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Federal Reserve policymakers received fresh confirmation last Friday that inflation is continuing to ease, paving the way for a potential interest rate reduction as early as next month. As inflationary pressures subside, the Fed’s focus is shifting towards preventing further cooling in the labour market, which has shown signs of softening.

The Commerce Department reported that the Personal Consumption Expenditures (PCE) price index, the Fed’s preferred inflation gauge, rose 2.5% in July from a year earlier, maintaining the same pace as in June. Over the past three months, the annualized reading on the PCE index has remained well below the Fed’s 2% target, signaling that inflation is largely under control. This has led Fed Chair Jerome Powell to suggest that “the time has come” to cut interest rates, following a period of aggressive rate hikes in 2022 and 2023 aimed at combating decades-high inflation. The central bank has kept its policy rate steady in the 5.25%-5.50% range since last July.

Ben Ayers, Senior Economist at Nationwide, wrote that “recent price trends confirm that the end of the Fed’s inflation fight is coming into view,” making a rate cut at the upcoming September 17-18 policy meeting likely. Ayers also noted that the further cooling of inflation could give the Fed more room to be aggressive with rate cuts in future meetings, especially if the labour market continues to deteriorate.

Despite the positive inflation data, the labour market has become a growing concern for the Fed. The unemployment rate has risen nearly a full percentage point to 4.3% since the Fed stopped raising rates more than a year ago. While this is still low by historical standards, it is enough for Powell to declare that the Fed would not welcome any further weakening in the job market. Economists at Evercore ISI have described the situation as a shift from an “inflation-first Fed to a labour-first Fed,” underscoring the central bank’s new priority.

Traders are currently betting that the Fed will begin with a quarter-percentage-point rate reduction in September, but there is speculation that a larger half-percentage-point cut could be in the cards at a later meeting. Financial markets are pricing in a full percentage point cut by the end of the year, although most analysts predict a slightly less aggressive approach, depending on the strength of the economy and labour market data.

Looking ahead, the focus of both investors and the Fed will be on key economic data releases before the September meeting, including the U.S. government’s employment report for August and the Consumer Price Index (CPI) report for the same month. These reports will play a critical role in determining the Fed’s next steps.

The U.S. economy grew at a slightly stronger pace in the second quarter than initially reported, with Gross Domestic Product (GDP) rising at a 3% annualized rate during the April-June period, up from the previous estimate of 2.8%. This growth was driven by an upward revision to consumer spending, which advanced 2.9%, more than the prior estimate of 2.3%. However, other areas of the economy, including business spending, inventories, and residential investment, showed signs of weakness.

The Gross Domestic Income (GDI), another key measure of economic activity, rose a more moderate 1.3% in the second quarter, matching the first-quarter gain. While GDP measures spending on goods and services, GDI measures the income generated from producing those same goods and services. The average of the two growth measures was 2.1%, indicating that growth has cooled so far this year after accelerating in the second half of 2023.

As the Fed prepares to lower interest rates, the easing of inflation is expected to provide some relief to sectors like housing and manufacturing, which have been heavily impacted by high borrowing costs. However, the labour market’s health will be the key factor in determining how aggressive the Fed will be with rate cuts moving forward.

In the meantime, corporate profits remain in the spotlight, with adjusted pre-tax profits rising 1.7% in the second quarter. The debate over corporate profits has become a focal point on the campaign trail, with Vice President Kamala Harris proposing new measures aimed at increasing taxes on corporations and high-income individuals, while former President Donald Trump has pledged fresh tax cuts to bolster the economy.

As the Fed navigates this complex economic landscape, its dual mandate of promoting maximum employment and stable prices will be tested. The coming months will be crucial in determining the direction of U.S. monetary policy as the central bank seeks to balance the need for economic growth with the challenges of a cooling labor market.

Canada’s economy showed surprising strength in the second quarter of this year, outpacing expectations with higher-than-anticipated growth. However, despite this strong showing, signs of economic weakness emerged during the summer months, raising the likelihood of an interest rate cut by the Bank of Canada (BoC) in the near future. As of now, financial markets are betting on an 80% chance that the BoC will lower interest rates by 25 basis points at its upcoming meeting on September 4th. There’s even a 20% chance of a more aggressive 50 basis point cut, a significant shift from just 24 hours ago when the likelihood of such a cut was considered minimal. Overall, the market is fully pricing in 75 basis points of cuts by the end of the year, remaining steady despite the recent GDP data.

