Kitchener-Waterloo:
Residential sales DOWN 22.4% and up 1.9% for the year. That's 6 months in a row with declining sales and increasing inventory.
Days on market from 51 to 44 for the year.
Sales to active ratio 15.1% was 21.4% in 2009.
That means less 1 in 6 homes sold.
Sales$ to list$ ratio was 97.7% and 98.1% 2009.
Average sale price detached up 13.5% $346,389 for the year.
Average sale price semi-detached UP 11.2% to $238,739 for the year.
Average sale price for freehold townhomes up 15.8% to $256,815 for the year.
New listings up 9.2% for the month to 847 and number of listings for the year 9296 is up 7.6%.
Wednesday, November 3, 2010
Friday, October 8, 2010
Canada Unexpectedly Loses Jobs
OTTAWA — The Canadian economy lost 6,600 jobs in September, Statistics Canada said Friday, as the country’s recovery faltered after an initially strong rebound from recession.
The jobless rate declined to eight per cent during the month, from 8.1% in August, “as fewer people, particularly youth, participated in the labour market,” the federal agency said.
Economists’ forecasts had ranged from 10,000 to 12,500 new jobs last month, following a gain of 35,800 in August, with the unemployment rate staying at 8.1%.
Canada’s gross domestic product declined in July for the first time in almost a year Statistics Canada said Thursday the economy shrank 0.1 per cent during the month.
The July data marked the first monthly contraction since August 2009, when GDP shrank 0.1%. That had been the only month to show a decline in economic activity since a 10-month string of reduced GDP readings between August 2008 and May 2009.
The Bank of Canada had anticipated 3.5% growth this year and 2.9% in 2011, although those projections are expected to be revised downward when the central bank releases its updated economic outlook on Oct. 20.
That slower growth has put into question any further interest rate hikes by the Bank of Canada.
The central bank has raised in recent months its trendsetting interest rate from a record low 0.25% to its current level of one per cent. The bank’s next policy meeting is Oct. 19.
The jobless rate declined to eight per cent during the month, from 8.1% in August, “as fewer people, particularly youth, participated in the labour market,” the federal agency said.
Economists’ forecasts had ranged from 10,000 to 12,500 new jobs last month, following a gain of 35,800 in August, with the unemployment rate staying at 8.1%.
Canada’s gross domestic product declined in July for the first time in almost a year Statistics Canada said Thursday the economy shrank 0.1 per cent during the month.
The July data marked the first monthly contraction since August 2009, when GDP shrank 0.1%. That had been the only month to show a decline in economic activity since a 10-month string of reduced GDP readings between August 2008 and May 2009.
The Bank of Canada had anticipated 3.5% growth this year and 2.9% in 2011, although those projections are expected to be revised downward when the central bank releases its updated economic outlook on Oct. 20.
That slower growth has put into question any further interest rate hikes by the Bank of Canada.
The central bank has raised in recent months its trendsetting interest rate from a record low 0.25% to its current level of one per cent. The bank’s next policy meeting is Oct. 19.
Wednesday, October 6, 2010
Sept. 2010 KW Real Estate Results
KITCHENER-WATERLOO, ON (Oct 5, 2010) -Home sales to the end of the third quarter of 2010 are ahead of last year by 4.5 percent. There were a total of 5,113 home sales through the Multiple Listing System (MLS®) of the Kitchener-Waterloo Real Estate Board (KWREB) during the first nine months of the year, compared with 4,892 during the same period of 2009.
"This is the first time since 2007 that sales to the end of the third quarter have increased on a year over year basis", says Ted Scharf, President of the KWREB. "It was also our third best September on record. "
Sales last month brought the dollar volume to $1,477,077,951, an increase of 14.1 percent compared to one year ago.
The most popular price range year-to-date has been for homes selling between $225,000 and $250,000, with nearly 15 percent of sales happening in that bracket. This is down slightly from 2009, when the percentage was 16 percent.
The number of residential sales increased in every price category above $250,000, with the biggest jump occurring in the most expensive homes. 62 homes sold to the end of September for more than $750,000, compared to only 24 last year at this time, a jump of 158 percent.
Stronger demand for high-end homes has contributed to the 10.2 percent increase in the average sale price of all detached homes sold year-to-date. The average price of a detached home to the end of the third quarter was $329,063, compared to $298,626 to the end of September 2009.
The average price of all residential properties sold year-to-date was $288,887, a 9.1 percent increase relative to 2009 results.
Scharf says the local residential real estate market should remain strong for the balance of the year. The local economy is both diverse and dynamic, and our region is highly regarded as a perfect place to make roots and invest in a home.
"This is the first time since 2007 that sales to the end of the third quarter have increased on a year over year basis", says Ted Scharf, President of the KWREB. "It was also our third best September on record. "
Sales last month brought the dollar volume to $1,477,077,951, an increase of 14.1 percent compared to one year ago.
The most popular price range year-to-date has been for homes selling between $225,000 and $250,000, with nearly 15 percent of sales happening in that bracket. This is down slightly from 2009, when the percentage was 16 percent.
The number of residential sales increased in every price category above $250,000, with the biggest jump occurring in the most expensive homes. 62 homes sold to the end of September for more than $750,000, compared to only 24 last year at this time, a jump of 158 percent.
Stronger demand for high-end homes has contributed to the 10.2 percent increase in the average sale price of all detached homes sold year-to-date. The average price of a detached home to the end of the third quarter was $329,063, compared to $298,626 to the end of September 2009.
The average price of all residential properties sold year-to-date was $288,887, a 9.1 percent increase relative to 2009 results.
Scharf says the local residential real estate market should remain strong for the balance of the year. The local economy is both diverse and dynamic, and our region is highly regarded as a perfect place to make roots and invest in a home.
Friday, September 24, 2010
Consumer gloom, heavy debt loads keeping economy on the slow track
By Julian Beltrame, The Canadian Press
OTTAWA - Canada's once reliable consumer is emerging as a weak link in the country's economic recovery and future growth prospects.
A survey of consumer confidence for September came in as expected Thursday, suggesting Canadians are losing faith in the recovery and putting purchasing decisions off for another day.
Research marketing firm TNS Canada said its consumer confidence index dropped 2.3 percentage points, tracking a similar downward trend found in other polls and coming on the heels of four straight monthly declines in retail sales.
The survey suggested that several factors are holding Canadians back from a more positive outlook, including lower confidence in household income and employment prospects over the next six months.
Fewer respondents said they thought the current period was a good time to make major purchases.
"After last month's mini-rally it seemed that consumers might be the sump pumps that could return some buoyancy to that recovery," said Michael Antecol, vice-president of the marketing research firm TNS Canada.
"Now, it seems as if those pumps are sputtering, leaving some rocky days ahead."
The likely explanation is that Canadian households — much like their U.S. counterparts — have simply run out of enough resources to continue powering the economy, analysts believe.
And Canadians are getting nervous about their job security, the biggest factor in the confidence index.
While the economy has recouped all the job losses from the recession, the unemployment rate remains about two points higher than pre-slump levels, and employment gains have slowed appreciably since the spring.
The Bank of Canada has been sending up red flags about the exposure of households to debt for the better part of the year, one reason it is the only central bank among the G7 countries to have begun raising interest rates.
The central bank is widely expected to pause for the next few months now that the recovery appears to be slowing much faster than anticipated.
By way of contrast, Canada's approach to monetary policy has been the exact opposite of the U.S., where the Federal Reserve said this week it will likely need to loosen the purse strings further through more quantitative easing.
Even if borrowing costs do rise, the issue for most indebted Canadians would not be insolvency, but the fact they will be forced to scale back on future purchases because a bigger slice of disposable income would be going to debt servicing.
Scotiabank economist Derek Holt noted that while Ottawa can rightly boast of its sound fiscal position, that does not extend to the private sector.
When private debt is combined with that held by government, Canada's total punches in at 239 per cent of gross domestic product, not far removed from such free-spenders as the United States, the United Kingdom and Spain, and above such troubled economies as Italy and Japan.
"One of the dominant reasons Canada outperformed its peer group from the G7 over the past decade had to do with domestic economy strength, and I think that story is coming to a close," Holt said.
"We've experienced a tremendous bull run in the consumer sector and housing markets, but there's a case for arguing Canadian households are debt weary."
The Bank of Canada has also built more parsimonious consumers and a softer housing market into its future growth scenarios.
Combined with a weak export sector that is hamstrung by flagging demand from its largest market, the United States, and a strong loonie, several forecasting houses have slashed growth projections for Canada to two per cent and under for the next 18 months.
The latest was the CIBC, which said Wednesday it now expects the economy to expand by only 1.9 per cent next year — 0.6 of a point less than its forecast just two months back and a full point below the Bank of Canada's forecast.
Growth in the two per cent range represents trend growth in normal times, but is unusually low for an economy just a few quarters out of a deep recession.
Holt said future pillars of Canadian growth will likely be commodity exports, particularly oil, and business investment. But for the first time since the last recession, the economy may have to plug along without much help from the consumer.
OTTAWA - Canada's once reliable consumer is emerging as a weak link in the country's economic recovery and future growth prospects.
A survey of consumer confidence for September came in as expected Thursday, suggesting Canadians are losing faith in the recovery and putting purchasing decisions off for another day.
Research marketing firm TNS Canada said its consumer confidence index dropped 2.3 percentage points, tracking a similar downward trend found in other polls and coming on the heels of four straight monthly declines in retail sales.
The survey suggested that several factors are holding Canadians back from a more positive outlook, including lower confidence in household income and employment prospects over the next six months.
Fewer respondents said they thought the current period was a good time to make major purchases.
"After last month's mini-rally it seemed that consumers might be the sump pumps that could return some buoyancy to that recovery," said Michael Antecol, vice-president of the marketing research firm TNS Canada.
"Now, it seems as if those pumps are sputtering, leaving some rocky days ahead."
The likely explanation is that Canadian households — much like their U.S. counterparts — have simply run out of enough resources to continue powering the economy, analysts believe.
And Canadians are getting nervous about their job security, the biggest factor in the confidence index.
While the economy has recouped all the job losses from the recession, the unemployment rate remains about two points higher than pre-slump levels, and employment gains have slowed appreciably since the spring.
The Bank of Canada has been sending up red flags about the exposure of households to debt for the better part of the year, one reason it is the only central bank among the G7 countries to have begun raising interest rates.
The central bank is widely expected to pause for the next few months now that the recovery appears to be slowing much faster than anticipated.
By way of contrast, Canada's approach to monetary policy has been the exact opposite of the U.S., where the Federal Reserve said this week it will likely need to loosen the purse strings further through more quantitative easing.
Even if borrowing costs do rise, the issue for most indebted Canadians would not be insolvency, but the fact they will be forced to scale back on future purchases because a bigger slice of disposable income would be going to debt servicing.
Scotiabank economist Derek Holt noted that while Ottawa can rightly boast of its sound fiscal position, that does not extend to the private sector.
When private debt is combined with that held by government, Canada's total punches in at 239 per cent of gross domestic product, not far removed from such free-spenders as the United States, the United Kingdom and Spain, and above such troubled economies as Italy and Japan.
"One of the dominant reasons Canada outperformed its peer group from the G7 over the past decade had to do with domestic economy strength, and I think that story is coming to a close," Holt said.
"We've experienced a tremendous bull run in the consumer sector and housing markets, but there's a case for arguing Canadian households are debt weary."
The Bank of Canada has also built more parsimonious consumers and a softer housing market into its future growth scenarios.
Combined with a weak export sector that is hamstrung by flagging demand from its largest market, the United States, and a strong loonie, several forecasting houses have slashed growth projections for Canada to two per cent and under for the next 18 months.
The latest was the CIBC, which said Wednesday it now expects the economy to expand by only 1.9 per cent next year — 0.6 of a point less than its forecast just two months back and a full point below the Bank of Canada's forecast.
Growth in the two per cent range represents trend growth in normal times, but is unusually low for an economy just a few quarters out of a deep recession.
Holt said future pillars of Canadian growth will likely be commodity exports, particularly oil, and business investment. But for the first time since the last recession, the economy may have to plug along without much help from the consumer.
Monday, September 20, 2010
Most Expensive Cities
Montreal, Toronto among top 10 most expensive cities- Vancouver, obviously was already in the list.
By The Canadian Press
TORONTO - Toronto and Montreal have now joined the list of the top 10 most expensive cities in the world due to a stronger loonie and higher inflation rate.
An updated survey from Swiss wealth management firm UBS Bank suggests the two Canadian cities jumped around 20 spots since last year, ranking eighth and ninth among 73 cities surveyed.
Oslo, Zurich and Geneva remain the world's most expensive cities, but Canada's two largest cities ranked higher than London, Singapore and even Paris.
On the other end, the lowest prices for a broad basket of goods and services can be found in Mumbai, Manila and Bucharest.
Despite the pricey standard of living, the survey also found employees in the Canadian cities enjoy relatively high purchasing power from their hourly wages with Montreal ranking 11th and Toronto 14th.
On top were workers in Zurich, Sydney and Miami, while employees in Jakarta, Nairobi and Manila had the lowest purchasing power among cities surveyed.
When it came to comparing wages, the survey found Toronto ranked 13th and Montreal 16th among cities surveyed. Zurich and Copenhagen had the two highest wage levels.
The Prices and Earnings survey is published every three years. In 2009, the survey measured a standardized basket of 122 goods and services between March and April. This year's update was carried out to adjust 2009 data for cumulative inflation and exchange rate movements.
The next full survey is scheduled for the spring of 2010.
By The Canadian Press
TORONTO - Toronto and Montreal have now joined the list of the top 10 most expensive cities in the world due to a stronger loonie and higher inflation rate.
An updated survey from Swiss wealth management firm UBS Bank suggests the two Canadian cities jumped around 20 spots since last year, ranking eighth and ninth among 73 cities surveyed.
Oslo, Zurich and Geneva remain the world's most expensive cities, but Canada's two largest cities ranked higher than London, Singapore and even Paris.
On the other end, the lowest prices for a broad basket of goods and services can be found in Mumbai, Manila and Bucharest.
Despite the pricey standard of living, the survey also found employees in the Canadian cities enjoy relatively high purchasing power from their hourly wages with Montreal ranking 11th and Toronto 14th.
On top were workers in Zurich, Sydney and Miami, while employees in Jakarta, Nairobi and Manila had the lowest purchasing power among cities surveyed.
When it came to comparing wages, the survey found Toronto ranked 13th and Montreal 16th among cities surveyed. Zurich and Copenhagen had the two highest wage levels.
The Prices and Earnings survey is published every three years. In 2009, the survey measured a standardized basket of 122 goods and services between March and April. This year's update was carried out to adjust 2009 data for cumulative inflation and exchange rate movements.
The next full survey is scheduled for the spring of 2010.
Tuesday, September 7, 2010
Favourable U.S. data suggests Canadian rate increase
Paul Vieira, Financial Post · Monday, Sept. 6, 2010
OTTAWA • What a difference a week makes in gauging the state of the Canadian economy.
At the start of last week, few market players believed the Bank of Canada would raise its benchmark rate on Wednesday as concern over its largest trading partner, the United States, mounted. The U.S. economy was believed to be on the verge of flirting with a double-dip recession, given the spate of weak economic data traders had grown accustomed to over the summer.
But two key U.S. pieces of August data released last week — the ISM manufacturing index and non-farm payrolls — were better than expected and suggested the North American economic recovery, while sluggish, marches on and is in no real danger of falling into an abyss. This helped trigger a “vicious” sell-off in bonds, in which investors piled in because of fears of a severe economic slowdown.
The result: The probability that Mark Carney, the Bank of Canada governor, will raise interest rates by 25 basis points, to 1%, increased to slightly more than 60% on Friday from less than 50% as of late August.
The good-looking U.S. data “tipped the scale heavily” toward a rate hike, said Douglas Porter, deputy chief economist at BMO Capital Markets.
Also playing a role was Canadian GDP data for the second quarter, which on the surface appeared tepid — 2% annualized growth, well below the rapid pace recorded in previous quarters. But analysts say the Canadian economy is stronger than the second-quarter headlines indicated, with final domestic demand still advancing at a robust pace. Plus, much of the second-quarter drag was from so-called “import leakage,” in which gains in imports — as firms acquired productivity-enhancing equipment at the fastest pace since 2005 — outstripped exports. Income data also showed wages and salaries grew “a very solid” 4.8% annualized in the three-month period, according to economists at Moody’s Analytics.
“Although growth slowed more than expected in the second quarter, the cause of this slowing does not suggest that there has been significant deterioration in the economy’s overall health,” said John Clinkard, chief Canadian economist at Deutsche Bank.
“Given the surge of investment in new machinery and equipment in the second quarter, that [means] business confidence is strong,” Mr. Clinkard said.
Still, much doubt remains about the health of the United States. The Bank of Canada’s economic outlook, released just two months ago, now appears too optimistic given recent trends. It expected the economy to reach its full potential late next year, but that could be pushed out further with weaker economic indicators in the United States and Canada. Plus, recent data suggest inflation, which ultimately drives the bank’s rate decisions, poses no threat as the key core rate — which strips out volatile-priced items — has slowed for two straight months.
These factors are driving analysts to scale back expectations for rate hikes for the remainder of 2010 and into 2011, predicting the Bank of Canada will pause for a while to see where all the economic dust settles. For instance, Bank of Nova Scotia chief economist Warren Jestin now envisages the central bank moving its benchmark rate no higher than 1.75% next year, or 50 basis points below previous forecasts.
