
You know that was a lot of fun because I haven't seen pictures but I'm sure there was wine glasses going on while you were talking to me even though while yours three hour time difference, I guess but still. Okay, there was okay. I will admit you guys were having way too much fun. I had a glass of red wine and I know that it was a conference and I know what conferences are like I've been to a couple of myself at least from what I can remember. I've been to a couple myself
Michele Cummins - PREC:
from years ago. Yes, I know this is the first one we were scheduled to do it the year that COVID happened, and then it's been canceled. And so this is the first one back. So I was so happy seeing all my call like most of my colleagues, a lot of the call my colleagues we haven't seen in years from across Canada, even some came from out of country. It was really nice was the Canadian REMAX conference. And we had CIBC chief economist Benjamin Tal, he was there and he did a whole presentation. And actually, I have never every year I hear economist, I go on my your every year, right. But there, it's so dry. And it's you know, you yawn but you're like a half to hear this information is important. But he was so entertaining Curtis, it was so fun. He is the funniest, down to earth yet very, you know, serious, he knows his stuff, right? But he had this humor throughout his whole presentation that really kept you kind of laughing and really interested. I got like, he's, he's the best. So we're going to talk about a lot of some of the reports or the future outlook that he has. All right. And so that's on the show today. And on my website on my blog, I'm actually uploading today, the his presentation, his actual slides that he went through. So that's going to be on my blog if you want to follow up and have a look at those. But yeah, so that's what we're going to do today. And what he says is he shared the Canadians will relocate to achieve more affordable housing, rent inflation is starting to rise and Canada's housing crisis is being intensified by labor shortages and rising input costs so that we'll take a deep dive into it, though later. But first news and real estate reminders.
Curtis Pope:
So I was you said that like we're breaking into like breaking news. But can you put the hand up and do the whole breaking news, breaking news? Come on, you're an actress. Go into full actor mode here and give us your best newscaster? Oh,
Michele Cummins - PREC:
okay, so I'm sure proud of my REMAX family. As I mentioned, with this conference that we were, I was at, we all gathered together. And literally every time we gather together, we raise money for the Children's Miracle Network. Whether it's international, it's throughout Canada, of course, it's one and I out of every transaction that I do give to the BC Children's Miracle Network, so very local. But we raised over $160,000 for Children's Miracle Network at the conference. And it's hospitals for across Canada, of course, through the fundraisers at the event. So we had like 5050 We had an auction. And I'm really, really excited because I now am a motorcycle riders, you know, and Bruce Johnson, he is a realtor who started about four or five. No, yeah, about five years ago, he started this ride for the children ride for miracles, and he rides his motorcycle across, usually a province at a time and he does it every couple of years. And he stops it children's hospitals and he stops at the REMAX offices and to raise money for the children. So now that I'm a motorcycle writer, not only am I going to be able to donate financially, but now I can be part of helping raise money and and riding with him. So I'm excited to do that next time he does that. And because the children are our future and changing kids health and changing their lives is changes our future for the better. So I love supporting Children's Miracle partner, every single listing the mind you'll always see a topper on top of it saying miracle home so that everyone knows if you buy one of my listings, you are supporting Children's Miracle Network and by course listing with me or buying with me, you were also supporting because every transaction of mine, I love to give to them. So that's the miracle homes. So I wanted to talk about now some news. Okay, so the Bank of Canada this last week on the 26th of course raised No surprise there raise the interest rates by 50 basis points. So not quite the three quarter percent raise we thought they were going to do but they did do by 50 basis points. So this means probably another raise in December January when they meet again. Home prices fell for the first time in September. For the first time for the sixth consecutive month as well since our peak in earlier this year. It has fallen in September. So next week, we should have our stat show and we'll see what October has brought us about on average 3.4% in the Fraser Valley for residential homes is what it went down in September. So it is a great time to be a buyer even though the interest rates are going up. It really is a