January 2013 Canadian Economic Fundamentals

[Ally]

For clues to Canada's housing future, look to Australia




Let`s put aside, just for a minute, the idea that there is a housing bubble in Canada.




It there is a housing bubble, then we know it will burst at some point, and that the fallout will be singularly unpleasant. After all, we watched the bursting of the bubble in the U.S. take place in real time, just as if it was being broadcast on some kind of gigantic, high-definition television screen. We know how that story ends.





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[Ally]

The gap between eastern and western Canada to narrow




OTTAWA ` The gap between Eastern and Western Canada should begin to narrow this year, even as the fiscal climate in most provinces continues to deteriorate, BMO Capital Markets says.




`The resource sector continues to fuel solid growth in Western Canada, but Alberta`s economy is expected to downshift further this year,` said BMO senior economist Robert Kavcic.




`While the energy sector is still humming, growth has been tempered at the margin by a lack of pipeline capacity, including still uncertain development prospects and a deep discount for Canadian heavy oil prices,` he said in a report released Thursday.





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[Ally]

Canada on track for stronger growth later this year




OTTAWA ` Even as a major world lender dealt another blow to an early turnaround in the global economy, Canada`s finance minister was playing the calm card.




Jim Flaherty sought to quell concerns Wednesday of an economic downturn in this country, adding that the government is still on track to balance its budget and additional fiscal stimulus would not be needed.





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[Ally]

How low will house prices go?





Last summer, having surveyed their local real estate market, and finding themselves spooked by deteriorating prices, Rheanna Mushet and her husband, Justin, decided to sell their Burnaby condo. `We wanted to cash out,` Mushet says, adding that they may end up living in her parents` basement for a while as they wait out the downturn in the Vancouver market. `We`re going to make sure we get the most for our money. There`s no hurry.` She only regrets not acting sooner. By the time they listed, buyers were no longer competing for the privilege of overpaying. For six months, the Mushets waited for an offer and showed their condo to prospective buyers who seemed to be almost looking for a reason to pass. `They were very choosy,` she says. ``It`s not on the right floor. The ceiling`s not high enough. There`s a stain on your carpet.` Just the silliest things that before wouldn`t even be a consideration.` They finally agreed to sell for $22,000 below their original asking price to the first person to make an offer. She accepted the fact that her condo just wasn`t worth what she had hoped. Many other sellers are soon going to have to come to the same realization.



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[Ally]

Is the slump in home sales nearing the bottom?





As The Globe and Mail`s Tara Perkins and Sean Silcoff report, sales across the country plunged 17.4 per cent in December from a year earlier, bringing 2012 to a dip of 1.1 per cent.









Sales have been affected ` deliberately - by Finance Minister Jim Flaherty bringing in his fourth round of mortgage restrictions in July, determined to temper the debt buildup among Canadian consumers. Many see this as a good thing.

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[Ally]

National Bank of Canada adjusts its mortgage rates





MONTREAL, Jan. 18, 2013 /CNW Telbec/ ` National Bank has adjusted its rates for residential mortgages. The new rates are effective as of Friday, January 18, 2013.





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[Ally]

Factory sales rebound sharply




Canadian manufacturing sales bounced back in November after a dismal performance in October, offering a glimmer of hope for growth amid a string of disappointing data and weak global demand for the country`s goods.




Factory sales climbed 1.7 per cent in the month, above forecasts for a 1-per-cent gain, on strength in the transportation equipment, primary metal and chemical industries, Statistics Canada said on Friday.



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[Ally]

Canadians carrying debt into retirement




We've all heard the warning. Don't retire with debt. It's a four-letter word ` especially for those who've left the workforce.




But many of us aren't listening, it seems.




Statistics Canada says it's found that about one-third of retirees have debt. Among those 55 and over who are not yet retired, two-thirds are in debt. While half of retirees with debt owe less than $25,000, about one-sixth of them say they're in hock to the tune of more than $100,000.





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[Ally]

Canadian homebuyers more experienced, financially prudent moving forward says Re/Max





KELOWNA, BC, Jan. 22, 2013 /CNW/ - Changing market conditions have triggered a shift in the Canadian homebuyer mix and mindset, a fact identified and confirmed by the RE/MAX Canadian Homebuying Trends Survey 2013-2014 released today.



The national survey, hosted on the Angus Reid Forum in December, was conducted among 1,109 prospective purchasers who intend to buy within the next 24 months. From consumer demographics to buyer intentions, the survey provides a snapshot of Canadian homebuyers heading into a period of moderation.





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[Ally]

Is Canada talking itself into a housing crisis?





Little was heard of housing bubbles in Canada up to about a year ago. Now, predictions of crashes are on the front cover of Maclean`s and other publications. One might wonder if we are talking ourselves into a housing miasma, even though the fundamentals don`t point to one.