Last week’s U.S. data may have put to rest fears of a double-dip recession, “but we are also tracking a U.S. economy that is nowhere near the pace it needs to be at this stage of the business cycle,” said Avery Shenfeld, chief economist at CIBC World Markets. The United States still requires “easy monetary policy and a softening in next year’s planned fiscal tightening if it is going to stay out of trouble.”
Even with positive jobs and manufacturing data, the week ended with a bit of a reality check for the U.S. economy with figures showing growth slowing in the service sector, which accounts for 80% of U.S. output.
The U.S. Federal Reserve is expected to refrain from rate hikes for a while — well into 2011, according to most analysts — with the U.S. economy still in a lacklustre state. The Bank of Canada, then, won’t want to raise rates too aggressively ahead of the Fed or risk the Canadian dollar appreciating to levels that start to take a bite out of economic output.
In fact, speculation is that the Fed would inject further liquidity, through another round of securities purchases, before considering a rate hike. But senior Fed policymakers remain divided on that need, with Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, describing fears of deflation and a double-dip recession as “alarmist.”
In addition, Mr. Lockhart said that, despite all the worry, the U.S. economy remained on a “gradual recovery track.”
OTTAWA • What a difference a week makes in gauging the state of the Canadian economy.
At the start of last week, few market players believed the Bank of Canada would raise its benchmark rate on Wednesday as concern over its largest trading partner, the United States, mounted. The U.S. economy was believed to be on the verge of flirting with a double-dip recession, given the spate of weak economic data traders had grown accustomed to over the summer.
But two key U.S. pieces of August data released last week — the ISM manufacturing index and non-farm payrolls — were better than expected and suggested the North American economic recovery, while sluggish, marches on and is in no real danger of falling into an abyss. This helped trigger a “vicious” sell-off in bonds, in which investors piled in because of fears of a severe economic slowdown.
The result: The probability that Mark Carney, the Bank of Canada governor, will raise interest rates by 25 basis points, to 1%, increased to slightly more than 60% on Friday from less than 50% as of late August.
The good-looking U.S. data “tipped the scale heavily” toward a rate hike, said Douglas Porter, deputy chief economist at BMO Capital Markets.
Also playing a role was Canadian GDP data for the second quarter, which on the surface appeared tepid — 2% annualized growth, well below the rapid pace recorded in previous quarters. But analysts say the Canadian economy is stronger than the second-quarter headlines indicated, with final domestic demand still advancing at a robust pace. Plus, much of the second-quarter drag was from so-called “import leakage,” in which gains in imports — as firms acquired productivity-enhancing equipment at the fastest pace since 2005 — outstripped exports. Income data also showed wages and salaries grew “a very solid” 4.8% annualized in the three-month period, according to economists at Moody’s Analytics.
“Although growth slowed more than expected in the second quarter, the cause of this slowing does not suggest that there has been significant deterioration in the economy’s overall health,” said John Clinkard, chief Canadian economist at Deutsche Bank.
“Given the surge of investment in new machinery and equipment in the second quarter, that [means] business confidence is strong,” Mr. Clinkard said.
Still, much doubt remains about the health of the United States. The Bank of Canada’s economic outlook, released just two months ago, now appears too optimistic given recent trends. It expected the economy to reach its full potential late next year, but that could be pushed out further with weaker economic indicators in the United States and Canada. Plus, recent data suggest inflation, which ultimately drives the bank’s rate decisions, poses no threat as the key core rate — which strips out volatile-priced items — has slowed for two straight months.
These factors are driving analysts to scale back expectations for rate hikes for the remainder of 2010 and into 2011, predicting the Bank of Canada will pause for a while to see where all the economic dust settles. For instance, Bank of Nova Scotia chief economist Warren Jestin now envisages the central bank moving its benchmark rate no higher than 1.75% next year, or 50 basis points below previous forecasts.
Last week’s U.S. data may have put to rest fears of a double-dip recession, “but we are also tracking a U.S. economy that is nowhere near the pace it needs to be at this stage of the business cycle,” said Avery Shenfeld, chief economist at CIBC World Markets. The United States still requires “easy monetary policy and a softening in next year’s planned fiscal tightening if it is going to stay out of trouble.”
Even with positive jobs and manufacturing data, the week ended with a bit of a reality check for the U.S. economy with figures showing growth slowing in the service sector, which accounts for 80% of U.S. output.
The U.S. Federal Reserve is expected to refrain from rate hikes for a while — well into 2011, according to most analysts — with the U.S. economy still in a lacklustre state. The Bank of Canada, then, won’t want to raise rates too aggressively ahead of the Fed or risk the Canadian dollar appreciating to levels that start to take a bite out of economic output.
In fact, speculation is that the Fed would inject further liquidity, through another round of securities purchases, before considering a rate hike. But senior Fed policymakers remain divided on that need, with Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, describing fears of deflation and a double-dip recession as “alarmist.”
In addition, Mr. Lockhart said that, despite all the worry, the U.S. economy remained on a “gradual recovery track.”
Tuesday, August 10, 2010
Waterloo Region No. 2 place to invest in Canada: survey
RECORD STAFF
WATERLOO REGION — A diverse economy, strong post-secondary institutions and the planned investment in light rail transit makes Waterloo Region the second best place in Canada to invest in real estate, according to a survey by the Real Estate Investment Network.
Don Campbell, the network’s president, said Waterloo Region finished second behind Calgary in the snapshots of best Canadian cities to invest in between now and 2015. “We looked at what regions will outperform the average over the next five years,” he said in an interview Monday.
The survey by the network, a national organization comprised of real estate investor members, considered a variety of factors, including average household income, population growth and affordability of property, plus factors such as the transportation infrastructure.
The report describes Waterloo Region as the “economic Alberta of Ontario,” in terms of investment potential for residential and commercial real estate, outperforming other cities in the province and in eastern Canada. Hamilton and the Barrie-Orillia area are the two other Ontario locations that made the list of 11 best Canadian places to invest in.
Campbell said a diverse economy and favourable geographic location, along with strong post-secondary institutions, were big factors in why Waterloo Region did so well.
The report also cited the region’s high-tech job growth. The investment in the information technology sector has protected the area from the steep economic downturn that affected other communities, the network’s report said.
The planned light rail transportation system will help to make the region a hot investment location for the future, Campbell said. “That will raise the region up on the world map, because it will be one of the smallest centres with its own regional light rail transportation line. That will be a factor in investment and it will also be a factor in attracting new residents from outside the Waterloo Region.”
Another major factor is the affordability of real estate relative to average household income, he said.
In past years, Waterloo Region has ranked as the best place in Ontario to invest in for real estate. This was the first year the network did rankings for all of Canada, Campbell said.
WATERLOO REGION — A diverse economy, strong post-secondary institutions and the planned investment in light rail transit makes Waterloo Region the second best place in Canada to invest in real estate, according to a survey by the Real Estate Investment Network.
Don Campbell, the network’s president, said Waterloo Region finished second behind Calgary in the snapshots of best Canadian cities to invest in between now and 2015. “We looked at what regions will outperform the average over the next five years,” he said in an interview Monday.
The survey by the network, a national organization comprised of real estate investor members, considered a variety of factors, including average household income, population growth and affordability of property, plus factors such as the transportation infrastructure.
The report describes Waterloo Region as the “economic Alberta of Ontario,” in terms of investment potential for residential and commercial real estate, outperforming other cities in the province and in eastern Canada. Hamilton and the Barrie-Orillia area are the two other Ontario locations that made the list of 11 best Canadian places to invest in.
Campbell said a diverse economy and favourable geographic location, along with strong post-secondary institutions, were big factors in why Waterloo Region did so well.
The report also cited the region’s high-tech job growth. The investment in the information technology sector has protected the area from the steep economic downturn that affected other communities, the network’s report said.
The planned light rail transportation system will help to make the region a hot investment location for the future, Campbell said. “That will raise the region up on the world map, because it will be one of the smallest centres with its own regional light rail transportation line. That will be a factor in investment and it will also be a factor in attracting new residents from outside the Waterloo Region.”
Another major factor is the affordability of real estate relative to average household income, he said.
In past years, Waterloo Region has ranked as the best place in Ontario to invest in for real estate. This was the first year the network did rankings for all of Canada, Campbell said.
Sunday, August 8, 2010
July 2010 Sales Review
RECORD STAFF
WATERLOO — House sales cooled off in Waterloo Region in July, but the president of the Kitchener-Waterloo Real Estate Board insists the local market remains stable.
Sales were down 23.7 per cent in Kitchener and Waterloo as 499 homes changed hands compared to 654 for the same month a year ago, the board said Friday.
In Cambridge, 237 homes were sold last month, a drop of 16.3 per cent from the 283 sold for the same month a year ago.
While July totals were down, Ted Scharf, president of the Kitchener board, pointed to year-to-date residential sales of 4,135 units, an increase of 9.2 per cent compared to 2009.
“There are only so many buyers in a year. We had a pretty hot spring. Buyers came out in droves,” he said in an interview.
The average sale price rose one per cent to $284,344, another sign that the local market remains stable and values are “in no way inflated,” Scharf said.
July was a busy month last year as the economy emerged from the recession, he noted. The harmonized sales tax, which kicked in on July 1, may also have dampened sales this year, he said.
Instead of the previous five per cent, buyers now pay a 13 per cent HST on real estate commissions, legal fees, appraisals, condo fees, home inspection fees and moving costs.
July’s sales totals were the lowest since 2002.
Last month’s residential sales in Kitchener and Waterloo included 332 detached homes, 80 condos, 39 semis and 41 townhouses. The most popular price range was $225,000 to $275,000. Thirty-per-cent of sales occurred in this category.
While July totals were down in Cambridge, year-to-date sales are up 10.7 per cent. A total of 1,757 properties have changed hands, compared to 1,587 for the first seven months of 2009.
The average sale price increased 14.9 per cent to $287,923 in July.
“We’re continuing to see strong upward pressure on prices,” Bob Peace, president of the Cambridge Real Estate Board, said in a release.
But softer sales and gains in housing supply will likely have a cooling effect on prices in the second half of the year, he noted.
One hundred and five properties sold for under $249,999, the busiest category during July, the board said.
WATERLOO — House sales cooled off in Waterloo Region in July, but the president of the Kitchener-Waterloo Real Estate Board insists the local market remains stable.
Sales were down 23.7 per cent in Kitchener and Waterloo as 499 homes changed hands compared to 654 for the same month a year ago, the board said Friday.
In Cambridge, 237 homes were sold last month, a drop of 16.3 per cent from the 283 sold for the same month a year ago.
While July totals were down, Ted Scharf, president of the Kitchener board, pointed to year-to-date residential sales of 4,135 units, an increase of 9.2 per cent compared to 2009.
“There are only so many buyers in a year. We had a pretty hot spring. Buyers came out in droves,” he said in an interview.
The average sale price rose one per cent to $284,344, another sign that the local market remains stable and values are “in no way inflated,” Scharf said.
July was a busy month last year as the economy emerged from the recession, he noted. The harmonized sales tax, which kicked in on July 1, may also have dampened sales this year, he said.
Instead of the previous five per cent, buyers now pay a 13 per cent HST on real estate commissions, legal fees, appraisals, condo fees, home inspection fees and moving costs.
July’s sales totals were the lowest since 2002.
Last month’s residential sales in Kitchener and Waterloo included 332 detached homes, 80 condos, 39 semis and 41 townhouses. The most popular price range was $225,000 to $275,000. Thirty-per-cent of sales occurred in this category.
While July totals were down in Cambridge, year-to-date sales are up 10.7 per cent. A total of 1,757 properties have changed hands, compared to 1,587 for the first seven months of 2009.
The average sale price increased 14.9 per cent to $287,923 in July.
“We’re continuing to see strong upward pressure on prices,” Bob Peace, president of the Cambridge Real Estate Board, said in a release.
But softer sales and gains in housing supply will likely have a cooling effect on prices in the second half of the year, he noted.
One hundred and five properties sold for under $249,999, the busiest category during July, the board said.
Wednesday, August 4, 2010
Condo sales in Toronto drop for first time in 16 years
Globe and Mail Update Published on Tuesday, Aug. 03, 2010 1:14PM EDT Last updated on Tuesday, Aug. 03, 2010 2:15PM EDT
New condo sales in Toronto decreased for the first time in 16 years in the second quarter, as the market cooled along with the broader housing market .
Sales of new condos have posted quarter-over-quarter sales gains since 1994, said Urbanation Inc, an information gathering company that tracks sales in the Toronto area. There were 4,991 sales in the second quarter, an eight per cent decline from the first quarter’s 5,415.
“Despite the quarter-over-quarter decrease, sales during the past four quarters were near record highs,” said Ben Myers, Urbanation’s executive vice-president. “When we consider the rapid sales pace of the six months prior to Q2/10, the new sales market is softening. Expect a slightly slower sales pace for the remaining two quarters of 2010.”
The amount of time units are sitting on the market has also increased, to 25 days in the second quarter from 22 days in the first quarter. There were 12,638 unsold units available at the end of the second quarter, an increase of 12 per cent over the same time last year.
The resale market held up far better, setting a new quarterly record of 5,076 sales, beating the previous high of 4,854 set in the third quarter of 2009. It’s an 18 per cent increase over the first quarter, and five per cent over a year ago.
Prices held steady, however, with the average selling price rising less than one per cent in the second quarter to $331,000 as buyers had a record 10,997 units to choose from.
“A flush resale supply coming kept resale pricing in check,” Mr. Meyers said. “Many of these resale listings were absorbed during the quarter, bringing the number of resale listings down to 8,714 units, which allowed the strong demand during the spring months to be met without further impacting affordability due to rising resale prices.”
He said prices should remain stagnant in the coming months because of a flood of new supply.
“With almost 6,000 occupied and not yet registered units in the CMA at the end of Q2/10, and the potential for as many as 12,000 completions over the remaining quarters of 2010, it’s possible the addition of that many units to the market will force resale prices to remain relatively flat,” he said.
New condo sales in Toronto decreased for the first time in 16 years in the second quarter, as the market cooled along with the broader housing market .
Sales of new condos have posted quarter-over-quarter sales gains since 1994, said Urbanation Inc, an information gathering company that tracks sales in the Toronto area. There were 4,991 sales in the second quarter, an eight per cent decline from the first quarter’s 5,415.
“Despite the quarter-over-quarter decrease, sales during the past four quarters were near record highs,” said Ben Myers, Urbanation’s executive vice-president. “When we consider the rapid sales pace of the six months prior to Q2/10, the new sales market is softening. Expect a slightly slower sales pace for the remaining two quarters of 2010.”
The amount of time units are sitting on the market has also increased, to 25 days in the second quarter from 22 days in the first quarter. There were 12,638 unsold units available at the end of the second quarter, an increase of 12 per cent over the same time last year.
The resale market held up far better, setting a new quarterly record of 5,076 sales, beating the previous high of 4,854 set in the third quarter of 2009. It’s an 18 per cent increase over the first quarter, and five per cent over a year ago.
Prices held steady, however, with the average selling price rising less than one per cent in the second quarter to $331,000 as buyers had a record 10,997 units to choose from.
“A flush resale supply coming kept resale pricing in check,” Mr. Meyers said. “Many of these resale listings were absorbed during the quarter, bringing the number of resale listings down to 8,714 units, which allowed the strong demand during the spring months to be met without further impacting affordability due to rising resale prices.”
He said prices should remain stagnant in the coming months because of a flood of new supply.
“With almost 6,000 occupied and not yet registered units in the CMA at the end of Q2/10, and the potential for as many as 12,000 completions over the remaining quarters of 2010, it’s possible the addition of that many units to the market will force resale prices to remain relatively flat,” he said.
Wednesday, July 21, 2010
Canadians back away from borrowing
Owe Canada. It’s not our anthem any more.
Crazy borrowings on lines of credit? History. The gotta-buy-now housing market? Toast. Credit card debt? Slowing down, too.
Many months ago, it was fashionable to question how Canada’s profligate borrowers would hold up when interest rates began to rise. Today, after the Bank of Canada raised its trendsetting overnight rate for the second time in the past two months, we’re starting to see the answer.
In virtually all forms of borrowing, the rate of increase has slowed drastically. “I’ve been saying for a while that this is the most logical display of behaviour on the part of the consumer that I’ve seen in a long time,” said Benjamin Tal, senior economist at CIBC World Markets and an expert on household finances.
Mr. Tal’s take is that consumers ramped up their borrowing to take advantage of the historically low rates that were used by central banks around the world to fight the recession and global financial crisis. The likelihood of a rate rebound was widely discussed, and people took notice. When he looked at borrowing data for the first quarter of 2010, the rate of growth was down across the board.
“What we need to see now is a continuation of the softening in credit in order for people not to get into trouble,” Mr. Tal said.
This appears to be happening. The latest mortgage data has prompted him to forecast growth in outstanding mortgage debt of 3 to 4 per cent in 2011, down from 10 to 12 per cent in the first half of this year. He said growth in line-of-credit balances has fallen to about 7 per cent on an annual basis from 30 per cent two years ago. As for credit cards, growth in balances has fallen to 3 to 4 per cent from 12 to 14 per cent two years ago.
“All credit vehicles are slowing significantly,” Mr. Tal said.
This responsible attitude toward debt came through as well in the results of a survey by Genworth Financial Canada, which competes with Canada Mortgage and Housing Corp. to provide mortgage default insurance. It indicates that one-quarter of homeowners with mortgages have either made a lump-sum payment against principal or accelerated their payments in the past year.
