September 2012 Canadian Economic Fundamentals

[Ally]

CREA cuts home sales forecast for this year and next





OTTAWA ` The Canadian Real Estate Association cut its 2012 and 2013 outlook for home sales and lowered its national average price forecast on Monday as it reported the biggest month-to-month drop in activity in two years..




The association said that tighter regulations on mortgage lending that came into effect in July helped push August homes sales to their largest month-over-month decline since June 2010.




Sales of previously owned Canadian houses and condos have now gone down in five of the past six months.






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[Ally]

Canada's housing market cools





Canada`s housing market is cooling rapidly in the wake of government changes to mortgage insurance rules, amid suggestions that many potential first-time buyers are opting to remain tenants.




Indeed, the changes made by Finance Minister Jim Flaherty in July appear to be having more of an impact than his earlier attempts.






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[Ally]

Calgary and Edmonton to lead Canadian economic growth





CALGARY ` Calgary and Edmonton are forecast to be the fastest growing economies in Canada over the next four years, according to the Conference Board of Canada`s Metropolitan Outlook-Autumn 2012 released Tuesday.




`Energy-related investment in Alberta is expected to stay vibrant throughout the next four years. For instance, about $29-billion worth of energy-related projects are now underway in the province, and nearly $86-billion worth of projects are proposed for the future,` said Mario Lefebvre, Director, Centre for Municipal Studies, for the board.




`All this investment will continue to be a boon to Calgary`s economy, which remains the services hub of the province`s energy sector.`






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[Ally]

Canada's Joe Oliver pledges to feed Asia's growing natural gas needs





Natural Resources Minister Joe Oliver is offering assurances to Asian customers that Canada will move quickly to build liquefied natural gas plants capacity on the west coast to feed their growing demand.




Accompanied by several companies involved in proposed projects in British Columbia, Mr. Oliver spoke at an international LNG conference in Tokyo on Wednesday where he promoted Canada as a secure source of gas and a welcoming place for Asian investment.






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[Ally]

Home prices see weakest August increase in 12 years





Home prices rose just 0.2 per cent in August from July, the smallest increase for the month of August in 12 years, according to the Teranet-National Bank National Composite House Price Index.




Prices declined in three of the 11 metropolitan housing markets that were surveyed. In Vancouver they dropped 1.2 per cent, in Victoria 0.7 per cent, and in Quebec City 0.6 per cent.






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[Ally]

Housing market correction appears to be underway



A correction in Canada`s housing market `appears to be under way,` led by Vancouver but destined to spread after the government`s new mortgage restrictions, Toronto-Dominion Bank warns today.



`We expect the slowdown will become more broad-based following a fourth round of mortgage insurance regulation tightening by the federal government in July,` economists Craig Alexander, Derek Burleton and Diana Petramala said in a new report that also warns Canada`s economy is `stuck in a soft patch` this year.





This housing correction will weigh on Canada`s over all economic growth, the TD economists added





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[Ally]

B.C. housing slowdown signals wider slump





As he drives through Kitsilano in Vancouver`s coveted westside district, real estate agent Chris Frederickson points out the For Sale signs, block after block.




Of 62 active listings, only three homes have sold over the past 30 days in Kitsilano, underscoring the slowdown in residential sales that has hit Canada`s most expensive city for housing. In Greater Vancouver, the number of residential units sold tumbled to 1,670 last month, down 31 per cent from August, 2011.






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[Ally]

Soft landing at worst for Canadian housing market




TORONTO, Sept 18 (Reuters) - New data showing a slowdown in Canada's hot housing market was largely expected and a market correction will not have a significant impact on the Canadian economy or on its big banks, the head of Bank of Nova Scotia said on Tuesday.





As Canadian homeowners and economists watch and worry about the risk of a U.S.-style housing crash, Scotiabank Chief Executive Rick Waugh said he believes the country's mortgage lenders and its economy will withstand a drop in both prices and sales.





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[Ally]

Auto strike would be painful to Canadian economic growth




A debt ratings agency that covers the auto industry believes that even a short strike by Canadian auto workers could be `painful` and hurt the country`s weak economic growth for months to come.




`Even a one-week walkout could jeopardize Canada`s increasingly listless growth, shaving 0.25 percentage point from September GDP while disrupting North American supply chains and retail spending into the fourth quarter,` Moody`s Analytics senior economist Mark Hopkins said Friday.





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[Ally]

Yukon's resource riches spur Whitehorse real estate records





A mining rush in Yukon that promises billions in spending is feeding a prolonged boom in Whitehorse, now experiencing its third year of setting real-estate records amid a deluge of people moving to the northern territory.




