March 2015 Canadian Economic Fundamentals

[Ally]

Consumer spending and exports to underpin Canada's economic growth in 2015

TORONTO - RBC Economics downgraded their forecast for the Canadian economy in 2015 after a sharp drop in energy prices. According to the latest RBC Economic Outlook issued today, Canada's real GDP is projected to grow by 2.4 per cent this year - a reduction of 0.3 percentage points from the forecast issued in December.

RBC notes that while the drop in energy prices is clearly a negative for Canada's oil and gas sector, much of the weakening will be offset by strength in consumer spending and exports.

Read the full article here.

 

[Ally]

Consumer debt reflects 'laissez-faire' attitude to borrowing

Canadians spend too much money they don't have.

Sound familiar?

It should. Economists have been sounding the alarm about consumer debt for the last few years. It was also a recurring mantra of our late finance minister, Jim Flaherty.

Read the full article here.

 

[Ally]

FOMO! Millennials overspending thanks to social media

Ten years ago, following someone you just met might have earned you a night in a holding cell. Today, thanks to social media, it’s apt to lead to overspending.

While it looks like voyeurism is going to be the modern world’s natural resting state for the foreseeable future, it’s having some unintended consequences – specifically on Millennials – according to a study from PR firm Citizen Relations.

Read the full article here.

 

[Ally]

Best deals in real estate 2015: Canada's top cities to buy in

Thinking about buying real estate in Canada this year? Get ready for a carnival. But instead of using bright lights and loud noises to distract would-be customers, the housing market relies on ever-increasing prices and the promise of future wealth to entice and awe.

Leaving a carnival a few bucks short isn’t a big deal, but make the wrong choice in today’s housing market and you could end up in a scary financial place, as sky-high prices continue to climb. Consider the Toronto market: Despite predictions the market would finally cool, sales in Canada’s largest city surged dramatically in the first two months of 2015, with the average home price jumping more than 10% year-over-year.

Read the full article here.

 

[Ally]

The new HPI index is out

How did your city perform?

Click here to learn.

 

[Ally]

Spring real estate market heats up

Rock-bottom interest rates, a scarcity of supply and growing demand from millennials and wealthy immigrants have fuelled a strong start to the spring real estate season in Toronto and Vancouver.

"Spring has come early for both Toronto and Vancouver," said Sal Guatieri, a senior economist at BMO Capital Markets.

Read the full article here.

 

[Ally]

RBC Economic updates

Quarterly forecasts of the economic prospects for each provincial economy including forecast detail tables and key provincial comparisons.

Read the reports here.

 

[Ally]

IEA sees renewed pressure on oil prices as glut worsens

(Reuters) - Oil prices might have stabilized only temporarily because the global oil glut is worsening and U.S. production shows no sign of slowing, the International Energy Agency said on Friday.

The West's energy watchdog said the United States may soon run out of spare capacity to store crude, which would put additional downward pressure on prices.

Read the full article here.

 

[Ally]

Wealth Transfer Driving Vancouver House Prices (Not Just Overseas Buyers)

In the past couple of weeks we’ve seen how Greater Vancouver’s house prices are on a seemingly unstoppable upward trajectory, with the real estate board reporting that February benchmark prices are up 6.4 per cent year over year for homes sold on the MLS, and sales up 21 per cent compared with February 2014.

But what’s driving this rise in house prices? We all know that investment from overseas (mostly mainland Chinese) buyers is a major factor. But is that the only factor?

 

[Ally]

There's a $9,000 difference
in income tax paid (on same salary) Que vs Alberta. Where does your province
land?

The province or territory where you lived on Dec. 31, 2014, determines how much income tax you owe.

Provincial and territorial income tax rates and tax brackets — and therefore, overall tax bills — vary widely from one part of the country to the next.

Read the full article here.

 

[Ally]

Lockheed Martin unveils new Kanata facility

The 109,000-square-foot facility on Palladium Drive gives the company the chance to not only expand but consolidate all its facilities. Lockheed Martin had been located on Solandt Road since 1994 and also operated two off-site warehouses for the last six years.

“We were ready for expansion,” MST vice-president and general manager Rosemary Chapdelaine told OBJ during a tour earlier in the day. She said the company jumped at the opportunity to relocate once Smart Technologies closed its space at the property last year.

Read the full article here.

 

[Ally]

Get ready for a new round of speculation on Canadian housing crash

The Canadian housing market’s continued strength was on display again Friday, but news that prices are rising on a national level is sure to drive a new round of crash speculation.