There’s no better way to prepare yourself for the impact of rising interest rates on your mortgage than to make a lump-sum payment or speed up your pace of repayment.
In a way, the Bank of Canada’s latest move to raise rates is a gift to people with debts. They’ll have to pay a bit more in interest on their lines of credit, variable-rate mortgages and floating rate loans, but the increase is mild and the pace of further increases will be muted. It could be a lot worse.
In fact, lots of market watchers thought it would be worse last year when they looked ahead to 2010. They saw all the government stimulus pumped into the economy during the recession producing a significant uptick in inflation, which in turn would send interest rates marching higher.
Now, there’s talk of deflation, or falling prices. The Bank of Canada’s not outwardly concerned about this, but it did throw a mention into its latest statement on rates about how it expects economic growth to slow next year and in 2012 from the 3.5-per-cent growth of 2010. Back in April, the bank expected 3.7-per-cent growth this year.
Borrowers would undoubtedly argue in favour of keeping rates steady at current levels, but that promotes an unhelpful complacency. Rates are still close to the unsustainable emergency lows they hit in the financial crisis and recession. By increasing them by a quarter-point in June and then another quarter-point on Tuesday, the Bank has signalled to people that it’s time to take control of their debts.
Lots of people have obviously got the message already, and good for them. But let’s remember that less borrowing means less of the consumer spending that’s essential to economic growth.
Mr. Tal said lower levels of consumer spending are one of the reasons why his firm sees growth slowing, just as the Bank of Canada does. But he still thinks both the economy and borrowers are benefiting from the central bank’s early action on rates.
“By October, I think we’ll have reached a point where interest rates have gone up enough to slow down economic momentum without the risk of punishing the consumer too much.”
That seems fair, given how much less Owe Canada’s being sung these days.
http://www.theglobeandmail.com/globe-investor/personal-finance/rob-carrick/canadians-back-away-from-borrowing/article1646613/
Crazy borrowings on lines of credit? History. The gotta-buy-now housing market? Toast. Credit card debt? Slowing down, too.
Many months ago, it was fashionable to question how Canada’s profligate borrowers would hold up when interest rates began to rise. Today, after the Bank of Canada raised its trendsetting overnight rate for the second time in the past two months, we’re starting to see the answer.
In virtually all forms of borrowing, the rate of increase has slowed drastically. “I’ve been saying for a while that this is the most logical display of behaviour on the part of the consumer that I’ve seen in a long time,” said Benjamin Tal, senior economist at CIBC World Markets and an expert on household finances.
Mr. Tal’s take is that consumers ramped up their borrowing to take advantage of the historically low rates that were used by central banks around the world to fight the recession and global financial crisis. The likelihood of a rate rebound was widely discussed, and people took notice. When he looked at borrowing data for the first quarter of 2010, the rate of growth was down across the board.
“What we need to see now is a continuation of the softening in credit in order for people not to get into trouble,” Mr. Tal said.
This appears to be happening. The latest mortgage data has prompted him to forecast growth in outstanding mortgage debt of 3 to 4 per cent in 2011, down from 10 to 12 per cent in the first half of this year. He said growth in line-of-credit balances has fallen to about 7 per cent on an annual basis from 30 per cent two years ago. As for credit cards, growth in balances has fallen to 3 to 4 per cent from 12 to 14 per cent two years ago.
“All credit vehicles are slowing significantly,” Mr. Tal said.
This responsible attitude toward debt came through as well in the results of a survey by Genworth Financial Canada, which competes with Canada Mortgage and Housing Corp. to provide mortgage default insurance. It indicates that one-quarter of homeowners with mortgages have either made a lump-sum payment against principal or accelerated their payments in the past year.
There’s no better way to prepare yourself for the impact of rising interest rates on your mortgage than to make a lump-sum payment or speed up your pace of repayment.
In a way, the Bank of Canada’s latest move to raise rates is a gift to people with debts. They’ll have to pay a bit more in interest on their lines of credit, variable-rate mortgages and floating rate loans, but the increase is mild and the pace of further increases will be muted. It could be a lot worse.
In fact, lots of market watchers thought it would be worse last year when they looked ahead to 2010. They saw all the government stimulus pumped into the economy during the recession producing a significant uptick in inflation, which in turn would send interest rates marching higher.
Now, there’s talk of deflation, or falling prices. The Bank of Canada’s not outwardly concerned about this, but it did throw a mention into its latest statement on rates about how it expects economic growth to slow next year and in 2012 from the 3.5-per-cent growth of 2010. Back in April, the bank expected 3.7-per-cent growth this year.
Borrowers would undoubtedly argue in favour of keeping rates steady at current levels, but that promotes an unhelpful complacency. Rates are still close to the unsustainable emergency lows they hit in the financial crisis and recession. By increasing them by a quarter-point in June and then another quarter-point on Tuesday, the Bank has signalled to people that it’s time to take control of their debts.
Lots of people have obviously got the message already, and good for them. But let’s remember that less borrowing means less of the consumer spending that’s essential to economic growth.
Mr. Tal said lower levels of consumer spending are one of the reasons why his firm sees growth slowing, just as the Bank of Canada does. But he still thinks both the economy and borrowers are benefiting from the central bank’s early action on rates.
“By October, I think we’ll have reached a point where interest rates have gone up enough to slow down economic momentum without the risk of punishing the consumer too much.”
That seems fair, given how much less Owe Canada’s being sung these days.
http://www.theglobeandmail.com/globe-investor/personal-finance/rob-carrick/canadians-back-away-from-borrowing/article1646613/
Friday, July 9, 2010
Canadian economy adds 93,200 jobs in June; loonie jumps after employment report
OTTAWA - Canada enjoyed another big month for employment in June, churning out a whopping 93,200 new jobs — almost all in Ontario and Quebec and all in the services sector.
The strong performance brings the jobless rate to 7.9 per cent, the first time it has been under eight per cent since the depths of the recession in January 2009.
The Canadian dollar rose sharply after the Statistics Canada report. A few minutes before the release, the loonie was trading overseas just below 96 cents US and jumped more than half a cent after the jobs report came out.
Canada's dollar was at 96.71 cents US shortly before the official open of trading Friday, up about a cent from the previous close of 95.79 cents
With the employment gains in June, the Canadian economy has recouped almost all the jobs that were lost during the economic contraction that began in the fall of 2008.
But Statistics Canada noted that the unemployment rate remains well elevated above the 6.2 per cent that existed in October 2008 because many more Canadians have since joined the labour force.
Still, the quickly improving labour market likely gives the Bank of Canada all the evidence it needs to raise its key interest rates by another quarter-point to 0.75 per cent on July 20 in order to keep inflation in line.
There were a number of surprises in the Statistics Canada report.
Economists had expected a modest pick-up in the range of 15,000 new jobs because several economic indicators, including retail sales, exports and building permits, have been weak since March.
Also, the 109,000 additional jobs created in April suggested a pay-back was in order.
The other surprise was that the jobs were all concentrated in Ontario and Quebec, despite the fact that manufacturing actually shed workers during the month.
Ontario gained 60,300 workers, slicing the province's unemployment rate 0.6 points to 8.3 per cent.
Meanwhile, Quebec gained 30,400 new jobs, bringing its unemployment rate to 7.8 per cent.
This was accomplished without any help from the manufacturing sector, a mainstay in both provinces, as factories actually shed 14,300 jobs overall in June.
All of the new jobs were in the services, including retail and wholesale trade, business building and other support services, health care, social assistance and other services, such as auto repair and personal care.
The agency said the new jobs were split between full-time and part-time, with more than half private sector.
There was also a big increase in student employment — 63,000 more last month than was the case in June last year.
However, there were setbacks. There were 10,200 fewer working in the goods producing industries last month, with losses in the factories sector leading the way.
Regionally, other provinces didn't fare a well as Canada's two most populous, with most recording slight gains and Newfoundland and New Brunswick outright job losses.
The strong performance brings the jobless rate to 7.9 per cent, the first time it has been under eight per cent since the depths of the recession in January 2009.
The Canadian dollar rose sharply after the Statistics Canada report. A few minutes before the release, the loonie was trading overseas just below 96 cents US and jumped more than half a cent after the jobs report came out.
Canada's dollar was at 96.71 cents US shortly before the official open of trading Friday, up about a cent from the previous close of 95.79 cents
With the employment gains in June, the Canadian economy has recouped almost all the jobs that were lost during the economic contraction that began in the fall of 2008.
But Statistics Canada noted that the unemployment rate remains well elevated above the 6.2 per cent that existed in October 2008 because many more Canadians have since joined the labour force.
Still, the quickly improving labour market likely gives the Bank of Canada all the evidence it needs to raise its key interest rates by another quarter-point to 0.75 per cent on July 20 in order to keep inflation in line.
There were a number of surprises in the Statistics Canada report.
Economists had expected a modest pick-up in the range of 15,000 new jobs because several economic indicators, including retail sales, exports and building permits, have been weak since March.
Also, the 109,000 additional jobs created in April suggested a pay-back was in order.
The other surprise was that the jobs were all concentrated in Ontario and Quebec, despite the fact that manufacturing actually shed workers during the month.
Ontario gained 60,300 workers, slicing the province's unemployment rate 0.6 points to 8.3 per cent.
Meanwhile, Quebec gained 30,400 new jobs, bringing its unemployment rate to 7.8 per cent.
This was accomplished without any help from the manufacturing sector, a mainstay in both provinces, as factories actually shed 14,300 jobs overall in June.
All of the new jobs were in the services, including retail and wholesale trade, business building and other support services, health care, social assistance and other services, such as auto repair and personal care.
The agency said the new jobs were split between full-time and part-time, with more than half private sector.
There was also a big increase in student employment — 63,000 more last month than was the case in June last year.
However, there were setbacks. There were 10,200 fewer working in the goods producing industries last month, with losses in the factories sector leading the way.
Regionally, other provinces didn't fare a well as Canada's two most populous, with most recording slight gains and Newfoundland and New Brunswick outright job losses.
Thursday, July 8, 2010
Real estate broker predicts lower home prices on the way
BY LUANN LASALLE
MONTREAL — Home buyers can expect more choice and lower prices in the second half of 2010, while sellers can expect fewer offers for their homes, says one of Canada’s leading real estate brokers.
“Accurate pricing is going to be really key,” said Phil Soper, president and chief executive of Royal LePage Real Estate Services.
In its latest housing survey, Royal LePage said Wednesday the real estate market will start to slow in the second half of 2010 with the number of sales expected to fall compared with the hot activity earlier in the year.
“I would say if you’re a seller, the first thing you should expect is fewer multiple offers on your home,” Soper said.
Sellers who try to squeeze extra money out of their homes will likely have their homes “languish” on the market, unless they’re exceptional properties, he said.
“I believe we are through the highly volatile spiking of prices and activity levels, both up and down,” Soper said.
“We’ll see a much a more stable, but frankly less exciting in a good way, real estate market in the next 18 months,” he said.
The Canadian housing market has been a strong pillar under the economic recovery in Canada, mainly because of low mortgage rates and positive consumer confidence. However, interest rate increases and stiffer bank lending rules have taken some of the steam out of the sector since the early part of the year.
Soper said a lot of buyers were frustrated by a tight supply and “over-exuberant competition,” particularly in the 2010 first quarter, but that’s easing with increased listings.
In the first six months of 2010, about half of real estate transactions involved first-time buyers, he said.
“It took a while for sellers to get comfortable that the recovery from the recession was real. We had an all-time record number of new homes come on the market in the first quarter of 2010. It started to impact prices in the second half (of 2010).”
Derek Burleton, vice-president and deputy chief economist at TD Bank Financial Group, said the decline in homes sales is expected to accelerate and selling prices will also go down.
“The market is frothy and it’s going to come back down to earth for the usual reasons,” he said.
In the survey, Royal LePage said some markets will see a decline in home prices and sales volumes toward the end of 2010 but that should be seen more as a reaction to the highs reached late last year rather than a major slowdown.
Prices for detached bungalows and two-storey houses were up about nine per cent in the April-June quarter, compared with the same time last year. Condominiums were up 7.3 per cent.
Royal LePage is forecasting that by the end of 2010, home prices will rise an average 6.8 per cent over last year, while the number of home sales will increase by just over one per cent from 2009.
The Canadian Press
MONTREAL — Home buyers can expect more choice and lower prices in the second half of 2010, while sellers can expect fewer offers for their homes, says one of Canada’s leading real estate brokers.
“Accurate pricing is going to be really key,” said Phil Soper, president and chief executive of Royal LePage Real Estate Services.
In its latest housing survey, Royal LePage said Wednesday the real estate market will start to slow in the second half of 2010 with the number of sales expected to fall compared with the hot activity earlier in the year.
“I would say if you’re a seller, the first thing you should expect is fewer multiple offers on your home,” Soper said.
Sellers who try to squeeze extra money out of their homes will likely have their homes “languish” on the market, unless they’re exceptional properties, he said.
“I believe we are through the highly volatile spiking of prices and activity levels, both up and down,” Soper said.
“We’ll see a much a more stable, but frankly less exciting in a good way, real estate market in the next 18 months,” he said.
The Canadian housing market has been a strong pillar under the economic recovery in Canada, mainly because of low mortgage rates and positive consumer confidence. However, interest rate increases and stiffer bank lending rules have taken some of the steam out of the sector since the early part of the year.
Soper said a lot of buyers were frustrated by a tight supply and “over-exuberant competition,” particularly in the 2010 first quarter, but that’s easing with increased listings.
In the first six months of 2010, about half of real estate transactions involved first-time buyers, he said.
“It took a while for sellers to get comfortable that the recovery from the recession was real. We had an all-time record number of new homes come on the market in the first quarter of 2010. It started to impact prices in the second half (of 2010).”
Derek Burleton, vice-president and deputy chief economist at TD Bank Financial Group, said the decline in homes sales is expected to accelerate and selling prices will also go down.
“The market is frothy and it’s going to come back down to earth for the usual reasons,” he said.
In the survey, Royal LePage said some markets will see a decline in home prices and sales volumes toward the end of 2010 but that should be seen more as a reaction to the highs reached late last year rather than a major slowdown.
Prices for detached bungalows and two-storey houses were up about nine per cent in the April-June quarter, compared with the same time last year. Condominiums were up 7.3 per cent.
Royal LePage is forecasting that by the end of 2010, home prices will rise an average 6.8 per cent over last year, while the number of home sales will increase by just over one per cent from 2009.
The Canadian Press
Tuesday, July 6, 2010
Home Sales Surpass Billion Dollar Mark in first half of 2010
By Taniab • July 6th, 2010
KITCHENER-WATERLOO, ON (July 6, 2010) – During the first half of the year, the number of residential properties sold through the Multiple Listing System (MLS®) of the Kitchener-Waterloo Real Estate Board (KWREB) increased 16 percent.
While the 3,633 homes sold during the first six months of the year are 96 units shy of 2007’s record breaking first half, the total value of those sales broke the one billion dollar mark for the first time to the end of June.
“The residential real estate market is alive and kicking in Waterloo Region,” says Ted Scharf, President of the KWREB. “Consumers continue to have a strong sense of confidence in the value of home ownership in the region, and I expect the market will remain steady and healthy for the remainder of the year.”
The increase in home sales occurred predominantly in the top half of the price range spectrum: There were 2,093 sales of residential properties for more than $250,000 to the end of June, compared to 1,446 for the same period in 2009, an increase of almost 45 percent.
In the upper end of the market, this trend was even more prominent, with an 84% increase in homes selling for more than half a million dollars relative to one year ago for a total of 205 sales.
KITCHENER-WATERLOO, ON (July 6, 2010) – During the first half of the year, the number of residential properties sold through the Multiple Listing System (MLS®) of the Kitchener-Waterloo Real Estate Board (KWREB) increased 16 percent.
While the 3,633 homes sold during the first six months of the year are 96 units shy of 2007’s record breaking first half, the total value of those sales broke the one billion dollar mark for the first time to the end of June.
“The residential real estate market is alive and kicking in Waterloo Region,” says Ted Scharf, President of the KWREB. “Consumers continue to have a strong sense of confidence in the value of home ownership in the region, and I expect the market will remain steady and healthy for the remainder of the year.”
The increase in home sales occurred predominantly in the top half of the price range spectrum: There were 2,093 sales of residential properties for more than $250,000 to the end of June, compared to 1,446 for the same period in 2009, an increase of almost 45 percent.
In the upper end of the market, this trend was even more prominent, with an 84% increase in homes selling for more than half a million dollars relative to one year ago for a total of 205 sales.
First-time homebuyers want new, detached homes but expect a deal: TD Bank survey
SUNNY FREEMAN, THE CANADIAN PRESS
THE CANADIAN PRESS, 2010
TORONTO - A majority of Canadians who just bought or are about to buy their first home expect to pay less than the asking price and prefer newer and detached homes over older and semi-detached homes or condos, according to a TD Bank survey.
But the report questioned whether the homebuyers had unreasonable expectations, considering that nine out of 10 took out or expect to take out a mortgage for their home.
"It's only natural to want your first home to be the home of your dreams, but it is important to be realistic about what you can afford," said Farhaneh Haque, a mortgage specialist at TD Canada Trust.
Six in 10 first-time homebuyers said they were worried about being able to afford their home should interest rates rise — a scenario that economists say is inevitable after an era of historically low rates sparked a rush into the housing market.
Only 30 per cent said they plan to or already have more than a 20 per cent down payment, and the remaining 70 per cent will require mortgage insurance. Eight of 10 buyers reported putting down as much as they can afford.
