April 2012 Canadian Economic Fundamentals

[Ally]

The property predicament



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What would happen if, as so many people are hoping, home prices were to go up dramatically again as they did in the early 2000s? Would such a change really benefit society?





People who most ardently desire this are homeowners who are underwater on their mortgages, who took out mortgages at the peak of the boom and now find that their homes are worth less than they owe on them. They would just feel relieved to get out of the red as soon as possible.





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[Ally]

Bank of Canada head urges caution in housing market






TORONTO (Reuters) - Parts of the Canadian housing market, especially condominiums in some major cities, have seen prices jump to levels that warrant caution, the head of the country's central bank said in an interview broadcast on Saturday.





"There are issues, particularly in some parts of the country in the condo market, without question, where activity has been particularly strong, has reached back to levels of the late 1980s," Bank of Canada Governor Mark Carney told CBC Radio when asked if Canada was experiencing a housing bubble.





"And in some of our major cities, without question, valuations are extremely firm, to put it one way. And so some caution is warranted in that environment." Carney did not mention specific regions or cities





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[Ally]

Investors turn to condos





On a warm spring day, a construction crew perched on scaffolding 11 storeys up is installing a Laval condominium building's yellow faÃade.




sight of construction workers O The in hard hats is now all too common in the Greater Montreal Area, where new condo starts have soared to record levels over the past two years. But this latest 15-storey suburban condo development - like the other three completed buildings in the Logix residential project - is hardly typical.






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[Ally]

Canadian housing starts on the upswing





The seasonally adjusted annual rate[sup]1[/sup] of housing starts was 215,600 units in March, according to Canada Mortgage and Housing Corporation (CMHC). This is up from 205,300 units in February.






"The upward movement in March was largely due to an increase in multiple starts, particularly in Ontario and the Prairies. This was partly offset by a decrease in multiple starts in British Columbia and Quebec, while single-detached starts decreased marginally country-wide," said Mathieu Laberge, Deputy Chief Economist at CMHC's Market Analysis Centre."





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[Ally]

How to take advantage of low mortgage rates




While it may seem that historically low interest rates have become the Canadian mortgage standard lately, don't be fooled. Sooner or later, the economy will rally bringing with it increased lending rates. While most economists are devoting their energy to predicting when this shift will occur, hundreds of thousands of Canadian homeowners are doing everything they can to ensure they take advantage of current best rate mortgage products.




Surveys indicate that nearly one-third of mortgage holders are actively trying to terminate their current mortgage early by making extra payments. In this way, they'll be able to renew and lock in at an unbelievable rate as part of a long-term fixed rate agreement.





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[Ally]

U.S. home prices drop for 6th straight month




WASHINGTON (AP) -- Home prices dropped in February in most major U.S. cities for a sixth straight month, a sign that modest sales gains haven't been enough to boost prices.




The Standard & Poor's/Case-Shiller home-price index shows that prices dropped in February from January in 16 of the 20 cities it tracks.




The steepest declines were in Atlanta, Chicago and Cleveland. Prices rose in Phoenix, San Diego and Miami. They were unchanged in Dallas.





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[Ally]

Scotiabank's ultimate variable rate mortgage





Variable-rate mortgage volumes have dropped off a cliff since last summer.



Most feel that variable rates simply aren`t low enough (compared to fixed rates) to offset the risk.




But what if there was a limit to that risk?





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[Ally]

Why our young may save the housing market from tumbling




Here`s one more factor buoying average home prices: young and middle-aged adults.




Canada stands out among the 34 countries in the Organization for Economic Co-operation and Development with one of the fastest growth rates in housing prices since 2007, note StÃfane Marion and Matthieu Arseneau, economists at National Bank Financial Inc.





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[Ally]

Mortgage lending change could trigger soft landing or 'apocalypse'




The federal government has moved to further tighten up mortgage lending and cool the overheated Canadian real estate market by effectively reining in the Canada Mortgage and Housing Corp.




What`s unclear is whether the move will throw a cold compress on Toronto`s feverish housing market or just mean there`s one more person keeping a close eye on its temperature.





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[Ally]

Home prices up in March, but gains continue to moderate






OTTAWA ` April 27th, 2012 ` The MLSÂ Home Price Index (HPI), the leading measure of Canadian home prices, stayed above year-ago levels in March 2012 according to statistics released today by The Canadian Real Estate Association (CREA). Year-over-year gains have been moderating. The increase in March was the smallest since last June.





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[Ally]

Why would Canadians hide the ethics of their oil




Canadians haven`t dedicated themselves to creating a nation that upholds the world`s highest standards of human rights, a country with unparalleled protection in business for workers and the environment, just so we can feel awkward about it. When you`ve strived to build a country and society built upon liberal democratic values with a higher ethical standard, why hide it?





