By Sunny Freeman, The Canadian Press
TORONTO - Canada's housing sector is edging closer to a sellers' market as sales and prices jumped again in November, but the number of listings dropped off.
Home resales rose six per cent last month on a year-over-year basis and jumped 0.5 per cent on a seasonally adjusted basis compared to October levels, the Canadian Real Estate Association said Thursday.
November marked the third straight month that national activity on its Multiple Listing Service was up from the one before.
The national average price increased 4.6 per cent year-over-year to $360,396. And while prices continue to rise, CREA noted that November's increase was the smallest jump since January. Meanwhile, the number of newly listed homes was down 3.4 per cent from October to November.
"The national housing market remains balanced, but is edging closer to seller's market territory," the association said in a release.
A sellers' market occurs when demand outweighs supply and owners can fetch a higher price for their homes in bidding wars between buyers.
The latest signs pointing toward a market that favours sellers stand in stark contrast to predictions earlier this year that demand would drop off, giving buyers a break from rapidly rising prices.
But a continuation of ultra low interest rates — which have sat at one per cent since September 2010 — due to trouble signs outside Canada's borders has kept demand strong and buyers competing.
New listings slipped lower in more than two-thirds of Canadian housing markets, with Toronto, the Hamilton-Burlington region, and Calgary falling the most. The national sales-to-new listings ratio a measure of market balance, rose to 55.5 per cent in November — its highest reading since the spring.
Sales activity rose in about 60 per cent of all local markets, CREA said. Record November sales in the Halifax-Dartmouth region offset a dip in sales in the white hot Toronto market.
"The Canadian housing market is proving resilient in the face of ongoing global economic and financial uncertainty, to the benefit of Canadian economic growth," said Gary Morse, CREA’s President.
And while sales so far this year have been stronger than expected, up 2.1 per cent on a year-to-date basis, they have remained in line with the 10-year average.
However, sales in November were so robust, that they broke that pattern to climb seven per cent above the 10 year average to the fourth highest level on record for the month.
But CREA's chief economist Gregory Klump noted that the upswing heading into year-end is similar to what happened last year.
"By contrast, national average price also picked up toward the end of last year, whereas this year it has held steady after having peaked in the spring," he added.
For the first time this year, Klump acknowledged that the hot real estate market — driven in part by a persistent low interest rate environment that is expected to last well into next year — could lead to signs of trouble.
"With interest rates expected to remain low for longer, the housing sector will no doubt be closely watched for signs of excess," said Klump.
"That said, current trends for resale housing and new home construction suggest that tightened mortgage regulations are working as intended and fostering economic stability in Canada."
Heavy borrowing activity signals dark clouds on the horizon for some households as debt reaches record levels — as much as 153 per cent of disposable incomes, according to data released earlier this week.
The most over-leveraged Canadians could find themselves unable to cope when interest rates eventually rise, federal Finance Minister Jim Flaherty and Bank of Canada governor Mark Carney have warned.
A total of 432,048 homes have changed hands on CREA's MLS system so far this year, that's about 0.7 per cent above the 10-year average.
Friday, December 16, 2011
Thursday, December 1, 2011
Canada’s economy surges ahead
Christine Dobby Nov 30, 2011 – 7:06 PM ET
The Canadian economy was not as bad as first feared in the third quarter. In fact, it was much better than almost anyone had hoped.
Fuelled by record monthly output from the oil-and-gas and mining sectors and overall export strength as temporary headwinds drifted away, third-quarter economic growth shot past expectations.
Statistics Canada said Wednesday that gross domestic product for the period rose by an annualized 3.5%, beating economists’ more moderate average prediction of 3.0% growth and the Bank of Canada’s forecast of 2.0%. In September alone, the economy grew 0.2% from August, falling just short of a 0.3% increase economists predicted.
The growth during the quarter comes as a welcome change after a revised 0.5% contraction in the second quarter.
Net exports staged a decided recovery as external pressures like the fallout from the Japanese natural disasters in March were no longer a factor.
But the devil is in the details as flagging domestic demand and weak business investment lurked beneath the report’s strong headline growth. A close look at the data has economists forecasting only modest growth — in the range of about 2% — in the coming quarters and predicting the Bank of Canada will remain on hold with interest rate hikes.
Here’s what stood out from Wednesday’s report:
EXPORTS
The driving force behind the uptick in GDP for the quarter, exports grew at an annualized rate of 14.4%, up from a pullback of 6.4% in the previous quarter.
Paul Ferley, assistant chief economist at Royal Bank of Canada, said that factors that weighed on Canadian exports in the second quarter — including the Japanese supply-chain disruptions as well as wildfires in Northern Alberta that led to shutdowns of oil sand production facilities — were resolved in Q3 and contributed to the increase.
But, he cautioned, “The boost to third-quarter growth provided by the reversal of these factors is not expected to continue to the same extent into the fourth quarter.”
As the global economy stalls and prospects for a quick turnaround look increasingly grim, economists predict it will could spoil the Canadian export party.
HOUSING
Canada’s unstoppable real estate market was another bright spot during the quarter. Residential construction shot up 10.9% annualized, following on comparatively modest increases of 1.6% in Q2 and 6.7% in Q1.
“After quarters of booming housing starts data, the residential construction bonanza finally translated into the GDP numbers,” said Emanuella Enenajor, economist at CIBC Economics.
The expansion in this sector came from all three major components including fees and transfer costs related to resale transactions, new housing construction and renovation activity.
“Continued strength in new-home sales has elicited more and more new housing construction, particularly in the high-rise condo market,” said David Madani, Canada economist for Capital Economics.
He noted that a reported increase in housing starts bodes well for further strong growth in this category next quarter.
CONSUMER SPENDING
Canadians slowed their spending on goods and services during the quarter, raising red flags for economists concerned about sluggish domestic demand.
Personal expenditures grew at an annualized rate of 1.2%, down from an expansion of 2.1% in the previous quarter.
“A slowing pace of income growth owing to tepid hiring and weaker wage dynamics will likely continue to put downward pressure on consumption activity,” Ms. Enenajor said.
BUSINESS INVESTMENT
Business investment actually contracted during the quarter with a decrease of 3.6% annualized, down from last quarter’s 14.6% increase.
“Weak business investment is a worry, as it has been an important source of growth since early 2010 and replaced personal spending as the main source of domestic growth,” said Charles St. Arnaud, an analyst with Nomura Global Economics.
He noted that this, coupled with the fact that personal spending is likely to remain weak, “Could mean that domestic demand stays weak over the next few quarters, as global uncertainty remains high.”
FINAL DOMESTIC DEMAND
The combined slowdown in consumer spending and business investment was a drag on final domestic demand, which rose only 0.9% in the third quarter, down from a 3.1% gain in Q2. The other component, government expenditures, was flat in the quarter as government stimulus spending continues to slow to a trickle.
“Note that the pace of final domestic demand has been consistently slowing since 2010, weakening from around 6% to its current sub-1% pace,” Ms. Enenajor said.
The Canadian economy was not as bad as first feared in the third quarter. In fact, it was much better than almost anyone had hoped.
Fuelled by record monthly output from the oil-and-gas and mining sectors and overall export strength as temporary headwinds drifted away, third-quarter economic growth shot past expectations.
Statistics Canada said Wednesday that gross domestic product for the period rose by an annualized 3.5%, beating economists’ more moderate average prediction of 3.0% growth and the Bank of Canada’s forecast of 2.0%. In September alone, the economy grew 0.2% from August, falling just short of a 0.3% increase economists predicted.
The growth during the quarter comes as a welcome change after a revised 0.5% contraction in the second quarter.
Net exports staged a decided recovery as external pressures like the fallout from the Japanese natural disasters in March were no longer a factor.
But the devil is in the details as flagging domestic demand and weak business investment lurked beneath the report’s strong headline growth. A close look at the data has economists forecasting only modest growth — in the range of about 2% — in the coming quarters and predicting the Bank of Canada will remain on hold with interest rate hikes.
Here’s what stood out from Wednesday’s report:
EXPORTS
The driving force behind the uptick in GDP for the quarter, exports grew at an annualized rate of 14.4%, up from a pullback of 6.4% in the previous quarter.
Paul Ferley, assistant chief economist at Royal Bank of Canada, said that factors that weighed on Canadian exports in the second quarter — including the Japanese supply-chain disruptions as well as wildfires in Northern Alberta that led to shutdowns of oil sand production facilities — were resolved in Q3 and contributed to the increase.
But, he cautioned, “The boost to third-quarter growth provided by the reversal of these factors is not expected to continue to the same extent into the fourth quarter.”
As the global economy stalls and prospects for a quick turnaround look increasingly grim, economists predict it will could spoil the Canadian export party.
HOUSING
Canada’s unstoppable real estate market was another bright spot during the quarter. Residential construction shot up 10.9% annualized, following on comparatively modest increases of 1.6% in Q2 and 6.7% in Q1.
“After quarters of booming housing starts data, the residential construction bonanza finally translated into the GDP numbers,” said Emanuella Enenajor, economist at CIBC Economics.
The expansion in this sector came from all three major components including fees and transfer costs related to resale transactions, new housing construction and renovation activity.
“Continued strength in new-home sales has elicited more and more new housing construction, particularly in the high-rise condo market,” said David Madani, Canada economist for Capital Economics.
He noted that a reported increase in housing starts bodes well for further strong growth in this category next quarter.
CONSUMER SPENDING
Canadians slowed their spending on goods and services during the quarter, raising red flags for economists concerned about sluggish domestic demand.
Personal expenditures grew at an annualized rate of 1.2%, down from an expansion of 2.1% in the previous quarter.
“A slowing pace of income growth owing to tepid hiring and weaker wage dynamics will likely continue to put downward pressure on consumption activity,” Ms. Enenajor said.
BUSINESS INVESTMENT
Business investment actually contracted during the quarter with a decrease of 3.6% annualized, down from last quarter’s 14.6% increase.
“Weak business investment is a worry, as it has been an important source of growth since early 2010 and replaced personal spending as the main source of domestic growth,” said Charles St. Arnaud, an analyst with Nomura Global Economics.
He noted that this, coupled with the fact that personal spending is likely to remain weak, “Could mean that domestic demand stays weak over the next few quarters, as global uncertainty remains high.”
FINAL DOMESTIC DEMAND
The combined slowdown in consumer spending and business investment was a drag on final domestic demand, which rose only 0.9% in the third quarter, down from a 3.1% gain in Q2. The other component, government expenditures, was flat in the quarter as government stimulus spending continues to slow to a trickle.
“Note that the pace of final domestic demand has been consistently slowing since 2010, weakening from around 6% to its current sub-1% pace,” Ms. Enenajor said.
Monday, November 28, 2011
Canada’s slowing economy may need rate cuts: OECD
By Greg Quinn
Bloomberg
Canada’s economy is slowing because of weaker foreign demand and may need new stimulus from the central bank and government if things get worse, the Organization for Economic Cooperation and Development said.
Gross domestic product will grow 1.9% next year, the Paris-based OECD predicted Monday, down from its May forecast for a 2.8% expansion. The outlook for this year was pared to 2.2% from 3% in May, and it estimated 2013 growth of 2.5%.
Finance Minister Jim Flaherty said last week he may offer additional stimulus if required, adding the risks to the global recovery from Europe’s debt crisis are increasing. Bank of Canada Governor Mark Carney has kept his key lending rate at 1% since September 2010 and has said the economy won’t fully recover until well into 2013.
“Output is projected to expand at a slow pace as exports are restrained by sluggish external demand,” the OECD report said. “Domestic spending should sustain growth but at a moderate rate, as high debt and waning sentiment curb consumption growth.”
Consumers may be discouraged from spending by debts that are a record 150% of disposable income and by a weak job market marked by government cutbacks and slow private hiring, the OECD said. Unemployment will be little changed next year at 7.3% from this year’s 7.4% according to the report.
“Risks are skewed to the downside,” the OECD said, and if they materialize “the Bank of Canada should ease monetary policy via further interest rate cuts, which in a downside scenario would be consistent with the inflation target.”
The Bank of Canada has predicted inflation will slow to 1% in the second quarter of next year from 2.7% this quarter. The bank acts to keep inflation in the middle of a 1% to 3% band.
Bloomberg
Canada’s economy is slowing because of weaker foreign demand and may need new stimulus from the central bank and government if things get worse, the Organization for Economic Cooperation and Development said.
Gross domestic product will grow 1.9% next year, the Paris-based OECD predicted Monday, down from its May forecast for a 2.8% expansion. The outlook for this year was pared to 2.2% from 3% in May, and it estimated 2013 growth of 2.5%.
Finance Minister Jim Flaherty said last week he may offer additional stimulus if required, adding the risks to the global recovery from Europe’s debt crisis are increasing. Bank of Canada Governor Mark Carney has kept his key lending rate at 1% since September 2010 and has said the economy won’t fully recover until well into 2013.
“Output is projected to expand at a slow pace as exports are restrained by sluggish external demand,” the OECD report said. “Domestic spending should sustain growth but at a moderate rate, as high debt and waning sentiment curb consumption growth.”
Consumers may be discouraged from spending by debts that are a record 150% of disposable income and by a weak job market marked by government cutbacks and slow private hiring, the OECD said. Unemployment will be little changed next year at 7.3% from this year’s 7.4% according to the report.
“Risks are skewed to the downside,” the OECD said, and if they materialize “the Bank of Canada should ease monetary policy via further interest rate cuts, which in a downside scenario would be consistent with the inflation target.”
The Bank of Canada has predicted inflation will slow to 1% in the second quarter of next year from 2.7% this quarter. The bank acts to keep inflation in the middle of a 1% to 3% band.
Thursday, November 10, 2011
Bank of Canada could slash interest rates in a big way next year
John Shmuel Nov 9, 2011 – 4:10 PM ET | Last Updated: Nov 10, 2011 2:06 AM ET
As the nail biter in Europe continues this week, two economists are predicting the Bank of Canada will move to cut rates in a big way next year.
Sheryl King, an economist at Bank of America Merril Lynch, said in a note that the volatility hitting Europe and the risk of damage to the global economy means the Bank of Canada will move to cut its benchmark interest rate to ward off the risk of recession. Her prediction is the cut will be a whopping 0.75% decrease from the current rate of 1%.
“With the Eurozone sovereign debt and banking crisis showing no sign of containment, we think the Bank of Canada will cut rates back to the effective lower bound of 25 basis points (0.25%) early next year,” she said.
Ms. King forecasts that the cut would come in two phases, with a 0.50% trim being announced during the bank’s January 17 meeting, while the second and final 0.25% cut coming during the March 8 meeting.