But Haque advised that prospective first-time homeowners consider a larger down payment because paying 10 per cent or more will make a big difference, bringing down the time it will take to pay off a mortgage and possibly affecting regular payment amounts.
"It may mean that you need to save longer before buying your first home, but it will pay off in the end."
The vast majority of those surveyed said they made informed financial decisions before buying, with nine in 10 homebuyers getting pre-approved mortgages and calculating closing costs before buying.
However, closing costs, land transfer tax, and legal fees were the top three costs buyers felt unprepared for.
Six in 10 first time home buyers said they bought or intend to buy a fully detached home and three-quarters want a new home.
Meanwhile, survey respondents were equally split between preferring a smaller home closer to work and 45 per cent would prefer a larger home with a longer commute.
Almost all respondents, 99 per cent, said price was the most important factor when considering what kind of home to buy.
The report compiled 1,000 results from an online survey between June 8 and 21 of Canadians who had purchased their first home within the past 24 months or intended to purchase their first home within the next 24 months.
First-time homebuyers in B.C. bucked a national trend and said condominiums were their No. 1 choice. They were also most concerned about being able to afford their homes if interest rates rise.
Respondents from Atlantic Canada were most likely to have their hearts set on new, large and fully detached homes. They are also most likely to prefer a larger home even if it would mean a longer commute.
Quebecers browsed through the fewest number of homes while shopping for their first, but were most likely in the country to live in their first home for their entire lifetime, the report found.
More first-time buyers in Alberta expected to pay less than asking price than those in any other province.
In Ontario, more homebuyers than the national average planned to put more than 20 per cent toward a down payment.
More than in any other provinces, people in Manitoba and Saskatchewan said they would prefer a newer home over an older home if price points were similar.
THE CANADIAN PRESS, 2010
TORONTO - A majority of Canadians who just bought or are about to buy their first home expect to pay less than the asking price and prefer newer and detached homes over older and semi-detached homes or condos, according to a TD Bank survey.
But the report questioned whether the homebuyers had unreasonable expectations, considering that nine out of 10 took out or expect to take out a mortgage for their home.
"It's only natural to want your first home to be the home of your dreams, but it is important to be realistic about what you can afford," said Farhaneh Haque, a mortgage specialist at TD Canada Trust.
Six in 10 first-time homebuyers said they were worried about being able to afford their home should interest rates rise — a scenario that economists say is inevitable after an era of historically low rates sparked a rush into the housing market.
Only 30 per cent said they plan to or already have more than a 20 per cent down payment, and the remaining 70 per cent will require mortgage insurance. Eight of 10 buyers reported putting down as much as they can afford.
But Haque advised that prospective first-time homeowners consider a larger down payment because paying 10 per cent or more will make a big difference, bringing down the time it will take to pay off a mortgage and possibly affecting regular payment amounts.
"It may mean that you need to save longer before buying your first home, but it will pay off in the end."
The vast majority of those surveyed said they made informed financial decisions before buying, with nine in 10 homebuyers getting pre-approved mortgages and calculating closing costs before buying.
However, closing costs, land transfer tax, and legal fees were the top three costs buyers felt unprepared for.
Six in 10 first time home buyers said they bought or intend to buy a fully detached home and three-quarters want a new home.
Meanwhile, survey respondents were equally split between preferring a smaller home closer to work and 45 per cent would prefer a larger home with a longer commute.
Almost all respondents, 99 per cent, said price was the most important factor when considering what kind of home to buy.
The report compiled 1,000 results from an online survey between June 8 and 21 of Canadians who had purchased their first home within the past 24 months or intended to purchase their first home within the next 24 months.
First-time homebuyers in B.C. bucked a national trend and said condominiums were their No. 1 choice. They were also most concerned about being able to afford their homes if interest rates rise.
Respondents from Atlantic Canada were most likely to have their hearts set on new, large and fully detached homes. They are also most likely to prefer a larger home even if it would mean a longer commute.
Quebecers browsed through the fewest number of homes while shopping for their first, but were most likely in the country to live in their first home for their entire lifetime, the report found.
More first-time buyers in Alberta expected to pay less than asking price than those in any other province.
In Ontario, more homebuyers than the national average planned to put more than 20 per cent toward a down payment.
More than in any other provinces, people in Manitoba and Saskatchewan said they would prefer a newer home over an older home if price points were similar.
Friday, July 2, 2010
Tech sector keeps multiplying in tough times
WATERLOO REGION — Waterloo Region’s technology sector just keeps on growing.
The number of high technology companies in the region has jumped to about 700 from 550 in 2008, according to a new report from Communitech, the association representing tech companies in the area.
That represents a growth rate of 21 per cent during one of the worst economic downturns of the past 20 years.
This sector, which includes digital media, information technology and software companies, computer hardware firms and advanced manufacturing businesses, employs roughly 30,000 people with 2,000 job openings waiting to be filled, Communitech said in a news release Wednesday.
The figures are based on a survey and inventory of technology firms in Waterloo Region and area conducted by Communitech in January and February.
Results are published in the 2010 edition of the Waterloo Region Tech Directory, which will be released at a tech leadership conference sponsored by Communitech on July 14.
Featured speakers at the conference, to be held at Bingemans in Kitchener, include Clayton Christensen, author of the Innovators Dilemma, Bill Taylor, co-founder of Fast Company magazine, and Noel Biderman, president of Avid Life Media.
Among other findings, the report notes that 51 per cent of technology firms in the area are small businesses of between one and five employees. The region is also home to 25 publicly traded tech companies, of which 15 have their headquarters here. They include Research In Motion, Open Text, ATS Automation Tooling Systems and Com Dev.
Venture capital invested in area tech companies exceeds $300 million and the sector accounts for $18 billion in annual revenues, the report notes.
Iain Klugman, chief executive officer of Communitech, said the latest inventory underscores the strength of the local tech sector. “We’re thrilled because so much has changed in the past five years,” he said in an interview. “We’ve really got the momentum going.”
The region has been home to roughly 350 startups in the last 30 months, he noted. “Not all of them make it, but at the end of the day you’ve got to have startups if you want to have successful medium-sized companies.”
One of the key drivers of recent growth, Klugman said, has been digital media, broadly defined as computer gaming, social networking software and digital tools to advance research in areas such as health care, finance and mineral exploration.
The region has benefitted greatly in this regard through its designation as the headquarters of the Canadian Digital Media Network, a joint venture of all three levels of government, Communitech and industry partners. The network will set up shop in the Tannery building in downtown Kitchener this summer along with a Communitech digital media incubator called the Hub.
Apart from digital media, the local sector has shown its resilience during the recession by maintaining strong balance sheets and focusing its research on “solving significant problems,” Klugman said.
chowitt@therecord.com
Saturday, June 19, 2010
Vacancy rate ristes to 3.1% while Rents Increase 1.3%
(Source: The Record)
The Vacancy Rate for Rental Housing in the Kitchener Census Metro Area stood at 3.1 per cent in April, up from 2.9 per cent a year ago and below the Provincial Average of 3.4 per cent, says Canada Mortgage and Housing Corporation.
Average Rents in the region rose 1.3 per cent in price over the past year, compared to 1.8 per cent for the year before.
A two-bedroom apartment cost $858 per month, an increase of $5 from April 2009 and below the provincial average of $978, the agency said.
The Vacancy Rate for Rental Housing in the Kitchener Census Metro Area stood at 3.1 per cent in April, up from 2.9 per cent a year ago and below the Provincial Average of 3.4 per cent, says Canada Mortgage and Housing Corporation.
Average Rents in the region rose 1.3 per cent in price over the past year, compared to 1.8 per cent for the year before.
A two-bedroom apartment cost $858 per month, an increase of $5 from April 2009 and below the provincial average of $978, the agency said.
Friday, June 18, 2010
Canada’s financial hub is preparing for G20 lockdown
Source: Jameson Berkow, Financial Post
All five major banks will be reducing hours or shutting a total of 51 branches that are inside or close to the summit meeting in downtown Toronto. Plans are also underway to reduce staff on trading floors and corporate offices and move some operations to remote locations or allow employees to work from home.
Most banks will be implementing so-called “business continuity plans” — previously put to the test during the SARS outbreak and the Ontario power blackout in 2003 — and now being put through their paces once again. Although the summit takes place on the June 26-27 weekend, many banks will be limiting operations in the days leading up to it.
Banks are keeping details of their plans largely under wraps. Many bank employees who generally work downtown still don’t know if they are going to be coming into work or if they will be at a remote site setup. Much will depend on the intensity of the protests and the level of street disruptions.
The Bank of Montreal, in addition to closing nine downtown locations, intends to shift part of its trading operations to an alternate location outside of the secure zone, which encloses most of the financial district.
“Trading will probably split operations, moving half of its staff to an alternate location to reduce demand on the main trading floor,” Ralph Marranca, a spokesman for BMO said. At the peak of the summit disruption, BMO could have as many as 40% of its downtown staff working from home, he added, though plans are still in flux.
Toronto-Dominion Bank will modify hours at 22 branches, for five business days leading up to the summit.
“Like many companies expecting to be impacted by the summit, we have pretty robust plans in place,” said Wojtek Dabrowski, a spokesman for TD. “In order to make sure everything runs safely and smoothly we’re closing eight branches in the downtown core.”
Decisions about further closures or reductions in hours, including trading and other operations will be made on an ongoing basis, Mr. Dabrowski said.
For Royal Bank of Canada, the summit will be a real-life test of its continuity strategy.“This is an actual event taking place in Toronto so we are putting our customized business continuity plans in place,” Don Blair, a RBC spokesman said.
RBC’s strategy, which also involves closing eight of its downtown branches from June 24 until June 27, will have as many employees as possible who work downtown either work from home or from alternative RBC locations in the Greater Toronto Area. According to Mr. Blair, RBC is planning to maintain normal trading operations for its investment services, Mr. Blair said.
An RBC branch in Ottawa was firebombed last month. The group that claimed responsibility for the attack, FFFC-Ottawa, has said it planned to protest at the Toronto event as well.
The Canadian Imperial Bank of Commerce will be closing six downtown locations, including its flagship Commerce Court branch, for all or part of the summit duration.
Aside from closing six downtown locations, Bank of Nova Scotia is not planning any specific mitigation strategy to deal with the G20 disruption. Though the bank will be “implementing business continuity plans as required,” said, Joe Konecny a bank spokesman.
The Toronto Stock Exchange (TSX), which maintains a corporate headquarters one block from the secure zone, is expecting approximately 75% of its staff to work from home. Though it does not anticipate any impact on its trading operations which occur off-site, according to TSX spokeswoman Carolyn Quick
All five major banks will be reducing hours or shutting a total of 51 branches that are inside or close to the summit meeting in downtown Toronto. Plans are also underway to reduce staff on trading floors and corporate offices and move some operations to remote locations or allow employees to work from home.
Most banks will be implementing so-called “business continuity plans” — previously put to the test during the SARS outbreak and the Ontario power blackout in 2003 — and now being put through their paces once again. Although the summit takes place on the June 26-27 weekend, many banks will be limiting operations in the days leading up to it.
Banks are keeping details of their plans largely under wraps. Many bank employees who generally work downtown still don’t know if they are going to be coming into work or if they will be at a remote site setup. Much will depend on the intensity of the protests and the level of street disruptions.
The Bank of Montreal, in addition to closing nine downtown locations, intends to shift part of its trading operations to an alternate location outside of the secure zone, which encloses most of the financial district.
“Trading will probably split operations, moving half of its staff to an alternate location to reduce demand on the main trading floor,” Ralph Marranca, a spokesman for BMO said. At the peak of the summit disruption, BMO could have as many as 40% of its downtown staff working from home, he added, though plans are still in flux.
Toronto-Dominion Bank will modify hours at 22 branches, for five business days leading up to the summit.
“Like many companies expecting to be impacted by the summit, we have pretty robust plans in place,” said Wojtek Dabrowski, a spokesman for TD. “In order to make sure everything runs safely and smoothly we’re closing eight branches in the downtown core.”
Decisions about further closures or reductions in hours, including trading and other operations will be made on an ongoing basis, Mr. Dabrowski said.
For Royal Bank of Canada, the summit will be a real-life test of its continuity strategy.“This is an actual event taking place in Toronto so we are putting our customized business continuity plans in place,” Don Blair, a RBC spokesman said.
RBC’s strategy, which also involves closing eight of its downtown branches from June 24 until June 27, will have as many employees as possible who work downtown either work from home or from alternative RBC locations in the Greater Toronto Area. According to Mr. Blair, RBC is planning to maintain normal trading operations for its investment services, Mr. Blair said.
An RBC branch in Ottawa was firebombed last month. The group that claimed responsibility for the attack, FFFC-Ottawa, has said it planned to protest at the Toronto event as well.
The Canadian Imperial Bank of Commerce will be closing six downtown locations, including its flagship Commerce Court branch, for all or part of the summit duration.
Aside from closing six downtown locations, Bank of Nova Scotia is not planning any specific mitigation strategy to deal with the G20 disruption. Though the bank will be “implementing business continuity plans as required,” said, Joe Konecny a bank spokesman.
The Toronto Stock Exchange (TSX), which maintains a corporate headquarters one block from the secure zone, is expecting approximately 75% of its staff to work from home. Though it does not anticipate any impact on its trading operations which occur off-site, according to TSX spokeswoman Carolyn Quick
Tuesday, June 15, 2010
No One Understands Homes Like a Realtor
Before anybody decides to sell their homeon their own and fly solo through this complex, time consuming and financially perilous process, they should consider the following, advises the Kitchener-Waterloo Real Estate Board.
When Buyers see a home for sale "by the owner", they usually think they see a bargain. They imagine the realtor's fee going into their own pocket, not the seller's.
"Did you know that selling a home is a complicated and ever changing process, where real estate law governs nearly every phasse of selling your home? One small slip-up and an entire deal can fall through, or sorse, a lawsuite can come your way."
Selling a home takes more than just haning a "For Sale" sign. Consider the following:
* How will you promote your home? Will you write your own ads?
* How will you use the Internet, knowing that you'll have no access to the cooperative service available through the Multiple Listing Serive.
* Promoting a home is a fulltime job, and you may already have a full time job. Will you be able to take calls at any time? How about screening the callers to figure out if they're suitable candidates?
* Lacking years of experience, the average do-it-yourselfer is merely guessing at their listing price. Often they set the price too low and miss out on thousands of dollars, or they price their home too high and drive away willing buyers.
Source - The Record June 12, 2010
When Buyers see a home for sale "by the owner", they usually think they see a bargain. They imagine the realtor's fee going into their own pocket, not the seller's.
"Did you know that selling a home is a complicated and ever changing process, where real estate law governs nearly every phasse of selling your home? One small slip-up and an entire deal can fall through, or sorse, a lawsuite can come your way."
Selling a home takes more than just haning a "For Sale" sign. Consider the following:
* How will you promote your home? Will you write your own ads?
* How will you use the Internet, knowing that you'll have no access to the cooperative service available through the Multiple Listing Serive.
* Promoting a home is a fulltime job, and you may already have a full time job. Will you be able to take calls at any time? How about screening the callers to figure out if they're suitable candidates?
* Lacking years of experience, the average do-it-yourselfer is merely guessing at their listing price. Often they set the price too low and miss out on thousands of dollars, or they price their home too high and drive away willing buyers.
Source - The Record June 12, 2010
Friday, June 11, 2010
Market Slowed Only Slightly in May
Month to Month comparison May 2009 – May 2010 for Kitchener Waterloo
653 total homes were sold, a decrease of 7.1% over May 2009
432 detached homes were sold, a decrease of 9.6%
114 condominium homes were sold, an increase of 5.6%
59 semi detached homes were sold, an increase of 37.2%
44 townhouses were sold, a decrease of 34.3%
Source: KW Real Estate Board MLS statistics
653 total homes were sold, a decrease of 7.1% over May 2009
432 detached homes were sold, a decrease of 9.6%
114 condominium homes were sold, an increase of 5.6%
59 semi detached homes were sold, an increase of 37.2%
44 townhouses were sold, a decrease of 34.3%
Source: KW Real Estate Board MLS statistics
Wednesday, June 9, 2010
Housing Starts Drop in May
Housing starts drop in May, in latest sign Canada's housing market is cooling
By Sunny Freeman, The Canadian Press
TORONTO - New home construction slowed in May as the number of startups last month fell below economists' expectations — the latest indicator that Canada's once white-hot housing market is cooling off.
Canada Mortgage and Housing Corp reported Tuesday that the annual rate of housing starts dropped last month, pegging the rate at 189,100 units in May, down from a revised 201,800 in April.
Douglas Porter, deputy chief economist at the Bank of Montreal, said May's figures were below expectations but "hardly a shock."
"The surprise so far in 2010 had been how quickly starts had ramped up from their depressed levels a year ago," Porter wrote in a note Tuesday. "While the May level of starts is the lowest so far this year, it’s still above where we see activity for all of 2010."
Economists have widely predicted a slowdown in the housing market in the second half of 2010.
Consumers pushed many sales forward into the latter half of 2009 and the early part of 2010 in order to get into the market in advance of tougher new mortgage rules in April, the widely expected interest rate increase that was announced by the Bank of Canada in June and the implementation of the harmonized sales tax in Ontario and B.C. coming July 1.
CMHC said the decrease in May is consistent with its forecast of 182,000 housing starts for all of 2010.