The latest GDP figures reveal that the Canadian economy grew by 2.1% on an annualized basis in the second quarter. This was in line with preliminary estimates but exceeded both the consensus forecast of 1.7% and the BoC’s own projection of 1.5%. The growth was driven by government spending and a strong rebound in non-residential investment, particularly in machinery and equipment. However, household consumption growth slowed to just 0.6%, a worrying sign for the BoC. The real concern lies in the future. June’s GDP was revised down to show no growth, and preliminary data for July indicates a similar flat performance. Even if the economy rebounds in August and September, third-quarter growth is likely to fall short of the BoC’s 2.8% forecast, potentially coming in at less than 2.0%.

Given these factors, some economists are now considering the possibility of a 50-basis point cut this week, though the majority still expect a smaller 25 basis point reduction. The BoC’s next move will be critical, as it will signal how the central bank plans to navigate the delicate balance between fostering economic growth and managing inflation.

Experts from across the financial sector have weighed in on the situation:

Stephen Brown, Deputy Chief North America Economist: Brown notes that while second-quarter growth was stronger than expected, the slowdown in household consumption and the flat GDP readings for June and July point to a much weaker third quarter. He believes there is a nearly 50/50 chance of a 50-basis point cut next week.

Royce Mendes, Managing Director and Head of Macro Strategy at Desjardins Securities: Mendes argues that the BoC’s optimistic forecast for the third quarter now seems unlikely. He suggests that while a 25-basis point cut is the most likely scenario, a 50 basis point reduction could be on the table if the economy continues to underperform.

Derek Holt, Vice-President of Scotiabank Economics: Holt highlights the significant role government spending played in second-quarter growth, which he finds concerning given that it reflects retroactive wage increases rather than sustainable economic activity. He expects the BoC to proceed with a 25-basis point cut this week but warns of potential larger cuts in the future.

Douglas Porter, Chief Economist at BMO Capital Markets: Porter sees the strong headline GDP growth as misleading, noting that much of the growth was driven by government spending, with little contribution from the private sector. He expects the BoC to maintain its course with a 25 basis point cut, but acknowledges that weaker third-quarter growth could prompt more aggressive action later in the year.

As the BoC prepares to make its next move, the focus will be on how to support the Canadian economy amid these mixed signals. While the second quarter showed resilience, the outlook for the rest of the year remains uncertain, and the central bank’s response will be crucial in steering the economy through these turbulent times. The strong showing of the economy, lots of job growth in Ontario, and the slaying of inflation are all good signs of the beginning of a series of rate cuts by the Bank of Canada.

We’re seeing slowdowns in the condo market, a large increase in listings compared to sales, and investors increasingly wary of allocating capital. Higher interest rates and slowing employment growth are taking their toll. But despite these challenges, the Ontario economy continues to create jobs and show resilience, and inflation is back under control, suggesting the possibility of a sustained round of interest rate cuts. Tembo is busy helping navigate a real estate market in flux, here’s how our services can come in handy in a challenging time.

Debt Consolidation Loans

A big challenge that people are facing is getting access to capital and credit. This is a buyer’s market, and there are good deals to be had and price discounts all over the place. But prospective homebuyers may have too many debt products, their credit score may be in a bad spot, and overall, this could be an anchor in getting approved for more credit from a big, cautious Canadian bank. If you own a home in Ontario, Tembo Financial can help you consolidate your debts into one manageable payment. A debt consolidation loan from Tembo Financial allows you to leverage your home equity to simplify your finances, reduce your overall interest rates, and potentially improve your credit score. By combining multiple high-interest debts into a single loan, you can lower your monthly payments and regain control of your financial situation. Debt consolidation can help you save money, avoid bankruptcy or consumer proposals, and maintain or even boost your credit score. This financial tool is especially beneficial if you have multiple debts over $10,000, making it easier to manage your finances and secure essential purchases. 

Stop Power of Sale Loans

Some of our customers have overstretched themselves and were unable to sufficiently adapt to the 10-interest rate increases by the Bank of Canada in one year. We helped a significant number of clients who found themselves in power of sale situations by their banks. Facing a power of sale can be overwhelming, with costly penalties and legal fees adding to the stress. If your lender is moving toward or has initiated a power of sale, Tembo Financial can help you regain control of your home’s sale, potentially saving you both money and peace of mind. We provide fast and efficient funding to buy out your existing mortgage and stop the power of sale process. Power of sale occurs when a borrower can’t meet their mortgage obligations, leading the lender to sell the property to recover their investment. This process often results in a loss of “stigma equity,” where the property sells for significantly less than its market value due to the forced sale. A big bank initiating a power of sale doesn’t care about maximum value – that home is a digital icon in a ledger on a computer to them. Their goal is liquidate quickly. Tembo Financial allows you to control the sale of your home, avoid the steep costs and stigma associated with power of sale, and maximize your property’s value – we’re experts at helping clients do this. We can give you options, and crucially, time. With access to funds within 48 hours and no monthly payments, Tembo can help you navigate this challenging situation.