Also predicting a lower interest rate next year was David Madani, Canada economist at Capital Economics. He is forecasting a more mild cut of 50 basis points, however, saying he expects it to occur in April or June.
Either way, Mr. Madani said he expects interest rates in Canada will remain low for some time.
“The Bank might communicate that its policy rate will remain at 0.50% for a lengthy period of time, conditional on its projected outlook for consumer price inflation,” he said, in reference to the Bank of Canada’s target of 2% annual inflation.
“Even if we are wrong, the broader message remains that interest rates will remain unusually low for a very long time.”
Most economists, however, are still predicting that the Bank of Canada will raise interest rates rather than lower them in 2012. In a recent Reuters survey of 40 economists last month, the consensus was that an interest rate increase will occur in the third quarter of next year.
If rates are cut, it will mark a sharp turnaround for the Bank of Canada, which only last year raised interest rates. Canada became one of the first advanced economies to raise its benchmark interest rates following the recession when the Bank of Canada implemented a 25 basis point hike in September of last year. The benchmark rate has since remained unchanged at 1%.
As the nail biter in Europe continues this week, two economists are predicting the Bank of Canada will move to cut rates in a big way next year.
Sheryl King, an economist at Bank of America Merril Lynch, said in a note that the volatility hitting Europe and the risk of damage to the global economy means the Bank of Canada will move to cut its benchmark interest rate to ward off the risk of recession. Her prediction is the cut will be a whopping 0.75% decrease from the current rate of 1%.
“With the Eurozone sovereign debt and banking crisis showing no sign of containment, we think the Bank of Canada will cut rates back to the effective lower bound of 25 basis points (0.25%) early next year,” she said.
Ms. King forecasts that the cut would come in two phases, with a 0.50% trim being announced during the bank’s January 17 meeting, while the second and final 0.25% cut coming during the March 8 meeting.
Also predicting a lower interest rate next year was David Madani, Canada economist at Capital Economics. He is forecasting a more mild cut of 50 basis points, however, saying he expects it to occur in April or June.
Either way, Mr. Madani said he expects interest rates in Canada will remain low for some time.
“The Bank might communicate that its policy rate will remain at 0.50% for a lengthy period of time, conditional on its projected outlook for consumer price inflation,” he said, in reference to the Bank of Canada’s target of 2% annual inflation.
“Even if we are wrong, the broader message remains that interest rates will remain unusually low for a very long time.”
Most economists, however, are still predicting that the Bank of Canada will raise interest rates rather than lower them in 2012. In a recent Reuters survey of 40 economists last month, the consensus was that an interest rate increase will occur in the third quarter of next year.
If rates are cut, it will mark a sharp turnaround for the Bank of Canada, which only last year raised interest rates. Canada became one of the first advanced economies to raise its benchmark interest rates following the recession when the Bank of Canada implemented a 25 basis point hike in September of last year. The benchmark rate has since remained unchanged at 1%.
Friday, November 4, 2011
Royal LePage Launches New Mobile Site
Wednesday, 02 November 2011 09:12
In an effort to make real estate shopping more accessible, flexible and convenient, Royal LePage Real Estate Services has launched a new mobile site for Android, iPhone and BlackBerry mobile devices.
The site will provide both information about listings and neighbourhood data, as well as feedback and comments from agents and residents that know the neighbourhood inside and out-giving this tool some personal context.
This tool has been nicknamed the “Neighbourhood Navigator”, which Royal LePage describes as the combination of” seller and agent comments ... with neighbourhood "walkability scores" and consumer rankings of nearby businesses to provide valuable insights for users.”
Furthermore, users can take advantage of GPS to position themselves in their targeted neighbourhood, helping them find useful items like open houses and neighbourhood amenities like schools, banks, grocery stores, restaurants and cafes.
“Buying a home is often the largest financial decision Canadians will make in their lifetime," said Phil Soper, president and chief executive, Royal LePage Real Estate Services. "To help prospective buyers make informed decisions, our new mobile site allows users to gain extra insights from the seller about their home and comments from the agent about the neighbourhood."
"While it will take some time to get the seller and agent comments populated, we have many advanced features to serve as the backbone for the mobile site," added Soper.
"The future is mobile and we're pleased to offer homebuyers and sellers the ability to access valuable real estate information right from their mobile devices," said Soper.
In an effort to make real estate shopping more accessible, flexible and convenient, Royal LePage Real Estate Services has launched a new mobile site for Android, iPhone and BlackBerry mobile devices.
The site will provide both information about listings and neighbourhood data, as well as feedback and comments from agents and residents that know the neighbourhood inside and out-giving this tool some personal context.
This tool has been nicknamed the “Neighbourhood Navigator”, which Royal LePage describes as the combination of” seller and agent comments ... with neighbourhood "walkability scores" and consumer rankings of nearby businesses to provide valuable insights for users.”
Furthermore, users can take advantage of GPS to position themselves in their targeted neighbourhood, helping them find useful items like open houses and neighbourhood amenities like schools, banks, grocery stores, restaurants and cafes.
“Buying a home is often the largest financial decision Canadians will make in their lifetime," said Phil Soper, president and chief executive, Royal LePage Real Estate Services. "To help prospective buyers make informed decisions, our new mobile site allows users to gain extra insights from the seller about their home and comments from the agent about the neighbourhood."
"While it will take some time to get the seller and agent comments populated, we have many advanced features to serve as the backbone for the mobile site," added Soper.
"The future is mobile and we're pleased to offer homebuyers and sellers the ability to access valuable real estate information right from their mobile devices," said Soper.
Wednesday, November 2, 2011
Variable Rate Holders May Face Trouble .
CANADIANS - don't worry too much. In the USA most clients were approved at the LOWER floating rate to the maximum of their buying ability. So naturally a rate change would hurt them - if you have a VIRM in Canada you were probably approved at around 4-5% and Prime is still on 3%. Once in a while it is good not to have "The American Way".
Neil "Mortgage Man" McJannet
Monday, 31 October 2011 10:18 Newsroom . . A new report from Bank of America Merril Lynch warns about the dangers facing some Canadian mortgage holders
The report suggests that there are a vast number of variable rate mortgage holders who will be vulnerable in the event of an interest rate hike. In fact, they suggest that two of every three new mortgages is a variable rate mortgage.
In the past, according to Bank of America Merril Lynch, typically around 25%-30% of mortgages were variable rate, suggesting that the tremendous shift in appetite could spell financial disaster for a big chunk of home owners in the event of a rate hike.
The good news, at least for the moment, is that many economists have put the possibility of a rate hike off the table until around 2013- but the fundamental vulnerability remains.
While it doesn’t mean that a rate hike will spell disaster, the possibility does remain. However, as many Canadian mortgage brokers will tell you, variable rate or not- they typically qualify a client at a higher fixed rate, so as to remove them from the danger zone in the event of a rate hike, simply as a part of due diligence. While the possibility of a US- style collapse exists in theory, the prevailingly stringent attitudes towards lending in Canada suggest that there are stop gaps in place to protect against such vulnerability.
Economists at Bank of America Merril Lynch suggest that, because rates have been so low for such an extended period of time, that mortgage holders are constructing false expectations about the true cost of a mortgage, and as such are taking more risk than they perhaps should be.
They indicate that Canadian mortgage holders must be mindful of the fact that rates will likely rise. According to their research, a rise of 2% will be enough to push those on the fringe into trouble
Neil "Mortgage Man" McJannet
Monday, 31 October 2011 10:18 Newsroom . . A new report from Bank of America Merril Lynch warns about the dangers facing some Canadian mortgage holders
The report suggests that there are a vast number of variable rate mortgage holders who will be vulnerable in the event of an interest rate hike. In fact, they suggest that two of every three new mortgages is a variable rate mortgage.
In the past, according to Bank of America Merril Lynch, typically around 25%-30% of mortgages were variable rate, suggesting that the tremendous shift in appetite could spell financial disaster for a big chunk of home owners in the event of a rate hike.
The good news, at least for the moment, is that many economists have put the possibility of a rate hike off the table until around 2013- but the fundamental vulnerability remains.
While it doesn’t mean that a rate hike will spell disaster, the possibility does remain. However, as many Canadian mortgage brokers will tell you, variable rate or not- they typically qualify a client at a higher fixed rate, so as to remove them from the danger zone in the event of a rate hike, simply as a part of due diligence. While the possibility of a US- style collapse exists in theory, the prevailingly stringent attitudes towards lending in Canada suggest that there are stop gaps in place to protect against such vulnerability.
Economists at Bank of America Merril Lynch suggest that, because rates have been so low for such an extended period of time, that mortgage holders are constructing false expectations about the true cost of a mortgage, and as such are taking more risk than they perhaps should be.
They indicate that Canadian mortgage holders must be mindful of the fact that rates will likely rise. According to their research, a rise of 2% will be enough to push those on the fringe into trouble
Thursday, October 27, 2011
Real estate appraisers decry Zoocasa calculator
Again everyone is running to save their souls. I would not use this service as "Gospel" but it sure sounds like a good idea as part of a personal research before buying a home.
Try It - You May like it!
Neil "Mortgage Man" McJannet
steve ladurantaye — REAL ESTATE REPORTER
Globe and Mail Update
Published Wednesday, Oct. 26, 2011 4:30PM EDT
Last updated Wednesday, Oct. 26, 2011 6:11PM EDT
The country’s professional real estate appraisers are sounding the alarm over a service that allows Internet users to receive instant estimates of a house’s worth using past appraisal data.
Zoocasa.com recently unveiled its Zoopraisal service, which allows anyone with a web connection to punch in an address and receive a valuation estimate. The estimate is generated using data provided by Centract Settlement Services, a property valuation company that has appraised millions of homes across the country on behalf of financial services companies.
But the Appraisal Institute of Canada says anyone who let Centract into their home wasn’t doing it so the data could be used by snoopy Internet surfers curious about property values along their street.
“Our organization has significant concerns relative to the confidentiality and custody of the data being used to populate the site,” said Keith Lancastle, the organization’s chief executive officer.
Zoocasa president Butch Langlois said the service isn’t intended to replace the services of professional appraisers or real estate agents, and the estimates are based on similar properties in a neighbourhood and not on any specific report on a specific property.
“We are not actually pulling any data on specific houses,” he said. “It’s based on sales and appraisals in the area around the home.”
Traditionally, the best way to get an estimate of a house’s value was to call a real estate agent. But as data become more available, web services such as Zoocasa are stepping in to make the process less cumbersome for consumers.
Appraisals are typically carried out when someone is looking to borrow money against a property. The Appraisal Institute of Canada has about 5,000 members who are certified to do the work. Mr. Lancastle said he was “concerned” that services such as Zoocasa’s could undermine his organization’s reputation.
“Much as a retail store blood pressure test is not a substitute for regular medical care, a web-based calculator is no substitute for a real property appraisal,” he said. “A proper appraisal comprises a number of stages – including research, analysis and interpretation – needed to provide an accurate estimate of the market value of a property.”
While some real estate agents have also expressed concern about the service, others such as George O’Neill of O’Neil Real Estate Ltd. in Toronto have welcomed it as a one more tool for consumers to use before they approach a professional for help.
“I would prefer that someone do all this research before contacting me so I can provide more value-added services rather than just provide numbers,” he said. “That may put me in the minority amongst my peers. But I’d rather spend my time getting someone the best price, because that can never be automated.”
Try It - You May like it!
Neil "Mortgage Man" McJannet
steve ladurantaye — REAL ESTATE REPORTER
Globe and Mail Update
Published Wednesday, Oct. 26, 2011 4:30PM EDT
Last updated Wednesday, Oct. 26, 2011 6:11PM EDT
The country’s professional real estate appraisers are sounding the alarm over a service that allows Internet users to receive instant estimates of a house’s worth using past appraisal data.
Zoocasa.com recently unveiled its Zoopraisal service, which allows anyone with a web connection to punch in an address and receive a valuation estimate. The estimate is generated using data provided by Centract Settlement Services, a property valuation company that has appraised millions of homes across the country on behalf of financial services companies.
But the Appraisal Institute of Canada says anyone who let Centract into their home wasn’t doing it so the data could be used by snoopy Internet surfers curious about property values along their street.
“Our organization has significant concerns relative to the confidentiality and custody of the data being used to populate the site,” said Keith Lancastle, the organization’s chief executive officer.
Zoocasa president Butch Langlois said the service isn’t intended to replace the services of professional appraisers or real estate agents, and the estimates are based on similar properties in a neighbourhood and not on any specific report on a specific property.
“We are not actually pulling any data on specific houses,” he said. “It’s based on sales and appraisals in the area around the home.”
Traditionally, the best way to get an estimate of a house’s value was to call a real estate agent. But as data become more available, web services such as Zoocasa are stepping in to make the process less cumbersome for consumers.
Appraisals are typically carried out when someone is looking to borrow money against a property. The Appraisal Institute of Canada has about 5,000 members who are certified to do the work. Mr. Lancastle said he was “concerned” that services such as Zoocasa’s could undermine his organization’s reputation.
“Much as a retail store blood pressure test is not a substitute for regular medical care, a web-based calculator is no substitute for a real property appraisal,” he said. “A proper appraisal comprises a number of stages – including research, analysis and interpretation – needed to provide an accurate estimate of the market value of a property.”
While some real estate agents have also expressed concern about the service, others such as George O’Neill of O’Neil Real Estate Ltd. in Toronto have welcomed it as a one more tool for consumers to use before they approach a professional for help.
“I would prefer that someone do all this research before contacting me so I can provide more value-added services rather than just provide numbers,” he said. “That may put me in the minority amongst my peers. But I’d rather spend my time getting someone the best price, because that can never be automated.”
Tuesday, October 25, 2011
With little doubt about interest rate, analysts look to Carney's call on economy
By The Canadian Press
OTTAWA - The Bank of Canada is expected to continue setting the conditions for economic recovery today by passing again on interest rate hikes.
Most economists and markets agree that governor Mark Carney will leave the rate at one per cent until the end of the year and likely well into 2012 or longer.
And, any thought Carney might have had of cutting the rate likely went out the window last week when Statistics Canada reported inflation rose to 3.2 per cent in September, above the bank's one-to-three per cent acceptable range.
TD Bank chief economist Craig Alexander says with uncertainty over Europe's debt issues high, and the U.S. economy still stumbling, the Canadian central bank is in wait and see mode for some time.
He says of greater interest today is what Carney will say about future prospects for the Canadian economy.