Urban starts fell 9.5 per cent to 165,200 units in May, while rural starts were estimated at an annual rate of 23,900 units. Urban multiple starts, which include condos and townhouses, decreased 5.6 per cent to 92,800 units, while single urban starts dropped 14.1, to 72,400 units.
While spring and summer are generally the busiest building seasons of the year, construction is expected to slow markedly as a result of cooling demand in Canada's housing market, Porter said, adding it looks as though Canadian residential construction activity has peaked for the time being and will recede in the months ahead.
Most economists now predict that home prices will either remain flat or fall in the rest of the year and into 2011.
Derek Burleton, vice-president and deputy chief economist at TD Bank Financial Group, said starts dropped in May despite unseasonably warm, construction-friendly weather in Central and Eastern Canada and were the first major setback for home building in several months.
"Today's data suggest that the rebound in home-building activity from last year's recession is quickly running out of steam," he wrote in a note Tuesday.
"Prior to May, starts had rallied strongly from a recession low of 112,000 units in April of last year. In the first four months of the year, starts had plateaued at the 200,000 level."
He added that TD Economics anticipates average resale home prices to decline by six to seven per cent over the next four or five quarters.
"A bigger culprit (than the HST) however, is easing price conditions in the broader housing market, as sales continue to come off the boil and more listings make their way onto the market," Burleton said.
But, thanks in part to a strong showing in April, housing starts in the second quarter are still likely to be solid—around 190,000 to 195,000 on an annualized basis —down slightly from about 200,000 units in the first quarter, Burleton predicted.
Meanwhile, he said in the second half of the year, housing starts will moderate to the 160,000 to 170,000 unit range.
The Canadian Real Estate Association last week lowered its 2010 national forecast for resale transactions following a weaker than anticipated start to the year in some provinces, mainly British Columbia, Ontario and Alberta.
CREA also revised its projected housing price increases for this year, saying it still expects a record to be set this year but that the increase now is expected to be just 1.6 per cent over 2009.
The previous forecast had called for prices to rise 5.4 per cent over last year's record-setting peak.
The association predicted that by 2011, the national average housing price is expected to decline by 1.5 per cent, driven down by an easing of the growth in sales in B.C. and Ontario.
http://ca.news.finance.yahoo.com/s/08062010/2/biz-finance-housing-starts-drop-latest-sign-canada-s-housing.html
By Sunny Freeman, The Canadian Press
TORONTO - New home construction slowed in May as the number of startups last month fell below economists' expectations — the latest indicator that Canada's once white-hot housing market is cooling off.
Canada Mortgage and Housing Corp reported Tuesday that the annual rate of housing starts dropped last month, pegging the rate at 189,100 units in May, down from a revised 201,800 in April.
Douglas Porter, deputy chief economist at the Bank of Montreal, said May's figures were below expectations but "hardly a shock."
"The surprise so far in 2010 had been how quickly starts had ramped up from their depressed levels a year ago," Porter wrote in a note Tuesday. "While the May level of starts is the lowest so far this year, it’s still above where we see activity for all of 2010."
Economists have widely predicted a slowdown in the housing market in the second half of 2010.
Consumers pushed many sales forward into the latter half of 2009 and the early part of 2010 in order to get into the market in advance of tougher new mortgage rules in April, the widely expected interest rate increase that was announced by the Bank of Canada in June and the implementation of the harmonized sales tax in Ontario and B.C. coming July 1.
CMHC said the decrease in May is consistent with its forecast of 182,000 housing starts for all of 2010.
Urban starts fell 9.5 per cent to 165,200 units in May, while rural starts were estimated at an annual rate of 23,900 units. Urban multiple starts, which include condos and townhouses, decreased 5.6 per cent to 92,800 units, while single urban starts dropped 14.1, to 72,400 units.
While spring and summer are generally the busiest building seasons of the year, construction is expected to slow markedly as a result of cooling demand in Canada's housing market, Porter said, adding it looks as though Canadian residential construction activity has peaked for the time being and will recede in the months ahead.
Most economists now predict that home prices will either remain flat or fall in the rest of the year and into 2011.
Derek Burleton, vice-president and deputy chief economist at TD Bank Financial Group, said starts dropped in May despite unseasonably warm, construction-friendly weather in Central and Eastern Canada and were the first major setback for home building in several months.
"Today's data suggest that the rebound in home-building activity from last year's recession is quickly running out of steam," he wrote in a note Tuesday.
"Prior to May, starts had rallied strongly from a recession low of 112,000 units in April of last year. In the first four months of the year, starts had plateaued at the 200,000 level."
He added that TD Economics anticipates average resale home prices to decline by six to seven per cent over the next four or five quarters.
"A bigger culprit (than the HST) however, is easing price conditions in the broader housing market, as sales continue to come off the boil and more listings make their way onto the market," Burleton said.
But, thanks in part to a strong showing in April, housing starts in the second quarter are still likely to be solid—around 190,000 to 195,000 on an annualized basis —down slightly from about 200,000 units in the first quarter, Burleton predicted.
Meanwhile, he said in the second half of the year, housing starts will moderate to the 160,000 to 170,000 unit range.
The Canadian Real Estate Association last week lowered its 2010 national forecast for resale transactions following a weaker than anticipated start to the year in some provinces, mainly British Columbia, Ontario and Alberta.
CREA also revised its projected housing price increases for this year, saying it still expects a record to be set this year but that the increase now is expected to be just 1.6 per cent over 2009.
The previous forecast had called for prices to rise 5.4 per cent over last year's record-setting peak.
The association predicted that by 2011, the national average housing price is expected to decline by 1.5 per cent, driven down by an easing of the growth in sales in B.C. and Ontario.
http://ca.news.finance.yahoo.com/s/08062010/2/biz-finance-housing-starts-drop-latest-sign-canada-s-housing.html
Thursday, May 27, 2010
Housing market continues to sizzle
Loonie's plunge signals long-term risk for Canadian and global economies -prospects that Bank of Canada will start hiking rates next Tuesday are a coin-flip today.
· TSX -3.27 only slightly lower after a sharp fall early in the day on worries that Europe's banking problems could derail global economic recovery
· DOW -22.82 .
· Dollar -.94c to 93.46cUS
· Oil -$1.46 to $68.75US per barrel.
· Gold +$4.00 to $1,197.80 USD per ounce as bullion prices climbed on safe-haven buying
· Canadian 5 yr bond yields -.11bps to 2.51. The spread (based on the MERIX 5 yr rate published rate of 4.59%) has jumped far above the comfort zone to 2.08
· http://www.financialpost.com/markets/market-data/money-yields-can_us.html?tmp=yields-can_us
The rate of return on your bond, can be read through a yield curve, If the increase in bond yield continues to go up, the spread will continue to shrink and this could be a trigger for interest rates to rise. Currently lenders are looking for a spread between 1.35 and 1.60
Loonie's plunge signals long-term risk for Canadian and global economies
By Julian Beltrame, The Canadian Press
OTTAWA - The Canadian dollar plunged to its lowest level in eight months before recovering Tuesday, sending a clear signal that Europe's debt crisis has the potential to reach across the Atlantic and impact Canada's mending economy.
The loonie has lost about eight per cent of its value over the last month in reaction to fears in global equity and financial markets about the lasting imprint of government debt, and now a new risk — the threat of war on the Korean peninsula.
Over the weekend, the Bank of Spain had to bail out Cajasur — the second savings bank in that country to receive public money since March 2009. On Monday, four other Spanish savings banks announced plans to merge amid concerns over solvency in the sector.
Tension in Asia has also risen since last week after North Korea was accused of the sinking in March of a South Korean warship. Seoul has called for sanctions against the North.
The Canadian dollar closed down 0.94 of a cent at 93.46 cents US on Tuesday after bouncing off a low of 92.18 cents US earlier in the day.
The loonie is not alone in seeing its value eroded. Other commodity currencies have also taken a hit in the flight to dependable and liquid U.S. Treasury bills.
The short-term impact on the Canadian economy of frightened financial markets and a loonie closer to 90 cents than parity, ironically, may be mostly positive.
A weaker dollar will give a much-needed boost to manufacturers and exporters who prosper whenever they can sell their products abroad with a currency discount.
And the unsettling of financial markets has caused real interest rates to soften for mortgages and other loans. Many Canadian banks have dropped posted rates on five-year mortgages to below six per cent.
As a result, prospects that Bank of Canada governor Mark Carney will start hiking rates next Tuesday have gone from a virtual sure thing a month ago to a coin-flip today.
Export Development Canada's chief economist, Peter Hall, welcomed the fact that the loonie's wings have been clipped, saying that a dollar at par had the potential to take two or three points off economic growth next year — the equivalent of about $30 billion to $45 billion in output.
But the longer term implications may be that Canada's recovery won't go as smoothly as many had hoped. The loonie is acting as a proxy for the global economy: when the Canadian dollar is down, it means so are prospects for global expansion, say economists.
"Everything and anything that happens in the world affects Canada," said TD Bank chief economist Don Drummond, noting Canada's dependence on trade and on the prices of commodities it sells to the rest of the world.
The longer term outlook is that many governments, not just the poor cousins of Europe, will soon need to deal with debt burdens that cannot be sustained, and the ensuing clampdown on spending will stall the recovery.
Several economists, including David Rosenberg of Gluskin and Sheff, said the risk of a second downturn in key economies, including the United States as Washington withdraws stimulus spending, has become very real. Much like in 2008-09, Canada would become collateral damage, they said.
"For a small, open (and) commodity-sensitive economy whose entire recession in 2009 was imported from abroad and south of the border, the answer is yes," Rosenberg said when asked whether a second dip is possible.
That still remains a minority view, although the TD's Drummond puts the risk at about 20 per cent.
The key question is whether the European crisis is an overblown temporary crisis, or the precursor of government debt woes in the United Kingdom, the United States and other larger economies.
Scotiabank portfolio manager Andrew Pyle said he believes the fears over Europe will blow over in a matter of weeks, which will cause both oil prices and the loonie to recover to previous levels.
"I think people will be surprised to see how quickly that will happen. I wouldn't be surprised to see us back to parity in July," he said.
But it's the longer-term prospects that most worries Drummond. He says the perception that the situation will stabilize if the bailout of Greece and other countries works, or that things will implode if the bailout doesn't work, is simplistic.
"Those countries (with large debts) aren't getting out of this any time soon . . . easy bailout or not," he said.
http://ca.news.finance.yahoo.com/s/25052010/2/biz-finance-loonie-s-plunge-signals-long-term-risk-canadian.html
Transmitted by CNW Group
Ontario's housing market continues to sizzle: RBC Economics
TORONTO, May 25 /CNW/ - Ontario's hot housing market is showing few signs of letting up, causing housing affordability measures and property values to reach record highs in many parts of the province during the first quarter of 2010, according to the latest housing report released today by RBC Economics Research.
"Despite an increased supply of homes on the market, prices continue to rise which has undermined affordability," said Robert Hogue, senior economist, RBC. "While still well below peak levels, most of the housing affordability measures now stand above their long-term average, suggesting that more and more buyers are being priced out of the Ontario market."
The report found that housing activity in Ontario remained in top gear in the early part of the year. The RBC Housing Affordability measure for Ontario, which captures the province's proportion of pre-tax household income needed to service the costs of owning a home, rose across all four housing classes in the first quarter of 2010.
Affordability of the detached bungalow benchmark edged up to 39.6 per cent (up 0.4 of a percentage point over the last quarter), the standard townhouse to 32.7 per cent (up 0.4 of a percentage point), the standard condo to 27.8 per cent (up 0.4 of a percentage point) and the standard two-storey home to 45.4 per cent (rising 0.2 of a percentage point).
With the clock ticking toward the implementation of the HST on July 1, 2010, which will increase the transaction costs associated with a home purchase, both the demand for and supply of housing units in the province are likely being boosted by the rush of buyers and sellers to beat the tax.
The Toronto market reached new heights as strong demand catapulted sales of existing homes and property values to record highs in late 2009 and the early part of 2010. Affordability generally continued to weaken in Toronto in the first quarter, with RBC's measures creeping up between 0.3 and 0.6 percentage points for three of the four housing categories (condominiums were the only exception).
"While previously undecided sellers finally joined the fray in recent months, they continue to be outnumbered by buyers with bidding wars and quick sales still common," added Hogue. "All Toronto housing affordability measures now exceed their long-term average, suggesting that the market's dizzying flight could soon run into some turbulence."
The Ottawa-area market continued to chart a record-breaking path in the first few months of 2010, driven higher by motivated buyers. This strong demand added upward pressure on pricing, accelerating the pace of increases relative to the subdued gains recorded during the second half of 2009, although more homes were put up for sale. The higher prices eroded affordability in the area in the first quarter, with the RBC measures rising between 0.3 and 1.0 percentage points, reversing most of the surprising improvement in the fourth quarter.
"Although demand momentum is likely to remain brisk in the very near term, the historically-elevated costs of homeownership in the Ottawa area could well become a factor deterring buyers later this year," noted Hogue.
RBC's Housing Affordability measure for a detached bungalow in Canada's largest cities is as follows: Vancouver 73.4 per cent (up 4.8 percentage points over the last quarter), Toronto 49.1 per cent (up 0.4 of a percentage point), Ottawa 40.3 per cent (up 0.3 of a percentage point), Montreal 39.7 per cent (up 0.9 of a percentage point), Calgary 36.5 per cent (down 0.3 of a percentage point) and Edmonton 32.0 (down 0.5 of a percentage point).
The report also looked at mortgage carrying costs relative to incomes for a broader sampling of cities across the country, including Toronto and Ottawa. For these cities, RBC has used a narrower measure of housing affordability that only takes mortgage payments relative to income into account.
The RBC Housing Affordability measure, which has been compiled since 1985, is based on the costs of owning a detached bungalow, a reasonable property benchmark for the housing market. Alternative housing types are also presented including a standard two-storey home, a standard townhouse and a standard condominium. The higher the reading, the more costly it is to afford a home. For example, an affordability reading of 50 per cent means that homeownership costs, including mortgage payments, utilities and property taxes, take up 50 per cent of a typical household's monthly pre-tax income.
Highlights from across Canada:
- British Columbia: Homeownership became even more expensive in B.C.,
as strong home price momentum continued in the first quarter. Housing
affordability measures have now returned close to the all-time highs
reached in early-2008. This trend represents a risk that could weigh
heavily on the province's housing market in the near term.
- Alberta: Affordability measures eased in the first quarter, as
Alberta was the only province to show a decline in the costs
associated with owning a home. Housing price increases in the
province were fairly modest over the past year, which has kept home
ownership relatively affordable. RBC affordability measures are at or
below the long-term averages.
- Saskatchewan: Housing prices picked up in the province in early 2010,
causing home affordability measures to rise significantly in the
first quarter. This is a change from previous quarters, which showed
an improvement in affordability. Despite this increase, affordability
measures still remain well below the all-time peak levels reached in
early-2008.
- Manitoba: Prices for most housing types surged ahead in the first
quarter of 2010, pushing affordability measures above the long-term
average for the province despite a slower pace of resale activity.
Affordability in the province has reached a point where an additional
decline in home affordability may temper housing demand.
- Quebec: Quebec's housing market rally continued in the first quarter
of the year, with record-levels of buying activity and rising
property values. This escalation in home prices, while more moderate
than in the previous two quarters, weakened affordability in the
province. All affordability measures now exceed their long-term
average, which may soon slow housing demand in the province.
- Atlantic Canada: Resale activity on the East Coast remained solid,
with an increase in sales met by a rise in the supply of available
homes. These broadly balanced conditions have limited the pace of
price increases in the region. Overall housing affordability in
Atlantic Canada continues to be among the most attractive in the
country, with measures still below long-term averages.
The full RBC Housing Affordability report is available online, at www.rbc.com/economics/market/pdf/house.pdf.
· TSX -3.27 only slightly lower after a sharp fall early in the day on worries that Europe's banking problems could derail global economic recovery
· DOW -22.82 .
· Dollar -.94c to 93.46cUS
· Oil -$1.46 to $68.75US per barrel.
· Gold +$4.00 to $1,197.80 USD per ounce as bullion prices climbed on safe-haven buying
· Canadian 5 yr bond yields -.11bps to 2.51. The spread (based on the MERIX 5 yr rate published rate of 4.59%) has jumped far above the comfort zone to 2.08
· http://www.financialpost.com/markets/market-data/money-yields-can_us.html?tmp=yields-can_us
The rate of return on your bond, can be read through a yield curve, If the increase in bond yield continues to go up, the spread will continue to shrink and this could be a trigger for interest rates to rise. Currently lenders are looking for a spread between 1.35 and 1.60
Loonie's plunge signals long-term risk for Canadian and global economies
By Julian Beltrame, The Canadian Press
OTTAWA - The Canadian dollar plunged to its lowest level in eight months before recovering Tuesday, sending a clear signal that Europe's debt crisis has the potential to reach across the Atlantic and impact Canada's mending economy.
The loonie has lost about eight per cent of its value over the last month in reaction to fears in global equity and financial markets about the lasting imprint of government debt, and now a new risk — the threat of war on the Korean peninsula.
Over the weekend, the Bank of Spain had to bail out Cajasur — the second savings bank in that country to receive public money since March 2009. On Monday, four other Spanish savings banks announced plans to merge amid concerns over solvency in the sector.
Tension in Asia has also risen since last week after North Korea was accused of the sinking in March of a South Korean warship. Seoul has called for sanctions against the North.
The Canadian dollar closed down 0.94 of a cent at 93.46 cents US on Tuesday after bouncing off a low of 92.18 cents US earlier in the day.