Home Renovation Loans

One of the ways we help our clients maximize the value and sale price of their property is through our Home Renovation Loans, which have been a perennial favourite of our Tembo Community for years. Many homeowners plan to update both the interior and exterior of their properties to refresh the look and potentially increase the home’s value. If you’re considering selling, cosmetic renovations can also help maximize your sale price. Tembo Financial offers fast, hassle-free renovation loans in Ontario, with no credit checks, income verification, or appraisals required. You can receive funds within 48 hours, making it easier to start your renovations right away, whether you’re updating your home or preparing it for sale. A home renovation loan from Tembo Financial can help you cover the rising costs of materials and labor, enabling you to make improvements like home repairs, painting, kitchen and bathroom remodels, landscaping, and more. Some of our clients will use our renovation loans to turn a basement into a full suite, to turn their home into a partial rental property and cash cow. This also broadens sales appeal to investors looking for regular cash flow. By tapping into your home equity, you can modernize your space, enhance curb appeal, and increase your property’s value. Let Tembo Financial make your dream renovations a reality with quick and easy financing.

Despite the impact of higher rates on the real estate and construction sectors, Ontario’s diversified and resilient economy still managed to create 22,000 new jobs in July. The national economy overall lost a few thousand jobs, with negative trends in overall employment, unemployment among the youth, women, and immigrants, and a decline in private sector hiring. Manitoba and Nova Scotia both lost roughly 5,000 jobs. Government hiring, particularly at the federal level post-pandemic, has helped balance out the weakening pace of private sector employment growth. And yet again, despite all these trends, Ontario managed to maintain its record of generally leading the nation in job growth. This speaks to the stability of our diversified economy, our attractiveness to newcomers, and our strong growth fundamentals. This long-term resilience is exactly why the Ontario real estate market has been bullish for so long, because we have a strong economy and because we’re consistently a job creation engine. We want our readers and clients to always keep this in mind.

A very healthy statistic underpinning the good Ontario news was that 70,000 full-time jobs were created, while 48,000 part-time jobs were lost. The unemployment rate fell by 0.3% to 6.7% – almost on par with the national unemployment rate of 6.4%. Ontario’s gains were mostly in services, with over 14,000 jobs created in transportation and warehousing, the science and tech sectors enjoyed solid growth, and there was also a significant increase in government jobs (over 15,000). The cities of Ottawa, Belleville, St. Catharines, and Windsor saw employment growth, with 10,000 new jobs created in Toronto alone – a testament to dynamism of Ontario’s largest city. 160,000 new jobs have been created in Ontario since the start of 2024.

Since 2010, Ontario’s total employment has increased by over 21 percent, outpacing the rest of Canada (ROC), which grew by approximately 18 percent. The second chart highlights that Ontario consistently maintains a higher private sector employment share than the ROC, underscoring Ontario’s ongoing significance as a hub for Canadian manufacturing and finance, particularly in the Greater Toronto Hamilton Area (GTHA). Additionally, since 2010, this share has risen from just under 66 percent to 67 percent, with growth persisting even after the post-pandemic employment recovery. Meanwhile, the rest of the country has remained relatively stagnant, with its private sector employment share unchanged since 2014. Lastly, Ontario’s self-employment share remained fairly steady between 2010 and 2020, averaging slightly above 15 percent. So Ontario is not only resilient, diversified, and dynamic, but over time, it trends significantly better than the rest of Canada in most long-term employment trends.

Ontario experienced a significant economic, real estate, and stock market boom in the 1980s, driven by robust growth, especially in manufacturing and finance. However, this boom eventually led to an economic downturn in the early 1990s, marked by a recession and a sharp correction in the housing market. This was caused by Bank of Canada interest rate increases, just like the cooling period we’re in now. But we recovered! Despite this setback, Ontario’s economy gradually recovered through the latter half of the 1990s, bolstered by a resurgence in manufacturing and an expanding service sector. Real estate boomed from the late 1990s through to 2020, with a brief ‘pause’ in 2007-2009. The province faced another major challenge with the onset of the COVID-19 pandemic in 2020, which disrupted industries across the board. Yet, Ontario once again demonstrated resilience, rebounding as public health measures eased and economic activities resumed, continuing its tradition of recovery after periods of adversity. Our real estate market soared to heights we didn’t think were possible post-COVID, and we’re now going through an adjustment. No matter the challenge, Ontario’s economy and real estate market perseveres, never forget that.