A few weeks ago, the bank was expected to dramatically downgrade its official growth projections of 2.8 and 2.6 per cent for this year and next. But with economic data coming in better-than-expected in recent weeks, including last month's surprising 61,000 jobs gain, the bank may not be as glum about prospects going forward.
OTTAWA - The Bank of Canada is expected to continue setting the conditions for economic recovery today by passing again on interest rate hikes.
Most economists and markets agree that governor Mark Carney will leave the rate at one per cent until the end of the year and likely well into 2012 or longer.
And, any thought Carney might have had of cutting the rate likely went out the window last week when Statistics Canada reported inflation rose to 3.2 per cent in September, above the bank's one-to-three per cent acceptable range.
TD Bank chief economist Craig Alexander says with uncertainty over Europe's debt issues high, and the U.S. economy still stumbling, the Canadian central bank is in wait and see mode for some time.
He says of greater interest today is what Carney will say about future prospects for the Canadian economy.
A few weeks ago, the bank was expected to dramatically downgrade its official growth projections of 2.8 and 2.6 per cent for this year and next. But with economic data coming in better-than-expected in recent weeks, including last month's surprising 61,000 jobs gain, the bank may not be as glum about prospects going forward.
Wednesday, October 19, 2011
BC Homes sale and prices rise
Low mortgage rates and improving employment numbers continued to bolster the already hot B.C. real estate market last month, putting home sales and prices back on an upward trend after experiencing some slight softening, on a month-to-month basis, during the summer.
B.C. home sales processed through the Multiple Listings System rose 8.8% to 5,995 transactions in September compared to the same month last year, while the average residential price rose 6% to $523,568 on a year-over-year basis.
On a seasonally adjusted basis, however, sales were up just 3%, said Cameron Muir, BCREA chief economist.
"Despite a modest gain in unit sales, total active residential listings in the province remained elevated in September,” Muir said. More than 55,600 home were listed in the province at the end of September.
On a year-to-date basis, the total value of residential sales in the province increased 17.5% to $34.8 billion, compared to the same period last year, while the volume of residential sales increased 3.2% to 61,127 units. The average residential price continued to outpace the national average, rising 13.9% $569,922 over the same period.
B.C. home sales processed through the Multiple Listings System rose 8.8% to 5,995 transactions in September compared to the same month last year, while the average residential price rose 6% to $523,568 on a year-over-year basis.
On a seasonally adjusted basis, however, sales were up just 3%, said Cameron Muir, BCREA chief economist.
"Despite a modest gain in unit sales, total active residential listings in the province remained elevated in September,” Muir said. More than 55,600 home were listed in the province at the end of September.
On a year-to-date basis, the total value of residential sales in the province increased 17.5% to $34.8 billion, compared to the same period last year, while the volume of residential sales increased 3.2% to 61,127 units. The average residential price continued to outpace the national average, rising 13.9% $569,922 over the same period.
Monday, October 17, 2011
New Online Home Appraisal Tool .
“... The launch of Zoopraisals™ addresses one of our most requested features,” said Butch Langlois, President of Zoocasa. “Knowing the current price of your home is the kick-off point for many Canadians as they consider making their next move.”
This free service is provided through a licencing agreement with Centract Settlement Services. “Centract possesses one of the largest national databases of residential real estate prices and information in Canada,” said Rob Soja, Vice President of Business Development at Centract. "We’re really excited to be working with Zoocasa to provide home price estimates to Canadian consumers nationally.”
Consumers who use the tool can expect “An indication of a home’s price ...based on like properties in their neighbourhood. It also provides additional content from the Zoocasa database and its content partnerships including detailed neighborhood demographics.”
In the latest move, demonstrating the tremendous presence of the Internet in all things housing and real estate, real estate search site Zoocasa has released a tool for consumers to get online home price estimates- called the Zoopraisal service.
What this does underscore is the importance of one-stop shopping for busy consumers. Statistics suggest that upwards of 80% of real estate searches at least begin- or have some part taking place on the internet.
Demand for immediate access for full, comprehensive information- especially as it pertains to housing is increasing as well.
“Zoopraisal™ is just the newest in a long line of new tools and services to support consumers in their home search process,” said Mr. Langlois. “Consumers are spending an average of 11 months in their home search process, predominantly online, and Zoocasa wants to support these consumers and allow them to conveniently connect with real estate professionals across the entire process including realtors, mortgage lenders or other such experts.”
This free service is provided through a licencing agreement with Centract Settlement Services. “Centract possesses one of the largest national databases of residential real estate prices and information in Canada,” said Rob Soja, Vice President of Business Development at Centract. "We’re really excited to be working with Zoocasa to provide home price estimates to Canadian consumers nationally.”
Consumers who use the tool can expect “An indication of a home’s price ...based on like properties in their neighbourhood. It also provides additional content from the Zoocasa database and its content partnerships including detailed neighborhood demographics.”
In the latest move, demonstrating the tremendous presence of the Internet in all things housing and real estate, real estate search site Zoocasa has released a tool for consumers to get online home price estimates- called the Zoopraisal service.
What this does underscore is the importance of one-stop shopping for busy consumers. Statistics suggest that upwards of 80% of real estate searches at least begin- or have some part taking place on the internet.
Demand for immediate access for full, comprehensive information- especially as it pertains to housing is increasing as well.
“Zoopraisal™ is just the newest in a long line of new tools and services to support consumers in their home search process,” said Mr. Langlois. “Consumers are spending an average of 11 months in their home search process, predominantly online, and Zoocasa wants to support these consumers and allow them to conveniently connect with real estate professionals across the entire process including realtors, mortgage lenders or other such experts.”
Thursday, October 13, 2011
Flaherty rules out mortgage tightening
Finance Minister Jim Flaherty dismissed speculation about a Canadian housing bubble, telling reporters in New York on Wednesday that he sees no need to tighten the country’s mortgage rules further.
"We have seen in the past year some softening in the Canadian housing market, in part due to the tightening of the insured mortgage market rules that we did earlier this year … That's an appropriate result from that tightening," Flaherty said during a news conference. "It will take clear evidence of a bubble in the housing market in Canada, which we have not seen."
Flaherty made those comments despite Royal LePage’s finding in its quarterly housing survey released on Wednesday that the average detached home price in Vancouver in the third quarter rose 17% on a year-over-year basis to more than $1 million. That’s three times the national average.
The soaring prices in Vancouver have largely been influenced by a flood of foreign money being invested into wealthy neighbourhoods like Richmond, Phil Soper, president and CEO of Royal LePage, said.
Asian investors, who are surrounded by some of the most inflated real estate markets in the world – especially in Hong Kong and Australia – typically see Vancouver’s prices as a bargain.
Soper said he believes the Vancouver market will likely soften next year because of slowing domestic demand, but the steady flow of foreign money into the city will likely reduce the amount of overall moderation.
“Vancouver is being influenced at the margin by foreign investment. I believe that that is a sustainable scenario,” he told CRE Online.
Foreign investors tend to purchase homes in Vancouver with cash. That means they are in no way influenced by the Bank of Canada’s interest rate policy. “So that investment will cushion the downside to the Vancouver market because most of those foreign buyers are purchasing with cash,” he said.
"We have seen in the past year some softening in the Canadian housing market, in part due to the tightening of the insured mortgage market rules that we did earlier this year … That's an appropriate result from that tightening," Flaherty said during a news conference. "It will take clear evidence of a bubble in the housing market in Canada, which we have not seen."
Flaherty made those comments despite Royal LePage’s finding in its quarterly housing survey released on Wednesday that the average detached home price in Vancouver in the third quarter rose 17% on a year-over-year basis to more than $1 million. That’s three times the national average.
The soaring prices in Vancouver have largely been influenced by a flood of foreign money being invested into wealthy neighbourhoods like Richmond, Phil Soper, president and CEO of Royal LePage, said.
Asian investors, who are surrounded by some of the most inflated real estate markets in the world – especially in Hong Kong and Australia – typically see Vancouver’s prices as a bargain.
Soper said he believes the Vancouver market will likely soften next year because of slowing domestic demand, but the steady flow of foreign money into the city will likely reduce the amount of overall moderation.
“Vancouver is being influenced at the margin by foreign investment. I believe that that is a sustainable scenario,” he told CRE Online.
Foreign investors tend to purchase homes in Vancouver with cash. That means they are in no way influenced by the Bank of Canada’s interest rate policy. “So that investment will cushion the downside to the Vancouver market because most of those foreign buyers are purchasing with cash,” he said.
Wednesday, October 12, 2011
Canada Housing Starts Jump 7.3% In September From August
TORONTO (Dow Jones)--Canadian housing starts rose 7.3% to an annual rate of 205,900 in September, mainly due to an increase in multiple starts, Canada Mortgage and Housing Corp. said Tuesday.
Results were well ahead of the 189,000 rate analysts surveyed by Dow Jones had projected for the month.
The September rate was up from a revised 191,900 units in July.
CMHC said the pickup in September housing starts reflects an increase in multiple starts in the Atlantic region, Quebec and in British Columbia, but noted that multiples "are expected to move back towards levels consistent with demographic fundamentals in the near term."
CIBC World Markets agreed, saying in a note that multiple starts are "widely expected to scale down in the months ahead."
However, CIBC said the data suggest residential construction could be a positive for GDP in the third quarter "as homebuilding continues to garner support from a low rate environment, and a robust multiples market."
In September, urban starts rose 8% to 185,900. Multiple urban starts were up 14.2%, while urban single starts were down 1.5%.
Last month's seasonally adjusted annual rate of urban starts jumped 47% in the Atlantic region, 32% in Quebec and 18.6% in BRitish Columbia, while urban starts fell by 3.5% in Ontario and 12.1% in the Prairie region.
Rural starts were estimated at 20,000 units in September.
Results were well ahead of the 189,000 rate analysts surveyed by Dow Jones had projected for the month.
The September rate was up from a revised 191,900 units in July.
CMHC said the pickup in September housing starts reflects an increase in multiple starts in the Atlantic region, Quebec and in British Columbia, but noted that multiples "are expected to move back towards levels consistent with demographic fundamentals in the near term."
CIBC World Markets agreed, saying in a note that multiple starts are "widely expected to scale down in the months ahead."
However, CIBC said the data suggest residential construction could be a positive for GDP in the third quarter "as homebuilding continues to garner support from a low rate environment, and a robust multiples market."
In September, urban starts rose 8% to 185,900. Multiple urban starts were up 14.2%, while urban single starts were down 1.5%.
Last month's seasonally adjusted annual rate of urban starts jumped 47% in the Atlantic region, 32% in Quebec and 18.6% in BRitish Columbia, while urban starts fell by 3.5% in Ontario and 12.1% in the Prairie region.
Rural starts were estimated at 20,000 units in September.
Friday, October 7, 2011
Canada adds 61,000 jobs in Sept, jobless rate down
OTTAWA (Reuters) - A whopping 60,900 new jobs helped slice Canada's unemployment rate to 7.1 percent in September from 7.3 percent in August, Statistics Canada said on Friday.
This far exceeded the median forecast of 10,000 new jobs in a Reuters survey of economists after August's decline of 5,500. The most optimistic forecasters had predicted 30,000 new positions in September .
Adding to the positive news, September saw 63,800 full-time additions, while part-time employment declined by 2,900.
However, 38,400 of the new jobs were in educational services, presumably largely the result of the return to work of teachers and assistants who were laid off for the summer. Statscan tries to adjust for seasonality but said there had not been a consistent pattern in this sector in recent years.
The unemployment rate is the lowest since December 2008. The data should temper market expectations of a rate cut by the Bank of Canada as it signals an economy that is still humming despite dire news out of Europe. Another indicator the bank watches closely for inflationary pressure, showed the average hourly wage of permanent employees had risen by 1.6 percent from a year earlier.
This far exceeded the median forecast of 10,000 new jobs in a Reuters survey of economists after August's decline of 5,500. The most optimistic forecasters had predicted 30,000 new positions in September .
Adding to the positive news, September saw 63,800 full-time additions, while part-time employment declined by 2,900.
However, 38,400 of the new jobs were in educational services, presumably largely the result of the return to work of teachers and assistants who were laid off for the summer. Statscan tries to adjust for seasonality but said there had not been a consistent pattern in this sector in recent years.
The unemployment rate is the lowest since December 2008. The data should temper market expectations of a rate cut by the Bank of Canada as it signals an economy that is still humming despite dire news out of Europe. Another indicator the bank watches closely for inflationary pressure, showed the average hourly wage of permanent employees had risen by 1.6 percent from a year earlier.
Wednesday, October 5, 2011
Canada best for business: Forbes
By Theresa Tedesco, Financial Post
Canada ranks as the top country among 134 major developed nations for business, according to the annual Best Countries for Business survey by influential business magazine Forbes.
The move from fourth in 2010 to top billing is based on a ranking of 11 different factors – including property rights, taxes, freedom of trade, money, corruption, innovation, investor protection and market performance. According to the survey, Canada is the only country to score in the top 20 consistently in 10 of those metrics.
“As an affluent, high-tech industrial society in the trillion-dollar class, Canada resembles the US in its market-oriented economic system, pattern of production and affluent living standards,” the report says.
Canada is lauded for avoiding the financial meltdown that has seen banks teetering perilously in the U.S. and Europe since 2008, for tax reform, mostly with the introduction of the Harmonized Sales Tax in Ontario and British Columbia, and for its ability to maintain a lower unemployment rate than its trading partners. In fact, in terms of overall tax burden, Canada ranked ninth in 2011, up from 23rd in 2010.
“During the run-up to every U.S. presidential election, countless Americans threaten to move to Canada if their preferred candidate does not emerge victorious,” declared Forbes. “Of course, few follow through with a move north. Maybe it is time to reconsider.”
While the U.S. is “paralyzed by fears of a double-dip recession and Europe struggles with sovereign debt issues,” Canada’s economy held its own, the report gushes. “Canada enjoys a substantial trade surplus with the US, which absorbs about three-fourths of Canadian exports each year.”
The unemployment rate of 7.3% in Canada compares favourably with the U.S. rate of over 9% and the eurozone unemployment rate of 10%.
Even economic expansion, projected at 2.4% but down from last year’s 3.1%, is heralded.
While many Canadians have a love-hate relationship with their banks, the folks at Forbes are unequivocal in their adoration. “Canada’s major banks, however, emerged from the financial crisis of 2008-09 among the strongest in the world, owing to the financial sector’s tradition of conservative lending practices and strong capitalization.”
The other countries rounding out the top 10 are New Zealand, Hong Kong, Ireland, Denmark, Singapore, Norway, the United Kingdom, and the U.S, at 10th spot, down from ninth in 2010. The culprit in 2011: the U.S. surpassed Japan as having the highest corporate tax rate among major developed countries.
