January 2012 Canadian Economic Fundamentals
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Analysis: Canadian housing market thrives while prices surge
OTTAWA (MNI) - Canada's housing market continues to perform strongly, though its high sales and prices are a mixed blessing because they help underpin the domestic economy but give rise to concerns about growing household indebtedness. Mark Carney, the governor of the Bank of Canada, terms Canadian household debt the country's biggest domestic economic risk, but says the danger is not imminent and pales behind the foremost risk to Canada's economy, contagion from Europe. The largest contributor to Canadian household debt also is the largest single contributor to the consumer spending that has been Canada's economic mainstay during the 2008-2009 recession and to the present: the C$1.079 trillion residential housing sector. Statistics released by The Canadian Real Estate Association (CREA) show home sales in Canada are still on the rise, though the pace of increase is slowing. Data released by CREA in November show the national average house price is C$360,396, up 4.6% from the same month last year.
Read the full article here.
OTTAWA (MNI) - Canada's housing market continues to perform strongly, though its high sales and prices are a mixed blessing because they help underpin the domestic economy but give rise to concerns about growing household indebtedness. Mark Carney, the governor of the Bank of Canada, terms Canadian household debt the country's biggest domestic economic risk, but says the danger is not imminent and pales behind the foremost risk to Canada's economy, contagion from Europe. The largest contributor to Canadian household debt also is the largest single contributor to the consumer spending that has been Canada's economic mainstay during the 2008-2009 recession and to the present: the C$1.079 trillion residential housing sector. Statistics released by The Canadian Real Estate Association (CREA) show home sales in Canada are still on the rise, though the pace of increase is slowing. Data released by CREA in November show the national average house price is C$360,396, up 4.6% from the same month last year.
Read the full article here.
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Housing component of economy continues to grow, reaches $330 billion
OTTAWA - CMHC says housing and related spending continues to be a major pillar of Canada's economy.
The federal housing agency says more than 20 per cent of Canada's economy is related to spending on homes.
Read the full article here.
OTTAWA - CMHC says housing and related spending continues to be a major pillar of Canada's economy.
The federal housing agency says more than 20 per cent of Canada's economy is related to spending on homes.
Read the full article here.
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CMHC forecasts real estate prices will show more modest growth in 2012
After surprising growth in 2011, Greater Vancouver real estate prices will rise just two per cent in 2102, Canada Mortgage and Housing is forecasting.
In 2011, CHMC predicted price growth of just three per cent, tempered by an expectation of higher interest rates, but interest rates stayed low and prices ultimately jumped 16 to 17 per cent.
In 2012, the market will stabilize and show modest growth in line with inflation, said Robyn Adamache, senior market analyst with CMHC in Vancouver.
Read the full article here.
After surprising growth in 2011, Greater Vancouver real estate prices will rise just two per cent in 2102, Canada Mortgage and Housing is forecasting.
In 2011, CHMC predicted price growth of just three per cent, tempered by an expectation of higher interest rates, but interest rates stayed low and prices ultimately jumped 16 to 17 per cent.
In 2012, the market will stabilize and show modest growth in line with inflation, said Robyn Adamache, senior market analyst with CMHC in Vancouver.
Read the full article here.
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Forecast: 'Modest' growth in area real estate prices for 2012 - CMHC
After surprising growth in 2011, Greater Vancouver real estate prices will rise just two per cent in 2102, Canada Mortgage and Housing is forecasting.
In 2011, CHMC predicted price growth of just three per cent, tempered by an expectation of higher interest rates, but interest rates stayed low and prices ultimately jumped 16 to 17 per cent.
In 2012, the market will stabilize and show modest growth in line with inflation, said Robyn Adamache, senior market analyst with CMHC in Vancouver.
Read the full article here.
After surprising growth in 2011, Greater Vancouver real estate prices will rise just two per cent in 2102, Canada Mortgage and Housing is forecasting.
In 2011, CHMC predicted price growth of just three per cent, tempered by an expectation of higher interest rates, but interest rates stayed low and prices ultimately jumped 16 to 17 per cent.
In 2012, the market will stabilize and show modest growth in line with inflation, said Robyn Adamache, senior market analyst with CMHC in Vancouver.
Read the full article here.
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Economists predict growth despite stagnant economy
Statistics Canada recently reported that the Canadian economy was stagnant in October, driven in part by declines in construction.
However, economists are optimistic that the national economy will expand in the last quarter of 2011 and the first quarter of this year.
`This report was broadly in line with expectations, although the mix was surprising, with manufacturing up and wholesale down,` said Douglas Porter, deputy chief economist with BMO Financial Group.
Read the full article here.
Statistics Canada recently reported that the Canadian economy was stagnant in October, driven in part by declines in construction.
However, economists are optimistic that the national economy will expand in the last quarter of 2011 and the first quarter of this year.