The loonie is not alone in seeing its value eroded. Other commodity currencies have also taken a hit in the flight to dependable and liquid U.S. Treasury bills.
The short-term impact on the Canadian economy of frightened financial markets and a loonie closer to 90 cents than parity, ironically, may be mostly positive.
A weaker dollar will give a much-needed boost to manufacturers and exporters who prosper whenever they can sell their products abroad with a currency discount.
And the unsettling of financial markets has caused real interest rates to soften for mortgages and other loans. Many Canadian banks have dropped posted rates on five-year mortgages to below six per cent.
As a result, prospects that Bank of Canada governor Mark Carney will start hiking rates next Tuesday have gone from a virtual sure thing a month ago to a coin-flip today.
Export Development Canada's chief economist, Peter Hall, welcomed the fact that the loonie's wings have been clipped, saying that a dollar at par had the potential to take two or three points off economic growth next year — the equivalent of about $30 billion to $45 billion in output.
But the longer term implications may be that Canada's recovery won't go as smoothly as many had hoped. The loonie is acting as a proxy for the global economy: when the Canadian dollar is down, it means so are prospects for global expansion, say economists.
"Everything and anything that happens in the world affects Canada," said TD Bank chief economist Don Drummond, noting Canada's dependence on trade and on the prices of commodities it sells to the rest of the world.
The longer term outlook is that many governments, not just the poor cousins of Europe, will soon need to deal with debt burdens that cannot be sustained, and the ensuing clampdown on spending will stall the recovery.
Several economists, including David Rosenberg of Gluskin and Sheff, said the risk of a second downturn in key economies, including the United States as Washington withdraws stimulus spending, has become very real. Much like in 2008-09, Canada would become collateral damage, they said.
"For a small, open (and) commodity-sensitive economy whose entire recession in 2009 was imported from abroad and south of the border, the answer is yes," Rosenberg said when asked whether a second dip is possible.
That still remains a minority view, although the TD's Drummond puts the risk at about 20 per cent.
The key question is whether the European crisis is an overblown temporary crisis, or the precursor of government debt woes in the United Kingdom, the United States and other larger economies.
Scotiabank portfolio manager Andrew Pyle said he believes the fears over Europe will blow over in a matter of weeks, which will cause both oil prices and the loonie to recover to previous levels.
"I think people will be surprised to see how quickly that will happen. I wouldn't be surprised to see us back to parity in July," he said.
But it's the longer-term prospects that most worries Drummond. He says the perception that the situation will stabilize if the bailout of Greece and other countries works, or that things will implode if the bailout doesn't work, is simplistic.
"Those countries (with large debts) aren't getting out of this any time soon . . . easy bailout or not," he said.
http://ca.news.finance.yahoo.com/s/25052010/2/biz-finance-loonie-s-plunge-signals-long-term-risk-canadian.html
Transmitted by CNW Group
Ontario's housing market continues to sizzle: RBC Economics
TORONTO, May 25 /CNW/ - Ontario's hot housing market is showing few signs of letting up, causing housing affordability measures and property values to reach record highs in many parts of the province during the first quarter of 2010, according to the latest housing report released today by RBC Economics Research.
"Despite an increased supply of homes on the market, prices continue to rise which has undermined affordability," said Robert Hogue, senior economist, RBC. "While still well below peak levels, most of the housing affordability measures now stand above their long-term average, suggesting that more and more buyers are being priced out of the Ontario market."
The report found that housing activity in Ontario remained in top gear in the early part of the year. The RBC Housing Affordability measure for Ontario, which captures the province's proportion of pre-tax household income needed to service the costs of owning a home, rose across all four housing classes in the first quarter of 2010.
Affordability of the detached bungalow benchmark edged up to 39.6 per cent (up 0.4 of a percentage point over the last quarter), the standard townhouse to 32.7 per cent (up 0.4 of a percentage point), the standard condo to 27.8 per cent (up 0.4 of a percentage point) and the standard two-storey home to 45.4 per cent (rising 0.2 of a percentage point).
With the clock ticking toward the implementation of the HST on July 1, 2010, which will increase the transaction costs associated with a home purchase, both the demand for and supply of housing units in the province are likely being boosted by the rush of buyers and sellers to beat the tax.
The Toronto market reached new heights as strong demand catapulted sales of existing homes and property values to record highs in late 2009 and the early part of 2010. Affordability generally continued to weaken in Toronto in the first quarter, with RBC's measures creeping up between 0.3 and 0.6 percentage points for three of the four housing categories (condominiums were the only exception).
"While previously undecided sellers finally joined the fray in recent months, they continue to be outnumbered by buyers with bidding wars and quick sales still common," added Hogue. "All Toronto housing affordability measures now exceed their long-term average, suggesting that the market's dizzying flight could soon run into some turbulence."
The Ottawa-area market continued to chart a record-breaking path in the first few months of 2010, driven higher by motivated buyers. This strong demand added upward pressure on pricing, accelerating the pace of increases relative to the subdued gains recorded during the second half of 2009, although more homes were put up for sale. The higher prices eroded affordability in the area in the first quarter, with the RBC measures rising between 0.3 and 1.0 percentage points, reversing most of the surprising improvement in the fourth quarter.
"Although demand momentum is likely to remain brisk in the very near term, the historically-elevated costs of homeownership in the Ottawa area could well become a factor deterring buyers later this year," noted Hogue.
RBC's Housing Affordability measure for a detached bungalow in Canada's largest cities is as follows: Vancouver 73.4 per cent (up 4.8 percentage points over the last quarter), Toronto 49.1 per cent (up 0.4 of a percentage point), Ottawa 40.3 per cent (up 0.3 of a percentage point), Montreal 39.7 per cent (up 0.9 of a percentage point), Calgary 36.5 per cent (down 0.3 of a percentage point) and Edmonton 32.0 (down 0.5 of a percentage point).
The report also looked at mortgage carrying costs relative to incomes for a broader sampling of cities across the country, including Toronto and Ottawa. For these cities, RBC has used a narrower measure of housing affordability that only takes mortgage payments relative to income into account.
The RBC Housing Affordability measure, which has been compiled since 1985, is based on the costs of owning a detached bungalow, a reasonable property benchmark for the housing market. Alternative housing types are also presented including a standard two-storey home, a standard townhouse and a standard condominium. The higher the reading, the more costly it is to afford a home. For example, an affordability reading of 50 per cent means that homeownership costs, including mortgage payments, utilities and property taxes, take up 50 per cent of a typical household's monthly pre-tax income.
Highlights from across Canada:
- British Columbia: Homeownership became even more expensive in B.C.,
as strong home price momentum continued in the first quarter. Housing
affordability measures have now returned close to the all-time highs
reached in early-2008. This trend represents a risk that could weigh
heavily on the province's housing market in the near term.
- Alberta: Affordability measures eased in the first quarter, as
Alberta was the only province to show a decline in the costs
associated with owning a home. Housing price increases in the
province were fairly modest over the past year, which has kept home
ownership relatively affordable. RBC affordability measures are at or
below the long-term averages.
- Saskatchewan: Housing prices picked up in the province in early 2010,
causing home affordability measures to rise significantly in the
first quarter. This is a change from previous quarters, which showed
an improvement in affordability. Despite this increase, affordability
measures still remain well below the all-time peak levels reached in
early-2008.
- Manitoba: Prices for most housing types surged ahead in the first
quarter of 2010, pushing affordability measures above the long-term
average for the province despite a slower pace of resale activity.
Affordability in the province has reached a point where an additional
decline in home affordability may temper housing demand.
- Quebec: Quebec's housing market rally continued in the first quarter
of the year, with record-levels of buying activity and rising
property values. This escalation in home prices, while more moderate
than in the previous two quarters, weakened affordability in the
province. All affordability measures now exceed their long-term
average, which may soon slow housing demand in the province.
- Atlantic Canada: Resale activity on the East Coast remained solid,
with an increase in sales met by a rise in the supply of available
homes. These broadly balanced conditions have limited the pace of
price increases in the region. Overall housing affordability in
Atlantic Canada continues to be among the most attractive in the
country, with measures still below long-term averages.
The full RBC Housing Affordability report is available online, at www.rbc.com/economics/market/pdf/house.pdf.
Tuesday, May 18, 2010
From castle to condos - Barra Castle on Queen
Developer hopes to save Barra’s exterior as part of new project
This drawing shows a developer's plan for a condominium project at the site of the Barra Castle on Queen Street South.
The Bara Castle on Queen Street, Kitchener. A developer planning a condo project on the site plans to save the front exterior.
KITCHENER — Demolition of the Barra Castle on Queen Street South is scheduled to begin today as the owner prepares the site for high-end condominiums.
Polocorp Inc. wants to retain and renovate the original part of the 1930 landmark at 393 Queen St. S. and add a six-storey building to the back with 36 units.
In as little as three weeks all but the front section of the building will be gone. Following that, engineers must take a close look at the remaining wing that faces Queen Street South to determine if it can be saved. “We originally thought the front of the building was solid and the back was a problem, but on closer inspection we have found serious structural deficiencies in the front,” Mike Puopolo of Polocorp Inc. said.
The original part of the castle will be replicated if it can not be saved.
Preliminary marketing has already started on the condominiums, branded as The Barra Castle on Queen, that will range in size from 1,100-square-feet to 1,300-square-feet. Depending on the features and size the prices may range from $275,000 to nearly $400,000.
Polocorp is targeting couples, 50 to 65, who want to sell their existing home and move into the central part of the city.
“I think this is a niche market,” Puopolo said.
“People who want to be part of the Barra Castle, and the size of the units are fairly large.”
Puopolo is working with his father, veteran developer Paul Puopolo, who believes the downtown area of the city can absorb all of the condominiums and apartments now under construction or in the planning stages.
Andrin Homes of Brampton has plans for 385 condominiums for the western half of Centre Block, which is bounded by King, Young, Duke and Ontario streets. Auburn Developments of London is working on the Arrow Lofts on Benton Street, which includes 134 units in the old factory and 184 in a 16-storey building next to it.
Marketing will begin in earnest this fall for The Barra Castle on Queen. When about half of the units are pre-sold, construction will start.
If all goes well, the building could be completed and occupied in late 2012. Preliminary interest on Polocorp’s website has been positive.
“We’ve been getting some good feedback,” Paul Puopolo said. “We had a couple of inquiries for bigger units with three bedrooms and 1,400 to 1,500 square feet.”
What concerns the elder Puopolo more than anything at this stage is the coming HST on July 1. The residential housing market has been strong, but some speculate a lot of buyers are getting into ownership now to beat the HST, and sales will slow after the harmonized sales tax takes effect.
“I am a little worried about what happens after July 1,” he said. “My gut feeling is there is still a market and it is still a go.”
The redevelopment of the site will likely be the final chapter in the 80-year history of a unique building that was allowed to deteriorate beyond saving in a Heritage Conservation District. The exteriors of all buildings in those districts are protected under the Ontario Heritage Act, but that legislation afforded no protection to the Scottish baronial castle that graced Queen Street South.
A former owner of the building, Elite Capital Inc., had started renovations and repairs in 2007, but inspectors with the city, fire department and electrical authority shut the site down for numerous violations.
Under previous owners the Barra Castle had fallen into neglect. The inspectors acted in 2007 after a complaint was made by a tenant.The inspectors did not inform Heritage Kitchener or the city’s heritage planner.
The building, already in rough shape, suffered even more damage as pipes burst during the winter of 2007-2008. Former tenants were outraged as many retained a lot of affection for the building that featured large apartments, hardwood floors, archways and old trim and baseboards.
Mathew McCarthy, Record staff
Five Bad Home Improvement Ideas
Published on Saturday, May 15, 2010, by Kimbrough Gray, Broker Agent News
When considering adding value to a home, you consistently hear from the real estate industry that updated bathrooms and quality kitchens stand out in a home sale. Those are proven sale closers. There are certain other improvements you can make to your home that will beautify it or create convenience for your family. When it comes time to selling, however, those improvements may do nothing to increase the value of the property and may even turn off potential homebuyers.
Over-the-Top Renovations
Au contraire mon frère, not all renovations will raise the value of your home. Just `cause it's bigger doesn't mean it will be perceived as better by future homebuyers. Unless your home is located in Beverly Hills or some other very posh neighborhood, don't install the bathroom with the supersized steam shower, imported Italian marble and several different spray heads ... unless you have the money to do it for your own pleasure and enjoyment only. That kind of improvement doesn't typically do anything to increase the value of the average home.
On the other hand, if you updated an old bathroom, you could see an increase of several thousand dollars to your home's bottom line. Real estate professionals suggest that homeowners pour over local home listings to see what amenities are the standard in your area, then upgrade your home to meet it. If you overdo it, however, you may not recoup your investment.
Swimming Pools
If you think installing a swimming pool in the back side of your home will draw hoards of homebuyers clamoring to make offers on your home at sale time, you'd be wrong. Some may consider it a perk, but others may perceive it as a pain with all the maintenance it will require.
Homeowners have even paid to have their swimming pools buried to create more yard space. If you shell out the expense to build one, don't expect your home's value to budge. The only exception to building a swimming pool is if you live in states where they are considered the norm.
Home Office Renovations
Although, a home office is often an amenity appreciated by those shopping for a home, it should be built with frugality in mind. Overhauling an office doesn't pay off when it's time to sell your home. Don't steal usable space from another living area to create a home office. Instead, make sure the space can easily be converted back into a bedroom or other living space if needed. If you decide you just have to have the built-in Curly Maple wood shelves, know that you will only recoup around 50 percent of your cost at sale time.
Unique Builds
Home magazines are always coming up with clever and creative ways to change the look of your living space. Some are exotic and outlandish, but they can pique your interest. Tempted to put a classic disco ball with lights in your bedroom, a constellation ceiling in your family room or a peaceful Koi pond in your back yard? Avoid making outlandish changes to your home or changes that will be perceived as adding work for a future homeowner. Don't be tempted to incorporate these ideas into your own home, unless you don't plan on selling anytime soon. Homebuyers may not share your enthusiasm.
Roof Renovations
If your roof needs repair, don't hesitate to have the work done. It will be one less issue you'll have to deal with when listing your home. If in your pursuit to list your home you think replacing your roof with cedar shakes or clay tiles will increase the value, think again. Although they have the ability to make your home stand out, they probably won't inspire homebuyers to pay more for them. So, unless you have the money to burn, keep it simple when preparing your home to be listed on the real estate market.
When considering adding value to a home, you consistently hear from the real estate industry that updated bathrooms and quality kitchens stand out in a home sale. Those are proven sale closers. There are certain other improvements you can make to your home that will beautify it or create convenience for your family. When it comes time to selling, however, those improvements may do nothing to increase the value of the property and may even turn off potential homebuyers.
Over-the-Top Renovations
Au contraire mon frère, not all renovations will raise the value of your home. Just `cause it's bigger doesn't mean it will be perceived as better by future homebuyers. Unless your home is located in Beverly Hills or some other very posh neighborhood, don't install the bathroom with the supersized steam shower, imported Italian marble and several different spray heads ... unless you have the money to do it for your own pleasure and enjoyment only. That kind of improvement doesn't typically do anything to increase the value of the average home.
On the other hand, if you updated an old bathroom, you could see an increase of several thousand dollars to your home's bottom line. Real estate professionals suggest that homeowners pour over local home listings to see what amenities are the standard in your area, then upgrade your home to meet it. If you overdo it, however, you may not recoup your investment.
Swimming Pools
If you think installing a swimming pool in the back side of your home will draw hoards of homebuyers clamoring to make offers on your home at sale time, you'd be wrong. Some may consider it a perk, but others may perceive it as a pain with all the maintenance it will require.
Homeowners have even paid to have their swimming pools buried to create more yard space. If you shell out the expense to build one, don't expect your home's value to budge. The only exception to building a swimming pool is if you live in states where they are considered the norm.
Home Office Renovations
Although, a home office is often an amenity appreciated by those shopping for a home, it should be built with frugality in mind. Overhauling an office doesn't pay off when it's time to sell your home. Don't steal usable space from another living area to create a home office. Instead, make sure the space can easily be converted back into a bedroom or other living space if needed. If you decide you just have to have the built-in Curly Maple wood shelves, know that you will only recoup around 50 percent of your cost at sale time.
Unique Builds
Home magazines are always coming up with clever and creative ways to change the look of your living space. Some are exotic and outlandish, but they can pique your interest. Tempted to put a classic disco ball with lights in your bedroom, a constellation ceiling in your family room or a peaceful Koi pond in your back yard? Avoid making outlandish changes to your home or changes that will be perceived as adding work for a future homeowner. Don't be tempted to incorporate these ideas into your own home, unless you don't plan on selling anytime soon. Homebuyers may not share your enthusiasm.
Roof Renovations
If your roof needs repair, don't hesitate to have the work done. It will be one less issue you'll have to deal with when listing your home. If in your pursuit to list your home you think replacing your roof with cedar shakes or clay tiles will increase the value, think again. Although they have the ability to make your home stand out, they probably won't inspire homebuyers to pay more for them. So, unless you have the money to burn, keep it simple when preparing your home to be listed on the real estate market.
Monday, May 17, 2010
Kitchener ranks third on New Housing Price Index
Be the first to Comment 0 Recommendation(s) House prices in Kitchener are rising at the third fastest rate in Canada. According to new numbers from Statistics Canada today, the New Housing Price Index rose 0.3 per cent in March after a 0.1 per cent increase in February. The report reveals prices rose the most in London, Ont., (1.7 per cent) between February and March, followed by Montreal and Kitchener (both up one per cent).