Three African countries – Burundi, Zimbabwe and Chad – bring up the rear among the 134 nations ranked, all faring poorly mostly because of corruption and red tape.
© Copyright (c) National Post
Canada ranks as the top country among 134 major developed nations for business, according to the annual Best Countries for Business survey by influential business magazine Forbes.
The move from fourth in 2010 to top billing is based on a ranking of 11 different factors – including property rights, taxes, freedom of trade, money, corruption, innovation, investor protection and market performance. According to the survey, Canada is the only country to score in the top 20 consistently in 10 of those metrics.
“As an affluent, high-tech industrial society in the trillion-dollar class, Canada resembles the US in its market-oriented economic system, pattern of production and affluent living standards,” the report says.
Canada is lauded for avoiding the financial meltdown that has seen banks teetering perilously in the U.S. and Europe since 2008, for tax reform, mostly with the introduction of the Harmonized Sales Tax in Ontario and British Columbia, and for its ability to maintain a lower unemployment rate than its trading partners. In fact, in terms of overall tax burden, Canada ranked ninth in 2011, up from 23rd in 2010.
“During the run-up to every U.S. presidential election, countless Americans threaten to move to Canada if their preferred candidate does not emerge victorious,” declared Forbes. “Of course, few follow through with a move north. Maybe it is time to reconsider.”
While the U.S. is “paralyzed by fears of a double-dip recession and Europe struggles with sovereign debt issues,” Canada’s economy held its own, the report gushes. “Canada enjoys a substantial trade surplus with the US, which absorbs about three-fourths of Canadian exports each year.”
The unemployment rate of 7.3% in Canada compares favourably with the U.S. rate of over 9% and the eurozone unemployment rate of 10%.
Even economic expansion, projected at 2.4% but down from last year’s 3.1%, is heralded.
While many Canadians have a love-hate relationship with their banks, the folks at Forbes are unequivocal in their adoration. “Canada’s major banks, however, emerged from the financial crisis of 2008-09 among the strongest in the world, owing to the financial sector’s tradition of conservative lending practices and strong capitalization.”
The other countries rounding out the top 10 are New Zealand, Hong Kong, Ireland, Denmark, Singapore, Norway, the United Kingdom, and the U.S, at 10th spot, down from ninth in 2010. The culprit in 2011: the U.S. surpassed Japan as having the highest corporate tax rate among major developed countries.
Three African countries – Burundi, Zimbabwe and Chad – bring up the rear among the 134 nations ranked, all faring poorly mostly because of corruption and red tape.
© Copyright (c) National Post
Saturday, October 1, 2011
Building Self Confidence!
Many people are feeling overwhelmed by the need to achieve, the complexity of competition, and a fear of failure or rejection. As a result their self-confidence is like the mystical unicorn — elusive and seldom, if ever, seen. You will probably never catch a unicorn, but here are the five steps that will help you capture your self-confidence.
1. Focus on what’s right, not what’s wrong.
When people talk about work, school, life, and other people they are usually talking about what’s wrong or everything that could go wrong. That type of thinking can nullify your strengths and kill your self-confidence.
Unconsciously your mind negatively perceives disappointment as a threat. You automatically begin to focus on the perceived threat or what’s wrong or could go wrong. This is not an alligator, you can fight it.
Completing and constantly saying the following phrases to yourself will build confidence:
• I have a good chance of succeeding because…
• Everything will work out because…
• I’m great for this position, listing, or opportunity because…
• Today is going to be an extraordinary day because…
These declarations won’t magically make things perfect but they will help to bring back your self-confidence.
Once you begin to regularly use these and similar phrases you will create vivid images in your mind that will help you to...
2. Visualize Your Victory.
Your unconscious mind makes no distinction between imagination and reality. Think about that. If you imagine having confidence then you will actually experience being confident. Find a quiet place and for a few moments imagine what you will see, hear, feel, taste, and smell during your victory. Envision yourself successfully achieving your desired outcome.
3. Thoroughly prepare and be authentic.
You know if you’ve properly prepared for the task at hand. It’s difficult to be confident when you’re not prepared and pretending to be something that you’re not. Thoroughly prepare and keep it real. Be authentic. As you prepare, focus on what’s right, visualize your victory, and...
4. Avoid Disaster Dan and the Taverns of Turmoili.
Have you ever known or heard of someone that never has anything good to say? Do you know what you should tell people like that? Absolutely nothing. Don’t tell them about your dreams, aspirations, or goals. Don’t even tell them your name, email address, or where you live. And if they know where you live it’s time to move! These kinds of people dwell in Taverns of Turmoil — negative environments — which should be avoided at all costs. Instead use your time to....
5. Set bite-sized goals and celebrate success.
When a task, goal, or obstacle appears to be insurmountable your self-confidence can begin to wane. The good news, however, is that small, successful experiences can produce more confidence. As your confidence grows, celebrate by giving yourself a treat or doing something you enjoy. Then set another small goal and celebrate again. This technique is a tremendous confidence booster.
Self-confidence is a priceless asset that will frequently tip the odds in your favor. The five steps you just walked though will keep your self-confidence from being like the unicorn – elusive and seldom, if ever, seen.
1. Focus on what’s right, not what’s wrong.
When people talk about work, school, life, and other people they are usually talking about what’s wrong or everything that could go wrong. That type of thinking can nullify your strengths and kill your self-confidence.
Unconsciously your mind negatively perceives disappointment as a threat. You automatically begin to focus on the perceived threat or what’s wrong or could go wrong. This is not an alligator, you can fight it.
Completing and constantly saying the following phrases to yourself will build confidence:
• I have a good chance of succeeding because…
• Everything will work out because…
• I’m great for this position, listing, or opportunity because…
• Today is going to be an extraordinary day because…
These declarations won’t magically make things perfect but they will help to bring back your self-confidence.
Once you begin to regularly use these and similar phrases you will create vivid images in your mind that will help you to...
2. Visualize Your Victory.
Your unconscious mind makes no distinction between imagination and reality. Think about that. If you imagine having confidence then you will actually experience being confident. Find a quiet place and for a few moments imagine what you will see, hear, feel, taste, and smell during your victory. Envision yourself successfully achieving your desired outcome.
3. Thoroughly prepare and be authentic.
You know if you’ve properly prepared for the task at hand. It’s difficult to be confident when you’re not prepared and pretending to be something that you’re not. Thoroughly prepare and keep it real. Be authentic. As you prepare, focus on what’s right, visualize your victory, and...
4. Avoid Disaster Dan and the Taverns of Turmoili.
Have you ever known or heard of someone that never has anything good to say? Do you know what you should tell people like that? Absolutely nothing. Don’t tell them about your dreams, aspirations, or goals. Don’t even tell them your name, email address, or where you live. And if they know where you live it’s time to move! These kinds of people dwell in Taverns of Turmoil — negative environments — which should be avoided at all costs. Instead use your time to....
5. Set bite-sized goals and celebrate success.
When a task, goal, or obstacle appears to be insurmountable your self-confidence can begin to wane. The good news, however, is that small, successful experiences can produce more confidence. As your confidence grows, celebrate by giving yourself a treat or doing something you enjoy. Then set another small goal and celebrate again. This technique is a tremendous confidence booster.
Self-confidence is a priceless asset that will frequently tip the odds in your favor. The five steps you just walked though will keep your self-confidence from being like the unicorn – elusive and seldom, if ever, seen.
Thursday, September 29, 2011
S.M.A.R.T. Goal setting
The best way to actually formulate your goals is to utilize SMART goal setting.
SMART goals ensure that all your objectives include all the key elements to maximize your goal setting success.
When you use SMART goal setting you will find that it is easier for you to stay on track with your various goals in all areas of your life.
Essentially SMART stands for:
S=Specific: There is a higher likelihood that a specific clearly stated goal would be accomplished than a general goal.
A vague goal can set you up for procrastination since you may not be sure exactly how to approach the goal. To help create a specific goal ask yourself the following questions.
Who is involved? What do I want to accomplish? Where is the central locale? When is my deadline? Which requirements or constraints should I consider?Why do I want to accomplish this goal?
M = Measurable: Goals need to be measurable so that there are benchmarks of attainment.When your goals are measurable or quantifiable you are more likely to stay on track and reach certain milestones which give you that boost of confidence to press on.
A = Attainable: Keep your goals within your control. If you set goals that you do not have reasonable control over, you may be setting yourself up for failure. Having attainable goals is also about identifying goals that are truly important to you.
R = Realistic: Make sure that you set goals that you are both willing and able to achieve. It is important that you are able to make substantial progress toward your goal.
T = Timely: Goals need a time frame attached to them. There needs to be a sense of urgency. A goal that you can taste, touch, smell, see or hear is tangible and is more defined. This will make that goal more attainable.
Here is an example of how you might use SMART goal setting.
Specific: Lose 10 pounds
Measurable: Weigh myself on the scale once a week. Measure my waist every three weeks.
Attainable:Lessen the amount and type of foods I eat. Do 20 minutes of physical activity everyday
Realistic: Lose 1-2 pounds a week
Timely: Lose 10 pounds over the next 8-10 weeks
SMART goal setting really helps you stay motivated through rough patches.
You will notice that you are able to work more efficiently, meet deadlines and make the kind of decisions necessary to bring you closer to achieving your goals. And when that happens don't forget to pat yourself on the back and celebrate your achievements!
SMART goals ensure that all your objectives include all the key elements to maximize your goal setting success.
When you use SMART goal setting you will find that it is easier for you to stay on track with your various goals in all areas of your life.
Essentially SMART stands for:
S=Specific: There is a higher likelihood that a specific clearly stated goal would be accomplished than a general goal.
A vague goal can set you up for procrastination since you may not be sure exactly how to approach the goal. To help create a specific goal ask yourself the following questions.
Who is involved? What do I want to accomplish? Where is the central locale? When is my deadline? Which requirements or constraints should I consider?Why do I want to accomplish this goal?
M = Measurable: Goals need to be measurable so that there are benchmarks of attainment.When your goals are measurable or quantifiable you are more likely to stay on track and reach certain milestones which give you that boost of confidence to press on.
A = Attainable: Keep your goals within your control. If you set goals that you do not have reasonable control over, you may be setting yourself up for failure. Having attainable goals is also about identifying goals that are truly important to you.
R = Realistic: Make sure that you set goals that you are both willing and able to achieve. It is important that you are able to make substantial progress toward your goal.
T = Timely: Goals need a time frame attached to them. There needs to be a sense of urgency. A goal that you can taste, touch, smell, see or hear is tangible and is more defined. This will make that goal more attainable.
Here is an example of how you might use SMART goal setting.
Specific: Lose 10 pounds
Measurable: Weigh myself on the scale once a week. Measure my waist every three weeks.
Attainable:Lessen the amount and type of foods I eat. Do 20 minutes of physical activity everyday
Realistic: Lose 1-2 pounds a week
Timely: Lose 10 pounds over the next 8-10 weeks
SMART goal setting really helps you stay motivated through rough patches.
You will notice that you are able to work more efficiently, meet deadlines and make the kind of decisions necessary to bring you closer to achieving your goals. And when that happens don't forget to pat yourself on the back and celebrate your achievements!
Wednesday, September 28, 2011
Canadian housing market loses momentum, but at less dramatic pace: Scotiabank
The Canadian Press, On Tuesday September 27, 2011, 8:26 am EDT
By The Canadian Press
TORONTO - A Scotia Economics report says Canada's housing market is cooling, but at a slower pace than most other markets in the developed world.
Scotiabank's latest real-estate outlook said Tuesday that Canada is showing a resilience that few other countries have been able to maintain.
"In the majority of the major markets we track in North America, Europe and Australasia, inflation-adjusted home prices declined on a year-over-year basis in the second quarter of 2011," said Scotia Economics senior economist and real estate specialist Adrienne Warren.
"While Canada's hot housing market also has begun to cool, it remains a notable outperformer."
The bank (TSX:BNS) noted that of the nine major developed markets it tracks, only Canada, France and Switzerland showed housing price increases year over year.
In Canada, existing home prices were up five per cent year-over-year from April to June, while prices appeared to level out in July and August, the report said.
However, the bank pointed to several challenges that could stall the current pace of the domestic housing market.
"Heightened economic uncertainty combined with recent signs of a loss of momentum in Canada's jobs market could keep some potential buyers on the sidelines for the time being," Warren said.
"On balance, we anticipate a modest slowdown in the volume of sales transactions heading into year end, alongside relatively flat prices."
By The Canadian Press
TORONTO - A Scotia Economics report says Canada's housing market is cooling, but at a slower pace than most other markets in the developed world.
Scotiabank's latest real-estate outlook said Tuesday that Canada is showing a resilience that few other countries have been able to maintain.
"In the majority of the major markets we track in North America, Europe and Australasia, inflation-adjusted home prices declined on a year-over-year basis in the second quarter of 2011," said Scotia Economics senior economist and real estate specialist Adrienne Warren.
"While Canada's hot housing market also has begun to cool, it remains a notable outperformer."
The bank (TSX:BNS) noted that of the nine major developed markets it tracks, only Canada, France and Switzerland showed housing price increases year over year.
In Canada, existing home prices were up five per cent year-over-year from April to June, while prices appeared to level out in July and August, the report said.
However, the bank pointed to several challenges that could stall the current pace of the domestic housing market.
"Heightened economic uncertainty combined with recent signs of a loss of momentum in Canada's jobs market could keep some potential buyers on the sidelines for the time being," Warren said.
"On balance, we anticipate a modest slowdown in the volume of sales transactions heading into year end, alongside relatively flat prices."
Wednesday, September 21, 2011
Vancouver prices to keep rising: Central 1 Credit Union
The Vancouver housing market may already be unaffordable for many, but there’s enough demand to keep prices rising, according to a new forecast.
A report by Central 1 Credit Union economist Brian Yu predicts the median home price will increase 6.8% to $417,000 by the end of the year compared to 2010. This is despite the fact home sales are expected to decline in 2011, down 1% from 2010, to reach 88,200.
The Royal Bank of Canada has recently calculated ownership costs of an average two-storey home in Vancouver equals 95.5% of average income this year, a record high.
Yu defended his prediction in a statement, citing low interest rates, a limited supply of land, and a low percentage of speculation. It runs out most Vancouver buyers are living in their homes, with only 2-3% of properties owned by speculators, he said.
“Our research shows few signs that speculators are overly active in the Vancouver market, which means we are unlikely to see a speculation-induced bust,” Yu said.