`This report was broadly in line with expectations, although the mix was surprising, with manufacturing up and wholesale down,` said Douglas Porter, deputy chief economist with BMO Financial Group.
Read the full article here.
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The 2012 recovery: Handle with care
What does 2012 hold in store for the world economy? Let us start by looking at the battered high-income countries. Is there a good reason to expect healthy recoveries? Not really. The outcome in the euro zone might be a disaster that spreads around the world. Even the U.S. recovery is likely to be fragile. The shadow cast by events before 2007 passes slowly.
Read the full article here.
What does 2012 hold in store for the world economy? Let us start by looking at the battered high-income countries. Is there a good reason to expect healthy recoveries? Not really. The outcome in the euro zone might be a disaster that spreads around the world. Even the U.S. recovery is likely to be fragile. The shadow cast by events before 2007 passes slowly.
Read the full article here.
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Investing in property: A young person's game?
You buy a duplex, get a mortgage, find tenants and collect monthly rent cheques. What could be easier?
With stock and bond markets spinning their wheels, many Canadians are looking for alternative places to park their money. And while buying an investment property might seem like a good way to diversify, you should do your homework before jumping into the housing market.
`Real estate investing is not for everyone,` says Vancouver-based Don Campbell, president of the Real Estate Investment Network.
Read the full article here.
You buy a duplex, get a mortgage, find tenants and collect monthly rent cheques. What could be easier?
With stock and bond markets spinning their wheels, many Canadians are looking for alternative places to park their money. And while buying an investment property might seem like a good way to diversify, you should do your homework before jumping into the housing market.
`Real estate investing is not for everyone,` says Vancouver-based Don Campbell, president of the Real Estate Investment Network.
Read the full article here.
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Canada's housing boom among longest in Western world
Canada`s housing boom is among the most long-lived in the Western world at 13 years, but the next few years could chip away at the gains that have seen the average house increase in value by 85 per cent since 1998.
In a report released Tuesday that said the Canadian housing market was the strongest in the developed world in the third quarter, Bank of Nova Scotia economists said `the slow pace of the global economic recovery, intensifying sovereign debt concerns, weak consumer confidence and high unemployment all continue to weigh on residential property markets` in 10 countries it tracks.
Read the full article here.
Canada`s housing boom is among the most long-lived in the Western world at 13 years, but the next few years could chip away at the gains that have seen the average house increase in value by 85 per cent since 1998.
In a report released Tuesday that said the Canadian housing market was the strongest in the developed world in the third quarter, Bank of Nova Scotia economists said `the slow pace of the global economic recovery, intensifying sovereign debt concerns, weak consumer confidence and high unemployment all continue to weigh on residential property markets` in 10 countries it tracks.
Read the full article here.
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Diverging paths for Canadian and U.S. economies: BMO
The Canadian economy has outperformed its southern neighbour in terms of GDP growth for the past six years. But according to a new report from economists at BMO Capital Markets, that win streak is about to come to an end.
BMO's Douglas Porter expects GDP growth in Canada to come in at 2 percent in 2012 compared to a forecast of 2.2-percent growth for the U.S. economy.
"The growth gap drivers have been consumer spending and housing," Porter says in a recent note to clients. "On both fronts, it appears that the extended period of faster growth in Canada is in danger."
Read the full article here.
The Canadian economy has outperformed its southern neighbour in terms of GDP growth for the past six years. But according to a new report from economists at BMO Capital Markets, that win streak is about to come to an end.
BMO's Douglas Porter expects GDP growth in Canada to come in at 2 percent in 2012 compared to a forecast of 2.2-percent growth for the U.S. economy.
"The growth gap drivers have been consumer spending and housing," Porter says in a recent note to clients. "On both fronts, it appears that the extended period of faster growth in Canada is in danger."
Read the full article here.
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A rosy economic outlook
I never really believed in economic forecasting. First of all, the forecasters tend to be wrong at least half of the time or they only commit to the vaguest predictions.
For instance, just a few weeks ago, I received an economic bulletin by a reputable firm stating that there was a 50% chance that there would be a recession in 2012 ... and a 50% chance that there wouldn't be one!
Now, if you want to believe that 2012 will be a reasonably good year in terms of economic growth, here are some arguments to support your thesis.
Read the full article here.
I never really believed in economic forecasting. First of all, the forecasters tend to be wrong at least half of the time or they only commit to the vaguest predictions.
For instance, just a few weeks ago, I received an economic bulletin by a reputable firm stating that there was a 50% chance that there would be a recession in 2012 ... and a 50% chance that there wouldn't be one!
Now, if you want to believe that 2012 will be a reasonably good year in terms of economic growth, here are some arguments to support your thesis.
Read the full article here.