Ted Scharf, President of the Kitchener-Waterloo Real Estate Board, says the index reflects the confidence that exists in the local housing market. Scharf tells 570 News the price index is reflective of new housing and speaks positively about developers in our community and the houses they are building to meet consumer demand. Scharf says there has been a sharp increase in demand for homes worth $500,000 which skews the balance of what's going on in the market. Scharf says the half million dollar market has increased by 200% over last year as buyers shift their focus from the lower end of the marketplace and attempt to "move up" or are considering high end homes.
Scharf says the types of employees being attracted by our region's high tech sector are part of the reason for the increase in demand for high end homes. Scharf says companies like Research in Motion and Sandvine are offering salaries that allow employees to buy into the higher end of the real estate market. He also says a $500,000 home is not what it was ten years ago, describing it as a "good executive home" while newer semi-detached homes are selling for $250,000 on their own.
Scharf says the index is demonstrative of our region's recovery from the economic downturn. He points to job losses in the manufacuring sector that have now been absorbed by other industries and re-training in local colleges that have helped the real estate market rebound. The fact that Kitchener has the third fastest climbing rate for new home prices is a sign to outsiders that the region is a good place to invest, according to Scharf.
With a 0.5 per cent drop, Charlottetown registered the largest monthly decline in March, followed by Hamilton and Edmonton (both down 0.3).
Year over year, the index was up 1.6 per cent in March, following a 0.9 per cent increase in February.
The largest year-over-year rise was recorded in St. John's, N.L. (up 5.1 per cent), followed by Winnipeg (4.5%) and Vancouver (4.3).
Among the 21 metropolitan regions, three registered 12-month declines in March: Victoria (down 4.6 per cent), Edmonton (2.4) and Charlottetown (1.2).
The New Housing Price Index has been advancing since last July.
Ted Scharf, President of the Kitchener-Waterloo Real Estate Board, says the index reflects the confidence that exists in the local housing market. Scharf tells 570 News the price index is reflective of new housing and speaks positively about developers in our community and the houses they are building to meet consumer demand. Scharf says there has been a sharp increase in demand for homes worth $500,000 which skews the balance of what's going on in the market. Scharf says the half million dollar market has increased by 200% over last year as buyers shift their focus from the lower end of the marketplace and attempt to "move up" or are considering high end homes.
Scharf says the types of employees being attracted by our region's high tech sector are part of the reason for the increase in demand for high end homes. Scharf says companies like Research in Motion and Sandvine are offering salaries that allow employees to buy into the higher end of the real estate market. He also says a $500,000 home is not what it was ten years ago, describing it as a "good executive home" while newer semi-detached homes are selling for $250,000 on their own.
Scharf says the index is demonstrative of our region's recovery from the economic downturn. He points to job losses in the manufacuring sector that have now been absorbed by other industries and re-training in local colleges that have helped the real estate market rebound. The fact that Kitchener has the third fastest climbing rate for new home prices is a sign to outsiders that the region is a good place to invest, according to Scharf.
With a 0.5 per cent drop, Charlottetown registered the largest monthly decline in March, followed by Hamilton and Edmonton (both down 0.3).
Year over year, the index was up 1.6 per cent in March, following a 0.9 per cent increase in February.
The largest year-over-year rise was recorded in St. John's, N.L. (up 5.1 per cent), followed by Winnipeg (4.5%) and Vancouver (4.3).
Among the 21 metropolitan regions, three registered 12-month declines in March: Victoria (down 4.6 per cent), Edmonton (2.4) and Charlottetown (1.2).
The New Housing Price Index has been advancing since last July.
Saturday, May 15, 2010
Falconridge May get New Elementary School
BY LUISA D’AMATO, RECORD STAFF
WATERLOO — Lexington Public School needs a $4.2-million expansion and facelift, including a 13-classroom addition, renovation and a new roof for the gym, and air conditioning for the school, a report to school board trustees says.
The report also recommends building a brand-new elementary school on Falconridge Drive by 2014 in a fast growing area of new homes — with 825 still to be built — around Kiwanis Park.
Trustees received the report Monday, but won’t vote on it until June.
The report was written by an accommodation review committee studying the schools in the eastern part of Kitchener and Waterloo, including Bridgeport, Elizabeth Ziegler, Lexington, Margaret Avenue, Prueter and Suddaby public schools.
An accommodation review committee is a group of parents, principals, staff and city officials who study shifting population trends in a certain area and make recommendations about closing schools, building new ones or changing boundaries.
The schools in the eastern part of Kitchener-Waterloo have room for 2,866 students with the schools that are already there, plus 325 more with the proposed new school on Falconridge Drive, for a total of 3,191 spaces.
There are only 2,429 students attending those schools. Even after population growth on the edge of the city is accounted for, there will only be 2,666 elementary students in 2015, staff predict.
But board planner Lauren Manske said the committee decided not to recommend closing any schools in the area.
“What it came down to is that there was a lot of support for community-level schools,” she said.
“Even if they are underutilized, if you were to take out any of those facilities, you’re abandoning the population in and around any one location.”
Lexington Public School was closed for a time, and reopened in 1993 with a temporary extra wing with the idea that it might close again 15 to 20 years later, after the population started to age.
The committee is recommending a permanent addition with 10 classrooms and three kindergarten rooms, renovations for the gym, and air conditioning. The renovations would be complete by 2012.
“There was very strong support to maintain a community school in the Lexington neighbourhood,” the report said.
As for the school on Falconridge Drive, it would be for junior kindergarten to Grade 6, the report said.
The committee felt it was important that as many students as possible have a school they can walk to. Because of the “relative isolation” of the community around Falconridge Drive, this isn’t possible for the children in that neighbourhood with the existing schools.
The committee also recommended that a small group of children who attend Elizabeth Ziegler School and then go on to Margaret Avenue Public School for Grade 7 and 8 instead be directed to MacGregor Public School for those grades.
This is because these few students lose almost all contact with their classmates from Elizabeth Ziegler for the two years of Grade 7 and 8. Then, most will rejoin their old friends again in Grade 9 at Kitchener-Waterloo Collegiate and Vocational School.
Allowing the students — there were only three in this position this year — to attend MacGregor with all their friends “will add a little bit of stability for these kids,” said Manske.
To read the full report, go to the public school board’s website at wrdsb.ca and click “About,” then “Board meetings” then “Meeting agendas” and then “Committee of the Whole agenda, May 10.” The report is in the agenda.
WATERLOO — Lexington Public School needs a $4.2-million expansion and facelift, including a 13-classroom addition, renovation and a new roof for the gym, and air conditioning for the school, a report to school board trustees says.
The report also recommends building a brand-new elementary school on Falconridge Drive by 2014 in a fast growing area of new homes — with 825 still to be built — around Kiwanis Park.
Trustees received the report Monday, but won’t vote on it until June.
The report was written by an accommodation review committee studying the schools in the eastern part of Kitchener and Waterloo, including Bridgeport, Elizabeth Ziegler, Lexington, Margaret Avenue, Prueter and Suddaby public schools.
An accommodation review committee is a group of parents, principals, staff and city officials who study shifting population trends in a certain area and make recommendations about closing schools, building new ones or changing boundaries.
The schools in the eastern part of Kitchener-Waterloo have room for 2,866 students with the schools that are already there, plus 325 more with the proposed new school on Falconridge Drive, for a total of 3,191 spaces.
There are only 2,429 students attending those schools. Even after population growth on the edge of the city is accounted for, there will only be 2,666 elementary students in 2015, staff predict.
But board planner Lauren Manske said the committee decided not to recommend closing any schools in the area.
“What it came down to is that there was a lot of support for community-level schools,” she said.
“Even if they are underutilized, if you were to take out any of those facilities, you’re abandoning the population in and around any one location.”
Lexington Public School was closed for a time, and reopened in 1993 with a temporary extra wing with the idea that it might close again 15 to 20 years later, after the population started to age.
The committee is recommending a permanent addition with 10 classrooms and three kindergarten rooms, renovations for the gym, and air conditioning. The renovations would be complete by 2012.
“There was very strong support to maintain a community school in the Lexington neighbourhood,” the report said.
As for the school on Falconridge Drive, it would be for junior kindergarten to Grade 6, the report said.
The committee felt it was important that as many students as possible have a school they can walk to. Because of the “relative isolation” of the community around Falconridge Drive, this isn’t possible for the children in that neighbourhood with the existing schools.
The committee also recommended that a small group of children who attend Elizabeth Ziegler School and then go on to Margaret Avenue Public School for Grade 7 and 8 instead be directed to MacGregor Public School for those grades.
This is because these few students lose almost all contact with their classmates from Elizabeth Ziegler for the two years of Grade 7 and 8. Then, most will rejoin their old friends again in Grade 9 at Kitchener-Waterloo Collegiate and Vocational School.
Allowing the students — there were only three in this position this year — to attend MacGregor with all their friends “will add a little bit of stability for these kids,” said Manske.
To read the full report, go to the public school board’s website at wrdsb.ca and click “About,” then “Board meetings” then “Meeting agendas” and then “Committee of the Whole agenda, May 10.” The report is in the agenda.
Thursday, May 13, 2010
New Mortgage Rules Explained
New Mortgage Rules:
On April 19 our government announced three major rule changes to “prevent” a housing-price bubble and keep homeowners from getting “overextended.”
These new rules apply to government-backed insured mortgages only.
5-Year Fixed Qualification Rates
• The New Rule: Borrowers will need to qualify using a 5-year fixed rate regardless of what term they choose. If you want a 1.95% variable rate, for example, you will need to show that you can afford payments at a higher fixed rate, like 6.10%.
• The Government’s Reasoning: “This initiative will help Canadians prepare for higher interest rates in the future.”
• The Effect: It will now be harder to qualify for a variable-rate mortgage, but not much harder. Most lenders used the three-year mortgage rate to calculate a borrower’s debt service ratios. This means the qualifying rate will go from something like 4.90% to 6.10%.
• The Verdict: A sound and necessary change - although many lenders already use similar guidelines.
90% Maximum Refinancing
• The New Rule: No longer will you be able to refinance your home to 95% of its value. 90% will be the new refinance maximum.
• The Government’s Reasoning: “This will help ensure home ownership is a more effective way to save.”
• The Effect: Borrowers will be less able to pay off high-interest debt with lower-cost mortgage money. On the upside, this rule has the positive effect of keeping equity in the home (which is quite helpful when home prices fall). It also discourages homeowners from relying on home equity to bail themselves out when they accumulate debt.
• The Verdict: It will be more difficult for people who need to restructure debt in an effort to pay more principal and less interest. On the other hand, a 90% refinance limit is beneficial in that it deters people from racking up debt and using their homes as a proverbial ATM machine.
80% Maximum Insured Financing On Rentals
• The New Rule: People buying non-owner occupied rental properties will need to put down 20% to get an insured mortgage, versus 5% previously.
• The Government’s Reasoning: To reduce speculation.
• The Effect: The number of investors creating rental housing will drop notably. Investors will need to borrow down payment funds elsewhere (assuming it’s allowed) or use higher-cost non-insured lenders (like TDFS) to get 90% financing. Note: This rule does not apply to multi-unit owner-occupied homes with rental units (like duplexes and triplexes).
• The Verdict: The government went from allowing 100% rental financing to 80%. The solution will have an effect on the rental stock in Canada. Will it cause a material rise in rents? That’s a tough call, but it will definitely reduce the supply of rental units and limit Canadians’ investment options.
On April 19 our government announced three major rule changes to “prevent” a housing-price bubble and keep homeowners from getting “overextended.”
These new rules apply to government-backed insured mortgages only.
5-Year Fixed Qualification Rates
• The New Rule: Borrowers will need to qualify using a 5-year fixed rate regardless of what term they choose. If you want a 1.95% variable rate, for example, you will need to show that you can afford payments at a higher fixed rate, like 6.10%.
• The Government’s Reasoning: “This initiative will help Canadians prepare for higher interest rates in the future.”
• The Effect: It will now be harder to qualify for a variable-rate mortgage, but not much harder. Most lenders used the three-year mortgage rate to calculate a borrower’s debt service ratios. This means the qualifying rate will go from something like 4.90% to 6.10%.
• The Verdict: A sound and necessary change - although many lenders already use similar guidelines.
90% Maximum Refinancing
• The New Rule: No longer will you be able to refinance your home to 95% of its value. 90% will be the new refinance maximum.
• The Government’s Reasoning: “This will help ensure home ownership is a more effective way to save.”
• The Effect: Borrowers will be less able to pay off high-interest debt with lower-cost mortgage money. On the upside, this rule has the positive effect of keeping equity in the home (which is quite helpful when home prices fall). It also discourages homeowners from relying on home equity to bail themselves out when they accumulate debt.
• The Verdict: It will be more difficult for people who need to restructure debt in an effort to pay more principal and less interest. On the other hand, a 90% refinance limit is beneficial in that it deters people from racking up debt and using their homes as a proverbial ATM machine.
80% Maximum Insured Financing On Rentals
• The New Rule: People buying non-owner occupied rental properties will need to put down 20% to get an insured mortgage, versus 5% previously.
• The Government’s Reasoning: To reduce speculation.
• The Effect: The number of investors creating rental housing will drop notably. Investors will need to borrow down payment funds elsewhere (assuming it’s allowed) or use higher-cost non-insured lenders (like TDFS) to get 90% financing. Note: This rule does not apply to multi-unit owner-occupied homes with rental units (like duplexes and triplexes).
• The Verdict: The government went from allowing 100% rental financing to 80%. The solution will have an effect on the rental stock in Canada. Will it cause a material rise in rents? That’s a tough call, but it will definitely reduce the supply of rental units and limit Canadians’ investment options.
Interest Rate Expectations for Next 30 Days
The info below was gathered from a panel of experts, and consisted of Greg Klump, Chief Economist, CREA, Dr. Ian Lee, Director of MBA program at Sprott School of Business, Garth Turner, George Hugh, VP of Treasury for Ing, Dan Eisner, President, Verico True North,
One opinion was that fixed rates may reduce in anticipation of a slower real estate market over the last half of the year, VRMs will see pricing increase by .25-.50% on June 1st. and may continue to increase
This business still comes down to expert advice and getting in front of as many customers as you can every week. Your agents should understand your value and why you wish to speak with as many of their purchasers and listers as possible.
What is your outlook for Canadian mortgage rates over the next 30-45 days?
Panel consensus - May 2010
Fixed mortgage rates - Unchanged (80%)
Variable mortgage rates - Up (60%)
Summary
Fixed mortgage rates have risen quickly over the past month. However, given the recent drop in Government of Canada bond yields (the main influence on fixed mortgage rates) the Panel believes fixed rates will stay at current levels in the short term.
Variable mortgage rates will go up, but the question is when. An increase in interest rates will result in higher variable mortgage rates. The debate is whether or not the Bank of Canada will announce an interest rate increase following their meeting on June 1 or hold out until July 20. The Panel is split on the timing of the increase; however, 3/5 or 60% believe variable rates will begin their rise on June 1, 2010.
Fixed rates: Unchanged
Fixed mortgage rates increased quickly last month, with the benchmark posted 5 year fixed mortgage rate up by 1%. The Panel believes fixed mortgage rates are done climbing in the short term. Further increases are not in the cards this month as bond yields have dipped and concern is growing over Greece's debt crisis and its impact on the global financial markets.
Variable rates: Up
The Bank of Canada removed their conditional commitment to keep interest rates at all time lows until July, opening the door to speculation on whether interest rates will begin increasing in June or July. Economic indicators to be published later this month will help determine the Bank's decision.
The majority of the Panel members believe variable mortgage rates will start their accent in June rather than July.
One opinion was that fixed rates may reduce in anticipation of a slower real estate market over the last half of the year, VRMs will see pricing increase by .25-.50% on June 1st. and may continue to increase
This business still comes down to expert advice and getting in front of as many customers as you can every week. Your agents should understand your value and why you wish to speak with as many of their purchasers and listers as possible.
What is your outlook for Canadian mortgage rates over the next 30-45 days?
Panel consensus - May 2010
Fixed mortgage rates - Unchanged (80%)
Variable mortgage rates - Up (60%)
Summary
Fixed mortgage rates have risen quickly over the past month. However, given the recent drop in Government of Canada bond yields (the main influence on fixed mortgage rates) the Panel believes fixed rates will stay at current levels in the short term.
Variable mortgage rates will go up, but the question is when. An increase in interest rates will result in higher variable mortgage rates. The debate is whether or not the Bank of Canada will announce an interest rate increase following their meeting on June 1 or hold out until July 20. The Panel is split on the timing of the increase; however, 3/5 or 60% believe variable rates will begin their rise on June 1, 2010.
Fixed rates: Unchanged
Fixed mortgage rates increased quickly last month, with the benchmark posted 5 year fixed mortgage rate up by 1%. The Panel believes fixed mortgage rates are done climbing in the short term. Further increases are not in the cards this month as bond yields have dipped and concern is growing over Greece's debt crisis and its impact on the global financial markets.
Variable rates: Up
The Bank of Canada removed their conditional commitment to keep interest rates at all time lows until July, opening the door to speculation on whether interest rates will begin increasing in June or July. Economic indicators to be published later this month will help determine the Bank's decision.
The majority of the Panel members believe variable mortgage rates will start their accent in June rather than July.