And while the average price has skyrocketed in Vancouver, those jumps are mostly limited to particular areas of Vancouver where there have been a high number of luxury home sales such as Richmond. The rest of the market is more stable, he said.
“Even if the economy slows and employment slows, we expect to see individuals hold on to their homes, rather than sell them in a weaker market,” Yu said.
Yu’s report predicts in 2012 home sales in Vancouver will grow 3.4%, driven by new home sales, although existing home sales will decline.
Tax issues might push some home sales until 2013, said the report.
“People looking at new homes priced over $525,000 may very well wait until the tax changes lower the 12% hit they face,” said Yu.
A report by Central 1 Credit Union economist Brian Yu predicts the median home price will increase 6.8% to $417,000 by the end of the year compared to 2010. This is despite the fact home sales are expected to decline in 2011, down 1% from 2010, to reach 88,200.
The Royal Bank of Canada has recently calculated ownership costs of an average two-storey home in Vancouver equals 95.5% of average income this year, a record high.
Yu defended his prediction in a statement, citing low interest rates, a limited supply of land, and a low percentage of speculation. It runs out most Vancouver buyers are living in their homes, with only 2-3% of properties owned by speculators, he said.
“Our research shows few signs that speculators are overly active in the Vancouver market, which means we are unlikely to see a speculation-induced bust,” Yu said.
And while the average price has skyrocketed in Vancouver, those jumps are mostly limited to particular areas of Vancouver where there have been a high number of luxury home sales such as Richmond. The rest of the market is more stable, he said.
“Even if the economy slows and employment slows, we expect to see individuals hold on to their homes, rather than sell them in a weaker market,” Yu said.
Yu’s report predicts in 2012 home sales in Vancouver will grow 3.4%, driven by new home sales, although existing home sales will decline.
Tax issues might push some home sales until 2013, said the report.
“People looking at new homes priced over $525,000 may very well wait until the tax changes lower the 12% hit they face,” said Yu.
Tuesday, September 20, 2011
Canadian debt levels no cause for alarm,
Posted on Monday, September 19, 2011 6:40PM EDT
A report that showed Canadian household debt levels have topped U.S. ones should be taken with a grain of salt, according to one economist.
In a note released Monday, National Bank of Canada’s Matthieu Arseneau says the Canadian government’s indicator on household debt “does not lend itself well to such an international comparison owing to the considerable differences between the social safety nets of the two countries.”
Take charge of credit card debt
At first glance, personal disposable income levels appear much lower in Canada than in the United States. Mr. Arseneau attributes that to higher tax levels in Canada that are used, in part, to fund our national health care system.
Americans, meanwhile, must allocate nearly 20 per cent of their personal disposable income to paying for health care, he says. “If we adjust for this factor, the debt ratio of U.S. households exceeds that of their Canadian counterparts by 12 per cent.”
A report released last week showed that Canadian household debt rose to a record high in the second quarter, surpassing levels seen in the United States since the start of the year.
Statistics Canada said last Tuesday that the ratio of household credit-market debt – which includes mortgages, consumer credit and loans – to personal disposable income climbed to 149 per cent from 147 per cent in the first quarter. That’s the highest level since Statscan started gathering figures in this category in 1990.
The government agency attributed the growing debt to higher mortgages and increased consumer credit borrowing.
With interest rates slated to remain at low levels for the foreseeable future, Canadians are taking on both mortgages and consumer loans. Policy makers have expressed concerns about high household debt levels and warned against what could happen if rates were to rise.
In his note, Mr. Arseneau also noted that the Statscan ratio represents only one facet of the financial health of households.
“If we consider the ratio of debt to net worth, which is still markedly higher in the United States, we understand why household deleveraging is ongoing south of the border whereas nothing of the sort is happening in Canada,” he said.
Mr. Arseneau concluded his note by warning of the need to be vigilant, because excessive household debt levels “could represent a risk factor for Canada’s economic stability down the road.”
A report that showed Canadian household debt levels have topped U.S. ones should be taken with a grain of salt, according to one economist.
In a note released Monday, National Bank of Canada’s Matthieu Arseneau says the Canadian government’s indicator on household debt “does not lend itself well to such an international comparison owing to the considerable differences between the social safety nets of the two countries.”
Take charge of credit card debt
At first glance, personal disposable income levels appear much lower in Canada than in the United States. Mr. Arseneau attributes that to higher tax levels in Canada that are used, in part, to fund our national health care system.
Americans, meanwhile, must allocate nearly 20 per cent of their personal disposable income to paying for health care, he says. “If we adjust for this factor, the debt ratio of U.S. households exceeds that of their Canadian counterparts by 12 per cent.”
A report released last week showed that Canadian household debt rose to a record high in the second quarter, surpassing levels seen in the United States since the start of the year.
Statistics Canada said last Tuesday that the ratio of household credit-market debt – which includes mortgages, consumer credit and loans – to personal disposable income climbed to 149 per cent from 147 per cent in the first quarter. That’s the highest level since Statscan started gathering figures in this category in 1990.
The government agency attributed the growing debt to higher mortgages and increased consumer credit borrowing.
With interest rates slated to remain at low levels for the foreseeable future, Canadians are taking on both mortgages and consumer loans. Policy makers have expressed concerns about high household debt levels and warned against what could happen if rates were to rise.
In his note, Mr. Arseneau also noted that the Statscan ratio represents only one facet of the financial health of households.
“If we consider the ratio of debt to net worth, which is still markedly higher in the United States, we understand why household deleveraging is ongoing south of the border whereas nothing of the sort is happening in Canada,” he said.
Mr. Arseneau concluded his note by warning of the need to be vigilant, because excessive household debt levels “could represent a risk factor for Canada’s economic stability down the road.”
Monday, September 19, 2011
US Jobless Claims Continue to Climb .
Friday, 16 September 2011 09:56 Newsroom . .
In another indication that the US economy may be in trouble, jobless claims jumped last week to the highest level seen in three months. This is hard evidence that the job market is depressed.
According to data released by the US Labor Department said Thursday that weekly applications increased last week 11,000 to a seasonally adjusted 428,000- and this reflects a week that included the Labour Day holiday. Also for the fourth consecutive week, the four week average increased, registering in at 419,500.
What may be a little disturbing about this is that typically short weeks mean a reduction in unemployment claims, but this past week bucked that trend- suggesting that there may indeed be trouble of a serious economic kind brewing south of the border. Also, these unemployment applications are widely considered by many to be a barometer of layoff activity.
The magic number to demonstrate that hiring is outpacing the unemployment mark is 375,000- which continues to be elusive. In fact, claims have not been below that level since February, indicating that this is not a blip on the map.
Compounding things, there was net zero job growth in the US in August, which unfortunately, represents the worst figure seen in almost a year, and the unemployment rate continues to hold at a high 9.1% for the second month in a row.
What may be the most staggering August statistic though is businesses only added 17,000 jobs- which is a remarkable plunge from the 156,000 added the month prior.
Beyond the numbers though, is what this means- bottom line for the US economy, and many analysts are worried that there is a concerning trend emerging here. Amidst talk of a double-dip recession, a frail US economy is in desperate need of job creation to pull itself out of the chasm and away from the brink.
In another indication that the US economy may be in trouble, jobless claims jumped last week to the highest level seen in three months. This is hard evidence that the job market is depressed.
According to data released by the US Labor Department said Thursday that weekly applications increased last week 11,000 to a seasonally adjusted 428,000- and this reflects a week that included the Labour Day holiday. Also for the fourth consecutive week, the four week average increased, registering in at 419,500.
What may be a little disturbing about this is that typically short weeks mean a reduction in unemployment claims, but this past week bucked that trend- suggesting that there may indeed be trouble of a serious economic kind brewing south of the border. Also, these unemployment applications are widely considered by many to be a barometer of layoff activity.
The magic number to demonstrate that hiring is outpacing the unemployment mark is 375,000- which continues to be elusive. In fact, claims have not been below that level since February, indicating that this is not a blip on the map.
Compounding things, there was net zero job growth in the US in August, which unfortunately, represents the worst figure seen in almost a year, and the unemployment rate continues to hold at a high 9.1% for the second month in a row.
What may be the most staggering August statistic though is businesses only added 17,000 jobs- which is a remarkable plunge from the 156,000 added the month prior.
Beyond the numbers though, is what this means- bottom line for the US economy, and many analysts are worried that there is a concerning trend emerging here. Amidst talk of a double-dip recession, a frail US economy is in desperate need of job creation to pull itself out of the chasm and away from the brink.
Wednesday, September 14, 2011
Variable Rate vs. Fixed Rate Conversation Renewed .
Monday, 12 September 2011 10:39 Newsroom . .
With the most recent interest rate announcement last week, and the knowledge that interest rates are set to remain low for the foreseeable future, the debate for variable rate mortgage over fixed rate has gained new momentum.
“With short-term rates now likely to stay at very low levels, and long-term rates testing record lows, whether to lock into a longer-term fixed mortgage rate or choose a variable rate continues to be a hot-button issue among home buyers,” says Benjamin Reitzes, Senior Economist, BMO Economics.
According to the Bank of Montreal, history would indicate that a variable rate is the way to go: “Research shows that there is little debate as to which has been the better option for homebuyers. Typically, borrowers save money by staying in variable products, and riding the rollercoaster of fluctuating rates. In fact, since 1975 the cost-effective route for borrowers was to stay variable 83 per cent of the time. And while the spread between 5-year fixed mortgage rates and variable rates has fallen from the all-time high hit in mid-2010, it remains historically elevated. “
Although, it is not as straightforward as one being better than the other, history aside. And, as Karen Blomquist, Mortgage Broker, Mortgage Intelligence, told Propertywire.ca, it has a lot to do with matching product to person too. “I still believe that choosing between a fixed-rate versus a variable-rate mortgage has a lot to do with a person's mind-set. I get nervous clients who went variable and then call or send e-mails every week. If you can handle a bit of risk, it's great. But if you can't, you should lock into a fixed rate, even if it is a bit higher.”
It is about lifestyle too, says Blomquist: “"You want to decide that if rates do land at 7%, you can handle it. After all, you need to be able to sleep at night."
There is much to be gained too, into doing a little research, and knowing both your client- and your lenders too, as Blomquist suggests: “I definitely caution anyone looking at variable rate mortgages should check the lender's "best rate" policies to ensure you can still get a discounted rate when locking in. "Not all banks offer it." When working with a broker we can ensure that the lock in terms are that the client would get the lowest locked in rate and not the posted rate like some banks offer.”
And, too in the current rate environment, there exists tremendous opportunity to be proactive with clients who could benefit in the long term by refinancing or consolidating now: “Given the borrowing climate even those with a current mortgage may find it's an ideal time to refinance, even if there are penalties”, she adds.
"Sometimes it will save you a lot of money in the long term. The results can be unbelievable when you crunch the numbers. I've seen some people save themselves $1,000 a month simply by moving to a 3.39% mortgage. If you do refinance, you might also want to consider rolling any consumer credit card debt into your mortgage to have a single lower payment."
With the most recent interest rate announcement last week, and the knowledge that interest rates are set to remain low for the foreseeable future, the debate for variable rate mortgage over fixed rate has gained new momentum.
“With short-term rates now likely to stay at very low levels, and long-term rates testing record lows, whether to lock into a longer-term fixed mortgage rate or choose a variable rate continues to be a hot-button issue among home buyers,” says Benjamin Reitzes, Senior Economist, BMO Economics.
According to the Bank of Montreal, history would indicate that a variable rate is the way to go: “Research shows that there is little debate as to which has been the better option for homebuyers. Typically, borrowers save money by staying in variable products, and riding the rollercoaster of fluctuating rates. In fact, since 1975 the cost-effective route for borrowers was to stay variable 83 per cent of the time. And while the spread between 5-year fixed mortgage rates and variable rates has fallen from the all-time high hit in mid-2010, it remains historically elevated. “
Although, it is not as straightforward as one being better than the other, history aside. And, as Karen Blomquist, Mortgage Broker, Mortgage Intelligence, told Propertywire.ca, it has a lot to do with matching product to person too. “I still believe that choosing between a fixed-rate versus a variable-rate mortgage has a lot to do with a person's mind-set. I get nervous clients who went variable and then call or send e-mails every week. If you can handle a bit of risk, it's great. But if you can't, you should lock into a fixed rate, even if it is a bit higher.”
It is about lifestyle too, says Blomquist: “"You want to decide that if rates do land at 7%, you can handle it. After all, you need to be able to sleep at night."
There is much to be gained too, into doing a little research, and knowing both your client- and your lenders too, as Blomquist suggests: “I definitely caution anyone looking at variable rate mortgages should check the lender's "best rate" policies to ensure you can still get a discounted rate when locking in. "Not all banks offer it." When working with a broker we can ensure that the lock in terms are that the client would get the lowest locked in rate and not the posted rate like some banks offer.”
And, too in the current rate environment, there exists tremendous opportunity to be proactive with clients who could benefit in the long term by refinancing or consolidating now: “Given the borrowing climate even those with a current mortgage may find it's an ideal time to refinance, even if there are penalties”, she adds.
"Sometimes it will save you a lot of money in the long term. The results can be unbelievable when you crunch the numbers. I've seen some people save themselves $1,000 a month simply by moving to a 3.39% mortgage. If you do refinance, you might also want to consider rolling any consumer credit card debt into your mortgage to have a single lower payment."
Tuesday, September 13, 2011
Many Canadians Living Paycheque to Paycheque .
Although many Canadians would dearly love to enjoy their ‘golden years’, a new poll suggests that that may be more of a dream than reality.
According to the Canadian Payroll Association (CPA),” 40% of Canadians said they now expect to retire later than they previously planned. The primary reason (cited by 40%) was "I'm not saving enough money for retirement." “
Considering this data, this is perhaps a bit of a wake-up call for those who are self-employed as well, given the demographic shift in this country- and the knowledge that Federal Pension programs will not be enough to support some down the road through retirement. For those who work for themselves, funding retirement falls squarely on their own shoulders, and takes long-term planning- and saving over time- to achieve the dream of the ‘golden years’.
The report says, “A major contributing factor to the low savings rate is that many Canadians are living close to the line. The CPA survey found that the majority of Canadian workers continue to live pay cheque to pay cheque, with 57% saying they would be in financial difficulty if their pay was delayed by even a week.”
“The numbers were even higher for younger Canadians aged 18 to 34 (63%) and single parents (74%). The regions with the highest percentage of workers living pay cheque to pay cheque were Ontario (60%) and the Atlantic provinces (64%), which may be the result of their slower recovery since the last recession. Financial planners generally recommend that people have approximately three months of expenses (rent, mortgage, bills, groceries, etc.) as an emergency fund.”
