Fisgard's broker relations head for Ontario and Manitoba gives his view on the post-pandemic landscape
Mortgage brokers shouldn’t necessarily be worried by potential fixed mortgage rate increases – although they should be prepared for them.
That’s the view of Fisgard Asset Management Corporation broker relations for Ontario and Manitoba, Reaza Ali (pictured), who told Mortgage Broker News that the prospect of rate rises should be tempered by the reality of those rates currently being extremely low.
“One thing we have to remember, if and when we do start to see those rate increases: we’re starting from a point of below 2%,” he said. “So even if it does increase into the 2% range for a five-year fixed – and I don’t know if we’ll see this, but potentially that 3% range – it’s an adjustment period for consumers.”
Ali, who’s served in his current role with Fisgard since 2017, is well placed to comment on future mortgage trends, having amassed 23 years of experience including previous stints as a national sales manager and branch manager within the industry. He believes that speculation surrounding rate increases means brokers must maintain clear and open communication with their customers about the comparative risks and opportunities of fixed and variable rate mortgages.
“Borrowers are aware of [the stress test rate] at this moment,” he said. “It’s a matter of the broker having conversations with the client about the difference between the fixed and the variable, what the benefits are, and what the risks might potentially be at the same time.”
As a company that describes itself as “broker driven”, it’s little surprise that Fisgard remains closely attuned to the thoughts and concerns of brokers. “The broker community is our clientele,” Ali said. “That’s one thing we value greatly. Service to our broker community – that’s top of mind.
“From myself right through to our management team, every touchpoint to our broker community is critical for the client experience.”
Ali emphasized that the exact pace and shape of the Canadian economy’s post-pandemic performance remained somewhat unclear. “None of us have a crystal ball to predict exactly when that will happen,” he said. Still, he forecasted a “decent” recovery in the coming year, bolstered by increasing numbers of high-paid jobs and new immigrants.
“Professional, white-collar employment has been steadily growing, and if anything, has just taken off,” he pointed out. “Those are your buyers – coupled with people still entering the country.”
Another factor that brokers should be attuned to, Ali said, was the question of how the shift away from downtown areas – particularly in cities like Toronto – may be affected by businesses and workplaces reopening.
“You’ve seen a pretty significant shift with respects to the downtown market in general,” he said. “I deal with all of Ontario, as well as Manitoba, but speaking for Ontario: over the last year, we really saw a big shift of people moving away from downtown – relocating themselves and their families further out from the workplace, because now everyone is working from home.
“I think that’s going to be a factor playing into the market as well: when things start opening up again, are companies going to mandate people to come back downtown to the head offices, or are there going to be work options available to those that thrive in a work from home environment?”
Ali also noted that the current real estate market – while routinely described as “hot” – still has the potential to cause headaches for brokers and their clients alike. “The reality is that there’s a lack of inventory, and the demand has not subsided,” he said. “With increased demand – or even steady demand – the housing market still hasn’t caught up to that.
“It really is a seller’s market at this moment, and it can be difficult for consumers and mortgage brokers to deal with at times.”
