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
Wednesday, April 28, 2010
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
Sunday, April 18, 2010
"Green" Tips for a Great Lawn
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Tanglewood is a contemporary 10 story mid-rise condominium to be built on the perimeter of a treed 10 acre scenic easement in the Country Hills Neighbourhood.
Tanglewood has 135 units comprised of a mix of Bachelor, 1 bed,1 bed+ den, 2 bed, 2 bed + den and 3 bed suites.
For More information on these affordable condos and then unique options for homes down payment assistance program just call us at 519-841-0559.
Thursday, April 15, 2010
Is it time to buy in Forida?
15 Great Reasons For "Why Buy a House In Florida Now?"
1. Great prices. Statewide, the existing-home median sales price was $161,200 in the fourth quarter of 2008; a year earlier, it was $216,600 for a decrease of 26 percent.
2. The time is right. Home sales volumes are rising again – a clear signal that today’s “buyers market” may be changing soon. In fourth quarter 2008, statewide sales of existing single-family homes were up 13 percent compared to the same period last year, according to FAR statistics.
3. High inventory levels. Conditions are ideal for buyers to find their dream home. Inventory is still plentiful in all price ranges. But as sales volumes increase, inventory levels are likely to shrink. That reality translates into this advice for buyers: Don’t wait too long.
4. Low mortgage rates. Mortgage rates are still at the lowest levels since the 1960s. Lower rates multiply a buyer’s financial power. Even half a percent can make a sizeable difference. For example, on a $200,000 home, half of 1 percent could save the homeowner about $815 a year. Buyers can get more home for the money, which is a perfect scenario for families looking to upsize. The dollar also has closed at par and this makes it dollar for dollar meaning more value!
5. Incentives to buy. Federal, state and local housing programs can help buyers make that big purchase. The U.S. Housing and Economic Recovery Act of 2009 includes an $8,000 tax credit for first-time buyers. President Obama’s 2009 economic stimulus package also identifies and offers incentives to help home buyers with mortgages. Talk to a local mortgage lender about state and federal incentive programs.
6. A long-term-growth state. Long-term economic and demographic trends continue to favor Florida. By 2010 economists forecast that Florida will be the third-most-populated state in the country. Florida’s population is expected to swell about 75 percent by 2030. Florida has been one of the 10 fastest-growing states in the U.S. for each of the past seven decades, and often the state has been in the top four, according to census data. Population growth will continue to provide a foundation for other economic development, such as new jobs and growing incomes. All of these trends are positive indicators for real estate growth.
7. A migration magnet. Even with a slowdown in economic growth nationally, projections call for Florida’s population to return to more normal growth levels of about 317,000 a year between 2010 and 2020, similar to the 1980s and 1990s, said Stan Smith, director of the University of Florida’s Bureau of Economic and Business Research. That’s a lot of new buyers coming into the market.
8. A favored retirement destination. Over the long term, Florida stands to benefit from the migration of the aging Baby Boomer generation, roughly 80 million strong. Demographic studies show that the Sunshine State’s mild climate and outdoor amenities continue to make Florida a top retirement destination.
9. Business-friendly state. Florida has always been a business-friendly state – no state income taxes, plus incentives from local municipalities encourage businesses to set up shop here. Even with the current economic downturn nationwide, Florida leaders continue to keep business needs in the forefront of planning for the state's future. The Milken Institute/Greenstreet Real Estate Partners ranked five Florida communities on its “Best Performing Cities Index 2008,” which ranks U.S. metropolitan areas by how well they are creating and sustaining jobs and economic growth. Florida’s business climate ranked fourth among executives and sixth overall on “Site Selection” magazine’s 2008 Top State Business Climate rankings.
10. Positive investment outlook. Every quarter, the University of Florida’s Bergstrom Center for Real Estate Studies conducts a survey of industry executives, market research economists, real estate scholars and other experts. In the third quarter 2008 survey, the investment outlook for various types of Florida properties remains steady. “People who have responded to our surveys have not lost their faith in Florida as a place to be and a place to invest,” said Dr. Wayne Archer, director. “We have 40 pages of comments from our respondents, and although the dominant theme is the disruption of financing, perhaps the second theme, as one person put it, is people being on the sidelines with full pads and helmets just waiting to jump back in.”
11. Homeownership has value. Realtors believe – and research supports that belief – that homeownership provides a variety of tangible and intangible benefits to the community and homeowners. Studies show that home equity is still the largest single source of household wealth, both for the individual homeowner and for homeowners as a group.
12. Greater sense of well-being. Owning a home leads to increased personal well-being. Research shows that people who own their own homes tend to show higher levels of personal esteem and life satisfaction, which in turn helps to make homeowners and their children more productive members of society.
13. Beneficial for kids. Studies show that children raised in homes owned by their families are more likely to stay in school and more likely to graduate high school. They’re also shown to have a higher lifetime annual income.