74% of Canadians say that they have saved less than one quarter needed to reach their retirement goal.
"This is particularly troubling when you realize that 71% of the respondents are over the age of 35, with the bulk in their main saving years between 35 and 54," states Dianne Winsor, CPM, Chairman of the CPA.
To compound the worry, half of the respondents said that they were saving 5% or less of their pay, and 40% indicated that they were not planning on trying to save more.
According to the findings of the survey, there is a disconnect between what is actually happening, and what needs to happen in order for people to reach their financial goals- which includes eliminating or reducing credit card debt, paying down mortgage and consistently building up savings.
According to the Canadian Payroll Association (CPA),” 40% of Canadians said they now expect to retire later than they previously planned. The primary reason (cited by 40%) was "I'm not saving enough money for retirement." “
Considering this data, this is perhaps a bit of a wake-up call for those who are self-employed as well, given the demographic shift in this country- and the knowledge that Federal Pension programs will not be enough to support some down the road through retirement. For those who work for themselves, funding retirement falls squarely on their own shoulders, and takes long-term planning- and saving over time- to achieve the dream of the ‘golden years’.
The report says, “A major contributing factor to the low savings rate is that many Canadians are living close to the line. The CPA survey found that the majority of Canadian workers continue to live pay cheque to pay cheque, with 57% saying they would be in financial difficulty if their pay was delayed by even a week.”
“The numbers were even higher for younger Canadians aged 18 to 34 (63%) and single parents (74%). The regions with the highest percentage of workers living pay cheque to pay cheque were Ontario (60%) and the Atlantic provinces (64%), which may be the result of their slower recovery since the last recession. Financial planners generally recommend that people have approximately three months of expenses (rent, mortgage, bills, groceries, etc.) as an emergency fund.”
74% of Canadians say that they have saved less than one quarter needed to reach their retirement goal.
"This is particularly troubling when you realize that 71% of the respondents are over the age of 35, with the bulk in their main saving years between 35 and 54," states Dianne Winsor, CPM, Chairman of the CPA.
To compound the worry, half of the respondents said that they were saving 5% or less of their pay, and 40% indicated that they were not planning on trying to save more.
According to the findings of the survey, there is a disconnect between what is actually happening, and what needs to happen in order for people to reach their financial goals- which includes eliminating or reducing credit card debt, paying down mortgage and consistently building up savings.
Monday, September 12, 2011
Wealthy Barber is back in business
Jonathan Chevreau Sep 10, 2011 – 7:00 AM ET | Last Updated: Sep 9, 2011 9:33 AM ET
More than 22 years after finding bestselling success with The Wealthy Barber, financial guru David Chilton is back with a non-fiction follow-up. The Wealthy Barber Returns is arguably the best financial planning book since, well, since The Wealthy Barber.
The lifelong Kitchener, Ont., resident has departed from the fictional setting of the original, maintaining what he terms his “stage voice” — a folksy, witty tone honed over countless speeches. So readers expecting the return of the fictional Sarnia barber, Roy, may be disappointed that character is not the wealthy barber who is returning.
“I quote him [Roy] a few times,” Chilton says in an interview, “His advice was smarter: he ended up right.”
Given that so many others (including me) have imitated Chilton’s fictional format, it seems strange he has switched gears, but his timing has always been impeccable. The fact is the phenomenal success of the first book (more than two million copies have been sold) means Chilton himself has become the wealthy barber, supplanting his fictional creation. As with the original, the cover sports a full-length photo of Chilton and the red-white-and-blue barber pole that’s part of his powerful image.
Chilton acknowledges that he has “become the barber. One guy introduced me as the only author who became his character. No one calls Herman Melville Moby Dick.”
Even though it’s self-published, Chilton’s clout and genius for marketing have assured him widespread bookstore distribution. It’s in stores now, from Chapters to a spot I can confirm personally, a small independent bookstore in Bayfield, Ont.
Judging by initial testimonials, he’s hit another grand-slam home run. Luckily for us other authors, this is only the second time he’s stepped up to the plate.
As explained in the introduction, he was long reluctant to follow up the original because it was “the only good idea” he had, one he’s been “milking” for the better part of two decades (typical of the charming self-deprecating wit he maintains throughout).
But after a detour into co-publishing cookbooks, he decided North Americans are still nowhere close to absorbing the central message that they’re not saving enough. Except for a fortunate minority in employer-provided defined-benefit pensions, or the even rarer few who marry rich or win lotteries, most of us will have to save significant chunks of our income to achieve financial independence at a decent age.
The long-awaited sequel makes it clear there’s no magic bullet that can substitute for consistently saving for retirement, year in and year out. Most need to save till it hurts. Recognizing that most people find it near-impossible to save, Chilton tries to shift their focus to spending less, which amounts to the same thing. In clear and witty prose, he makes a compelling case for lifelong frugality or what I call guerrilla frugality. Forget the fancy stuff: If you can’t save by consistently spending less than you earn, retirement is just a pipe dream.
I’ll spoil one chapter, titled Four Liberating Words, by revealing they are “I can’t afford it.” I’m not a big fan of tattoos, but in the case of some acquaintances I know, I’d consider tattooing that phrase on their foreheads.
Chilton goes out of his way to avoid repeating key concepts from his earlier book, although the pay-yourself-first message of the orignal pervades the sequel in concept if not the actual phrase. I didn’t notice a repeat of the succinct Be an Owner, Not a Loaner — his original stance on emphasizing stock ownership rather than bonds — but he continues to see the value of a diversified portfolio of quality dividend-paying stocks.
However, the mutual fund industry and other proponents of “active” security selection will not be happy the new book joins the growing ranks of passive “indexers,” whether through index mutual funds or exchange-traded funds (ETFs). Nor will the insurance industry be ecstatic that Chilton has not recanted his previous stance in favour of low-cost term insurance rather than costlier whole-life or permanent insurance.
The book is divided into two sections, the first devoted mostly to the need to save more. The second half is a potpourri of short unconnected chapters on various aspects of investing, covering everything from pensions to tax-free savings accounts to wills and estate planning.
Chilton devoted the better part of the past year to the book, bouncing it off multiple experts (notably Mercer’s Malcolm Hamilton) and media pundits. The result is a book parents and teachers should provide to students late in high school or as they enter the work force.
As I note in a back-cover blurb, it’s the kind of book the federal Task Force on Financial Literacy should be distributing — except for the troubling fact its chairs are from the life insurance industry and actively managed investment firms.
Ironically, the first chapter of the original was titled The Financial Illiterate. Too many North Americans are still financially clueless and as Senator Pamela Wallin notes on the front cover of the sequel, Chilton has returned “just in time.”
Just not Roy the barber.
More than 22 years after finding bestselling success with The Wealthy Barber, financial guru David Chilton is back with a non-fiction follow-up. The Wealthy Barber Returns is arguably the best financial planning book since, well, since The Wealthy Barber.
The lifelong Kitchener, Ont., resident has departed from the fictional setting of the original, maintaining what he terms his “stage voice” — a folksy, witty tone honed over countless speeches. So readers expecting the return of the fictional Sarnia barber, Roy, may be disappointed that character is not the wealthy barber who is returning.
“I quote him [Roy] a few times,” Chilton says in an interview, “His advice was smarter: he ended up right.”
Given that so many others (including me) have imitated Chilton’s fictional format, it seems strange he has switched gears, but his timing has always been impeccable. The fact is the phenomenal success of the first book (more than two million copies have been sold) means Chilton himself has become the wealthy barber, supplanting his fictional creation. As with the original, the cover sports a full-length photo of Chilton and the red-white-and-blue barber pole that’s part of his powerful image.
Chilton acknowledges that he has “become the barber. One guy introduced me as the only author who became his character. No one calls Herman Melville Moby Dick.”
Even though it’s self-published, Chilton’s clout and genius for marketing have assured him widespread bookstore distribution. It’s in stores now, from Chapters to a spot I can confirm personally, a small independent bookstore in Bayfield, Ont.
Judging by initial testimonials, he’s hit another grand-slam home run. Luckily for us other authors, this is only the second time he’s stepped up to the plate.
As explained in the introduction, he was long reluctant to follow up the original because it was “the only good idea” he had, one he’s been “milking” for the better part of two decades (typical of the charming self-deprecating wit he maintains throughout).
But after a detour into co-publishing cookbooks, he decided North Americans are still nowhere close to absorbing the central message that they’re not saving enough. Except for a fortunate minority in employer-provided defined-benefit pensions, or the even rarer few who marry rich or win lotteries, most of us will have to save significant chunks of our income to achieve financial independence at a decent age.
The long-awaited sequel makes it clear there’s no magic bullet that can substitute for consistently saving for retirement, year in and year out. Most need to save till it hurts. Recognizing that most people find it near-impossible to save, Chilton tries to shift their focus to spending less, which amounts to the same thing. In clear and witty prose, he makes a compelling case for lifelong frugality or what I call guerrilla frugality. Forget the fancy stuff: If you can’t save by consistently spending less than you earn, retirement is just a pipe dream.
I’ll spoil one chapter, titled Four Liberating Words, by revealing they are “I can’t afford it.” I’m not a big fan of tattoos, but in the case of some acquaintances I know, I’d consider tattooing that phrase on their foreheads.
Chilton goes out of his way to avoid repeating key concepts from his earlier book, although the pay-yourself-first message of the orignal pervades the sequel in concept if not the actual phrase. I didn’t notice a repeat of the succinct Be an Owner, Not a Loaner — his original stance on emphasizing stock ownership rather than bonds — but he continues to see the value of a diversified portfolio of quality dividend-paying stocks.
However, the mutual fund industry and other proponents of “active” security selection will not be happy the new book joins the growing ranks of passive “indexers,” whether through index mutual funds or exchange-traded funds (ETFs). Nor will the insurance industry be ecstatic that Chilton has not recanted his previous stance in favour of low-cost term insurance rather than costlier whole-life or permanent insurance.
The book is divided into two sections, the first devoted mostly to the need to save more. The second half is a potpourri of short unconnected chapters on various aspects of investing, covering everything from pensions to tax-free savings accounts to wills and estate planning.
Chilton devoted the better part of the past year to the book, bouncing it off multiple experts (notably Mercer’s Malcolm Hamilton) and media pundits. The result is a book parents and teachers should provide to students late in high school or as they enter the work force.
As I note in a back-cover blurb, it’s the kind of book the federal Task Force on Financial Literacy should be distributing — except for the troubling fact its chairs are from the life insurance industry and actively managed investment firms.
Ironically, the first chapter of the original was titled The Financial Illiterate. Too many North Americans are still financially clueless and as Senator Pamela Wallin notes on the front cover of the sequel, Chilton has returned “just in time.”
Just not Roy the barber.
Friday, September 9, 2011
Why do U.S. retailers charge us more, Flaherty asks
After weeks of hearing Canadian consumers complain they pay higher prices in Canada for identical goods sold in the U.S., federal Finance Minister Jim Flaherty says he shares their “irritation” and wants a committee to look into it.
In a letter obtained by The Star, Flaherty says he wants the standing senate committee on national finance to study why some prices remain higher here five years after the Canadian dollar soared above parity with the U.S. greenback.
“Canadians are rightly irritated when they see large price discrepancies on the exact same products being sold on different sides of the border,” Flaherty says in the letter.
Canadian consumers began complaining about the price gap in 2007 after the Canadian dollar soared above parity with the U.S. greenback for the first time in 30 years.
At the time, Flaherty responded by urging retailers to lower their prices and be more open about their pricing practices. He also suggested consumers shop around to ensure they got the best deal.
Canadian retailers said they felt unfairly blamed. They also said prices in Canada are higher because they face higher costs here for rent, labour, duties, transportation and marketing. As well, some multinational suppliers charge Canadian retailers higher prices, they said.
However, no-one has provided a detailed explanation of how much these factors affect prices. And in some cases, retailers have acknowledged they are charging whatever the market will bear.
In his letter, Flaherty calls on the senate committee to examine how these factors might affect pricing.
The committee, which should consult widely with retailers, distributors, wholesalers, importers, economists, analysts and consumers, could begin meeting this fall, the letter says.
Many prices have fallen since he last met with Canadian retailers five years ago to discuss this issue, Flaherty says in the letter. But many Canadians still have concerns with a persistent gap between some goods, the letter also says.
“We all want Canadians to shop at and support local businesses, especially with the start of the Christmas shopping season only months away. But we live in a market economy and Canadians know the value and power of shopping around. If we want our consumers to shop here, we need competitive prices,” his letter says.
“A strong dollar should benefit Canadian consumers,” the letter says.
The price-gap problem resurfaced last month after popular U.S. fashion retailer J. Crew opened its first store in Canada and also its first Canadian web site.
Fans of the clothing retailer were quick to point out J. Crew had not only raised its prices for Canada but by adding duties and taxes to its online prices, the final bill was in some cases 40 to 50 per cent higher than on its U.S. website.
J. Crew quickly backed down, removing the added duty from its Canadian website, though its prices both in the Yorkdale store and online remain 15 per cent higher on average than in the U.S.
It’s not just consumers who have noticed the price difference.
Doug Porter, deputy chief economist at BMO Capital Markets, has made a habit of surveying the cross-border price gap in recent years. His latest survey, last April, found that prices in Canada were on average 20 per cent higher than in the U.S. on a broad range of goods, from DVDs to luxury cars to golf balls.
When Porter first began tracking prices, in 2007, the gap was 24 per cent. Retailers said they needed time to adapt as most merchandise had been ordered 12 to 18 months earlier when the dollar was at 80 cents U.S.
In a letter obtained by The Star, Flaherty says he wants the standing senate committee on national finance to study why some prices remain higher here five years after the Canadian dollar soared above parity with the U.S. greenback.
“Canadians are rightly irritated when they see large price discrepancies on the exact same products being sold on different sides of the border,” Flaherty says in the letter.
Canadian consumers began complaining about the price gap in 2007 after the Canadian dollar soared above parity with the U.S. greenback for the first time in 30 years.
At the time, Flaherty responded by urging retailers to lower their prices and be more open about their pricing practices. He also suggested consumers shop around to ensure they got the best deal.
Canadian retailers said they felt unfairly blamed. They also said prices in Canada are higher because they face higher costs here for rent, labour, duties, transportation and marketing. As well, some multinational suppliers charge Canadian retailers higher prices, they said.
However, no-one has provided a detailed explanation of how much these factors affect prices. And in some cases, retailers have acknowledged they are charging whatever the market will bear.