great time to be a seller too if you're buying in the same market. So always keep in mind timing in your life and timing the market and you make it work for you and You'll always benefit with investing in real estate. So BC has kept the rate on rent increases. This is the next news for 2023. We're looking at a total increase that you can raise your rent if your landlord by 2%. So for tenants out there, you know you're safe, only 2% That could be raised. And landlords, there you have it, you can't raise it more than 2% for 2023. Okay, another set of news. Now, we talked about this a couple shows ago, but wanted to remind because it's just around the corner, there's two major changes the government is implementing starting January 1. And that is one being the cooling off period, where residential buyers will have three business days after an accepted offer to rescind their decision. So not as bad as we thought it was going to be. We thought it was going to be a lot more days than that. And this is for residential purchases only not commercial. And so there you have it, it's after it's accepted. It's three business days, not just regular days. So for me in real estate, I mean realtors, we work seven days a week, so maybe it does include Saturday and Sundays. business days for me. Anyways, the second major change is the that foreign buyers are not able to purchase, again, residential real estate for two years. So we thought maybe it might be three years. It's two years. And that's for residential purchases for foreign buyers. So it looks like they'll still be able to purchase commercial. So that's good. Now I know we probably have to go on our break. So when we come back, we'll hear all the news about CIBC chief economist Benjamin tell him
Curtis Pope:
all right, well if people want more information about you maybe want to see your listings and things like that, where can they go? Michelle
Michele Cummins - PREC:
cummings.ca
Curtis Pope:
We're back with more right after this. And here we are. We're back with segment number two of the Cummins Real Estate Group show with Shell Cummins and myself Curtis Pope. You're back from Quebec. You've had the poutine you saw a bunch people you haven't seen for years. And you just got a smile from ear to ear today.
Michele Cummins - PREC:
Also had the Montreal smoke steak sandwich.
Curtis Pope:
Oh yes that you have to have that in Montreal in Montreal? Yes. It was bad. Very nice. I got a cousin in Montreal. I should have had you know meet up with her. You shut up. Now. You don't want to talk to my cousin? Why not? Cuz Stacey. She doesn't listen, I won't have to worry about her. You know my cousin Stacy is a year older than me and so you know growing up we were we're pretty close and picked on each other a lot prouder over there. A man Oh, of course. Yes. Of course. Yes. Love brought love brought her to
Michele Cummins - PREC:
love. Now it's not Valentine's weekend. It's
Curtis Pope:
that love didn't last and then she met another guy who's really great. So
Michele Cummins - PREC:
does she speak French fluently? Oh,
Curtis Pope:
she didn't for the first while but she's just through osmosis being around it. She speaks it quite well now. But in Montreal, you don't really have to have it right but
Michele Cummins - PREC:
they have Did you know they have knots and knots far like, like, rides? No Montreal.
Curtis Pope:
I did not know that.
Michele Cummins - PREC:
Oh my gosh, I didn't know either until I was on my way to Quebec City. And then we got to go back that was with Christine. Colleague out of my office and we're like we're doing that when we come back. So on our way back we did it we didn't know was not at the time. We just thought we saw this ferris wheel. We saw a wood framed ride and we thought how fun and then we kept hearing it's a whole not it's a whole amusement park.
Curtis Pope:
That's like you know, for Southern California. Y'all took you right back home.
Michele Cummins - PREC:
Oh, so fun. She didn't want to quite go on all the rides. I wanted to go on every ride possible. I wanted to scare the heck out of myself. And I did
Curtis Pope:
because you had Knott's Berry Farm you had Disney Land. You had universal all there for it? Yeah.
Michele Cummins - PREC:
Oh, I love it all. Yeah, we went we went a lot. And then I had a family member who worked at Disneyland so we got some good deals.
Curtis Pope:
Oh, very nice. Yeah, it was.
Michele Cummins - PREC:
It was great. Now, we are going to talk about what's CIBC chief economist Benjamin Tao had to say and what He has delivered with his outlook and I'm not going to be quite as funny as him.
Curtis Pope:
Why not? Again? You got this performer in you. You're an actress. You're from California. Your dad worked with Elvis. Come on. What more? Yeah, come on. You know what one day I want you to do an entire show in various accents. We'll do that. You know, but
Michele Cummins - PREC:
I can't do accents. Ah, every time I try it comes out Southern and then when I tried to do a southern accent, it doesn't come out.