When the Bank of Canada catastrophically messed up its reading on inflation by surging rates way too quickly, they put the housing market in a difficult position. Now, many Canadians who bought property at the height of COVID when rates were at record lows, are looking at lower equity, and much higher mortgage payments. 10 rate hikes in about a year will do that to a real estate sector, no matter how strong it is. If you have been put in a position where you can no longer afford your mortgage and are now looking down the barrel of a power of sale scenario, this article is for you. We’ll discuss how you can stop power of sale default situations through a private mortgage loan with Tembo Financial. We’ll also explain “stigma equity,” a term coined by Tembo Financial, and its significance. Additionally, we’ll explore why Tembo offers a better alternative to big banks, which often rush to settle for the first offer. We’ll also delve into how we collaborate with clients to navigate challenges, optimize market terms, and unlock hidden value.

A key feature of Tembo’s private mortgages is the ability to exercise stop power of sale/default provisions. Unlike traditional lenders, Tembo Financial provides flexibility to work closely with clients facing financial hardships. When borrowers struggle to meet mortgage obligations, Tembo offers solutions such as paying out the bank, extending the loan tenure, and ultimately achieving better market outcomes. This approach helps clients retain their property and avoid a rushed sale by big banks or lenders, who often settle for the first possible transaction. Tembo’s solution empowers homeowners to control their sale and maximize their sale price.

“Stigma equity” is a term coined by Tembo Financial that refers to the difference between the listing price of a home under power of sale (often lower due to negative perceptions) and its true market value. Tembo specializes in helping clients leverage stigma equity to their advantage. By collaborating with clients and offering tailored solutions, Tembo Financial can often help revive, increase, or enhance a property’s value, bridging the gap between its distressed value and its actual potential. Many clients have successfully used Tembo’s financing to pay out the banks, renovate their properties, and control their sale despite financial hardship.

In conventional banking scenarios, the power of sale process can lead to rushed sales and lower prices to recover dues quickly. Tembo Financial approaches this differently. Instead of rushing into a sale, we adopt a more deliberate and strategic approach aimed at maximizing value and allowing homeowners to sell on their terms, not the bank’s. We get the banks off your back and work with you to find the best option. By paying off the bank and gaining the necessary time to position the property more favourably in the market, we help achieve a higher selling price.

Effective handling of power of sale and default situations is a hallmark of private mortgage lending. Tembo Financial uses a personalized approach, engaging in open dialogue with clients to craft solutions that align with their circumstances. This enables us to offer customized financing solutions that cater to a broader range of properties than traditional lenders.

Unlike traditional bank lenders, Tembo Financial has the luxury of time on our side. This means we help clients avoid settling for the first offer during a power of sale situation. Big banks aim to conclude power of sale transactions quickly, viewing them as mere numbers on a ledger. At Tembo, we prioritize maximizing value for our clients by allowing them to control the sale of their home. Through a strategic approach and assessment of the property’s true potential, we can often pay out the bank and provide a short-term loan, alleviating the stress of a power of sale proceeding. This patient approach, coupled with creative financing solutions, sets us apart in the real estate landscape.

Tembo Financial and our private power of sale lending solutions offer an alternative avenue for collaboration with clients, surpassing the constraints of big banks. Our ability to exercise stop power of sale/default, diminished stigma equity, and strategically manage power of sale helps homeowners secure favourable outcomes across Ontario. As the real estate market continues to evolve, Tembo understands how to harness these advantages to assist our clients during difficult times

Tembo Financial is pleased to announce the promotion of Arlen Ekstein to the position of Vice President of Sales & Marketing. In this new role, Arlen will oversee all sales and marketing activities for Tembo Financial, leading efforts to achieve long-term growth through strategic sales and marketing initiatives.

Arlen Ekstein joined Tembo Financial in 2020 as a Senior Associate and has since been an integral part of the team. With a Bachelor of Commerce degree and two diplomas specializing in marketing, Arlen brings a wealth of knowledge and expertise to his new position. His dedication, innovative approach, and proven track record have significantly contributed to the company’s success over the past few years.

“We are thrilled to promote Arlen to Vice President of Sales & Marketing,” said Arryn Greenspan, President/CEO of Tembo Financial. “His exceptional skills, leadership, and vision have been invaluable to our growth. We are confident that under his leadership, our sales and marketing efforts will reach new heights, driving the company’s continued success.”

In his new role, Arlen will be responsible for developing and implementing comprehensive sales and marketing strategies, managing the sales and marketing teams, and ensuring alignment with the company’s overall goals. His focus will be on enhancing brand visibility, expanding market reach, and driving revenue growth.

“I am honoured to take on this new role at Tembo Financial,” said Arlen Ekstein. “I look forward to working closely with our talented team to build on our successes and achieve our long-term growth objectives. Together, we will continue to deliver exceptional value to our clients and stakeholders.”

Tembo Financial is a direct private lender, committed to helping clients achieve their financial goals. With Arlen Ekstein at the helm of Sales & Marketing, the company is poised for continued growth and success.

