March 2012 Canadian Economic Fundamentals

[Ally]

Canadian home prices cooling off




As mortgage rates plummet to historic lows, some consumers may be wondering what's waiting for them in the usually frantic spring housing market.






"March through June is prime time in the real estate and mortgage markets," Robert McLister, editor of Canadian Mortgage Trends told CBC News in an email.






McLister said headline-making interest rates are encouraging some to buy early, but those numbers are not huge, at least at this point.







Read the full article here.

 

[Ally]

Western provinces seek to increase immigration caps in nominee program




SASKATOON - Saskatchewan is seeking to increase the cap on the number of immigrants allowed to come here through the immigrant nominee program.




Rob Norris, responsible for Advanced Education, Employment and Immigration, says the province would like to see the cap raised to 6,000 people from 4,000.





Read the full article here.

 

[Ally]

Up for debate: It's time to sell Alberta oil to eastern Canada for refining and exporting





Enbridge has just applied to reverse a section of its oil pipeline at Sarnia to accommodate Imperial's request to use western crude at its Nanticoke, Ontario refinery.







With their refineries and plants using expensive Brent-priced crude, why aren't eastern Canadians clamoring for cheaper western crude? Current differential of about $20 a barrel between Brent and West Texas Intermediate is enough margin to pump crude from Alberta, reduce gasoline prices in eastern Canada, create upgrading jobs in Alberta and improve western producers' profit margins.







But Enbridge's 47-year old pipeline system through the U.S. -- the same one that leaked thousands of barrels of oil into the Kalamazoo River last year -- is not the answer. Nor is their Northern Gateway pipeline proposal to export raw condensate-diluted bitumen to Asia in Canada`s best interest.






Read the full article here.

 

[Ally]

Canada's home sales back on the rise




Following a rough start to 2012, home sales in Canada rebounded in February with a modest increase from the previous month.




The Canadian Real Estate Association (CREA) said Thursday that home sale rose by 1.4% between January and February, which helped recover roughly one-third of the 4.5% drop recorded the previous month.




Compared with the same reporting period the previous year, activity was 8.6% higher than February 2011. Over the first two months of 2012, some 61,772 homes were sold, which represents a 6.7% hike from the same period in 2011.





Read the full artilce here.

 

[Ally]

Home ownership becoming more affordable




Housing affordability is improving in Canada as home prices soften, while low interest rates through this year should continue to keep costs at bay.




A national measure shows housing became more affordable in the fourth quarter of last year, the second improvement in a row, Royal Bank of Canada`s quarterly release showed Wednesday. It found all housing categories became more affordable, led by the two-storey home category.





Read the full artilce here.

 

[Ally]

Offshore bids price Canadians out of housing market



Overseas investors are snapping up properties in Canada's largest cities, driving up prices and pushing ordinary Canadians out of the housing market, observers say.





Real estate experts call it the "new reality," and the high price paid for a north Toronto bungalow is the latest evidence.





This month, the three-bedroom bungalow, circa the 1960s and without much updating, sold for $421,800 over the asking price, creating a buzz among agents and other buyers.





Read the full article here.

 

[Ally]

Why the latest mortgage war was months in the making




Before it waded back into the market with deeply discounted mortgage rates last week, Bank of Montreal (BMO-T59.180.220.37%) sought to give policy makers in Ottawa a heads-up that it was about to shake up the housing market again.




The bank had also spent months amassing a stockpile of cheap funding in the bond market to backstop the discounted mortgages, a strategy designed to ensure the cut-rate loans would not lose the bank money.





Read the full article here.

 

[Ally]

Oilsands important to meet energy demands





In the future, demand for energy will increase and fossil fuels will continue to feed that demand, the Globe 2012 conference heard on Wednesday. And the Canadian oilsands can be an important part of or that future, but collaboration is needed to make sure that the oilsands energy is produced as cleanly as possible, Suncor Energy Inc.`s president and chief operating officer Steve Williams said.




The International Energy Agency (IEA) forecasts global energy demand will increase by as much as 40 per cent by 2035 driven mainly by growing populations and improved living standards in China, India and the rest of the developing world and fossil fuels will supply 75 per cent of that consumption.






Read the full article here.

 

[Ally]

The end of super-low interest rates may be getting nearer, but not here yet




OTTAWA - Bank of Canada governor Mark Carney has long warned interest rates must rise eventually ` now some economists say the day may come sooner than previously thought.




It's commonly assumed there is absolutely no chance Carney will raise the trendsetting policy rate Thursday from the one-per-cent perch it has been nailed to since September 2010. Nor will hikes come in April or May.




But with economic conditions slowly showing signs of improvement, Carney may not be on hold until late 2013 as many had assumed.




Higher interest rates make it more expensive for households to borrow and could lead to a cooling of Canada's housing market, although economists say they expect any monetary tightening from the central bank will be gradual.




The recent C.D. Howe Institute policy council report found three of nine economists surveyed believing the central bank should start preparing Canadians for higher rates, and raising the policy setting within the next 12 months. The majority still favoured staying put, however.





Read the full article here.

 

[Ally]

Warmer winter housing sales up, fears of meltdown in spring demand





Melting snow across Canada may have helped heat up the housing market but the new worry is whether there will be any demand left for homes this spring.