Curtis Pope:
Okay, well, have you tried to be English and you can be southern? I think it'd be great. How are you all you can be great. Oh, we have our Southern belle. Michelle Cummings doing the real estate show.
Michele Cummins - PREC:
Okay, next time. We'll try that. I gotta rehearse. All right. So so economist Benjamin towel. So he believes that the overnight target rate and believe me, he is right on the money. I mean, for years. That's why he's CIBC is Chief Economist, but he believes will remain at the 3.25% or near there for the duration of 2023. And further, he says he doesn't see that it can go much higher into 2023. However, they do not expect the bank Canada to begin easing rates until the earlier part of 2024 is what he says. So the Bank of Canada would risk this one he says of course, overshooting and interest rates, if it looks it at its overnight rate if he if they do above 4%, according to him, so. So it was really interesting how he said it and what he went on to so I'm going to read through this but definitely go on my website and check out the blog for the actually the slides and all his graphs. You know how I'm a graph person
Curtis Pope:
and you like your stats and graphs and all that fun stuff?
Michele Cummins - PREC:
I do. And it's full, right all out there to check it out. Because it's only privy to REMAX agents who were there Right. So wanted to share that with everyone though. So although he indicated that improving supply chain conditions are a positive sign for Canada's inflation outlook, and delivering a keynote address he just did at the National Mortgage conference hosted in Vancouver by mortgage professionals Canada, which is MPC, so tal said that the central bank could avert a deep recession by ending its rate hike trajectory after one or two further jumps potentially by 50 basis points which just happened because this report came out right before this last week interest rate hike, followed by another 25 point increase. So we'll see if maybe that's what they do in December, January. So he says I believe that if the bank stops at 3.5 or 3.75%, even 4% you can have this recession that is happening now without major damage and therefore I will not call it a recession. He said, however, you go to 4.5% or 4.8%, as many people expect, you cause a significant recession with the unemployment rate rising at two or 3%, which will be recessionary. That will be people believe what you need to do in order to take inflation to 2%. I disagree. He says So around 50% of the recent decline in inflation has been caused by easing supply chain pressures, he said, meaning that his message to the Bank of Canada is to stop at 3.5% or 3.7% and call it a day see what happens. You don't have to overshoot. He says at the height of the COVID 19 pandemic supply chain disruptions were responsible for about 90% of inflation in Canada. Although that figure is declining at a substantial rate and now sits around 55%. That trend means softer inflation of goods is likely as a result, something that would be an all around positive development for the economy, tal said so once the central bank rate reaches its peak, it's unlikely to start falling in 2023. According to Tao, although he forecasts that cuts the following year would eventually bring it to about 2.75% as a new normal rate. He added that the five year rate is likely to start going down in 2023 ahead of the Bank of Canada rate, but also cautioned that there's no guarantee the central bank will hit pause on its rate hiking cycle if inflation remains a persistent challenge. When you're talking about inflation with clients, it's important to understand and that he's talking to the mortgage brokers and realtors that if you give the Bank of Canada two options, one is recessions. The order is inflation rising, they will take a recession any day he said and he explained more about it at the conference. They are telling you that the Bank of England is basically telling you we are aiming at a recession. We are cheering for a recession. The Bank of Canada is not using this kind of language but definitely thinking In this way, the same goes for the Fed. That's because the bank has spent four decades establishing a reputation as inflation fighters, according to tau, something, it wouldn't be prepared to sacrifice to stave off the possibility of an economic recession. The bank does not care about inflation today, but has its sights set on inflation expectations, or what Canadians expect price growth to be in the near future towel set. They have to show us that they mean business. That's why they raised interest rates by 100 basis points. That's why later this month, which just happened, they will raise by another 50 basis points, which is exactly what they did. They want to make sure that you and I understand that they're not behind the curve, and they're going to fight inflation and bring it to 2%. Regardless of what happens, Canada's annual inflation rate fell for third consecutive month in September, although it inched down by just 0.1% over August result and was 0.2% higher than economic economists had anticipated. The COVID 19 pandemic has played a huge role in contributing to that ballooning inflation