Mortgage rates on the rise as lending rates are cut
- Thread starter Unreel
- Start date
Corey_lax
Crew Member
I think early next year we will see a lot of that. I know a few people who have lost their jobs already. One from Coast Capital and he had a decent amount of experience so he has full pay severance until June 2023. Many of the people laid off from Coast Capital were there for 10+ years.
wildmanyeah
Crew Member
6 months ago i was begging to find people, September hit and its been a different world. guys coming in and dropping there resumes off, things change fast
sasqman
Crew Member
Our business is still lacking in the skilled man power area.
We will be in a labour crunch for least another year, although it is becoming some what easier to find people that want to start the trade.... they just dont have any skills yet.
uclueletcharters
Well-Known Member
If they work from home I would recommend looking outside city for better prices. If all they need is good internet for work they could move anywhere. Then they have the option to travel still or visit the city when they want to because they aren’t stretched. Who wants to be a slave to the payment. Could never understand why anyone would want to work a job that barely pays the bills among a concrete jungle. I always take note to the people in cities they rarely smile and always appear to be in a rush. Enjoy going for an event at Roger’s once done can’t wait to leave back to the coast. Lots of great communities all over BC that aren’t Vancouver real estate prices.
Condo Ownership going forward.
With Condo buildings opening up to allow long term rentals Strata Corporations are going to face a lot of new challenges.
Strata Rules enforcement, getting unsavory tenants to move out, and a long list of stupid behavior based stuff will be the new nightmare.
Will undesirability of being in a condo filled with renters drive prices down.
All of our young staff are on the waiting lists for Co-ops . A financially viable option for people who are community chores/maintenance driven .
Small businesses get beat up on any cash balances in their current account. Most small business accounts pay zero interest. The option we were given was a money market fund or non cashable term deposits.
We started to move money around some time ago (our business account is with TD) and now have our cash reserves in Gulf and Fraser Term deposits and our excess cash in a Manulife One corporate account. There are lots of options out there for small businesses and online banking has opened things up
On the Manulife One account we were able to establish the account net of commission - resulting an interest rate boost.
TD wanted to get our corporate money back ( we are not talking millions here) but were unable to come close to their competitor's rates. Including a discussion where they tried to explained to me that I didn't understand how interest rates worked.
You understand how truly valueless a Private Banker can be when they still don't know what you or your company do after 20 some years.
It would be helpful for courses in "dealing with your banker," becoming available.
With Condo buildings opening up to allow long term rentals Strata Corporations are going to face a lot of new challenges.
Strata Rules enforcement, getting unsavory tenants to move out, and a long list of stupid behavior based stuff will be the new nightmare.
Will undesirability of being in a condo filled with renters drive prices down.
All of our young staff are on the waiting lists for Co-ops . A financially viable option for people who are community chores/maintenance driven .
Small businesses get beat up on any cash balances in their current account. Most small business accounts pay zero interest. The option we were given was a money market fund or non cashable term deposits.
We started to move money around some time ago (our business account is with TD) and now have our cash reserves in Gulf and Fraser Term deposits and our excess cash in a Manulife One corporate account. There are lots of options out there for small businesses and online banking has opened things up
On the Manulife One account we were able to establish the account net of commission - resulting an interest rate boost.
TD wanted to get our corporate money back ( we are not talking millions here) but were unable to come close to their competitor's rates. Including a discussion where they tried to explained to me that I didn't understand how interest rates worked.
You understand how truly valueless a Private Banker can be when they still don't know what you or your company do after 20 some years.
It would be helpful for courses in "dealing with your banker," becoming available.
wildmanyeah
Crew Member
Ive never understood why international mega corporations always had to have a downtown office especially when most of their workers commute in.
Central location, transit hub, close to facilities needed for entertainment, hotels for staff, etc. That will change for some companies.
Our office is at a transit hub, it allows us to draw staff from a wider area
uclueletcharters
Well-Known Member
City is a bank account nightmare just bleeds you out all the way right down to parking. If you have a big truck your pretty much screwed no underground parking. A nice community outside of Van for them to start a family if they want and enjoy the outdoors. And most importantly close to some good fishing spots for dad 
wildmanyeah
Crew Member
I lived in a townhouse complex beside a rental unit, it went through 5 different tenants in the time we lived there, 3 of them beat their wives/girlfriend. 1 went through a divorce where there was screaming almost every day and that last people to live there when we moved was a nice couple.
It was pretty much the joke of our complex how when the knew renters came in everyone expected drama.
think our complex was limited by strata to 15% rentals.
my experience has obviously jaded me but i think it was a terrible idea to get rid of stats being able to limit it.
i have visions now of slum lords buying up all the units.
InterMechanico
Well-Known Member
One challenge is tax structure around passive income for small (and big) business.
- Passive income such as investment interest and dividends is taxed at a rate of 51%. Corp to Corp dividends are not taxed as long as the receiving Corp holds a significant portion of ownership ownership in the Corp paying out the dividend, nominally this equals 10% or higher ownership.
Capital gains are taxed less, but are harder to come by.
Examples (will make you puke, maybe revolt lol)
My Corporation purchased two 10k 5 year GICs. The average interst rate is 5.1% , compounding annually. Tax on the annual $510.00 Interest (automatically reinvested into the GIC) will be 51%, payable in the year it was received. Total interest for each 5 year gic will be roughly $2800.
Total for both $5600.