Home sales across the country rose 1.4% from January to February on a seasonally adjusted basis while actual sales climbed 8.6% from a year ago, the Canadian Real Estate Association says. In the first two months of the year, 61,772 homes changed hands, a 6.7% increase from a year earlier.





CREA said in particular there has been a jump in demand for low-rise homes, which has put pressure on prices.





Read the full article here.

 

[Ally]

How to buy an income property




Aneta Zimnicki doesn`t fit the profile of an aspiring real estate mogul. Five years ago she was working as an engineer at an auto parts manufacturer in Toronto. Today, she owns eight homes in Alberta and is on the hunt for more.




What drove her into this sector? Market volatility and economic malaise. Zimnicki felt the brunt of the economic crisis: It wreaked havoc on the auto sector, putting her job at risk, and after watching global markets tank she was wary of investing in equities. Against that backdrop, she felt Canadian real estate offered her the most financial security.





Read the full article here.

 

[Ally]

Bad luck o' the Irish a blessing for Canada





OTTAWA - Pubs bursting at the seams are a reminder of the old saying that on St. Patrick's Day, everyone's a little bit Irish.







But statistics show that immigration to Canada has become a lot more Irish.







By the end of 2011, there were more than 5,200 temporary foreign workers from Ireland in Canada, up almost 1,000 from the year before.







Read the full article here.

 

[Ally]

Bank Regulator proposes heightened scrutiny of mortgage market




Canada`s financial regulator is proposing strict rules to tighten lending practices in the housing sector, a move that could cool the red-hot market after months of warnings about rising consumer debt.




The new rules would require banks to take a closer look at how much a property is worth before issuing a mortgage ` and to know more about the monthly finances of borrowers before the money is doled out.





Read the full article here.

 

[Ally]

Economic risks not all external for Canada




For years, chief risks to the Canadian economy have come from outside.




External threats persisted through the recent recession and the bumpy recovery, from the U.S. housing market meltdown and its financial crisis to Greek debt woes and the spectre of a euro zone recession.




Now, as the bombardment of bad news from abroad abates, the nature of risk is tilting.





Read the full article here.

 

[Ally]

Mortgage war means good news for homeowners




Good news! The mortgage wars are back. Bad news! The mortgage wars are back. It all depends on your perspective.




If you`re an aspiring homeowner or you want to refinance to pay off back-breaking credit card debt, the latest battle of the banks for market share is a terrific opportunity.




If you`re Bank of Canada Governor Mark Carney, it`s a slap in the face. You`re the most influential financial person in the country and you`ve been spending a lot of time during the past two years warning Canadians about the dangers of their ever-increasing debt levels. And what is the banking oligarchy doing in response? Thumbing their collective noses at you by encouraging people to take on even more debt!









Read the full article here.

 

[Ally]

Buyer beware: Cracks in walls may be sign of repairs ahead




There is an old superstition that if you step on a crack in the pavement, you will break your mother`s back. When it comes to houses, if you see or step on a crack, ask questions, because it can be a sign of costly repairs to come.




In early February, 2008, Ronald and Kathleen Jacob agreed to buy a house on 122 St. in Edmonton from Kenneth and Renee Pool. The house was 90 years old and the offer was conditional on the Jacobs being satisfied with a home inspection.




During the inspection, the Jacobs noticed cracks on the drywall and ceiling in one of the rooms and also that some of the doors and windows did not close properly. They asked the Pools whether they had faced problems with the home`s foundation and the answer was no.





Read the full article here.

 

[Ally]

Low mortgage rates skew sense of affordability




Historically low interest rates are creating an opportunity for Canadians to fulfil their dream of home ownership. Whether you are a first time buyer or a current owner, understanding affordability will ensure that you are comfortable with your mortgage payments today and in the future, so if interest rates rise and your mortgage is up for renewal, the new interest rate and associated mortgage payments are not overwhelming.







Here are three tips to help home buyers and owners benefit from the low interest rate and provide for any potential future interest rate increases.





Read the full article here.

 

[Ally]

Bank regulator targets mortgage disclosure




Canada`s bank regulator has issued a set of draft guidelines on mortgage underwriting that, if approved, would significantly increase the level of transparency around one the industry`s most important and least understood businesses.




Based on similar principles released by the Switzerland-based Financial Stability Board at the end of last year, the proposed rules cover everything from lenders` internal risk management practices to what information is disseminated to investors.




Perhaps most notably, the rules would require bank boards of directors to approve their institution`s mortgage underwriting polices at least annually, and that those policies be based on `timely, accurate, independent and objective reporting` on the risks related to the mortgage business.





Read the full article here.

 

[Ally]

How all Canadians will benefit from Alberta's oil wealth





The recent exchange between the premiers of Ontario and Alberta on the question of oil prices and the exchange rate raises an interesting question: if the government of Alberta chose to manage its natural resources in the best interests of Canadians outside Alberta, what would it do differently?





Read the full article here.

 

[Ally]

Economic confidence makes comeback




Canada`s economic outlook is brightening, and confidence with it.




Several economists, including those at Royal Bank of Canada, Toronto-Dominion Bank, UBS Securities Canada and the University of Toronto, have recently nudged up their economic growth forecasts for this year.




Improving global conditions are the chief reason, as the U.S. economy shows increased signs of vigour and Europe moves to contain its financial turmoil. Closer to home, high commodity prices will support Western Canada while low interest rates will underpin business and consumer spending.





Read the full article here.