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Mortgage 101 – Is the Bank of Canada getting it wrong or right? | June 2022 Part 1

In this episode of Mortgage 101 with Clinton Wilkins and Todd Veinotte, as heard on CityNews 95.7 and CityNews 101.1, the guys talk about the hot topic of inflation and the Bank of Canada interest rate hikes, plus give some updates on migration to Nova Scotia and predict what the summer real estate market will be like.

Mortgage 101 with Clinton Wilkins & Todd Veinotte: Is the Bank of Canada getting it wrong or right?

Don’t feel like watching the video? Check out the transcript below.


What we do at Clinton Wilkins Mortgage Team

Todd Veinotte: [00:00:00:01] So there are new people listening each and every month, which is fantastic. In both our markets, Halifax and Ottawa. So I think it’s important that you kind of let everybody know, those new listeners, a bit about you and what you do. Not too much because you don’t want to belabour the point.

Clinton Wilkins: [00:00:16:01] Well, and especially I think there’s probably a lot of repeat listeners.

Todd Veinotte: [00:00:17:27] Yeah, there’s a lot of people who are loyal fans is what we call them.

Clinton Wilkins: [00:00:21:02] Of course, and I, you know, I sometimes hear some of the zingers and some of the funny things that we say. People tell me, say back to me. So I’m like, “Oh, people are actually listening.” Which is kind of funny.

My name is Clinton Wilkins. I’m a mortgage broker in Halifax, Nova Scotia. Recently, I guess, crowned or awarded Mortgage Broker of the Year for across the country. And we thank all our listeners here on CityNews, obviously in Halifax and in Ottawa for listening to us and for our viewers online and anybody who’s listening to us anywhere where you can get your podcast, you know, on Spotify or Apple Music.

I’ve been in the industry for 17 years. I funded over $1 billion worth of mortgages and almost 5,000 transactions. Todd, can you imagine?

Todd Veinotte: [00:01:03:05] I cannot imagine.

Clinton Wilkins: [00:01:04:05] You know, every time I think I’ve seen everything, I see something new.

Todd Veinotte: [00:01:08:02] And, you know, what’s really pushed you over that edge? Those two transactions you did with me. Without those you would not be successful.

After three and a half seasons, Todd knows a lot, too

Clinton Wilkins: [00:01:14:23] Those are my favourite two transactions, you know what I mean? No one outside of this industry knows more about mortgage lending than you do, Todd.

Todd Veinotte: [00:01:22:15] That’s true, isn’t it?

Clinton Wilkins: [00:01:23:11] Which is pretty cool.

Todd Veinotte: [00:01:24:15] Yeah, it is.

Clinton Wilkins: [00:01:24:24] I’m sure like at parties when you go to a party and, maybe this weekend, you can just talk about mortgage lending and everything, you know, with the Bank of Canada and real estate.

Todd Veinotte: [00:01:34:08] That’s right, because that’s what everybody wants to talk about at a party.

Clinton Wilkins: [00:01:37:08] Let me tell you, that’s what I talk about. I don’t know about you.

Mortgage brokers like to party

Todd Veinotte: [00:01:41:04] Speaking of parties, are you having another one this summer?

Clinton Wilkins: [00:01:43:08] You know, we’re always having a little event.

Todd Veinotte: [00:01:46:02] But you had a big blow-out last summer.

Clinton Wilkins: [00:01:48:00] Oh, yeah, I don’t know if I can redo that one. For any of you who don’t know, I had a big event here in downtown Halifax at our office. We’ve a big terrace outside our office here on George Street. We’re right beside the art gallery and kitty corner to Province House. So a great location. And we had a seated event for about 50 of our closest business partners and staff and friends. And it was a really a great time.

Todd Veinotte: [00:02:15:00] It was fun.

Clinton Wilkins: [00:02:16:01] And, you know, we got to host Todd and a couple of our other friends from CityNews, which was great. And, you know, we’d like to be able to do things like that, you know, obviously being self-employed, Todd. You’ve been self-employed in the past. You understand? You know, it’s the best of times and it’s the worst of times.

And that’s why I think even a lot of the clients that we deal with every day who are self employed like it holds a little bit bigger piece of my heart because I know what some of the struggles are, but it’s nice to celebrate some of those successes. And, you know, I think putting us on stage and just showing what we can do, obviously, I really believe in Halifax and Nova Scotia.

I think it’s a great place to live and do work. And I think maybe some of our listeners in Ottawa might want to join us here on the East Coast at some point and maybe, you know, learn some interesting things about mortgage lending as well on the way.

Updates on migration from other parts of the country

Todd Veinotte: [00:03:06:29] Too that, a lot of people have moved to this region from all other parts of the country, Ottawa, big cities. Is that still happening or is that kind of slowed a bit?

Clinton Wilkins: [00:03:19:14] I think there’s been less migration here than there was maybe a year ago, Todd. You know, that’s a symptom of things opening up across the country. Obviously, things are getting more back to normal. Is COVID over? No. You know, are things getting more to a normal state? I think so. And I think that, you know, we still have a very great life here.

I think there’s been some of the decisions by the provincial government that may be slightly less attractive for people wanting to relocate here. You know, one of the things is, you know, they announced increased property taxes, which was rollback.

Todd Veinotte: [00:03:56:19] Yeah, they rolled it back.

Clinton Wilkins: [00:03:57:22] There was going to be a 2 per cent increase in the property taxes for any like non Nova Scotians that own property here. So that was rollback. But they still have in place an increase in the deed transfer tax. So for non residents who buy a property here and they’re not going to live here within six months, they have to pay an increase in the deed transfer tax.