14. Community involvement. People who own homes have a strong financial stake in what happens to their community and tend to become more involved in community and civic affairs. Studies show that homeowners also interact more with their neighbors and communities. Compared to renters, homeowners join up to 41 percent more civic and/or nonprofessional organizations, such as the PTA or Scouts; vote in local elections 15 percent more often; enhance their neighborhoods with gardens 12 percent more often; attend church about 10 percent more often; and have a 3 percent greater chance of being interested in public affairs.
15. An unsurpassed lifestyle. Finally, let’s not forget the things that brought people to Florida in the first place, and will continue to attract them – beautiful beaches, fabulous weather and a friendly business climate, with no state income tax. It’s no wonder that Florida’s combination of temperate climate, outstanding recreational amenities and economic opportunity has consistently put Florida in the top three of Harris Poll’s “Most Desirable Places to Live” survey.If these reasons have really gotten you thinking about buying a house in Florida Callcleeves.com to learn more about the opportunities in Florida. You can also check out a couple of the properties we have for sale on the website. www.callcleeves.com
Credited Info from: http://media.floridarealtors.org/greattimetobuy/TimeToBuy/
March 2010 Market Update
Month to Month comparison March 2009 – March 2010
731 total homes were sold, an increase of 47.1% over March 2009
427 detached homes were sold, an increase of 31.8%
134 condominium homes were sold, an increase of 69.6%
71 semi detached homes were sold, an increase of 54.3%
93 townhouses were sold, an increase of 111.4%
Average price +/- sales from March 2009 to March 2010
All residential sales increased 9.6% with an average sale price to $276,695 compared with one year ago.
Single Detached homes increased 13.7% with an average sale price of $326,233 compared to March ‘09
Info is from the Kitchener Waterloo Real Estate Board
731 total homes were sold, an increase of 47.1% over March 2009
427 detached homes were sold, an increase of 31.8%
134 condominium homes were sold, an increase of 69.6%
71 semi detached homes were sold, an increase of 54.3%
93 townhouses were sold, an increase of 111.4%
Average price +/- sales from March 2009 to March 2010
All residential sales increased 9.6% with an average sale price to $276,695 compared with one year ago.
Single Detached homes increased 13.7% with an average sale price of $326,233 compared to March ‘09
Info is from the Kitchener Waterloo Real Estate Board
Friday, April 9, 2010
Prime Rate Staying Low Into Next Year?
Source: Julie Fortier, Financial Post
OTTAWA - With the Canadian economy doing surprisingly well over the past six months, many see higher interest rates from the Bank of Canada in the not so distant future, but according to a report released Thursday from CIBC's chief economist Avery Shenfeld, rates are likely to remain at a very low 2.5% through to 2011.
In CIBC World Markets' latest Global Positioning Strategy report, Mr. Shenfeld lists several reasons for Bank of Canada Governor Mark Carney to keep interest rates subdued after July. He points out that the U.S. will probably have a more gradual approach to raising rates and if Canada gets too far ahead, that could send the Canadian dollar soaring.
"While factories are recovering in Canada alongside a global industrial revival, output remains nearly 20% below the pre-recession peak, and wages are now substantially above those stateside without the productivity gains to match. There's only so much of a competitive challenge that non-resource exporters can take in short order," Mr. Shenfeld said.
He also pointed out that inflation is not expected to rise much further and stimulus spending is expected to be reigned in by governments - including Canada's - which will slow growth.
"If the U.S., the U.K., and Japan all move from huge stimulus to even modest restraint, Canada will feel it in our export prospects come 2011," Mr. Shenfeld pointed out. Mr. Carney has promised to keep interest rates where they are at 0.25% until the end of June.
However, the latest reading of Canada's economic growth showed the core inflation rate at 2.1% in February, far above the Bank of Canada's forecast of 1.6% for the first quarter of the year. Many analysts believe the Bank of Canada will not wait until mid-2010 to raise rates.
OTTAWA - With the Canadian economy doing surprisingly well over the past six months, many see higher interest rates from the Bank of Canada in the not so distant future, but according to a report released Thursday from CIBC's chief economist Avery Shenfeld, rates are likely to remain at a very low 2.5% through to 2011.
In CIBC World Markets' latest Global Positioning Strategy report, Mr. Shenfeld lists several reasons for Bank of Canada Governor Mark Carney to keep interest rates subdued after July. He points out that the U.S. will probably have a more gradual approach to raising rates and if Canada gets too far ahead, that could send the Canadian dollar soaring.
"While factories are recovering in Canada alongside a global industrial revival, output remains nearly 20% below the pre-recession peak, and wages are now substantially above those stateside without the productivity gains to match. There's only so much of a competitive challenge that non-resource exporters can take in short order," Mr. Shenfeld said.
He also pointed out that inflation is not expected to rise much further and stimulus spending is expected to be reigned in by governments - including Canada's - which will slow growth.
"If the U.S., the U.K., and Japan all move from huge stimulus to even modest restraint, Canada will feel it in our export prospects come 2011," Mr. Shenfeld pointed out. Mr. Carney has promised to keep interest rates where they are at 0.25% until the end of June.
However, the latest reading of Canada's economic growth showed the core inflation rate at 2.1% in February, far above the Bank of Canada's forecast of 1.6% for the first quarter of the year. Many analysts believe the Bank of Canada will not wait until mid-2010 to raise rates.
