November 2012 Canadian Economic Fundamentals

[Ally]

Update highlights Canada's economic resilience among global uncertainty




The Honourable Jim Flaherty, Minister of Finance, today stressed that the Canadian economy continues to be resilient at a time when the global economy remains highly uncertain. The Minister made this comment as he released an update of the Government`s economic and fiscal projections, which shows that Canada remains on track to return to balanced budgets over the medium term.




`The commitment to manage public finances in a responsible manner has been a key element of our Government`s comprehensive long-term agenda to foster strong, sustainable, long-term economic growth and the creation of high-quality, value-added jobs for Canadians,` said Minister Flaherty. ` Our Government is striking the right balance between returning to balanced budgets over the medium term and continuing to invest in the key drivers of economic growth and job creation.`





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[Ally]

Temperatures are dropping, but mortgage rates staying put






TORONTO, ONTARIO--(Marketwire - Nov. 13, 2012) - Canada's economic stance is one of caution, as risk of a recession looms globally and action pends on the U.S. fiscal cliff. As a result, there is no anticipated end to stimulus efforts on the home front, with mortgage rates remaining unchanged for the coming month.




Fixed mortgage rates are to remain stable as consistent investor interest in Government of Canada bonds drives yields down. Variable mortgage rates are not expected to change, along with the Bank of Canada's overnight lending rate, in the foreseeable future.





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[Ally]

Moderation - not correction - on tap for Canadian housing markets in 2013, says Re/Max




MISSISSAUGA, ON, Nov. 14, 2012 /CNW/ - Canadian real estate markets demonstrated remarkable resilience in 2012`with home sales up or on par in 65 per cent of major centres`despite considerable headwinds in terms of tighter financing and economic uncertainty abroad. The trend is expected to continue, with home-buying activity propped-up by low interest rates and an improved economic picture in 2013, according to a report released today by RE/MAX.




The RE/MAX Housing Market Outlook 2013 examined trends and developments in 26 major markets across the country. The report found that the number of homes sold is expected to match or exceed 2011 levels in 65 per cent of markets (17/26) in 2012, led by strong activity in Western Canada, including Calgary (up 13.5 per cent) and Regina (eight per cent). Eighty-one per cent (21/26) of markets are set to experience average price increases by year-end 2012, with Regina the country's frontrunner at eight per cent, followed by Hamilton-Burlington, Greater Toronto, and Fredericton at seven per cent and Saskatoon at 6.5 per cent. The forecast for 2013 shows the upward trend moderating, but values still ahead of 2012 levels in 85 per cent (22/26) of centres. Stability is forecast to characterize Canadian real estate in the new year, with sales above or on par with 2012 levels in 81 per cent (21/26) of markets.





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[Ally]

Home sales increased, or held steady in 2013





MISSISSAUGA, Ont. - The latest real estate outlook from ReMax says Canadian home sales increased or held steady in much of the country this year despite tighter financing and economic uncertainty abroad.







ReMax says the trend is expected to continue, with home-buying activity propped-up by low interest rates and an improved economic picture in 2013.







The report found that the number of homes sold is expected to match or exceed 2011 levels, led by strong activity in Calgary and other western centres.







Nationally, says ReMax, an estimated 454,000 homes will have changed hands in 2012, just one per cent short of the 2011 level of 456,749.







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[Ally]

Should Canada worry? Report sees U.S. as energy self-sufficient by 2035




CALGARY ` The International Energy Agency predicts the United States will be capable of meeting its own energy needs by 2035.




But that doesn`t mean its top crude supplier ` Canada ` has reason to panic.




`The United States, which currently imports around 20 per cent of its total energy needs becomes all but self-sufficient in net terms ` a dramatic reversal of the trend seen in most other energy-importing countries,` the Paris-based group said in its World Energy Outlook, released Monday.





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[Ally]

Canadians have cause for economic optimism




Jim Flaherty`s forecast Tuesday of a weaker global economy, a bigger 2012 deficit than previously anticipated and a delay in the balancing of Ottawa books is likely to trigger the kind of headlines that get folks wringing their hands.




Canada`s 1.4 million unemployed workers will fear an even longer wait for a decent job. A middle class that`s been struggling for three decades to make ends meet will doubt that a revival in household-income growth is close at hand.





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[Ally]

Video: Will rising interest rates bury you alive?





Rob Carrick takes a look.







View the video here.

 

[Ally]

Canadian job vacancies rise in Q3




TORONTO ` The percentage of unfilled private sector jobs have increased slightly from 2.3% in Q2 to 2.4% in the July-to-September period, according to data compiled by the Canadian Federation of Independent Business (CFIB).




`Job vacancies have increased at the same pace as the economy has grown,` said Ted Mallett, CFIB`s chief economist and vice-president. `The small gain in vacancies observed in the third quarter mirrors the slow growth in GDP.`




Overall, the vacancy rate has risen from 1.7% at the end of 2009, although it`s still down from where it was before the recession.





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[Ally]

Why condominium inspections make sense





Thirty years ago Home Inspection was not part of the real estate process. Now, over 70% of resale homes in North America include an inspection*. However, when it comes to Condominium Inspections, people are still living like it`s 1970.



Many operate under the misconception that since condos are typically smaller than houses and have a different set of systems and features there is no value in having a condominium inspected. Think again. Condos can experience water intrusion, leakage and damage. Their systems and appliances can fail. Previous owners may have completed undocumented or unapproved renovations. The list of what we`ve uncovered in condominiums goes on and on. This isn`t meant to be alarmist, but rather informative.