The Canadian Real Estate Association said prices were up 6.3% nationally from a year ago to a record $431,812 in February. Even using the Multiple Listing Service home price index, which is supposed to smooth out extremes, prices were up 5% from a year ago.

Read the full article here.

 

[Ally]

BMO drops Smart Fixed mortgage rate to 2.79%

Bank of Montreal is lowering the rate on its BMO Smart Fixed mortgage to 2.79 per cent from 2.99 per cent, effective immediately.

"Buying a home is one of the biggest decisions and financial commitments Canadians will make in their lifetime, so it's critical that home buyers get the help they need to make the right mortgage decision," said Cam Fowler, group head, Canadian personal and commercial banking, BMO Financial Group. "Choosing a longer term, such as five years, along with a great rate, will help Canadians own their home sooner while saving them thousands in interest payments over the life of the mortgage."

Read the full article here.

 

[Ally]

A tale of 2 economies: Making sense of U.S. and Canadian labour market data

If you’re watching labour market statistics on both sides of the U.S. and Canadian border, you might think our economies are heading in very different directions.

But a closer look shows that there are striking — and troubling — similarities.

Read the full article here.

 

[Ally]

Fight over Keystone XL project doesn't stall pipeline boom

WASHINGTON (AP) — In a far corner of North Dakota, just a few hundred miles from the proposed path of the Keystone XL pipeline, 84,000 barrels of crude oil per day recently began flowing through a new line that connects the state's sprawling oilfields to an oil hub in Wyoming.

In West Texas, engineers activated a new pipeline that cuts diagonally across the state to deliver crude from the oil-rich Permian Basin to refineries near Houston. And in a string of towns in Kansas, Iowa and South Dakota, local government officials are scrutinizing the path of pipeline extensions that would pass nearby.

Read the full article here.

 

[Ally]

BMO cuts special five-year fixed rate mortgage to 2.79%, the lowest among big banks

Bank of Montreal cut the rate on a promotional mortgage product to the lowest among Canada’s biggest lenders amid an increase in housing prices in the country’s largest cities.

Bank of Montreal reduced its 5-year fixed mortgage to 2.79% from 2.99%, the Toronto-based company said Tuesday in a statement. Its standard 5-year mortgage remains at 4.74% for those who don’t qualify for the lower rate, according to the firm’s website.

Read the full article here.

 

[Ally]

OECD slashes forecast for Canadian economy, blaming oil price declines

The OECD has sharply cut its growth forecasts for Canada for this year and next, a continuing reminder of how sinking oil prices are pulling down the country’s economy.

The downgraded projections from the Paris-based Organization for Economic Co-operation and Development come amid mounting job losses in Canada’s oilpatch. Talisman Energy, Nexen Energy and ConocoPhillips Canada have all separately announced plans to eliminate hundreds of workers in the coming weeks.

Read the full article here.

 

[Ally]

13 things you need to know before renewing your mortgage rate

Is your mortgage coming up for renewal? Don’t be too quick to sign that mortgage renewal letter. More than 70 per cent of Canadian mortgage holders do just that, and what is the usual result? A higher rate and a mortgage product that might not be best suited to their interests. Experience has shown that the “Big Banks” send their mortgage renewals out at a posted rate. Lenders are counting on the fact that most homeowners are too busy to ask questions or to inquire about getting a better rate. Don't let this happen to you!

Read the full article here.

 

[Ally]

Canadians pile on non-mortgage debt

Low interest rates appear to be inspiring Canadians to rack up more debt – a trend that started up again even before the Bank of Canada’s recent rate cut - a new report shows.

The latest data from credit report agency TransUnion show the debt level per average consumer (not including mortgages) increased 2.3 per to $21,428 in the fourth quarter of 2014, compared to the same time a year earlier. The Bank of Canada cut its benchmark rate to 0.75 per cent in late January of this year.

Read the full article here.

 

[Ally]

CBRE says multi-family housing demand on the rise

According to a recent report from the CBRE, demand for multi-family housing is stronger than ever in Canada and, as such, developers are shifting their focus to purpose-built rental housing. The CBRE says multi-family starts rose 52.2 per cent over the five-year average in 2014 as a result of low vacancy rates and a lack of affordable home ownership opportunities.

Across Canada, average vacancy rates remained low over the past decade, ranging between 2.1 per cent and 3.2 per cent. According to the report, such low rates lend “strength to the theory that constant immigration and population growth are providing multi-family rental owners with a steady source of demand, regardless of economic conditions.” However, a consistently low average rate also reflects a shortage of purpose-built rental apartments across the country, thereby leaving few options for renters.

Read the full article here.