January 2010

[Ally]

Canadians playing it safe with with mortgages, report finds

Canadian home buyers are being cautious when taking out new mortgages, a report suggests.

The Canadian Association of Accredited Mortgage Professionals examined 40,000 loans issued in 2009, and found that 86 per cent of new mortgages issued were fixed-term. These are considered less risky than variable-rate terms, because the homeowner is locked in at one rate for a set amount of time, typically five years.

"The vast majority of Canadian mortgage borrowers are not taking on undue risks," said Jim Murphy, the association`s president. "They have factored rising interest rates in to their mortgage decisions."

While variable rate loans have been available as low as 2.25 per cent (compared to 4 per cent for fixed rate mortgages), there is concern that interest rates will rise higher and make it difficult for many on variable plans to meet their rising costs.

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[Ally]

Canada`s economy picks up steam

Canada`s economy expanded for a third straight month in November, as mining, energy and wholesale trade helped pull the country further out of recession.

The 0.4-per-cent growth in the month, reported Friday by Statistics Canada , was more than economists expected. The federal statistics gathering agency also revised October`s growth figure up to 0.3 per cent, from the initially reported 0.2 pert cent. September`s reading was also revised up a tenth of a percentage point.

November`s data indicates the economy – which grew just 0.4 per cent in the third quarter – is on track to meet or exceed the Bank of Canada`s 3.3 per cent growth estimate for the final three months of 2009, economists said.

"It`s certainly an indication that the economy picked up a lot of steam in the last quarter," said Millan Mulraine, an economics strategist at TD Securities in Toronto. "We didn`t see it coming; we never thought it would be at this level so early.``

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[Ally]

Economies on rebound, bankers on the defense

The Canadian and U.S. economies are rebounding from the deep recession. Statistics Canada said this morning the economy expanded by 0.4 per cent in November from October, marking the third consecutive month of growth. Notably, gains were broad based with growth in most industries. "The Canadian economy does indeed appear to be gathering momentum, despite some recent disappointments on the employment front," said BMO Nesbitt Burns deputy chief economist Douglas Porter. "While much of the growth in November was concentrated in a few sectors, most industries were on the plus side as the recovery broadens and puts down firmer roots."

The expansion was led by mining, energy and wholesale trade, with added strength from the real estate industry, the bond market and mutual funds, which boosted the financial sector. Manufacturing stalled, and retail trade and utilities dipped.

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[Ally]

Home prices make strides in November

OTTAWA — A measure of home prices in major Canadian markets was up in November compared with a year earlier for the second straight month.

The Teranet-National Bank home index, released Wednesday, was up 2.6 per cent on an annual basis for November. The last two gains followed prices being down on a year-over-year basis for 10 straight months. The latest gains put the overall index just 0.1 per cent shy of its peak in August 2008.

The index has been up on a monthly basis seven consecutive times, though the 0.8 per cent rise was the first time in six months it has been less than 1.2 per cent.

Calgary was the only city among the six in the index where prices remained below year-earlier levels. Calgary home prices were down 2.1 per cent from a year before, but ahead 0.6 per cent for the month.

Vancouver skewed the month-to-month gain with its own 1.9 per cent rise in November. Without Vancouver, the gain in this composite index would have been just 0.5 per cent.

Read the full article here.