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[Ally]

Canadians' average weekly earnings were up in February





OTTAWA ` The average weekly pay for Canadians in conventional jobs was $886.45 in February, up 1.8 per cent from a year earlier, Statistics Canada reported Thursday.







The figure, reflecting gross earnings before deductions and adjusted to factor out seasonal fluctuations, was up 0.2 per cent from the month before.






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[Ally]

TD condo poll suggests Canadians don't mind paying for condo living





According to the TD Canada Trust 2012 Condo Poll, three-quarter of Canadian condo buyers say condo fees are worth the extra monthly expense to enjoy the perks of living in a condo.







The poll surveyed urban Canadians who recently bought or who were intending to buy a condo. The participants suggested they were drawn to condos due to the affordability (45 per cent), less required maintenance (60 per cent) and the amount of amenities (25 per cent).







Farhaneh Haque, Director of Mortgage Advice, TD Canada Trust, says of the survey, `Managing your housing expenses is about prioritizing your needs and budgeting accordingly. It`s clear that the convenience of condo living is important to many Canadians, and they are willing to pay the monthly fees that come with owning a condo.`







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[Ally]

Spain crisis deepens with downgrade, soaring unemployment






Spain's economic woes deepened Friday as the government revealed that unemployment rose to nearly 25 per cent, a day after a credit ratings agency downgraded the country's debt and warned it faces an uphill battle to get a grip on its finances at a time of recession.




Official figures showed that unemployment has jumped to 24.4 per cent in the first quarter of 2012 ` the highest rate in the 17-country euro zone ` from 22.9 per cent in the fourth quarter of 2011. The data showed that another 365,900 people lost their jobs in the first three months of the year, taking the total unemployed to 5.6 million.





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[Ally]

Canadians' average weekly earnings increase in February





OTTAWA ` The average weekly pay for Canadians in conventional jobs was $886.45 in February, up 1.8 per cent from a year earlier, Statistics Canada reported Thursday.







The figure, reflecting gross earnings before deductions and adjusted to factor out seasonal fluctuations, was up 0.2 per cent from the month before.







Those on non-farm payrolls worked an average of 32.8 hours a week in February, the federal agency said, down from 33 a year earlier and 32.9 in January.






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[Ally]

Getting used to a longer working life




You want to retire with the same standard of living you`ve grown used to in your lifetime. Who wouldn`t?




The question is how to fund those years. You can work longer, save more, or, as certified financial planner Lise Andreana jokes, win the lottery.




`There are a huge percentage of people who think that`s going to happen,` Ms. Andreana laughs.

The planner, who works for Continuum II Inc. in the retirement haven of Niagara-on-the-Lake, says she has many clients facing the reality that they will have to work longer to make the retirement they want work.





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[Ally]

Want a better life? Then take risks





Every year, oil tankers move about two billion metric tons of oil glob-ally. From 1970 through 2010, a total of 5.71 million metric tonnes was lost to the environment as a result of tanker incidents, little more than a statistical blip averaged over time.




While the volume of seaborne oil trade has grown steadily over those years, which suggests increased risk, the frequency of spills has, in fact, dropped significantly.






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[Ally]

CMHC reform: A good start



The financial press burst into a minor tizzy Thursday, in a quest to digest the housing and finance market implications of the 2012 budget implementation bill Finance Minister Jim Flaherty tabled in the House of Commons.





Notwithstanding the bill`s 431 pages, what grabbed attention was a few short sections overhauling Canada Mortgage and Housing Corp. oversight and dealing a short, sharp shock to an important corner of the bond market. Important steps, in my view, to improving the foundation and durability of Canada`s housing finance system, and doing so with just a little less taxpayer exposure to housing risks.





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[Ally]

Flaherty sets one-year goal for national regulator plan




Finance Minister Jim Flaherty has drawn a line in the sand for the first time in his for a national securities regulator, setting a one-year deadline before he walks away.




Mr. Flaherty has long fought for a national regulator, making it one of his signature goals since became finance minister. But he suffered a setback in December when the Supreme Court of Canada ruled such a plan would be unconstitutional by infringing on provincial independence.





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[Ally]

Home prices move higher in March



Home prices crept higher in March as a slowing Vancouver market was offset by an acceleration in prices in Calgary, Toronto and Montreal, according to a report by the Canadian Real Estate Association.





The MLS home price index was up 1.3 per cent in March on an month-over-month basis and up 5.1 per cent per cent compared with a year ago.



Read the full article here.