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Canadians scramble to get mortgage pre-approvals as rate hikes loom – Global News



Canadians are scrambling to get mortgage pre-approvals and rate holds before the era of low interest rates comes to an end, as some economists predict.

Real estate and mortgage brokers say their clients are increasingly seeking ways to hold on to current rates because many housing markets like Toronto are facing heated conditions making it hard to keep purchase prices down.

“It’s a seller’s market and you barely have the opportunity to put conditions (on a purchase) because there are 400,000 people waiting for their permanent residency, 200,000 of them are already here and there’s buyers lined up around the corners,” said Estee Zacks, the Toronto-based owner of Strategic Mortgage Solutions Inc.

“They feel weak, and they are statistically, so they’re just trying to get a leg up as much as they can.”

Zacks has noticed a recent surge in requests for rate holds, which freeze mortgage rates for up to 130 days.

Read more:
Interest rates are headed up. What it means for variable and fixed mortgage rates

Mortgage rates vary across banks, but shows the country’s top five banks are offering five-year fixed mortgages for as low as 2.62 per cent and as high as 2.94 per cent.

Three-year fixed mortgages range from 2.49 to 3.49 per cent, while five-year variable mortgages vary between 1.40 and 1.75 per cent.

The interest rate, which also weighs on homebuyers, has sat at 0.25 per cent since March 2020, but the Bank of Canada has hinted it could rise as the country continues to climb out of the pandemic and loosen restrictions.

A rise in both mortgage and interest rates would end an almost two-year period of rock-bottom borrowing costs. However, the low rates haven’t done much to take the bite out of housing costs.

The Canadian Real Estate Association said the national average home price was $686,650 in September, up 13.9 per cent from $602,657 last year.

In Toronto, it was even higher. The Toronto Real Estate Board said the average price of a home sold soared by almost 20 per cent to nearly $1.2 million in October, up from $968,535 in the same month last year.

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Rates hikes will make those purchases even more costly.

A one per cent increase in mortgage rates from current levels will cost an average new buyer $230 or 12 per cent more in additional monthly interest payments, CIBC Capital Markets analyst Benjamin Tal wrote in a Nov. 4 note to investors.

“Potential buyers will face a higher interest payment trajectory, leading to reduced demand for new and existing units, potentially resulting in some slowing in the important construction industry,” he wrote.

Read more:
Faster interest rate hikes shadow federal plans to manage debt

“Current variable rate holders might choose to keep their principal payments untouched and thus will absorb the full impact of higher rates _ potentially at the expense of other spending.”

If rates stay elevated into 2025, he added “the massive borrowing undertaken during the pandemic will feel the full bite of higher rates.”

Vancouver real estate broker Tirajeh Mazaheri said buyers have noticed this and are rushing to get pre-approved for a mortgage to extend any kind of relief they can.

Many, she said, spent much of the pandemic closely watching housing prices and hoping they’d decrease, but have now accepted that likely won’t happen.

“People are scared and they are saying if interest rates go up, they’ll never be able to afford the city,” she said.

Read more:
Bank of Canada is signaling faster rate hikes. What that means for Canada’s housing market

“What we’re seeing is a lot of people trying to take advantage of pre-approvals right now or trying to get approved, so they can get their hands on something and not miss out on low rates.”

BMO Capital Markets senior economist Robert Kavcic doesn’t think those people have long.

He believes the Bank of Canada will likely hike its rates quicker and by more than most people expect, and he’s already seeing signs of rising mortgage rates.

In a Nov. 3 note to investors he wrote, “Mortgage rates are already creeping higher in the five-year fixed space, but those with contracts in hand probably have another month or two to buy something.”

© 2021 The Canadian Press

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Tentative deal between union workers and beef producer Cargill struck | CTV News – CTV News Calgary



With less than a week to go before workers were set to go on strike at Cargill’s High River, Alta. beef processing plant, the company says a tentative deal has been reached.

The company announced the development on Wednesday and says it is “encouraged by the outcome” of recent talks.

“After a long day of collaborative discussion, we reached an agreement on an offer that the bargaining committee will recommend to its members. The offer is comprehensive and fair and includes retroactive pay, signing bonuses, a 21 per cent wage increase over the life of the contract and improved health benefits,” Cargill wrote in a statement to CTV News via email.

The company adds it also “remains optimistic” a deal can be finalized before the strike deadline.