Deed transfer tax increase

Todd Veinotte: [00:04:15:29] What’s the increase? I can’t remember. It’s a lot isn’t it?

Clinton Wilkins: [00:04:18:00] Yeah. I think it’s double, Todd. You know, or it’s one and a half percent and obviously some municipalities have zero. Some have one and a half. Like in Halifax, we have a 1.5 per cent deed transfer tax already. So, you know, that’s an impact. Is that the, you know, the showstopper for people who want to buy properties here? Probably not. But it certainly would discourage some people. And I think having the scare on that property tax piece and that you know a 2 per cent per, or $2 per $100 of the assessment, that was a significant kind of scare to some people.

So I think that maybe slowed the market a little bit. And, you know, in some markets from across the country having the increase in what’s going on in the rate environment right now, Todd, has impacted our real estate market here, maybe not so much, but in some other real estate markets, it certainly has had a big impact. And I think borrowers are becoming more cognisant of their cost of borrowing. And it’s not just the cost of borrowing and that’s impacting Canadians.

You know, inflation, when you go to the pump, it’s costing more money. I can tell you, groceries are much more expensive. And the Bank of Canada really sent a clear message here last week about what’s going on out there and consumer goods and inflation. You know, they sent a clear message to Canadians to stop spending and start saving their money.

Is the Bank of Canada getting it wrong or right?

Todd Veinotte: [00:05:39:10] Don’t you find, though, that for Canadians, this is such a contradiction? When you’re told throughout the pandemic that they want you to spend. Entice you to spend, low interest rates, get out there and do that, and then all of a sudden flip the switch, “No, we don’t want you to do that!” That’s, I just find this kind of market manipulation by the bank is I don’t know how I would describe.

Clinton Wilkins: [00:06:04:29] With the Bank of Canada, can they always get it right? I don’t think so. You know, I think they’re always playing catch up a little bit. They acted very swiftly and quickly when the pandemic struck. So I do kind of applaud them to lowering that cost of borrowing. Todd, you know, they needed to put a liquidity into the marketplace. They needed to bring down the cost of borrowing.

Todd Veinotte: [00:06:22:28] But that’s created all the inflation, though, has it not?

Clinton Wilkins: [00:06:25:00] In theory it did. Because guess what? No one spent any money for two years. No one was going out, going on vacation, shopping.

Todd Veinotte: [00:06:31:18] Yeah. So they get all this money and floating around.

Clinton Wilkins: [00:06:33:20] Canadians saved a lot of money, Todd.

Todd Veinotte: [00:06:34:19] Yeah, that’s right.

Clinton Wilkins: [00:06:35:16] So then you know what happened? All this money that was being was being saved, suddenly flooded the marketplace. And that flood in the marketplace has obviously put a strain on consumer goods. It really put a strain on, you know, if you’re building a home, the cost materials are very expensive. You know, there’s no cars to buy.

Todd Veinotte: [00:06:54:20] Yeah. Can’t even rent cars.

Clinton Wilkins: [00:06:55:29] You can’t rent a car. The lease on my car is up in December and I’m like, you know what? I might have to buy that car. Who knows?

Todd Veinotte: [00:07:02:24] Then again, if you trade it in and probably get a good value for it at this point.

Clinton Wilkins: [00:07:05:26] You know what? I could trade it in and I could walk away with a big, fat check, I can tell you that right now. But, on the flip side, I wouldn’t have a way to get around.

Todd Veinotte: [00:07:15:08] Yeah that’s right.

Summer real estate in Nova Scotia

Clinton Wilkins: [00:07:16:02] So that’s, you know, not great. But, you know, the long story, long of my explanation, I think the migration to Nova Scotia has somewhat slowed over the last couple of months, but we have a lot more listings on hand than we did before. So I’m interested to see now what’s going into the summer.

Typically, June is a little bit of a quieter month for us. You know, obviously kids are finishing up with school. We’re getting ready for summer. And summer is not always the busiest time. But I think if we do have some more listings, it’ll be very interesting to see what happens obviously with the purchases, you know, here in Halifax and across our region.

What’s up next?

Todd Veinotte: [00:07:56:06] So what do you want to talk about over the next three segments?

Clinton Wilkins: [00:07:59:00] You know, I think that we’re going to talk about what’s going on with the Bank of Canada and what’s going on with the rates. I know obviously if your consumer, if you’re in the market, if you have a mortgage already, you’re going to be interested to know kind of what’s going on with the rates. So we’re going to do a little bit of a deep dive into that. What’s better right now, a variable or a fixed? We’re also going to talk about refinance. Is the summer a good time to think about a refi? Why do people refinance?

Todd Veinotte: [00:08:23:12] Is there a season that’s better than others?

Clinton Wilkins: [00:08:25:20] I think the right season is the right season for you. So we’ll talk about that a little bit and the mechanics on how a refinance works. And, you know, we’re going to talk a little bit more about what’s going on here in the real estate market in Halifax.

Todd Veinotte: [00:08:37:25] And do you have any tips on what type of music we’re going to be playing today? Kind of more rocking?

Clinton Wilkins: [00:08:43:08] Well, last month, I don’t know if our listeners remember we had a whole ABBA theme. Now you picked the first song. I’ll pick the second song so you guys can decide which song you like better.

Todd Veinotte: [00:08:52:03] All right. Sounds good. Mortgage 101: Your Guide to Homeownership. We’ll be right back.

If you have any questions, get in touch with us at Clinton Wilkins Mortgage Team! You can call us at (902) 482-2770 or contact us here.