March 2014 Canadian Economic Fundamentals

[Ally]

Average Canadian home price now over $400,000





The average price of a Canadian home spiked to more than $400,000 due in part to a rebound in some of Canada's most expensive markets, the Canadian Real Estate Association said Monday.





February numbers released by CREA found that prices are now 10 per cent higher than what they were a year ago. The national average price for a home sold last month was $406,372.





Read the full article here.

 

[Ally]

Poloz says slow economic growth is the new norm





Slow economic growth is the new norm and will require central bankers to keep interest rates low for longer than they would have in the past, says BoC governor Stephen Poloz.





`The global economy may not be just suffering through a hangover from the financial crisis,` he says in notes of a speech delivered to the Halifax Chamber of Commerce. `There are other, longer-term forces at work as well.`





Read the full article here.

 

[Ally]

A quick look at Joe Oliver, Canada's next finance minister





Joe Oliver has been tapped to replace Jim Flaherty as the federal finance minister.





Montreal-born Oliver, who represents the Toronto riding of Eglinton-Lawrence, was first elected to the House of Commons in 2011, and quickly became the minister of natural resources.





Read the full article here.

 

[Ally]

Poloz says aging Baby Boomers will slow the economy






Aging Baby Boomers will be one of the driving factors behind slower growth in the economy in the years to come, the head of the Bank of Canada said Tuesday.







As they save more for their golden years, primarily in real estate, and then retire in droves, their collective departure will leave the workforce smaller and less productive, pulling momentum out of a global economy that was battered by the financial crisis.





Read the full article here.

 

[Ally]

Canadian dollar slides below $0.89 U.S.





The Canadian dollar fell heavily for a second day, dropping to 88.88 cents US in late trading before closing at 88.93 US on remarks by Fed chair Janet Yellen and Bank of Canada governor Stephen Poloz.





The loonie tumbled 0.68 of a cent on Tuesday, closing at 89.79, after Poloz said interest rates may have to remain low to keep the Canadian economy growing. The dollar last closed above parity with the greenback in early February 2013. At mid-afternoon, it had recovered slightly to 89.58 US, but Yellen's hawkish comments on U.S. rates dimmed prospects for the loonie.





Read the full article here.

 

[Ally]

Seven ways Jim Flaherty changed the mortgage market





The man who ran our nation`s finances for eight years is gone. In Jim Flaherty`s wake are a legacy of housing policies that will impact homeowners for years to come.





When it came to Canada`s mortgage market, the former minister of finance made tough decisions in tough times, and he had his share of detractors.





Read the full article here.

 

[Ally]

Canadian dollar under pressure over rates





The Canadian dollar has had a sharp slide since the beginning of 2014 and most predictions are that it will go lower.





RBC economists say 87 cents by this fall, perhaps 85 cents next year, while TD Bank says 85 cents before the end of the year, then a rebound to 90 cents in 2014.








Today the loonie is trading at 89.25 cents US, having dropped more than four cents since the beginning of the year.





Read the full article here.

 

[Ally]

Fear of a housing bubble overblown





Fears that a housing bubble is brewing in Canada are overblown, according to a new report by the Conference Board of Canada.





While house prices may be headed for a modest decline in some markets, there is no bubble to pop, the report says.





Read the full article here.

 

[Ally]

Real estate's next worry: commercial properties





TORONTO -- First, it was Canada's housing sector. Now, it's the country's commercial real estate market.





Pundits around the world are still immersed in a vigorous debate about just how overheated the residential real estate market here is, and whether it's destined for a crash. Now some are also training their sights on Canada's commercial real estate market - the wide array of office towers, shopping malls, and factories that have become hot commodities in recent years.





Read the full article here.

 

[Ally]

Housing market may undergo modest corrections, not a crash





OTTAWA -- The Conference Board isn't buying the notion that Canada's housing market will suddenly crumble, saying the most likely outlook is for a modest decline nationally and in some specific markets.





The Ottawa-based think-tank argues in a comprehensive new look at real estate in Canada that the conditions for a crash simply don't exist, despite numerous reports that the market is overbuilt and overvalued.








Read the full article here.

