Personal Finance in the News – October 2021:
Welcome to Money News – October 2021, and Happy Halloween! This month we look at the end of the Canada Recovery Benefit, the state of Canada’s housing market, and shifting mortgage market dynamics. This update also covers North America’s ongoing labour shortage, and if it pays to be in a relationship.
Read and Watch: The federal government has let the pandemic aid program known as CRB (or the Canada Recovery Benefit) expire. In its place, the government will be introducing a targeted approach helping those businesses and people facing the greatest hardships.
Read: Real estate continues to be a hot topic. According to this Narcity article by Lisa Belmonte, the cost of buying a house in Canada is now the highest its been since the 1980s, thanks to breakneck price appreciation across the country. This may explain why parents have gifted an average of $82,000 to their adult children to help them get into the housing market over the past year. According to CIBC’s Deputy Chief Economist, Benjamin Tal, the total spent is an estimated $10 billion!
Read: Sticking with real estate, changes in the mortgage market are afoot. Reuters is reporting that Canadian home buyers are piling into variable loans. This is because bond yields are rising, which increases the cost of fixed rate loans. Yet the Bank of Canada has kept its overnight lending rate low at 0.25%, and this is what influences the cost of variable mortgages. As a result, the share of variable-rate mortgages surged to 51% in July. For perspective, this is the highest level seen since the Bank of Canada started tracking the data in 2013 and represents a jump from less than 10% a year ago. Moreover, according to RateHub, 74% of Canadians have traditionally opted for fixed rate mortgages. Talk about a sea change! The implications of this could be worth watching if the Bank of Canada is forced to increase rates unexpectedly to address inflation. In the Bank’s most recent rate setting meeting, for example, Governor Tiff Macklem hinted that rates may be rising sooner than previously anticipated. For a deeper dive into the topic, check out this analysis by Leo Spalteholz.
Read: Is a relationship and marriage worth it financially? This BNN-Bloomberg article by Charlie Wells summarizes a recent study comparing the income profiles of single people against those with partners.
Read and Watch: Ready for a study showing Canadians enjoy low wireless and phone charges compared to peers? Ha! Me too. In this Financial Post article by Tristin Hooper, he reviews a Finnish report that concludes Canada’s wireless costs are still among the highest in the world.
Please keep in mind that I am not a financial advisor, and the opinions expressed are my own. My Money Moves does not provide financial advice. It is an informational website that details my own approach to my own money and personal finances. If you need specific financial help or guidance, please do your own research and seek out a professional.