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Economy seen growing, but global risks loom
TORONTO (Reuters) - Canada will likely see a second year of modest economic growth in 2012, but is highly vulnerable to turmoil in Europe, the United States and elsewhere, some of Canada's top economists predicted on Thursday.
The country, which fared better than most major Western economies in the global financial crisis, could also lag U.S. growth for the first time since the recession.
But economists with Canada's biggest banks warned forecasting is tougher than usual given uneven global growth, the impact of ultra-low interest rates and foreign political uncertainty.
Read the full article here.
TORONTO (Reuters) - Canada will likely see a second year of modest economic growth in 2012, but is highly vulnerable to turmoil in Europe, the United States and elsewhere, some of Canada's top economists predicted on Thursday.
The country, which fared better than most major Western economies in the global financial crisis, could also lag U.S. growth for the first time since the recession.
But economists with Canada's biggest banks warned forecasting is tougher than usual given uneven global growth, the impact of ultra-low interest rates and foreign political uncertainty.
Read the full article here.
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Canada loses 26,000 full-time jobs
An increase in part-time work offset a loss of 26,000 full-time jobs in Canada in December ` but it wasn't enough to stop the unemployment rate from ticking higher to 7.5 per cent.
Statistics Canada said the unemployment rate climbed by 0.1 percentage points despite the increase of 18,000 jobs because more Canadians were looking for work than in November.
Read the full article here.
An increase in part-time work offset a loss of 26,000 full-time jobs in Canada in December ` but it wasn't enough to stop the unemployment rate from ticking higher to 7.5 per cent.
Statistics Canada said the unemployment rate climbed by 0.1 percentage points despite the increase of 18,000 jobs because more Canadians were looking for work than in November.
Read the full article here.
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Canadians better at paying off credit card debt?
TORONTO ` Canadians are paying off more of their credit card debt and borrowing less as they cope with a weaker economy and some restrictions on credit expansion.
The latest national credit trends report from Equifax Canada, released early Tuesday, says the average credit card debt fell in 2011 by 3.4 per cent.
Despite that improvement and a reduction in consumer bankruptcies last year, overall debt continues to rise -- though much more slowly than before.
Read the full article here.
TORONTO ` Canadians are paying off more of their credit card debt and borrowing less as they cope with a weaker economy and some restrictions on credit expansion.
The latest national credit trends report from Equifax Canada, released early Tuesday, says the average credit card debt fell in 2011 by 3.4 per cent.
Despite that improvement and a reduction in consumer bankruptcies last year, overall debt continues to rise -- though much more slowly than before.
Read the full article here.
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Canada has become a major force on the global stage
This is the first offering from Matthew Fisher's new regular column for Postmedia News. Each week, he will be featured in the Tuesday, Friday and Sunday editions.
One persistent Canadian myth is that the country has a marvellous international reputation.
It is true that Canada for many years did all it could to be on the side of the angels.
Read the full article here.
This is the first offering from Matthew Fisher's new regular column for Postmedia News. Each week, he will be featured in the Tuesday, Friday and Sunday editions.
One persistent Canadian myth is that the country has a marvellous international reputation.
It is true that Canada for many years did all it could to be on the side of the angels.
Read the full article here.
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The girl who played with tax data: And uncovered the foreign funding of three Canadian green groups
Over the past year, Vancouver writer Vivian Krause has been documenting the role of activist U.S. charitable foundations ` many with radical agendas aimed at Canada ` in funding environmental groups in Canada. The foundations, from the Tides group to the Hewlett and Packard foundations and many others, have poured up to $300-million into Canadian groups over the past 10 years. Canadian industrial targets have included farmed salmon, tanker traffic, oil sands development and the forest industry ` core industries in Canada`s economic development.
Read the full article here.
Over the past year, Vancouver writer Vivian Krause has been documenting the role of activist U.S. charitable foundations ` many with radical agendas aimed at Canada ` in funding environmental groups in Canada. The foundations, from the Tides group to the Hewlett and Packard foundations and many others, have poured up to $300-million into Canadian groups over the past 10 years. Canadian industrial targets have included farmed salmon, tanker traffic, oil sands development and the forest industry ` core industries in Canada`s economic development.
Read the full article here.
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No Bank of Canada rate hike until Q1 2013
TORONTO ` A deteriorating European economy and weak global growth will keep the Bank of Canada from raising rates for at least another year, though an interest rate cut looks highly unlikely, according to a Reuters survey.
The Reuters poll of 41 economists and strategists released on Tuesday showed the median forecast for the next interest rate hike was pushed back by three months to the first quarter of 2013 from the fourth quarter of 2012 projected in a November poll. The Bank of Canada`s target for the overnight rate ` its main policy rate ` has been at 1% for more than a year.
`The longer we spend struggling with slower growth and the longer we go without the Europeans coming to some cohesive policy solution, the worse the economic drag will be,` said David Tulk, chief Canada macro strategist at TD Securities.