About Tembo Financial

Tembo Financial is a direct private lender that offers fast, flexible, and creative solutions to help our clients when they are looking for financial solutions. Tembo can help our clients get the funds on the timelines they need, especially when the banks are not the right option. Tembo provides innovative financial solutions tailored to meet the unique needs of our clients. Our experienced team works tirelessly to deliver exceptional service and support, helping individuals and businesses achieve their financial objectives. For more information, visit www.tembofinancial.com.

 On Wednesday, the Bank of Canada reduced its key interest rate to 4.5%, with Governor Tiff Macklem hinting at further reductions if inflation continues to decline. This move was anticipated by many economists following the easing of inflation in June. This is the central bank’s second consecutive rate cut, following a similar reduction last month, the first since March 2020. “If inflation continues to ease broadly in line with our forecast, it is reasonable to expect further cuts in our policy interest rate,” Macklem stated during the news conference. Last month, the bank decreased the key interest rate by 25 basis points to 4.75%, a shift from the previous steady rate of 5% maintained since July 2023.

The Bank of Canada initiated a series of aggressive rate hikes in April 2022 to combat high inflation. After a concerning May report showed inflation at 2.9%, doubts emerged about another rate cut in July. However, June’s 2.7% inflation reading alleviated these concerns. Earl Davis, head of fixed income and money markets at BMO Global Asset Management, remarked, “It wasn’t that much of a surprise because inflation is coming down.” He noted that weaker retail sales and impending mortgage renewals likely influenced the bank’s decision.

Governor Macklem, alongside Senior Deputy Carolyn Rogers, elaborated on the decision during the news conference. They cited an anticipated move towards the bank’s 2% inflation target, a slack labor market, and weakening economic conditions as factors in their decision. Despite this, Macklem emphasized that the bank is “not on a predetermined path” and will assess conditions “one meeting at a time.” The consecutive rate cuts have sparked optimism among prospective homeowners. Amy Grimble, an operations manager at a real estate firm in Scarborough, Ontario, expressed hope that lower rates might make home ownership more attainable. “It means that we’ll be saving a little bit per month on our mortgage,” Grimble told CBC News.

Rogers, addressing housing concerns, warned against relying solely on interest rate cuts for better housing market conditions. Rising rents, insurance, taxes, and maintenance costs continue to exert upward pressure on shelter inflation.

Economists reacted to the announcement with varied expectations. Douglas Porter, chief economist at BMO Capital Markets, noted the bank’s dovish tone, suggesting officials are increasingly concerned about the likelihood of a recession. Randall Bartlett from Desjardins echoed this sentiment, highlighting policymakers’ urgency to continue the rate-cutting cycle.

Avery Shenfeld, CIBC Capital Markets’ chief economist, now anticipates cuts in September and October. Capital Economics forecasts that the bank will cut 25 basis points at each meeting until the policy rate hits 2.5% by mid-2025, a prediction partly based on a slowdown in immigration. David Rosenberg of Rosenberg Research believes the Bank of Canada is far from done with rate reductions, expecting a steady diet of more rate relief. The central bank’s projections for economic growth in 2025 and 2026 imply that rates will need to decrease significantly more. The next interest rate decision from the Bank of Canada is scheduled for September 4. The path forward remains contingent on economic conditions and inflation trends, but the current outlook suggests a continued easing of monetary policy to support the economy.

How will these rate cuts affect mortgages?

Canadians with mortgages and those eyeing the housing market have significant decisions to make following consecutive interest rate cuts by the Bank of Canada. These cuts will immediately impact monthly mortgage payments for some Canadians, especially those with variable-rate mortgages.

“Those who are most immediately impacted are those who currently have variable-rate mortgages,” says Penelope Graham, a mortgage expert at Ratehub.ca. Homeowners with adjustable-rate mortgages will see their monthly payments decrease in line with the Bank of Canada’s decision.

Ratehub analyzed a scenario for a homeowner who put 10% down on a home valued at just under $700,000 with a five-year variable rate mortgage at 5.7%, amortized over 25 years. In this example, a homeowner with a monthly mortgage payment of $4,019 would see their mortgage rate drop to 5.45%, reducing their payments to $3,934. This equates to a $95 monthly savings or $1,140 annually.

For those with variable mortgages that have fixed payments, the amount paid each month won’t change. However, a greater portion of their payment will now go towards reducing the mortgage principal rather than covering interest charges. Other loans with variable interest rates, such as some student loans and home-equity lines of credit, will also benefit from the Bank of Canada’s recent rate cut.