Less 51% tax = $2800 net
Shareholder takes $2800 as dividend, pays 25% tax ($600.00) on dividend, keeps $2200.00 as net income.
Shareholder spends $2200.00 on anything other than food or children's clothing and pays a further 12% sales tax.
Shareholder actual buying power with $5600 of passive corporate income is whittled down to a peasantly $1936.00
End result:
My labor earns the capital to invest. Of the interest earned ($5600) on the investment:
The shareholder keeps $1936.00
Government receives $3664.00
InterMechanico
Well-Known Member
Its frustrating
I believe the punitive tax structure around passive income is meant to encourage corporations to invest in growth, not retirement
.
It's frustrating because many small business owners need to invest earnings for retirement, lacking typical retirement income such as a pension.
I believe the punitive tax structure around passive income is meant to encourage corporations to invest in growth, not retirement
.
Gong Show
Well-Known Member
I find it frustrating since they take the money from the successful small businesses and use it to bailout big stinker companies that are not successful. They use the bailout money then go bankrupt anyway.
My life became exponentially more complicated when I hired my first employee.
My life became exponentially more complicated when I hired my first employee.
InterMechanico
Well-Known Member
Re: Hiring an employee is an option for me but the potential downsides outweigh the benefits right now.
The frustration for me is more about the ever increasing size of government. At least a bailout can conceivably keep people at work and supporting themselves and others through taxation. It's the ever-increasing size and number of special interest projects and departments that drives me crazy.
InterMechanico
Well-Known Member
On mortgages though,
globalnews.ca
Half of variable mortgage holders with fixed payments have hit trigger rate: BoC - National | Globalnews.ca
The Bank of Canada is estimating that nearly two-thirds of variable-rate mortgage holders on fixed payments will hit their trigger rate by mid-2023.
globalnews.ca
Aquaholic
Crew Member
Downtown Vancouver has a 7% vacancy rate in the commercial office space. That is one of the lowest in North America. Businesses are luring their employees back by upping the amenity game. Vancouver is well aligned with Seattle, California and of course, Silicon Valley in the tech play by being in the same time zone, and this helps.
Residential sales in September were actually up, not prices, but sales.
A lot of investors that wanted to buy a condo for passive income had trouble because of the rental restrictions. Now the restrictions are mostly gone or going soon. It will take a while to play out, but as often with this type of government action, unintended consequences are the result. (The industry and stakeholder consultation was minimal at best) There could be a noticeable increase in condo sales activity.
Small stratas that are self managed that currently have rental restrictions are in for a rough ride if troubled tenants are renting. You have the self managed strata councils where everyone pitches in and cuts the grass or has a duty and it goes well because everyone has a financial stake and there are minimal or no rental tenants to worry about. That could change now with absentee owners that don’t vote yes for improvements etc. I know this point may contradict the earlier one about investors looking for properties, but we will see how it plays out.
Residential sales in September were actually up, not prices, but sales.
A lot of investors that wanted to buy a condo for passive income had trouble because of the rental restrictions. Now the restrictions are mostly gone or going soon. It will take a while to play out, but as often with this type of government action, unintended consequences are the result. (The industry and stakeholder consultation was minimal at best) There could be a noticeable increase in condo sales activity.
Small stratas that are self managed that currently have rental restrictions are in for a rough ride if troubled tenants are renting. You have the self managed strata councils where everyone pitches in and cuts the grass or has a duty and it goes well because everyone has a financial stake and there are minimal or no rental tenants to worry about. That could change now with absentee owners that don’t vote yes for improvements etc. I know this point may contradict the earlier one about investors looking for properties, but we will see how it plays out.
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wildmanyeah
Crew Member
On mortgages though,
Half of variable mortgage holders with fixed payments have hit trigger rate: BoC - National | Globalnews.ca
The Bank of Canada is estimating that nearly two-thirds of variable-rate mortgage holders on fixed payments will hit their trigger rate by mid-2023.
my coworkers bank phoned him at work and told him he had to up payments. The worst part is they only tell you how much you have to increase it to keep paying the interests.
He thought he got a big hit well a month later when he looked at his bank statement and seen he was only paying interest he up his payment to also pay some principal, That's when the massive hit happened.
my friend that owns a small business told me that after the Provence put in absent tax for residential foreign owners, they switched to buy commercial office space and prices went up.
Vancouver is like all thoes big coastal citys you mentioned, prices only go up
Unreel
Well-Known Member
What I find interesting though is i haven't seen prices drop at all in my area of Nanaimo. Im in a more rural area with farms and larger properties and its hard to find a place for sale under 1.2m with the average around 1.5. 2-3 years ago you would pretty much never see a property out this way for a million let alone over that unless it was 10 plus acres.
N2013
Well-Known Member
A few recently retired guys at work are doing that. Selling their properties in town, moving up island to a property with some space for their toys. Those properties are finite and in demand so that’d be my guess why they haven’t seen as much as a drop. I’d assume they’re zoned differently than places in town. I’ve heard Nanaimo could be the next spot that real estate really booms and it makes sense. Sorta like Vic years back. It’s has a good location, easy access to the mainland, and centrally located on the island. Lots of amenities.
This is not quite correct. The income in the corporation is originally taxed at 50.67%. Once you pay the dividend out the company will receive a refund of tax of 20.67%. Net tax in the corporation for investment income is 20% once the profits have been distributed.