 

[Ally]

Living beyond our means





The wind-up of Sears Canada`s flagship store in downtown Toronto was a sorry sight. Deal-hunters roamed the cavernous and half-empty building in search of deep discounts on everything from watches to washing machines. Even the dented fixtures were sold off at cut-rate prices`all while an army of suddenly unemployed mannequins looked on.





Over the next two years, the tired, three-level department store will be overhauled in preparation for the arrival of Nordstrom, a U.S. retailer that serves a decidedly higher-end crowd. Meanwhile, at the other end of Toronto`s Eaton Centre, a new Saks Fifth Avenue store will open inside the old Hudson`s Bay building, whose U.S. parent bought the luxury retailer for US$2.9 billion last year.





Read the full article here.

 

[Ally]

Conference Board of Canada gives housing market clean bill of health





OTTAWA ` The Conference Board isn`t buying the notion that Canada`s housing market will suddenly crumble, saying the most likely outlook is for a modest decline nationally and in some specific markets.





The Ottawa-based think-tank argues in a comprehensive new look at real estate in Canada that the conditions for a crash simply don`t exist, despite numerous reports that the market is overbuilt and overvalued.





Read the full article here.

 

[Ally]

How to prepare for the falling loonie





Your latest financial worry: The global economy is starting to get back to normal.





It means Canada`s 15 minutes of fame as a model of economic fortitude to the world are done. The U.S. economy looks to have better growth prospects, and investment dollars are flowing there instead of to us. As a result, our dollar is no longer the darling it was during the financial crisis.





Read the full article here.

 

[Ally]

More Canadian real estate being scooped up by foreign investors





Foreign investment proved to be one of the main drivers in the hotel sector last year, says a new report.





According to Colliers International, investors from outside the country bought $857-million worth of hotels in 2013 ` the highest level for foreign investment in the sector since 2007.





Read the full article here.

 

[Ally]

Tenants gain more power as office vacancy rate grows





The recent trend toward sluggish demand for office space in Canada is likely the new normal, CBRE Ltd. predicts.





More office space was vacated than leased across the country during the first quarter of this year, to the tune of 1.5 million square feet, CBRE says. That`s the fifth quarter in a row that the demand for space in existing buildings has been weak.





Read the full article here.

 

[Ally]

New mortgage war looms







Maybe it`s a coincidence that former Finance Minister Jim Flaherty is gone but Bank of Montreal signalled it is about to kick off another round of mortgage rate wars.





Read the full article here.

 

[Ally]

Canadian property prices up 105 year over year





Property prices in Canada increased by 10.1% compared with a year earlier, taking the national average price for homes sold in February to $406,372, according to the latest figures from the Canadian Real Estate Association.





CREA says that the size of year on year average price gains continues to reflect the decline in sales activity in February of last year among some of Canada`s most active and expensive markets, which dropped the national average at that time. This phenomenon was particularly clear this month, with Greater Vancouver having posted the biggest year on year increase in activity by a large margin.





Read the full article here.

 

[Ally]

BMO's mortgage rate cut won't have a big impact on the housing market








The amount of chatter that the Bank of Montreal`s mortgage rate cut generated this week is more proof that Canadians are not yet sick of talking about real estate. But it's unclear how much of an effect the new 2.99 per cent five-year rate will have in terms of driving new buyers to the market.





Read the full article here.

 

[Ally]

Why cut-rate mortgages won't be here for long





That cut-rate mortgage may not be here for long given a probable rise in bond yields, economists say.





To recap, Bank of Montreal has slashed its key fixed five-year rate to 2.99 per cent, the same level that sparked a warning from Canada`s former finance minister, Jim Flaherty, amid concerns over a potential bubble.





Read the full article here.

 

[Ally]

Finance minister Joe Oliver monitoring mortgages





OTTAWA - Newly minted Finance Minister Joe Oliver says he has no immediate plans to intervene in what could be the start of a mortgage war after one of the country's major banks slashed its five-year rate.





"We've been over the long-term reducing the Canadian involvement in the mortgage market to protect the indebtedness of Canadian consumers and Canadian taxpayers and we will continue in that regard," he said Thursday.





Read the full article here.