Consider affordability. The Bank of Canada`s housing affordability index shows that newly built standard houses are as affordable as 10 years ago. And the Royal Bank of Canada`s affordability indexes for existing housing only `exceed their long-term averages modestly, although the national figures are exaggerated by extremely poor affordability in Vancouver.`








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[Ally]

Tax alert from Canada Revenue Agency




Don't buy into illegal tax protester schemes



The Canada Revenue Agency (CRA) warns all Canadians to beware of individuals that try to convince you that Canadians do not have to pay tax on the income they earn. These individuals, also known as tax protesters, not only fail to report their own earnings, but they also conspire, counsel, and promote these tax schemes.





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[Ally]

Repeat buyers to lift housing market over next 2 years




A Re/Max survey says 70 per cent of home sales in the next 24 months will be to repeat buyers with some previous experience as owners.




The real-estate marketing organization says second-time or multi-time purchasers will be more fiscally conservative and don't plan to over-extend themselves.




And it says slightly more than 80 per cent of potential buyers surveyed believed that housing values in their area will rise or remain the same





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[Ally]

TD's latest real estate forecast: Dlowdown predicted in 2013




According to the Quebec Federation of Real Estate Boards (QFREB), the residential real estate market in the province will slow in 2013. It predicts that the number of sales transactions concluded through a real estate broker will reach 74,000, a drop of 4 per cent compared to 2012.


"The most recent tightening of mortgage rules that came into effect this past July will continue to slow real estate market activity, particularly among first-time buyers who are more affected by these new measures," said Paul Cardinal, Manager, Market Analysis, at the QFREB. "Luckily, the other fundamental factors affecting sales will remain favourable, particularly interest rates which will remain at their historically low level for another year," he added.





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[Ally]

Outlook is favourable for Canadian markets




The Canadian commercial real estate market is expected to remain on a healthy upswing through year-end, according to Avison Young`s 2013 Forecast.




The national office vacancy rate in 2012 decreased 0.2 percent from 2011 to 7.1 percent. Western markets such as Vancouver, British Columbia, and Edmonton, Alberta, saw a combined vacancy of 6.0 percent, faring better than their Eastern counterparts, which reported a 7.9 percent combined vacancy rate. A shortage of office space is expected in select markets in 2013, as increasing demand and lack of supply put upward pressure on rents. Pressure will ease in 2014 as new construction comes online.





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[Ally]

New Year, old Mortgage Rates






TORONTO, ONTARIO--(Marketwire - Jan. 22, 2013) - It is indeed a happy New Year for home buyers hoping that the historically low mortgage rates would carry over into 2013. For now, there are still no changes expected for fixed or variable mortgage rates, due to continued global economic unease combined with stimulus provided by the Canadian government. While Government of Canada bond yields have historically increased in the winter months, low mortgage volumes are prompting lenders to keep fixed rates at their historical lows. The Bank of Canada is also not expected to make any changes to the overnight lending rate, keeping variable rates at their current levels.





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[Ally]

Housing prices index confirms cooler demand in hot markets




The Teranet-National Bank index of Canadian housing prices continues to show effects from cooler demand for residential properties in most big markets.




The December price index was up 3.1 per cent in 2012 ` the lowest increase in three years.





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[Ally]

BoC says higher rates 'less imminent'


The Bank of Canada surprised most analysts today by cutting Canada's 2013 growth estimate (to 2.0%) and calling the timing of the next rate hike `less imminent than previously anticipated.`




The BoC has used the `less imminent" wording before, but not in any recent rate decision statements. It attributed its position, in part, to `more muted inflation` and cooling household debt levels.





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[Ally]

Home prices slip again, first four-month slide since recession



House prices in Canada slipped 0.4 per cent in December from a month earlier, according to a fresh reading today, marking the fourth decline in a row. But values remain "stretched" in some parts of the market, according to the Bank of Canada.






That four-month slide is the first since the recession, according to the Teranet-National Bank home price index.



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[Ally]

Realtor.ca now sporting Walk Scores




Realtor.ca -- the Canadian equivalent of Realtor.com -- and other Canadian real estate sites including RoyalLePage.ca are now displaying "Walk Scores" generated by the Seattle-based real estate technology developer of the same name.




Walk Score says its rankings are the only international, quantitative rankings of walkability. Cities and neighborhoods are ranked on a scale of 0-100, with locations receiving a score of 90-100 deemed a "Walkers' Paradise."





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[Ally]

Long-term unemployment , part-time work still high




Many Canadians are still jobless for long stretches of time, while the number of people stuck in part-time work who`d prefer a full-time job remains high.




While the broadest measure of the country`s labour market ` the unemployment rate ` has been gradually easing, the Bank of Canada issued a more nuanced reading of the health of the jobs market Wednesday.





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