In his letter, Flaherty calls on the senate committee to examine how these factors might affect pricing.
The committee, which should consult widely with retailers, distributors, wholesalers, importers, economists, analysts and consumers, could begin meeting this fall, the letter says.
Many prices have fallen since he last met with Canadian retailers five years ago to discuss this issue, Flaherty says in the letter. But many Canadians still have concerns with a persistent gap between some goods, the letter also says.
“We all want Canadians to shop at and support local businesses, especially with the start of the Christmas shopping season only months away. But we live in a market economy and Canadians know the value and power of shopping around. If we want our consumers to shop here, we need competitive prices,” his letter says.
“A strong dollar should benefit Canadian consumers,” the letter says.
The price-gap problem resurfaced last month after popular U.S. fashion retailer J. Crew opened its first store in Canada and also its first Canadian web site.
Fans of the clothing retailer were quick to point out J. Crew had not only raised its prices for Canada but by adding duties and taxes to its online prices, the final bill was in some cases 40 to 50 per cent higher than on its U.S. website.
J. Crew quickly backed down, removing the added duty from its Canadian website, though its prices both in the Yorkdale store and online remain 15 per cent higher on average than in the U.S.
It’s not just consumers who have noticed the price difference.
Doug Porter, deputy chief economist at BMO Capital Markets, has made a habit of surveying the cross-border price gap in recent years. His latest survey, last April, found that prices in Canada were on average 20 per cent higher than in the U.S. on a broad range of goods, from DVDs to luxury cars to golf balls.
When Porter first began tracking prices, in 2007, the gap was 24 per cent. Retailers said they needed time to adapt as most merchandise had been ordered 12 to 18 months earlier when the dollar was at 80 cents U.S.
Obama says U.S. faces ‘crisis,’ proposes $447B jobs plan
Reuters Sep 8, 2011 – 6:16 PM ET | Last Updated: Sep 8, 2011 7:52 PM ET
By Matt Spetalnick and Alister Bull
WASHINGTON, Sept 8 (Reuters) – U.S. President Barack Obama laid out a $447 billion jobs package of tax cuts and government spending on Thursday that will be critical to his re-election chances but he faces an uphill fight with Republicans.
With his poll numbers at new lows amid voter frustration with 9.1 percent unemployment, Obama said in a high-stakes address to Congress that the United States is in a “national crisis” and called for urgent action on sweeping proposals to revive the stalled economy and avert another recession.
“Those of us here tonight can’t solve all of our nation’s woes,” Obama said in a nationally televised prime-time speech. “But we can help. We can make a difference. There are steps we can take right now to improve people’s lives.”
Taking aim at Republicans who have consistently opposed his initiatives, Obama said it was time to “stop the political circus and actually do something to help the economy.”
Obama, who pushed through an $800 billion economic stimulus package in 2009, said his jobs plan would cut taxes for workers and businesses and put more construction workers and teachers on the job through infrastructure projects.
“It will provide a tax break for companies who hire new workers and it will cut payroll taxes in half for every working American and every small business,” he said.
Obama is seeking to seize the initiative in his bitter ideological battle with Republicans, ease mounting doubts about his economic leadership and turn around his presidency just 14 months before voters decide whether to give him a second term.
Obama wants Congress to pass his “American Jobs Act” — which administration officials said would cost $447 billion — by the end of this year and offset the cost with deficit cuts.
But a deal may be hard to achieve with politicians already focusing on the presidential and congressional elections in November 2012.
If Obama can push through his plan, it might provide an economic boost quickly enough for him to reap political benefits. If it stalls in a divided Congress, his strategy will be to blame Republicans for obstructing the economic recovery.
“RIGHT AWAY”
Obama said his proposed plan would “provide a jolt to an economy that has stalled and give companies confidence that if they invest and hire there will be customers for their products and services.”
“You should pass this jobs plan right away,” he said in a speech interrupted by applause from his fellow Democrats while Republicans sat mostly in silence.
Obama proposed extending unemployment insurance at a cost of $49 billion, modernizing schools for $30 billion and investing in transportation infrastructure projects for $50 billion.
But the bulk of his proposal was made up of $240 billion in tax relief by cutting payroll taxes for employees in half next year and trimming employer payroll taxes as well.
Obama also said he was seeking to broaden U.S. homeowners’ access to mortgage refinancing in a plan to help the ailing housing market and put money back in the pockets of borrowers needing help locking into record low interest rates.
How much of the jobs package is viable remains in question. Almost all of it ultimately depends on winning support from Republicans who control the House of Representatives.
Bipartisan cooperation could be hard to come by in Washington’s climate of political dysfunction where a bruising debt feud this summer brought the country to the brink of default and led to an unprecedented U.S. credit downgrade.
But Obama insisted that “everything in here is the kind of proposal that’s been supported by both Democrats and Republicans — including many who sit here tonight — and everything in this bill will be paid for. Everything.”
Republicans will still be resistant, not wanting to give Obama a helping hand before the election. But they will be under pressure to cede some ground to help boost the economy or risk a voter backlash in 2012.
Obama’s choice of a rare joint session of the House and Senate, a setting better known for the president’s annual State of the Union address, was intended to lend ceremonial pomp to a critical speech and push Republicans to cooperate.
But it also carried the risk of raising public expectations that will be hard to meet.
Obama’s speech has taken on new urgency after the latest Labor Department report showed zero employment growth in August, stoking fears of a slide back into recession.
The pressure on Obama to act is driven not just by a spate of dismal economic data but by his own increasingly grim approval ratings now languishing around 40 percent, the lowest since he took office in January 2009.
An NBC/Wall Street Journal poll showed Obama was no longer the favorite to win next year’s election.
By Matt Spetalnick and Alister Bull
WASHINGTON, Sept 8 (Reuters) – U.S. President Barack Obama laid out a $447 billion jobs package of tax cuts and government spending on Thursday that will be critical to his re-election chances but he faces an uphill fight with Republicans.
With his poll numbers at new lows amid voter frustration with 9.1 percent unemployment, Obama said in a high-stakes address to Congress that the United States is in a “national crisis” and called for urgent action on sweeping proposals to revive the stalled economy and avert another recession.
“Those of us here tonight can’t solve all of our nation’s woes,” Obama said in a nationally televised prime-time speech. “But we can help. We can make a difference. There are steps we can take right now to improve people’s lives.”
Taking aim at Republicans who have consistently opposed his initiatives, Obama said it was time to “stop the political circus and actually do something to help the economy.”
Obama, who pushed through an $800 billion economic stimulus package in 2009, said his jobs plan would cut taxes for workers and businesses and put more construction workers and teachers on the job through infrastructure projects.
“It will provide a tax break for companies who hire new workers and it will cut payroll taxes in half for every working American and every small business,” he said.
Obama is seeking to seize the initiative in his bitter ideological battle with Republicans, ease mounting doubts about his economic leadership and turn around his presidency just 14 months before voters decide whether to give him a second term.
Obama wants Congress to pass his “American Jobs Act” — which administration officials said would cost $447 billion — by the end of this year and offset the cost with deficit cuts.
But a deal may be hard to achieve with politicians already focusing on the presidential and congressional elections in November 2012.
If Obama can push through his plan, it might provide an economic boost quickly enough for him to reap political benefits. If it stalls in a divided Congress, his strategy will be to blame Republicans for obstructing the economic recovery.
“RIGHT AWAY”
Obama said his proposed plan would “provide a jolt to an economy that has stalled and give companies confidence that if they invest and hire there will be customers for their products and services.”
“You should pass this jobs plan right away,” he said in a speech interrupted by applause from his fellow Democrats while Republicans sat mostly in silence.
Obama proposed extending unemployment insurance at a cost of $49 billion, modernizing schools for $30 billion and investing in transportation infrastructure projects for $50 billion.
But the bulk of his proposal was made up of $240 billion in tax relief by cutting payroll taxes for employees in half next year and trimming employer payroll taxes as well.
Obama also said he was seeking to broaden U.S. homeowners’ access to mortgage refinancing in a plan to help the ailing housing market and put money back in the pockets of borrowers needing help locking into record low interest rates.
How much of the jobs package is viable remains in question. Almost all of it ultimately depends on winning support from Republicans who control the House of Representatives.
Bipartisan cooperation could be hard to come by in Washington’s climate of political dysfunction where a bruising debt feud this summer brought the country to the brink of default and led to an unprecedented U.S. credit downgrade.
But Obama insisted that “everything in here is the kind of proposal that’s been supported by both Democrats and Republicans — including many who sit here tonight — and everything in this bill will be paid for. Everything.”
Republicans will still be resistant, not wanting to give Obama a helping hand before the election. But they will be under pressure to cede some ground to help boost the economy or risk a voter backlash in 2012.
Obama’s choice of a rare joint session of the House and Senate, a setting better known for the president’s annual State of the Union address, was intended to lend ceremonial pomp to a critical speech and push Republicans to cooperate.
But it also carried the risk of raising public expectations that will be hard to meet.
Obama’s speech has taken on new urgency after the latest Labor Department report showed zero employment growth in August, stoking fears of a slide back into recession.
The pressure on Obama to act is driven not just by a spate of dismal economic data but by his own increasingly grim approval ratings now languishing around 40 percent, the lowest since he took office in January 2009.
An NBC/Wall Street Journal poll showed Obama was no longer the favorite to win next year’s election.
Tuesday, August 30, 2011
Economic conditions will help Canada's real estate sector stay healthy: CMHC
By Mary Gazze, The Canadian Press
Canada's national housing agency says it expects home sales and construction activity will cool but remain healthy in the second half of the year, due to favourable economic conditions that push up demand for homes.
Canada Mortgage and Housing Corp. said Monday that lower unemployment, a steady level of immigration, and low interest rates are working together to prop up Canada's real estate industry.
"I think the Canadian housing market is healthy at the moment despite the uncertainty we observed in the financial market," Mathieu Laberge, deputy Chief Economist at CMHC said in an interview.
He was referring to the stock market ups and downs earlier this month as investors worried about the European debt crisis and feared the U.S. could slip back into recession.
"Employment is expected to grow at a moderate pace in the next few years," he said.
"We expect interest rates to remain flat for the remainder of the year and increase in 2012, and new immigration is an addition to demand in the housing market."
Laberge said the CMHC predicts the market sales volumes will hold at a stable level next year.
Canada Mortgage and Housing Corp. said low unemployment, immigration and low interest rates led to fewer claims in the first half of the year under its mortgage insurance programs, which protect lenders from defaults by borrowers.
The agency said it expects fixed mortgage rates to stay relatively flat for most of the year, with the five-year posted rate at between 4.1 per cent and 5.6 per cent, then increase slightly in 2012.
CMHC said variable rate mortgages would remain near historically low levels, although some banks recently increased their variable rates to reflect the higher cost of raising money.
Prices of homes shown on the Multiple Listing Service are expected to grow only slightly going forward because the supply and demand for resale homes will likely stay in balanced territory, CMHC said.
A least one analyst agreed that the real estate market should stay fairly healthy for the rest of 2011, but said it's already cooling slowly and home prices may decline in the longer term.
"What you're probably looking at is a period where prices are relatively flat, maybe a little bit lower in the next few years," said Adrienne Warren, an economist at Scotiabank who specializes in the real estate industry.
"Affordability from a price perspective has deteriorated and that's going to have to, over time, come back to more normal levels but it doesn't imply that that has to happen quickly as a type of correction that occurs quickly."
She said interest rates are low and attractive right now and encourage first time home buyers to enter the market, which drives up prices. Once those rates begin to rise — likely in the second half of 2012 — the current price of homes will become unaffordable for many, putting downward pressure on future prices.
In its report Monday, CMHC said changes to mortgage rules introduced by the federal government earlier this year played a part in reducing mortgage interest payments and allowed Canadians to build equity in their homes faster.
Canadians are finding it easier to pay off their mortgages, with arrears levels improving and the volume of mortgage insurance claims lower than expected.
In March, the federal government put through new rules that reduced the maximum amortization period to 30 years and cut the maximum amount Canadians can borrow to 85 per cent of the home's value.
After the changes, refinancing activity fell by nearly 40 per cent, which means fewer Canadians took on more debt. Federal Finance Minister Jim Flaherty and Bank of Canada governor Mark Carney have repeatedly warned of the dangers of the ballooning debt level of Canadian consumers.
Ten per cent fewer Canadians bought mortgage insurance immediately after the new rules began, and the level was five per cent lower than sales before the changes came into effect.
CMHC also reported its net income for the quarter was $383 million, up $61 million from $322 million in the same quarter last year. Revenues were down slightly at $3.3 billion, versus $3.4 billion.
The agency's predictions for the rest of the year echo a revised forecast by the Canadian Real Estate Association released earlier this month. CREA said it expected higher national home resales this year, reversing upward its previous forecast of a one per cent dip.
National average prices will be in the range of $347,700 to $374,300, growing to between $349,500 to $385,000 in 2012, CREA predicted.
CMHC said sales of existing homes should range between 429,500 and 480,000 units in 2011 and between 410,000 and 511,900 units in 2012.
Earlier this month, the CMHC said that national housing starts rose to 205,100 units on a seasonally adjusted basis in July, 11.6 per cent higher than the 188,900 reported in the same month last year and 4.3 per cent more than the 196,600 recorded in June.
The uptick, driven by strong construction on condos and apartment buildings in urban centres, is likely due to builders catching up to robust demand last year rather than expectations of coming growth, it said.
Home building activity has been increasing through the first seven months of 2011, but starts are still down 4.6 per cent from a year ago.
Predictions for the Canadian market were in stark contrast with the most recent figures from the United States, which showed that country's depressed housing market is still trying to get back on track.
The U.S. National Association of Realtors said Monday that its index of sales agreements fell 1.3 per cent in July to a reading of 89.7. A reading of 100 is considered healthy by economists
The association also said a growing number of buyers had cancelled contracts after appraisals showed the homes they wanted to buy were worth less than they bid.
Monday, August 29, 2011
B.C.'s home sales, property values to slow as job growth ebbs: BCREA
VANCOUVER - Slower job growth in British Columbia's economy will mean slower increases in home sales and property values through to 2012, the B.C. Real Estate Association said Thursday.
And by the end of 2012, the association expects the high-flying prices in some of B.C.'s bigger markets to show small declines.
Home sales through the realtor-controlled Multiple Listing Service should hit 74,640 by the end of 2011, which is up four per cent from 2010, and then rise to 80,300 in 2012, association chief economist Cameron Muir said in his report.
However, those estimates are below B.C.'s long-term average for sales and the forecast for 2011 represents reduced expectations from Muir's forecast from earlier this year that B.C. should see 78,200 sales this year.