On the other hand, fixed-rate mortgage holders will not see any immediate changes from the rate cut. The rates offered on new fixed-rate mortgages are tied to the bond market, meaning they will only adjust if traders believe there will be a sustained change in the Bank of Canada’s policy rate.

The recent rate cuts by the Bank of Canada provide immediate relief to many homeowners with variable-rate mortgages. However, those with fixed-rate mortgages and other fixed-interest loans will need to wait and see how the bond market responds to these changes. As always, it’s essential for homeowners and prospective buyers to stay informed and consult with mortgage experts to make the best financial decisions in this evolving landscape.

With interest rates having peaked, and sales volume declining, more and more prospective homebuyers are beginning to jump into the market. Good deals and reasonably prices are more common in traditionally red hot real estate markets across the GTA and southern Ontario. Toronto’s real estate market has always been a fascinating and dynamic space, renowned for its resilience and adaptability. However, despite the Bank of Canada’s first interest rate cut in a while, the market has shown a decrease in activity, with sales continuing to decline across all property types. Notably, condominiums have experienced a significant 28 percent decrease in sales in June compared to the same period last year. In this article, Tembo will outline the complexities of the current market, the implications of the recent rate cut, and the potential opportunities for buyers in the near future.

Toronto’s real estate market has a rich history characterized by periods of rapid growth and the occasional ‘pause’ for breath, where activity slows down. Over the past few decades, the city has experienced remarkable expansion, driven by a robust economy, an influx of immigrants, and a thriving diversified economy and surging tech sector. Property values have steadily increased, making Toronto one of the most sought-after real estate markets in North America.

In the early 2000s, the city saw a construction boom, particularly in the condominium sector. High-rise buildings transformed the skyline, offering modern living spaces to a growing urban population. This period also saw significant foreign investment, further boosting the market. However, with rapid growth came challenges, including affordability concerns and market volatility.

The recent interest rate cut by the Bank of Canada, has not yet revitalized the market as expected. Many potential buyers are adopting a wait-and-see approach, anticipating further rate cuts before making a purchase. This makes perfect sense, why buy now when rates could be significantly lower in a year or so? It’s not a lack of fundamentals that’s underpinning the slowdown, it’s caution, and that’s a good thing. This cautious behavior has resulted in reduced demand, despite an increase in new listings. According to the latest report from the Toronto Regional Real Estate Board (TRREB), new listings have surged by 12 percent year over year, keeping the market well-supplied. So for those who have waited for years to jump in, now is a good time to consider making bids, because if rates fall more activity will pick up fast.

Jennifer Pearce, President of TRREB, highlighted the mixed impact of the rate cut: “The Bank of Canada’s rate cut last month provided some initial relief for homeowners and homebuyers. However, the June sales results suggest that most homebuyers will require multiple rate cuts before they move off the sidelines.” An Ipsos poll conducted for TRREB supports this, indicating that cumulative rate cuts of 100 basis points or more are necessary to significantly boost home sales.

On June 5, the Bank of Canada cut the overnight rate by 0.25 percentage points. Economists predict that any further rate cuts will be gradual, with potentially one or two more by the end of 2024. This measured approach aims to balance stimulating economic activity with maintaining financial stability.

Condos are particularly cold right now

The decline in sales and prices has been observed across all property types in Toronto and the Greater Toronto Area (GTA). Condominiums have faced the sharpest drop, with sales down 28 percent in June compared to the same period last year. Townhouses have also seen a decline of 14 percent, followed by semi-detached homes at 11.4 percent and detached homes at 10.6 percent.

Price reductions have also been significant across the board. Semi-detached homes have experienced the greatest decline at 9.3 percent, followed by townhouses at 4.9 percent, detached homes at 3.3 percent, and condos at 1.5 percent. Jason Mercer, TRREB’s Chief Market Analyst, emphasized the challenges faced by condos, often the entry-point for first-time buyers: “Condos are typically entry-point homes for first-time homebuyers. While many are close to purchasing their first home, they need to see more relief on the interest rate front.”

The condo market has become particularly stagnant, with over-leveraged investors attempting to offload properties while end users show little interest in expensive, small units unsuitable for families. This situation has led to a significant rise in active listings, which are up 67.4 percent year over year. Buyers currently enjoy substantial choice and negotiating power, with a sales to new listings ratio of 34.5 percent, indicating a buyer’s market.

Mercer explained the current buyer’s advantage: “Currently, buyers are benefitting from substantial choice and negotiating power on price. As sales pick up alongside lower borrowing costs, elevated inventory levels will help mitigate against a quick run-up in selling prices.”

Despite the current market challenges, there are several reasons for optimism. The TRREB forecasts that home prices will reach $1.17 million by the end of the year, with the average home price in June at $1.16 million. This indicates a stable market poised for gradual growth.

