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.
Thursday, May 27, 2010
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
Subscribe to:
Comments (Atom)