“(We) encourage employees to vote on this offer which recognizes the important role they play in Cargill’s work to nourish the world in a safe, responsible and sustainable way. While we navigate this negotiation, we continue to focus on fulfilling food manufacturer, retail and food service customer orders while keeping markets moving for farmers and ranchers,” it wrote.

The United Food and Commercial Workers’ Union (UFCW) Local 401 was expected to go on strike on Dec. 6.

It rejected the most recent attempt at a deal on Nov. 25 by a 98 per cent margin.


According to a statement from UFCW Local 401, the negotiating team engaged in “a marathon day” of talks with the company on Tuesday.

“Late in the evening, our bargaining committee concluded that they were in receipt of a fair offer and that they were prepared to present that offer to their coworkers with a recommendation of acceptance,” it wrote in a statement.

The union says the tentative deal will “significantly improve” the lives of Cargill workers and will be the ‘best food processing contract in Canada.”

Highlights from the deal include:

  • $4,200 in retroactive pay for many employees;
  • $1,000 signing bonus;
  • $1,000 COVID-19 bonus;
  • More than $6,000 total bonuses for workers three weeks before Christmas;
  • $5 wage increase for many employees;
  • Improved health benefits; and
  • Provisions to facilitate a new culture of health, safety, dignity and respect in the workplace

While UFCW Local 401 president Thomas Hesse calls the deal “fair,” he will support workers on the picket line if they decide to reject the proposal.

“If they do accept it, I’ll work with them every day to make Cargill a better workplace,” Hesse said in a statement. “I will do as our members ask me to do.

“I respect all of the emotions that they feel and the suffering that they have experienced.”

Employees are expected the vote on the new deal between Dec. 2 and 4.

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Afterpay delays vote on $29 billion buyout as Square awaits Spain’s nod



Afterpay Ltd will delay a shareholder meet to approve Square Inc’s $29-billion buyout of the Australian buy now, pay later leader, as the Jack Dorsey-led payment company awaits regulatory nod in Spain.

The investor meet was set for Dec. 6, but Afterpay said it would likely take place next year as Square, which has rebranded itself to Block Inc, is likely to get an approval from the Bank of Spain only in mid-January.

The delay is unlikely to impact the completion of Australia‘s biggest deal, which is set for the first quarter of 2022, Afterpay said.

“We continue to believe the risks of the transaction closing are minimal,” RBC Capital Markets analyst Chami Ratnapala said in a brief client note.

Meanwhile, Twitter Inc co-founder Dorsey is expected to focus on Square after stepping down as chief executive of the social media platform as it looks to expand beyond its payment business and into new technologies like blockchain.

Afterpay shares fell more than 6%, far underperforming the broader Australian market, tracking Square’s 6.6% drop overnight in U.S. market on worries over the Omicron variant.


(Reporting by Nikhil Kurian, Sameer Manekar and Indranil Sarkar in Bengaluru; Editing by Anil D’Silva, Rashmi Aich and Arun Koyyur)

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Canada Goose under fresh fire in China over no-return policies



China’s top consumer protection organisation has warned Canada Goose Holdings Inc against “bullying” customers in China with its return policies, just three months after the winterwear brand was fined for false advertising.

The premium down jacket manufacturer has been a hot topic on Chinese social media in recent days over its handling of a case involving a customer who wanted a refund of her purchases amounting to 11,400 yuan ($1,790.17) after finding quality issues.

She said she was told by Canada Goose that all products sold at its retail stores in mainland China were strictly non-refundable, according to her account which went viral online.

State-backed media such as the Global Times newspaper later cited Canada Goose as denying that it had a no-refund policy and that all products sold at its retail stores in mainland China were refundable in line with Chinese laws. The company did not respond to Reuters’ request for comment.

That has not failed to quell criticism of the brand.

“No brand has any privileges in front of consumers,” the government-backed China Consumer Association (CCA) said in an opinion piece posted on its website on Thursday morning.

“If you don’t do what you say, regard yourself as a big brand, behave arrogantly and in a superior way, adopt discriminatory policies, be condescending and bully customers, you will for sure lose the trust of consumers and be abandoned by the market,” the CCA said.

Representatives of the brand were summoned for talks on Wednesday by the Shanghai Consumer Council to explain its refund policy in China.

The dressing down of Canada Goose comes as tension between China and Western countries has fuelled patriotism and driven some shoppers to turn to home-grown labels.

Canada Goose was also fined 450,000 yuan in September in China for “misleading” consumers in its ads.

($1 = 6.3681 Chinese yuan renminbi)


(Reporting by Sophie Yu, Brenda Goh; Editing by Kim Coghill)

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