Mercer remains hopeful about the future: “There won’t be an instantaneous upward pressure on prices. Looking forward, buyers will take advantage of the lower prices compared to the 2021 and 2022 market, as well as lower borrowing costs, which will be important factors heading into 2025.”

For potential buyers, the current market conditions offer unique opportunities. The significant choice in properties and the negotiating power available can lead to favuorable deals. As borrowing costs are anticipated to decrease further, the affordability of homes is likely to improve, making it an opportune time for first-time buyers to enter the market.

For Tembo, understanding these market dynamics is crucial for strategic planning. The increased inventory and buyer’s market conditions present an excellent opportunity to offer competitive mortgage products tailored to investors looking to capitalize on the lower prices and favourable financing conditions. By providing flexible and attractive mortgage options, Tembo can play a pivotal role in helping you navigate the current market landscape. Please call us at 1-844-238-6717 or visit www.tembofinancial.com to discuss how we can help you navigate the opportunities in this market through our mortgage loans, bridge financing, reno loans, and credit consolidation loans!

Toronto’s real estate market, despite its current challenges, continues to be a resilient and dynamic environment. The recent interest rate cut by the Bank of Canada has yet to fully stimulate the market, but gradual improvements are anticipated. With increased inventory and favorable conditions for buyers, there is significant potential for growth in the near future.

For buyers and investors, understanding these market trends and leveraging the current opportunities can lead to successful real estate ventures. As the city continues to evolve, so too does its real estate landscape, offering new possibilities and opportunities for those ready to seize them.

Inflation and higher prices continue to prompt more Canadians to rely heavily on credit cards, loans, and lines of credit to manage their daily expenses. The increased interest rates are escalating debt servicing costs, causing even more financial strain. Surveys indicate that Canadians are cutting back on luxuries, streaming services, and clothing, with many postponing or canceling vacations. Among the hardest hit are Millennials, who are accumulating the highest levels of debt. In 2022, over one million Canadians reported missing or being late on mortgage or rent payments. That number is growing with higher rates now. The combination of rising debt and more frequent missed payments poses greater risks for lenders, who have responded by hiking interest rates on their products.

A private Tembo debt consolidation loan can offer a safeguard against these rising rates and economic uncertainties. Our debt consolidation loans allow you to merge multiple debts into a single, manageable transaction. Instead of juggling several monthly payments, you can consolidate them into one with a Tembo loan. This can help you eliminate high-interest credit card balances, clear your line of credit, reduce pressure on your credit score, and most importantly, often save money by avoiding the steep rates on many unsecured debts. Financial analysts widely predict more rate hikes in the U.S. in the coming months in the early fall if inflation continued to pick up there.

In Quebec, financial regulators have increased the minimum monthly credit card payments borrowers must make. Last year, these minimum payments rose from 3.5% to 4.5%. Equifax reports that the issuance of new credit cards surged by over 31.2% in Q1 2022 compared to Q1 2021, and the latest monthly credit card spending data shows an increase of over 17.5%. As of late last year, credit card debt topped $113 billion, an all time high. A Tembo private debt consolidation loan can help you manage high credit card balances, avoiding the impact of higher interest rates on lines of credit due to increased prime bank rates. Rising interest costs can add hundreds of dollars to your annual expenses.

With a Tembo Financial debt consolidation loan, you can access a quick, easy, and cost-effective solution to free up cash flow and improve your credit score by combining high-interest debts into a single, simple payment. As interest rates rise everywhere, the Bank of Canada has acted swiftly to increase the cost of borrowing. In the U.S., the interest rate for a fixed 30-year mortgage is now approaching 7%, up from nearly 2% not long ago. Inflation remains persistent; prices may stabilize or fall for some goods, but they continue to rise for others. As higher prices and inflation erode wage gains, more people are left with less disposable income, especially those with large mortgages, credit cards, lines of credit, and car payments. Debt costs will keep rising as long as inflation persists and central banks continue to hike rates. Higher prime rates lead to increased lending rates, affecting mortgage costs, credit card interest, and more. The next major economic challenge on the horizon is likely a recession.

Employment declines are beginning to reappear in Ontario, suggesting that a recession could bring job losses. The duration and severity of a potential recession are hard to predict, with experts divided on the issue. Regardless, the current environment of higher rates and uncertainty makes it wise to consolidate multiple debts into a straightforward, single transaction. Turn five monthly payments into one with a Tembo debt consolidation loan. Eliminate high-interest credit card bills, clear your line of credit, and alleviate pressure on your credit score. Save money by avoiding the higher rates that big banks and lenders will implement if the Bank of Canada raises rates again.