and tell indicated that while it will remain a factor in the months ahead, it's unlikely to have as a severe an impact on the economy as during 2020 and 2021. So yes, COVID will be with us even next year, but it will not dominate us, we're going to see a transition and it's happening maybe already from a pandemic to and endemic. He said the virus is not dead, it will be with us, but we will have enough ammunition to fight it. It will not dominate the agenda. It might impact the agenda, but it will not dominate it like it has over the past two and a half years. So that is the report that towel had to say. And then just to go a little bit further CMHC Deputy Chief Economist predicts a 15% housing price drop by the second quarter of 2023. So Canada Mortgage and Housing Corp is predicting housing prices will continue to drop in 2023. But it's warning the fall will do little for affordability. So Patrick Perrier, the housing agency's deputy chief economist said in a report Thursday, that the he expects the national average home price to fall and this is national 15% From where it's currently at 770,800. The peak season in the first quarter of this year, which was kind of mid February, by the end of the second quarter of 2023. On an annual basis, he sees prices growing 2.6% in 2022, compared with 21.3% in 2021, and then declining 6.3% in 2023 and rising 2.1% in 2024. So we might be at this for another year or so. Superior attribute ID that the he moves to housing demand showing an interest rates rising. Despite the price decline. Perrier believes housing affordability will not improve because any benefits that can be reaped from lower prices will be offset by higher interest rates and combined with an increasingly competitive rental market. So those who are current renters that were planning to purchase a house, they won't be able to do it. So they'll stay in the rental market. And unfortunately, we might see others that are currently owners that because of the debt, deterioration in their employment and income conditions might have to sell and go on into the rental market. So those are the some of the things that he sees may be happening. So perriers, he also sees the lack of affordability occurring as the country heads into a recession by the end of this year is what he says or maybe next year, but added that the down turn will not be as severe as the last and the recovery will begin in the second half of 2023. So you know what there's always ups and downs in life. There's always ups and downs in our personal lives business lives. You got to learn to ride with it not as does not That's not his quote, that's mine. I just added that just so y'all know nothing lasts
Curtis Pope:
forever, not even your problems. It's true.
Michele Cummins - PREC:
So there's always hope there's always light at the end of the tunnel and there's always ways of making every day amazing if you just have that mindset so have that mindset and it is it is a great market for a lot of people and it's a great, great life. So so enjoy it and have joy so okay, my new listings, I have some amazing new listings and I've got seven open houses this weekend. I am busy I have really busy. I had time to do this always time to do this love seeing you right 8am In the morning.
Curtis Pope:
No you don't. But I am the coffee talking.
Michele Cummins - PREC:
I'm allowing my second cup and I am going to have a great To open houses today and myself I'm posting and and a couple tomorrow, but I have seven in total throughout the weekend. So have a look on my socials to see them and my coming soon listings and my new listings and if you're interested in a land assembly, I've got a great one in Chilliwack. If you're looking at purchasing a business or commercial, I've got a couple meeting commercial listings as well. And I could tell you all about it when if you want to give me a call, and I want to end with a quote of the week. There are live lunch. Okay, this is looking at me so funny right now logistics. No, okay, this is from chip Gaines, maybe I should have you said,
Curtis Pope:
Oh, I'll probably screw it up just like he would. It can't be that deepens. Chip. Let's hear what you got.
Michele Cummins - PREC:
But you could probably say it like chip with his voice. I don't know. There are logical decisions and emotional decision buying the house is a little bit of both.
Curtis Pope:
Logical chip games come on Joanne's, all the the logic in that relationship. But it's a true statement.
Michele Cummins - PREC:
It is it's a real estate statement. And it's from our friendship games that we still have to get in the studio with us.
Curtis Pope:
Absolutely. We'd have to block off at least an hour for that show, though. At least. Yeah. All right. Well, if people want more information about what you do as a realtor to see those open houses and listings and things like that, where can they go? Michelle cummins.ca. And join us again next week and we will talk real estate in order to unlock your real estate potential on the show where real estate is maximized. Thanks for listening
If you missed last week's episode where Michele and friends join the show from quebec please go take a listen! It's well worth it!