Read the full article here.
TORONTO ` A deteriorating European economy and weak global growth will keep the Bank of Canada from raising rates for at least another year, though an interest rate cut looks highly unlikely, according to a Reuters survey.
The Reuters poll of 41 economists and strategists released on Tuesday showed the median forecast for the next interest rate hike was pushed back by three months to the first quarter of 2013 from the fourth quarter of 2012 projected in a November poll. The Bank of Canada`s target for the overnight rate ` its main policy rate ` has been at 1% for more than a year.
`The longer we spend struggling with slower growth and the longer we go without the Europeans coming to some cohesive policy solution, the worse the economic drag will be,` said David Tulk, chief Canada macro strategist at TD Securities.
Read the full article here.
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Condo risk bubbles up
The latest housing starts data Tuesday showed that the split between new highrise construction and single-unit homes spread to its widest point in more than 20 years last year, as some of Canada`s top bankers voiced their concerns about an overheating condominium market in Canada.
Overall in 2011, construction began on 106,700 units in condominiums or multi-unit buildings, up 17% from a year before, while starts of detached homes dropped about 12% to 66,800. The spread between single- and multi-unit starts is the widest since 1990, said Robert Kavcic, an economist with BMO Capital Markets.
Read the full article here.
The latest housing starts data Tuesday showed that the split between new highrise construction and single-unit homes spread to its widest point in more than 20 years last year, as some of Canada`s top bankers voiced their concerns about an overheating condominium market in Canada.
Overall in 2011, construction began on 106,700 units in condominiums or multi-unit buildings, up 17% from a year before, while starts of detached homes dropped about 12% to 66,800. The spread between single- and multi-unit starts is the widest since 1990, said Robert Kavcic, an economist with BMO Capital Markets.
Read the full article here.
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The richest countires by 2050
Say what you will about Goldman Sachs, but the investment firm does seem to grasp the next big thing. Jim O'Neill, Goldman's Chairman of Asset Management, you may recall, is the man largely credited with minting Brazil, Russia, India and China as the planet's next economic drivers - way back in 2001.
So regardless of how you feel about the notorious company's practices, when Goldman Sachs releases a projection report, the world listens. Recently, the Manhattan-based multinational announced its forecast for the richest countries by GDP per capita in 2050, considering Brazil, Russia, India and China, the N-11 and G7 nations*. Which country may be wealthiest 40 years from now? Click through to find out.
Read the full article here.
Say what you will about Goldman Sachs, but the investment firm does seem to grasp the next big thing. Jim O'Neill, Goldman's Chairman of Asset Management, you may recall, is the man largely credited with minting Brazil, Russia, India and China as the planet's next economic drivers - way back in 2001.
So regardless of how you feel about the notorious company's practices, when Goldman Sachs releases a projection report, the world listens. Recently, the Manhattan-based multinational announced its forecast for the richest countries by GDP per capita in 2050, considering Brazil, Russia, India and China, the N-11 and G7 nations*. Which country may be wealthiest 40 years from now? Click through to find out.
Read the full article here.
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REITs should ride out housing storm
Among the seemingly infinite number of financial prognostications for 2012 issued in recent weeks were numerous opinions focused on the uncertain future of Canadian residential real estate prices, especially in cities that have experienced significant price appreciation in recent years. There is a near unanimous belief that urban residential real estate prices are, as a result of unbridled speculation and availability of cheap debt, at best going to remain stagnant and at worst about to experience a precipitous decline.
Because our firm focuses on the due diligence of real estate-related income-oriented investment funds such as real estate investment trusts (REITs), I receive numerous calls from investors asking whether a decline in residential prices will detrimentally affect their REIT distributions. While the uncertainty that often accompanies declines in real estate values is not a good thing for the broader economy, the answer to their question is generally `No.` In order to understand why REIT returns and residential real estate prices are not highly correlated, one must first understand how real estate is valued.
Read the full article here.
Among the seemingly infinite number of financial prognostications for 2012 issued in recent weeks were numerous opinions focused on the uncertain future of Canadian residential real estate prices, especially in cities that have experienced significant price appreciation in recent years. There is a near unanimous belief that urban residential real estate prices are, as a result of unbridled speculation and availability of cheap debt, at best going to remain stagnant and at worst about to experience a precipitous decline.
Because our firm focuses on the due diligence of real estate-related income-oriented investment funds such as real estate investment trusts (REITs), I receive numerous calls from investors asking whether a decline in residential prices will detrimentally affect their REIT distributions. While the uncertainty that often accompanies declines in real estate values is not a good thing for the broader economy, the answer to their question is generally `No.` In order to understand why REIT returns and residential real estate prices are not highly correlated, one must first understand how real estate is valued.
Read the full article here.