A Tembo debt consolidation loan can provide protection and security against potential job losses or the harsh effects of a recession, freeing you from worries about credit card balances or lines of credit. In addition to central bank rate hikes, other factors are increasing debt costs. For instance, Telus has proposed a 1.5% surcharge on monthly phone bills for customers who pay with credit cards, adding to the overall cost. For a customer with a $100 cellphone bill, this surcharge would increase the bill to $106.66. Telus aims to offset the high fees charged by credit card companies by passing these costs onto consumers. As costs rise across the economy, using your housing equity to consolidate debts, pay down liabilities quickly, and simplify your payments can be a prudent move.

Take advantage of your increased housing equity to consolidate your debts, pay down liabilities fast, and simplify your payments. Visit Tembo Financial’s Debt Consolidation Services and give us a call at 1-844-238-6717.

Thinking about giving your home a facelift with some renovations? It’s a decision many homeowners contemplate, but navigating through the process and ensuring your investment pays off can be daunting. Luckily, Tembo is here with some expert tips to guide you through your home improvement journey.

Strategic Upgrades: When it comes to renovations, it’s essential to prioritize areas that offer the highest return on investment. While you can never guarantee how much of your investment you’ll recoup, focusing on key areas like kitchens and bathrooms typically yields the best results. In hot housing markets, the returns can even surpass your initial investment, making it a worthwhile endeavor.

Bathroom Brilliance: If you’re considering upgrading your bathroom but only have one, hold off on pouring money into it. Instead, consider investing in adding a second bathroom. Surprisingly, adding another bathroom can significantly enhance your home’s resale value, often outshining the benefits of adding another bedroom.

Maintenance Matters: Before diving headfirst into luxury upgrades, it’s crucial to address any maintenance issues lurking in your home. Imagine spending a fortune on a sleek new kitchen, only to have it overshadowed by water seeping into your basement. Always tackle maintenance problems first to safeguard your investment.

Exterior Enhancements: While it’s easy to get caught up in perfecting your home’s interior, don’t overlook the importance of curb appeal. No matter how opulent your interiors are, if the exterior lacks charm, potential buyers may never make it through the front door. Investing in exterior upgrades can make a significant difference in attracting buyers and boosting your home’s value.

Expand Wisely: Considering adding more square footage to your home? According to real estate experts, every 1,000 square feet added can elevate your home’s sale price by a remarkable 30 percent. Building an addition can create valuable space and appeal to potential buyers, making it a worthwhile investment to consider.

Once you’ve sold your home and need quick access to your equity for renovations, Tembo Financial offers a unique service in the Greater Toronto Area and Ontario. Get your funds in as little as 48 hours, with no credit check required.

Moving:

Moving can be both a thrilling and daunting experience, especially when factoring in the financial implications. However, with the right guidance and support, you can navigate through the process seamlessly. Tembo Financial is here to offer valuable moving tips and financial assistance to ensure your transition is smooth and hassle-free.

Choose Wisely: Selecting a reputable moving company is paramount to a successful move. It’s essential to do your due diligence and research potential moving companies thoroughly. Check their standing with the Better Business Bureau and consult the Ontario Ministry of Consumer Services’ Consumer Beware List to ensure they have a solid reputation.

Budgeting for Moving Expenses: Moving expenses can quickly add up, especially after taking on new financial responsibilities. Tembo Financial understands the financial strain associated with moving and offers assistance to alleviate the burden. By providing quick access to funds for moving expenses, they help ease the financial stress of relocating.

Understanding Average Moving Costs: Tembo Financial conducted research to analyze the average moving costs within the Greater Toronto Area (GTA) among reputable moving companies. Typically, a one-bedroom apartment move in the GTA ranges from $500 to $700 for a four to six-hour move with two movers and one truck. For a three-bedroom house, the cost typically falls between $1,000 and $1,400 for an eight to ten-hour move with three movers.

Consider Timing: It’s essential to consider the timing of your move, as rates tend to fluctuate based on demand. Rates are often higher at the beginning and end of the month, as well as on Sundays and holidays. Planning your move during off-peak times can help you save on costs.

Additional Services: Some moving companies offer additional services, such as packing assistance, to streamline the moving process. Prices for packing services vary based on the size of your home, ranging from approximately $500 for a one-bedroom apartment to around $1,400 for a full house.

Financial Assistance from Tembo: Tembo Financial recognizes the financial strain associated with moving and offers a unique service to provide funds for moving expenses in as little as 48 hours, with no credit check or appraisal required. Whether you need assistance with hiring movers, covering packing costs, or addressing unexpected expenses, Tembo Financial has you covered.

With Tembo Financial’s support and guidance, you can embark on your move with confidence, knowing that your financial needs are taken care of. Whether you’re relocating to a new home or moving within the GTA or southern Ontario, Tembo Financial is your trusted partner every step of the way.