Friday, May 7, 2010
Wednesday, April 28, 2010
Mixed feelings: US confidence rises-Canadian confidence falls
TSX -134.43 fell from a 19-month high as investors bailed out of stocks across all industry groups after ratings agency Standard & Poor's downgraded Greek ratings to junk status on concerns about its ability to implement the reforms needed to address its high debt burden and also cut the rating on Portugal by two notches to A-minus, four levels above speculative, because of concerns about the country's ability to deal with high debt levels.
The worst fear is that other heavily indebted governments such as Spain and Italy will face the same vicious spiral, in which default fears lead to higher borrowing costs that in turn fuel default fears even more. A key indicator of attitudes toward Greece — the interest rate gap, or spread between Greek 10-year bonds and the benchmark German equivalent — hit an astonishing 9.63 points, a massive jump from around 6.4 points on Tuesday. The higher the spread, the more investors think Greece might default
· DOW -213.04 to 10,991.99 falling below the 11,000 benchmark
· Dollar -1.59c to 98.27cUS the downgrades sparked a flight-to-safety U.S. dollar rally that pressured commodity prices.
· Oil -$1.76 to $82.44US per barrel.
· Gold +$8.20 to $1,161.70 USD per ounce
· Canadian 5 yr bond yields -.06 to 3.02. The spread (based on the NEW MERIX 5 yr rate published rate of 4.64%) is no longer in the comfort zone at 1.62. Expect to see an increase in fixed rates today. Also the 3 yr ARM p-.50 special will increase its rate Friday midnight EST. Watch for updates
The worst fear is that other heavily indebted governments such as Spain and Italy will face the same vicious spiral, in which default fears lead to higher borrowing costs that in turn fuel default fears even more. A key indicator of attitudes toward Greece — the interest rate gap, or spread between Greek 10-year bonds and the benchmark German equivalent — hit an astonishing 9.63 points, a massive jump from around 6.4 points on Tuesday. The higher the spread, the more investors think Greece might default
· DOW -213.04 to 10,991.99 falling below the 11,000 benchmark
· Dollar -1.59c to 98.27cUS the downgrades sparked a flight-to-safety U.S. dollar rally that pressured commodity prices.
· Oil -$1.76 to $82.44US per barrel.
· Gold +$8.20 to $1,161.70 USD per ounce
· Canadian 5 yr bond yields -.06 to 3.02. The spread (based on the NEW MERIX 5 yr rate published rate of 4.64%) is no longer in the comfort zone at 1.62. Expect to see an increase in fixed rates today. Also the 3 yr ARM p-.50 special will increase its rate Friday midnight EST. Watch for updates
Monday, April 26, 2010
Inflation eases in March, gives central bank more wiggle room
Julian Beltrame, The Canadian Press
OTTAWA - Inflationary pressures in Canada eased considerably last month, putting into question expectations that the Bank of Canada will be raising interest rates in a matter of weeks.
Statistics Canada reported Friday that Canada’s annual inflation rate slipped by two-tenths of a point to 1.4 per cent, and the closely watched Bank of Canada core rate fell even further — by four-tenths of a point to 1.7 per cent in March.
On a month-to-month basis, Canadians saw no increase in overall prices between February and March.
The agency said the big reason for the drops in both annual indexes was that the price-distorting Olympics ceased being a major contributor to inflation with the conclusion of the Winter Games at the end of February.
Prices for traveller accommodation soared 64.1 per cent in February, but in March they dropped back to earth to a more tame 2.8 per cent increase from March 2009.
Earlier in the week, the Bank of Canada cited inflationary risks for dropping its year-old conditional pledge to leave interest rates at record lows until at least July after the core reached as high as 2.1 per cent in February.
Economists had expected a slight slip in core inflation, once the Olympics ended, but the consensus was that core inflation would be right on the central bank’s target of two per cent.
March’s large fall now puts the core inflation rate, which excludes volatile items such as gasoline prices, well below the central bank’s target.
The March data suggests prices continue to be soft across many sectors with the exception of gasoline and everything else to do with cars.
Prices at gas pumps across Canada were 17.2 per cent higher in March than they had been a year earlier, overall transportation costs were six per cent higher, prices for the passenger vehicles rose 3.9 per cent and the cost of insuring them cost 5.5 per cent more. But food costs only advanced 1.3 per cent, mostly due to a 2.6 per cent hike in restaurant bills.
As well, consumers paid slightly more for household operations and furnishings, for health and personal care, reading, tuition fees, and cable and satellite services. But many items cost less this March than they did a year ago, including shelter costs and mortgage costs, clothing and footwear, as well as fresh vegetables, meat and fresh fruit.
With interest rates at record lows, mortgage costs were a full six per cent less in March than a year ago. Regionally, the agency said all provinces recorded a price increases, with the Atlantic provinces registering the biggest gains. http://news.therecord.com/article/701309
OTTAWA - Inflationary pressures in Canada eased considerably last month, putting into question expectations that the Bank of Canada will be raising interest rates in a matter of weeks.
Statistics Canada reported Friday that Canada’s annual inflation rate slipped by two-tenths of a point to 1.4 per cent, and the closely watched Bank of Canada core rate fell even further — by four-tenths of a point to 1.7 per cent in March.
On a month-to-month basis, Canadians saw no increase in overall prices between February and March.
The agency said the big reason for the drops in both annual indexes was that the price-distorting Olympics ceased being a major contributor to inflation with the conclusion of the Winter Games at the end of February.
Prices for traveller accommodation soared 64.1 per cent in February, but in March they dropped back to earth to a more tame 2.8 per cent increase from March 2009.
Earlier in the week, the Bank of Canada cited inflationary risks for dropping its year-old conditional pledge to leave interest rates at record lows until at least July after the core reached as high as 2.1 per cent in February.
Economists had expected a slight slip in core inflation, once the Olympics ended, but the consensus was that core inflation would be right on the central bank’s target of two per cent.
March’s large fall now puts the core inflation rate, which excludes volatile items such as gasoline prices, well below the central bank’s target.
The March data suggests prices continue to be soft across many sectors with the exception of gasoline and everything else to do with cars.
Prices at gas pumps across Canada were 17.2 per cent higher in March than they had been a year earlier, overall transportation costs were six per cent higher, prices for the passenger vehicles rose 3.9 per cent and the cost of insuring them cost 5.5 per cent more. But food costs only advanced 1.3 per cent, mostly due to a 2.6 per cent hike in restaurant bills.
As well, consumers paid slightly more for household operations and furnishings, for health and personal care, reading, tuition fees, and cable and satellite services. But many items cost less this March than they did a year ago, including shelter costs and mortgage costs, clothing and footwear, as well as fresh vegetables, meat and fresh fruit.
With interest rates at record lows, mortgage costs were a full six per cent less in March than a year ago. Regionally, the agency said all provinces recorded a price increases, with the Atlantic provinces registering the biggest gains. http://news.therecord.com/article/701309
Friday, April 23, 2010
Canadian economy expanding quickly, but will soon trail G7 countries: Carney
April 22, 2010 Julian Beltrame, THE CANADIAN PRESSThe Canadian Press, 2010
OTTAWA - Canada is leading the other G7 countries out of recession with the fastest growth in a decade, but it will be trailing those countries in a few years, the Bank of Canada said Thursday.
The central bank's latest economic outlook released Thursday makes several bold predictions, including that Canada's fast start out of last year's slump is already slowing, that the housing boom is fizzling out, and that the country's long-term growth prospects are discouraging.
And governor Mark Carney is cautioning markets not to be so sure Canada's central bank will raise its key interest rates in a matter of weeks.
On Tuesday, the Canadian dollar shot up more than 1.5 cents to above parity with the U.S. currency after the Bank of Canada said it was dropping its promise not to raise rates before July at the earliest.
But Carney told a news conference Thursday that there is still considerable risk in the global economy, or to anticipating his next move.
"There is nothing pre-ordained from this day forward," Carney said to a question on interest rates.
Most economists interpreted Tuesday's statement as an alert to plan for higher rates in June, but some argued Carney had left himself plenty of wiggle room.
"The Bank of Canada has limited scope to raise interest rates in the next several months," said Brian Bethune, chief economist with IHS Global Insight.
"While we may see one or two token moves to raise the overnight rate by a quarter of a point in the June to October window, action to raise rates will be very limited" by the fact doing so would further boost an already strong dollar.
In Thursday's report, the bank said it is planning for the dollar to hover around parity for the next three years and listed it as a major impediment to strong growth because it will make exports less competitive in global markets.
The dollar hovered just above and below parity throughout the Thursday trading day.
The report says Canada's economy expanded by 5.8 per cent in the just past quarter, the largest advance since 1999, but growth will likely slow to 3.8 per cent in the April-June period, and to 3.5 per cent the rest of the year.
It gets worse. Economic growth will average 3.1 per cent in 2011 and 1.9 per cent in 2012, about half what it will be in the United States and lower than both Europe and Japan.
"There is some good news here, our economy has returned to growth," said Carney, noting that more Canadians will find jobs and those who have had their hours reduced are more likely to be called in to work longer.
But as he has in the past, Carney warned that the longer-term prospects for the Canadian economy is modest unless the corporate sector starts investing heavily in new machinery and equipment to become more productive.
Canada is also facing a bigger issue of an aging workforce than the United States, exacerbating the divergent trend line between the two economies.
"This is in the hands of the private sector," Carney said. "If we want to grow faster, we're going to have to work smarter, invest better, (and) build new markets."
The bank said it fully expects businesses to step up investment this year, but it could hardly get worse - business investment actually declined in the fourth quarter when the rest of the economy was rebounding.
A big reason the economy has shot out of recession is that Canadian consumers, particularly home-buyers, have "front-loaded" their purchases because of record low interest rates.
But Canadians that bought homes in the past six months, or took advantage of the now defunct home renovation tax credit, won't be doing so in the future, hence bringing an end to the housing sector boom.
Housing, which is contributing about 0.6 per cent to economic growth this year, will actually be a slight drag next year, the bank forecasts. That doesn't necessary translate to an outright decline, but it does foresee prices and sales levelling out.
For the bank, that is a good thing because it regards the housing market as too hot for home-buyers' own good. It has warned repeatedly that households should make sure when they purchase a home that they will be able to afford the monthly payments once interest rates rise.
In the main, the bank's view of the Canadian economy and the world is actually brighter than the previous published analysis issued in January, while noting the high level of uncertainty.
The world economy will grow at around four per cent for the next three years, the bank says, led by China and other emerging countries. This should help Canada's export sector, the bank said.
The advanced countries, which borrowed heavily to soften the blow from the 2008-09 recession, will end up with lower activity going forward. Europe will be the weakest major economic region, with growth rates of 1.2 and 1.6 per cent over the next two years.
The bank also issued a more detailed explanation of its fears about inflation that provides more ammunition to analysts who expect Carney to raise the policy rate from 0.25 per cent to 0.5 per cent at the next opportunity, June 1.
The report says underlying inflation is higher than it had expected it to be at this point in the recovery because wages unexpectedly held up during last year's recession. Shelter costs have also increased faster than expected, it said.
The bank also warns that Canadians can expect prices to receive a 0.6-per-cent boost after July 1, when Ontario and British Columbia move to a harmonized sales tax.
The new tax will cut costs to businesses, however, and the bank says cost savings will likely be transmitted into prices in the second half of they year and trim inflation by 0.3 percentage points.
Total inflation, the amount Canadians actually see when they go to the store, will be higher than two per cent for the rest of this year before returning to target in the second half of 2011, it said
Comment: All of this means that Interest Rates may not rise as dramatically as some may think and home sales will probably level off and prices may continue to rise more controlled.
Thursday, April 22, 2010
Bank of Canada holds firm on interest rates, but warns rates going up soon
OTTAWA - The Bank of Canada has issued its first unequivocal warning that higher interest rates are on their way, likely in about five weeks.
The central bank’s policy statement today (April 20th, 2010) surprised no-one by keeping the trend-setting interest rate at the record low 0.25 per cent for another announcement date, but it was clear about where it was heading next.
The bank’s governing council declared with the economy growing faster this year than thought, as well as inflation, there was no need to stay with its “conditional commitment” that it wouldn’t touch rates until the end of the second quarter, or after June 30.
“This unconventional policy provided considerable additional stimulus during a period of very weak economic conditions,” the council wrote.
“With recent improvements in the economic outlook, the need for such extraordinary policy is now passing, and it is appropriate to begin to lessen the degree of monetary stimulus.”
Hence, the council went on, it was withdrawing the conditional commitment.
That means the bank no longer believes it has a pledge to keep the policy rate at the so-called lower bound until July and sets the stage for a quarter-point or even half-point hike on June 1, the next announcement date.
Markets had already been planning for the central bank to move off emergency rates and in the past few weeks had begun hiking fixed, longer-term mortgage rates.
Once the bank does act, short-term rates and variable mortgages are also likely to be increased.
To drive home the point that the bank believes the financial crisis is over, it said it was also ending its emergency liquidity instrument — the purchase and resale agreements — that ensured money markets in Canada continued to function during the recession.
Several economists had been urging governor Mark Carney to move early on interest rates, but the vast majority felt the bank would lose credibility if it did so without a clear indication that inflation was getting out of control.
A small minority, however, argued that the economy was still too weak to warrant any increase in interest rates this year, and that doing could stall the recovery.
Economists also feared that an early signal from the bank, ahead of the U.S. Federal Reserve, would light a fire under the loonie and make life even more difficult for Canada’s battered manufacturing and export sector.
The bank gave at most a mixed signal that it believes inflation is getting out of hand, however, it said it was more lively than it had expected.
Nor is the economy in danger of overheating, judging by the bank’s new forecasts for 2010, 2011 and 2012.
The bank said the economy will advance 3.7 per cent this year, 3.1 per cent next year and 1.9 per cent in 2012. In January, its last forecast, it had growth at 2.9 this year, 3.5 next and gave no estimate for 2012.
In essence, the bank has moved up growth in the near term but left it relatively unchanged in the aggregate.
“This profile reflects stronger near-term global growth, very strong housing activity in Canada, and the bank’s assessment that policy stimulus resulted in more expenditures being brought forward,” it said.
“At the same time, the persistent strength of the Canadian dollar, Canada’s poor relative productivity performance and the low absolute level of U.S. demand will continue to act as significant drags on economic activity,” it added.
As for inflation, the council said core prices have been firmer than projected, but that they were expected to ease slightly in the second quarter of this year and remain near the bank’s two per cent target over the next two years.
Total headline inflation, which includes volatile items such as gasoline prices, was expected to be higher than two per cent this year, but returning to target in the second half of 2011.
The sum of the parts, the bank said, is that the economy will return to full capacity one-quarter sooner than it had previously thought in the second quarter of 2011.
Source: The Canadian Press
The central bank’s policy statement today (April 20th, 2010) surprised no-one by keeping the trend-setting interest rate at the record low 0.25 per cent for another announcement date, but it was clear about where it was heading next.
The bank’s governing council declared with the economy growing faster this year than thought, as well as inflation, there was no need to stay with its “conditional commitment” that it wouldn’t touch rates until the end of the second quarter, or after June 30.
“This unconventional policy provided considerable additional stimulus during a period of very weak economic conditions,” the council wrote.
“With recent improvements in the economic outlook, the need for such extraordinary policy is now passing, and it is appropriate to begin to lessen the degree of monetary stimulus.”
Hence, the council went on, it was withdrawing the conditional commitment.
That means the bank no longer believes it has a pledge to keep the policy rate at the so-called lower bound until July and sets the stage for a quarter-point or even half-point hike on June 1, the next announcement date.
Markets had already been planning for the central bank to move off emergency rates and in the past few weeks had begun hiking fixed, longer-term mortgage rates.
Once the bank does act, short-term rates and variable mortgages are also likely to be increased.
To drive home the point that the bank believes the financial crisis is over, it said it was also ending its emergency liquidity instrument — the purchase and resale agreements — that ensured money markets in Canada continued to function during the recession.
Several economists had been urging governor Mark Carney to move early on interest rates, but the vast majority felt the bank would lose credibility if it did so without a clear indication that inflation was getting out of control.
A small minority, however, argued that the economy was still too weak to warrant any increase in interest rates this year, and that doing could stall the recovery.
Economists also feared that an early signal from the bank, ahead of the U.S. Federal Reserve, would light a fire under the loonie and make life even more difficult for Canada’s battered manufacturing and export sector.
The bank gave at most a mixed signal that it believes inflation is getting out of hand, however, it said it was more lively than it had expected.
Nor is the economy in danger of overheating, judging by the bank’s new forecasts for 2010, 2011 and 2012.
The bank said the economy will advance 3.7 per cent this year, 3.1 per cent next year and 1.9 per cent in 2012. In January, its last forecast, it had growth at 2.9 this year, 3.5 next and gave no estimate for 2012.
In essence, the bank has moved up growth in the near term but left it relatively unchanged in the aggregate.
“This profile reflects stronger near-term global growth, very strong housing activity in Canada, and the bank’s assessment that policy stimulus resulted in more expenditures being brought forward,” it said.
“At the same time, the persistent strength of the Canadian dollar, Canada’s poor relative productivity performance and the low absolute level of U.S. demand will continue to act as significant drags on economic activity,” it added.
As for inflation, the council said core prices have been firmer than projected, but that they were expected to ease slightly in the second quarter of this year and remain near the bank’s two per cent target over the next two years.
Total headline inflation, which includes volatile items such as gasoline prices, was expected to be higher than two per cent this year, but returning to target in the second half of 2011.
The sum of the parts, the bank said, is that the economy will return to full capacity one-quarter sooner than it had previously thought in the second quarter of 2011.
Source: The Canadian Press
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