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[Ally]

Home sales dip slightly in October




Home sales barely budged in October, dipping 0.1 per cent from September`s level, the Canadian Real Estate Association said Thursday.





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[Ally]

As Canada's hottest home markets cool, Re/Max looks east




The West Coast city of Vancouver is no longer Canada`s hottest real-estate market. Not by a mile.




In its 2013 outlook, RE/MAX forecasts home prices in Vancouver are poised to rise 1% in 2013, to an average C$742,000, after this year`s 6% drop.




That`s about what the international real-estate group sees happening nation-wide next year. But for the real action, RE/MAX is casting its eyes mostly eastward. Here`s its forecast for Canada`s hottest markets next year, by expected home-price appreciation:





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[Ally]

Home prices in Canada fall gradually




The recent changes in the mortgage policies in Canada have contributed to a decrease in the housing prices in Canada. This will have an overall affect on the housing market in Canada. According to certain predictions by experts, the housing prices will fall to a maximum of 10% in the next couple of years.




The Housing market contributes enormously to the Canadian economy and the fall in housing prices can negatively affect the economy and the annual GDP of the country as well.




Moreover, due to the inability of people to afford mortgage expenses as a result of the strict policies, the entire housing market will face the implications. The home construction industry will face a sharp decline in the coming year as the demand for homes will fall. Consequently, the cement, wood and paint industry as well as all those industries connected directly or indirectly with home construction will face similar consequences.





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[Ally]

CMHC caustiously optimistic about housing market





I attended Canada Mortgage and Housing`s 18th annual Housing Outlook Conference in Vancouver this week. My impression was that the presenters were optimistic about the housing market in B.C.



The conference presenters are seasoned analysts who objectively interpret the numbers from the real estate boards and the Census, as well as their own surveys and other sources of data.




Their analysis takes the hysteria out of the statistics that are so broadly interpreted and spun as to make them virtually useless to the average homebuyer or seller.



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[Ally]

Real Estate market slows across country






Home resales across Canada last month were down slightly from September, continuing a mild housing market slowdown in the face of mortgage reforms, a weakening economy, high consumer debt and elevated property prices.




The Canadian Real Estate Association reported Thursday that 13,004 residential properties were sold in October through the industry-run Multiple Listing Service, down about 0.1 per cent from September on a seasonally adjusted basis.




The national average home price through MLS was also virtually unchanged from October of last year at $361,516, an increase of just $80. However, the number of new listings across Canada fell by 3.8 per cent to 71,735 in October from 74,618 in September, keeping the market balanced in terms of supply and demand - at least nationally.




RRead the full article here.

 

[Ally]

Vast majority now favour fixed-rate mortgages




While it looks like interest rates will remain low for some time, there has been a large swing from variable to fixed-rate mortgages over the past year, says a new report by the Canadian Association of Accredited Mortgage Professionals.





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[Ally]

New standards ahead for mortgage insurers




Canada's financial regulator will release new guidelines for mortgage insurers early next year, including the government's Canada Mortgage and Housing Corp. - but they won't drag down the housing market as much as the guidelines for banks have, says the country's banking watchdog.





The Office of the Superintendent of Financial Institutions will outline what standards it expects the country's three mortgage insurers to follow when they underwrite a policy on a home. Ottawa has just recently given OSFI the job of overseeing CMHC, a federal Crown corporation that is the largest player in the industry; it was already regulating two private-sector rivals, Genworth MI Canada and Canada Guaranty.





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[Ally]

Gradual cooling trend is good news for housing market




MONTREAL - When you look behind the latest news on Canada`s housing market, you find a peculiar good-news, bad-news story. But it`s the good news that`s more significant, with the only serious worry centred on Vancouver.




The recent bad news (at least, for current owners) is that demand has weakened more rapidly than you might think, from reading news reports. These suggested that home sales didn`t drop significantly in October, but that`s not quite true, notes Robert Kavcic, an economist with BMO Capital Markets.





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[Ally]

Flaherty's rule changes will bite hard




The country`s mortgage brokers are taking aim at Jim Flaherty.




The Finance Minister`s moves to slow down Canada`s housing market have gone too far and are putting the economy at risk, the national mortgage brokers` association argues in a report to be released Monday.




The report says that many of this country`s economists and real estate associations are being overly optimistic, and don`t appreciate how significantly Mr. Flaherty`s latest round of changes, which came into effect during the summer, will affect the resale housing market.



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[Ally]

Aussie, Canada dollars termed reserve currencies




In a seemingly innocuous yet highly portentous move, the IMF is asking member countries from next year to include the Australian /quotes/zigman/4867876/sampled AUDUSD -0.4372% and Canadian dollars /quotes/zigman/4867882/sampled USDCAD +0.2049% in statistics supplied by reserve-holding nations on the make-up of their central banks` foreign exchange reserves. The technical-sounding measure, reflecting growing diversification of the world`s $10.5 trillion of reserves, is likely over time to exert wide-ranging impact on world bond and equity markets.





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[Ally]

'Muddling' Canadian economy shows signs of hope in East, resiliency in West




OTTAWA ` Overall, Canada`s economy is `barely muddling along,` but taken individually, the outlook for growth in the provinces is surprisingly bright.




`The swift rebound that occurred in 2010 and 2011, and which was driven by a strong domestic economy, mostly fizzled out over the first half of this year,` the Conference Board of Canada said Monday.




`The effects of a grim global environment, coupled with a heavy dose of fiscal restraint, will keep Canada`s economy barely muddling along through the rest of this year and into 2013,` the board said in its autumn outlook, which points to declines in consumer confidence, business investment and hiring.





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