The latest figures show the territory set a first-quarter real-estate sales record this year with more than $50-million in transactions, surpassing the previous high, set in 2011, by 40 per cent. That comes after Yukon property sales of $250-million in 2011 surged nearly 10 per cent more than the level in 2010, which had been a record-breaking year.






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[Ally]

Inflation dips in face of weak economic conditions in Canada, world






OTTAWA ` Canada`s inflation rate continued to slide in August, dipping one-tenth of a point to 1.2% in one of several signs Friday that the Canadian and global economies are slowing.







Statistics Canada also reported that wholesale prices in Canada fell 0.6% in July, and the World Trade Organization

released a new forecast slashing trade growth to a weak 2.5% this year.







The inflation softness was anticipated by economists ` they had expected price growth to remain unchanged at 1.3% ` but the falloff in wholesale sales was three times higher than consensus.





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[Ally]

Low inflation freezing Mark Carney's trigger finger



The Bank of Canada is running out of reasons to raise interest rates anytime soon.





Consumer prices rose 1.2 per cent in August from a year earlier, Statistics Canada reported Friday, compared with 1.3 per cent in July. That`s comfortably below the central bank`s target of 2 per cent. At the same time, wholesalers are struggling. Statscan said in a separate report that wholesale trade plunged 0.6 per cent in July, to $49.5-billion. Most Bay Street analysts were expecting a small gain.





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[Ally]

Will trade become the next economic stimulus?





Want a sure indicator that that global economy is facing a tough slog? Politicians and business lobbyists are starting to talk about trade as economic stimulus.




With governments broke and the world economy sputtering, signing new trade agreements is `one of the only avenues we have to improve growth,` John Manley, president of the Canadian Council of Chief Executives, told an audience in Washington on Thursday. Canada`s trade minister, Ed Fast, made similar comments Wednesday during a visit to the U.S. capital.






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[Ally]

Stalling economy traps Carney





The Canadian economy is slowing ` a reality that`s likely to be on full display when gross domestic product for July comes out Friday.




We already know that in July the trade deficit widened, factory sales fell and the economy lost more than 30,000 jobs. The economy will be hard-pressed to show any growth at all in the month.






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[Ally]

Inflation cools to 2-year low




Canada's inflation rate continued to slide in August, dipping one-tenth of a point to 1.2 per cent as most goods and services tracked by Statistics Canada fell or rose moderately compared with the same month last year.




The agency said the result returned the inflation rate to where it stood in May and equalled the lowest level in the consumer price index in more than two years.





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[Ally]

Canadian EI at 4-year low





The number of Canadians getting jobless benefits has fallen its lowest level in nearly four years, after the recession caused claims to spike.




Half a million -- or 508,000 people -- got regular employment insurance benefits in July, a small drop from the previous month. The number of people on EI is 6.4 per cent below the same month last year and at the lowest level since October, 2008.






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[Ally]

House Price Overvaluation Fading





TD Economics has gradually reduced its estimate of the overvaluation in Canada`s house prices, as the growth in people`s disposable income picks up while the market stagnates.




The quarterly economic forecast that the bank released Tuesday pegs the current overvaluation in the market at 10 per cent. It had previously estimated that prices were 15 per cent too high, and then suggested a range of 10 to 15 per cent.






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[Ally]

Suite Deal: Secondary suites open up door to new home ownership





With rising house prices and tightening mortgage regulations, how can first time home buyers get their dreams of new home ownership off the ground?







One Regina home builder is advising home buyers to look under their feet and consider the financial advantages of owning a new home with a regulation basement suite.







By popular demand, Trademark Homes Inc. is bringing back its innovative `Mortgage Helper` basement suite option, available at its new Harbour 13.2 streetscape development in The West Landings, Harbour Landing.






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[Ally]

Calgary, Edmonton to lead economic growth as energy investment remains strong





CALGARY ` Calgary and Edmonton are forecast to be the fastest growing economies in Canada over the next four years, according to the Conference Board of Canada`s Metropolitan Outlook-Autumn 2012 released Tuesday.




`Energy-related investment in Alberta is expected to stay vibrant throughout the next four years. For instance, about $29-billion worth of energy-related projects are now underway in the province, and nearly $86-billion worth of projects are proposed for the future,` said Mario Lefebvre, Director, Centre for Municipal Studies, for the board.





Read the full article here.

 

[Ally]

Risk of Canadian housing bubble appears to be easing



Risks of a bubble in Canada`s housing market appear to be easing, a `positive development` for the country`s banks, the Fitch ratings agency said today.





`In Fitch Ratings` view, these early signs of a cool-down in the housing market could be generally positive for the stability of the Canadian banking system and the sustainability of economic growth, though the full extent and pace of the housing correction remains unclear,` the agency said.





Fitch cited the most recent report by the Canadian Real Estate Association, which said this week that home sales fell 5.8 per cent in August from July.





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