Thursday, April 8, 2010
Should I buy a new property or a resale property?
One question buyers usually have on their mind when deciding to buy a home is: is it better to buy a new home or buy a resale property?
To start off a new home can be customized to your wants, not that a resale property can't but with a new home you start from scratch and can colour and decorate the house as you wish. You will also know how to use the new home to it's maximum efficiency because you were able to plan out what you want to go where. Because the house is new it comes with a warranty! The appliances will all be brand new meaning the HVAC (heating, venting, air conditioning) will run perfectly for a number of years before you even need to think about replacing these everyday appliances. New residential developments are carefully designed to offer consumers a pleasant balance between community and private life. Walkways, bike paths, signage and housing density are all thought out before hand to ensure your lifestyle is best represented by the community in which you live (Credit to Landmark homes).
Older homes have the character and charm not seen in newer homes. Unless you custom-built your home, bedroom communities do not build Victorian homes reminiscent of the bygone era. Age adds to the character of a home, like the patina finishes that can oftentimes be accomplished only when a house had been standing for years. The brand new homes are more of cookie cutter type, with less architectural details that are seen in older homes.The crown moldings and intricate wood details and plasters that were used are no longer seen in today's newer homes. A lot of those built decades, even centuries ago were handmade by wood carvers and carpenters who do not have the conveniences of using high powered tools. They are not manufactured in hundreds of pieces. More than likely, each piece on an older home is unique and a work of art on its own adding great value to the home.Another thing great about buying an older home is that it has been tested through time. Homes that had been in existence for decades, even hundreds of years is a testament to their true quality. Some of these places have gone through different climate changes and calamities, and if they are still standing, chances are, they will still be there a hundred years from now. Older homes for some reason have bigger land. Back when land was cheaper, these homes were built with more square footage of land than newer homes. Unless you have bought acreage of land to build your homes, buying mega new homes on a small lot can be a disadvantage of buying newer homes.
So there are the facts, ultimately you must decide which will work out better for you and your situation. To schedule a free consultation call the CallCleeves Team at 519 772 4326. Or send us an e-mail at info@callcleeves.com we'd love to hear from you!
To start off a new home can be customized to your wants, not that a resale property can't but with a new home you start from scratch and can colour and decorate the house as you wish. You will also know how to use the new home to it's maximum efficiency because you were able to plan out what you want to go where. Because the house is new it comes with a warranty! The appliances will all be brand new meaning the HVAC (heating, venting, air conditioning) will run perfectly for a number of years before you even need to think about replacing these everyday appliances. New residential developments are carefully designed to offer consumers a pleasant balance between community and private life. Walkways, bike paths, signage and housing density are all thought out before hand to ensure your lifestyle is best represented by the community in which you live (Credit to Landmark homes).
Older homes have the character and charm not seen in newer homes. Unless you custom-built your home, bedroom communities do not build Victorian homes reminiscent of the bygone era. Age adds to the character of a home, like the patina finishes that can oftentimes be accomplished only when a house had been standing for years. The brand new homes are more of cookie cutter type, with less architectural details that are seen in older homes.The crown moldings and intricate wood details and plasters that were used are no longer seen in today's newer homes. A lot of those built decades, even centuries ago were handmade by wood carvers and carpenters who do not have the conveniences of using high powered tools. They are not manufactured in hundreds of pieces. More than likely, each piece on an older home is unique and a work of art on its own adding great value to the home.Another thing great about buying an older home is that it has been tested through time. Homes that had been in existence for decades, even hundreds of years is a testament to their true quality. Some of these places have gone through different climate changes and calamities, and if they are still standing, chances are, they will still be there a hundred years from now. Older homes for some reason have bigger land. Back when land was cheaper, these homes were built with more square footage of land than newer homes. Unless you have bought acreage of land to build your homes, buying mega new homes on a small lot can be a disadvantage of buying newer homes.
So there are the facts, ultimately you must decide which will work out better for you and your situation. To schedule a free consultation call the CallCleeves Team at 519 772 4326. Or send us an e-mail at info@callcleeves.com we'd love to hear from you!
REAL ESTATE INVESTOR SEMINAR
Our regular monthly Real Estate Investor Seminar is being held on Monday April 12th, 2010 instead of Tuesday April 20th. This is due to the fact that government mortgage rules have changed and as of April 19th, 2010 CMHC will only insure rental properties with 20% down whereas now you can get CMHC coverage with only 5% down.
This means you as an investor need to come up with a lot more money down! And as investors we like to leverage as much as possible to spread the money and increase our CASH on CASH Return.
If you want to attend the Seminar to get all of the details - simply register by click this link.
Hope to see you on Monday April 12th 7pm - 8:30pm.
This means you as an investor need to come up with a lot more money down! And as investors we like to leverage as much as possible to spread the money and increase our CASH on CASH Return.
If you want to attend the Seminar to get all of the details - simply register by click this link.
Hope to see you on Monday April 12th 7pm - 8:30pm.
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