"Following a decade where unit sales broke all records, consumer demand for the next few years will be relatively moderate," Muir said in releasing the report.
A positive note, however, is that weaker global economic growth and uncertainty in world financial markets are signals that interest rates, including mortgage rates, will remain low and "help underpin housing demand."
Across the province, Muir is forecasting that the average home price, which has been heavily influenced by strong sales in the more expensive pockets of Metro Vancouver, to hit $559,179 by the end of 2011.
However, by the end of 2012, Muir is forecasting that the average price will fall back 2.5 per cent to $545,964.
The 2012 price declines, however, are expected to show up primarily in the Lower Mainland Markets, which influence the overall provincial averages.
Muir expects Metro Vancouver's average price to slip 3.5 per cent in 2012 to $742,000. However, that will be a decline off 2011, which Muir predicts will end with the average price having shot up 14 per cent to $769,000.
And Muir is forecasting that the Fraser Valley will see its average price in 2012 dip 1.4 per cent to $498,000. But that follows 2011, where he expects the average price will have gained 12 per cent from the previous year to hit $505,000.
And by the end of 2012, the association expects the high-flying prices in some of B.C.'s bigger markets to show small declines.
Home sales through the realtor-controlled Multiple Listing Service should hit 74,640 by the end of 2011, which is up four per cent from 2010, and then rise to 80,300 in 2012, association chief economist Cameron Muir said in his report.
However, those estimates are below B.C.'s long-term average for sales and the forecast for 2011 represents reduced expectations from Muir's forecast from earlier this year that B.C. should see 78,200 sales this year.
"Following a decade where unit sales broke all records, consumer demand for the next few years will be relatively moderate," Muir said in releasing the report.
A positive note, however, is that weaker global economic growth and uncertainty in world financial markets are signals that interest rates, including mortgage rates, will remain low and "help underpin housing demand."
Across the province, Muir is forecasting that the average home price, which has been heavily influenced by strong sales in the more expensive pockets of Metro Vancouver, to hit $559,179 by the end of 2011.
However, by the end of 2012, Muir is forecasting that the average price will fall back 2.5 per cent to $545,964.
The 2012 price declines, however, are expected to show up primarily in the Lower Mainland Markets, which influence the overall provincial averages.
Muir expects Metro Vancouver's average price to slip 3.5 per cent in 2012 to $742,000. However, that will be a decline off 2011, which Muir predicts will end with the average price having shot up 14 per cent to $769,000.
And Muir is forecasting that the Fraser Valley will see its average price in 2012 dip 1.4 per cent to $498,000. But that follows 2011, where he expects the average price will have gained 12 per cent from the previous year to hit $505,000.
Thursday, August 25, 2011
Fall Home Renovation Projects
Angie Mohr, On Monday August 22, 2011, 12:55 pm EDT
After summer holidays are over and the heat and humidity subsides, it’s a good time to start home renovation and preparation projects before the cold weather sets in. Flower beds can be cut down, lawns fertilized for the last time and windows washed. Here are five projects that are perfect for cool fall days.
Winterize the Deck
Decks get a lot of use during long summer days. By the time fall comes around, they can look worn out and old. Once the deck is cleaned off and all summer chairs and tables are stored away, power-wash the deck with a high-velocity pressure washer. This will dislodge any dirt that is stuck in the wood grain and will take away the gray color that decks fade to over time. Fall is also a good time to reseal the deck if you use a sealant or stain. Choose a warm day that has no chance of rain and start the process in the morning so that the deck has several hours of drying time before nightfall.
Insulate Exposed Plumbing
Uninsulated plumbing lines in unheated spaces are a major cause of power use, as the water heater must work extra hard to heat water. It can also cause pipes to freeze and burst if you live in an area that dips below the freezing mark in the winter. Check all of your plumbing lines to identify those that are outside or underneath the house, or are in an unheated basement or attic. Foam wrap can be purchased at any home improvement store. Wrap all exposed pipes to save on energy when the days start getting colder.
Roof Work
Once all the autumn leaves have fallen, cleaning out the roof gutters will save you from building up ice dams that can damage the roof in the winter. Blow out the gutters with a leaf blower or wash them out with a hose. Check for any holes or other damage to the gutters and repair them before heavy snow makes them worse. It’s also a good time to take a look at the roof itself and fix any shingles that are curling or any flashing around chimneys that has come loose. If your roof is in bad shape, bring in a roofing contractor to assess whether the roof needs to be replaced before winter or can wait until the spring.
Upgrade Doors and Windows
If you have old, single-pane windows, you will lose a significant amount of heat in the wintertime. Replacing old windows with energy-efficient, double-paned upgrades can pay for itself quickly in heat savings. Check all exterior doors to ensure that they are insulated and that there are no gaps or cracks between the doors and the frames that could let heat out. If you have weatherstripping around doors, make sure it is intact and in good shape. If it's not in good shape, replace it before the cold weather sets in.
Interior Painting
Warm fall days are perfect for indoor painting. Summer is often too humid for paint to dry properly and that can cause walls to look splotchy. In winter, the lack of ventilation can make paint fumes hang around and can lengthen drying times. Open up windows to ensure there is a breeze that will both reduce the paint smell and dry it quickly.
The Bottom Line
Fall is an important transition season for home improvement projects. With the cold of winter coming, getting the house and yard prepared will save you money in the long run.
After summer holidays are over and the heat and humidity subsides, it’s a good time to start home renovation and preparation projects before the cold weather sets in. Flower beds can be cut down, lawns fertilized for the last time and windows washed. Here are five projects that are perfect for cool fall days.
Winterize the Deck
Decks get a lot of use during long summer days. By the time fall comes around, they can look worn out and old. Once the deck is cleaned off and all summer chairs and tables are stored away, power-wash the deck with a high-velocity pressure washer. This will dislodge any dirt that is stuck in the wood grain and will take away the gray color that decks fade to over time. Fall is also a good time to reseal the deck if you use a sealant or stain. Choose a warm day that has no chance of rain and start the process in the morning so that the deck has several hours of drying time before nightfall.
Insulate Exposed Plumbing
Uninsulated plumbing lines in unheated spaces are a major cause of power use, as the water heater must work extra hard to heat water. It can also cause pipes to freeze and burst if you live in an area that dips below the freezing mark in the winter. Check all of your plumbing lines to identify those that are outside or underneath the house, or are in an unheated basement or attic. Foam wrap can be purchased at any home improvement store. Wrap all exposed pipes to save on energy when the days start getting colder.
Roof Work
Once all the autumn leaves have fallen, cleaning out the roof gutters will save you from building up ice dams that can damage the roof in the winter. Blow out the gutters with a leaf blower or wash them out with a hose. Check for any holes or other damage to the gutters and repair them before heavy snow makes them worse. It’s also a good time to take a look at the roof itself and fix any shingles that are curling or any flashing around chimneys that has come loose. If your roof is in bad shape, bring in a roofing contractor to assess whether the roof needs to be replaced before winter or can wait until the spring.
Upgrade Doors and Windows
If you have old, single-pane windows, you will lose a significant amount of heat in the wintertime. Replacing old windows with energy-efficient, double-paned upgrades can pay for itself quickly in heat savings. Check all exterior doors to ensure that they are insulated and that there are no gaps or cracks between the doors and the frames that could let heat out. If you have weatherstripping around doors, make sure it is intact and in good shape. If it's not in good shape, replace it before the cold weather sets in.
Interior Painting
Warm fall days are perfect for indoor painting. Summer is often too humid for paint to dry properly and that can cause walls to look splotchy. In winter, the lack of ventilation can make paint fumes hang around and can lengthen drying times. Open up windows to ensure there is a breeze that will both reduce the paint smell and dry it quickly.
The Bottom Line
Fall is an important transition season for home improvement projects. With the cold of winter coming, getting the house and yard prepared will save you money in the long run.
Wednesday, August 24, 2011
Royal Bank, BMO increase its five-year variable mortgage rates
Sunny Freeman, The Canadian Press, On Tuesday August 23, 2011, 8:01 pm EDT
By Sunny Freeman, The Canadian Press
TORONTO - Royal Bank of Canada (TSX:RY) is raising its variable rate mortgages for homebuyers in a move that reflects higher costs of borrowing in the bond market.
Canada's largest bank said Tuesday it is hiking the rates charged on its five-year variable closed mortgages by a fifth of a point, effective Wednesday.
That will put that rate even with the bank's prime rate of three per cent.
Bank of Montreal later joined Royal in raising its five-year variable closed mortgage to three per cent which, in the case of BMO, represented a 0.15 percentage point increase.
Meanwhile, the Royal's special variable rate mortgage also increased by a fifth of a point to prime minus 0.45 percentage points, making it 2.55 per cent.
In the past when banks raised variable rates without a corresponding increase in the Bank of Canada rate, they were accused of trying to boost profit margins at the expense of borrowers.
But Royal Bank, which is also Canada's largest mortgage lender, said the latest increase reflects higher costs in the bond market, where it raises money to finance its mortgage loans.
Bond interest rates have risen due to growing debt fears in the United States and Europe as lenders want higher rates to part with their money in a riskier global economy.
The increase in market interest rates comes at the same time central banks are keeping their rates low to stimulate the weak economy.
In the U.S., the Federal Reserve Board has said it will keep interest rates flat for another two years to spur growth, while the Bank of Canada is also expected to hold the line on rates well into next year.
Low mortgage rates in recent years have been a big factor in spurring growth in the Canadian housing market, which remains buoyant in most parts of the country.
Although it is unusual for banks to hike their variable rates without a rise in the Bank of Canada's overnight lending rate, it is not unprecedented.
"This is not the first time that the price for variable rate mortgages is changing relative to prime without a corresponding change in the BOC rate," a Royal Bank spokesman said in an email.
"In fact, over the period that BOC increased its overnight rate from 0.25 per cent to one per cent, the bank reduced the pricing levels for new mortgages relative to prime."
The mortgage market is highly competitive in Canada and in the past variable rate mortgages were popular with borrowers when interest rates were expected to remain low and there was little chance of sudden hikes in borrowing costs.
In the last few months, more consumers opted to lock into fixed terms when it looked like the Bank of Canada would begin to push rates sharply higher to fight inflationary pressures in the economy.
But the recent stock market and economic turmoil that has kept central bank rates low could push borrowers back to variable terms in the Canadian market.
Royal Bank said the Bank of Canada's rate is just one of many factors that go into pricing decisions. Banks mortgage costs are also based on changes in the bond markets, where rates have been volatile and banks raise money for their mortgage lending.
Recent global uncertainty over whether the U.S. can come up with a plan to deal with its debt problems, and over fears the debt crises in smaller European economies will spread across the continent, have caused bond rates to rise.
That makes it more expensive for banks to fund their mortgage operations, and led RBC to recoup some of those costs through a higher variable rate.
"Mortgage rates are tied to the banks funding costs which change from day to day," the bank said. "Due to global economic concerns, the funding costs for banks have been increasing.
"While we have held off in passing on these high costs to our clients, it is now necessary for us to increase this mortgage rate."
The big Canadian banks usually move in tandem when there is a variable rate change along with a change in the Bank of Canada's overnight lending rate, but its unclear whether the rest will follow this time.
Competitive pressures could force some banks to keep variable rates low to attract customers.
Royal Bank will report its third-quarter results on Friday.
By Sunny Freeman, The Canadian Press
TORONTO - Royal Bank of Canada (TSX:RY) is raising its variable rate mortgages for homebuyers in a move that reflects higher costs of borrowing in the bond market.
Canada's largest bank said Tuesday it is hiking the rates charged on its five-year variable closed mortgages by a fifth of a point, effective Wednesday.
That will put that rate even with the bank's prime rate of three per cent.
Bank of Montreal later joined Royal in raising its five-year variable closed mortgage to three per cent which, in the case of BMO, represented a 0.15 percentage point increase.
Meanwhile, the Royal's special variable rate mortgage also increased by a fifth of a point to prime minus 0.45 percentage points, making it 2.55 per cent.
In the past when banks raised variable rates without a corresponding increase in the Bank of Canada rate, they were accused of trying to boost profit margins at the expense of borrowers.
But Royal Bank, which is also Canada's largest mortgage lender, said the latest increase reflects higher costs in the bond market, where it raises money to finance its mortgage loans.
Bond interest rates have risen due to growing debt fears in the United States and Europe as lenders want higher rates to part with their money in a riskier global economy.
The increase in market interest rates comes at the same time central banks are keeping their rates low to stimulate the weak economy.
In the U.S., the Federal Reserve Board has said it will keep interest rates flat for another two years to spur growth, while the Bank of Canada is also expected to hold the line on rates well into next year.
Low mortgage rates in recent years have been a big factor in spurring growth in the Canadian housing market, which remains buoyant in most parts of the country.
Although it is unusual for banks to hike their variable rates without a rise in the Bank of Canada's overnight lending rate, it is not unprecedented.
"This is not the first time that the price for variable rate mortgages is changing relative to prime without a corresponding change in the BOC rate," a Royal Bank spokesman said in an email.
"In fact, over the period that BOC increased its overnight rate from 0.25 per cent to one per cent, the bank reduced the pricing levels for new mortgages relative to prime."
The mortgage market is highly competitive in Canada and in the past variable rate mortgages were popular with borrowers when interest rates were expected to remain low and there was little chance of sudden hikes in borrowing costs.
In the last few months, more consumers opted to lock into fixed terms when it looked like the Bank of Canada would begin to push rates sharply higher to fight inflationary pressures in the economy.
But the recent stock market and economic turmoil that has kept central bank rates low could push borrowers back to variable terms in the Canadian market.
Royal Bank said the Bank of Canada's rate is just one of many factors that go into pricing decisions. Banks mortgage costs are also based on changes in the bond markets, where rates have been volatile and banks raise money for their mortgage lending.
Recent global uncertainty over whether the U.S. can come up with a plan to deal with its debt problems, and over fears the debt crises in smaller European economies will spread across the continent, have caused bond rates to rise.
That makes it more expensive for banks to fund their mortgage operations, and led RBC to recoup some of those costs through a higher variable rate.
"Mortgage rates are tied to the banks funding costs which change from day to day," the bank said. "Due to global economic concerns, the funding costs for banks have been increasing.
"While we have held off in passing on these high costs to our clients, it is now necessary for us to increase this mortgage rate."
The big Canadian banks usually move in tandem when there is a variable rate change along with a change in the Bank of Canada's overnight lending rate, but its unclear whether the rest will follow this time.
Competitive pressures could force some banks to keep variable rates low to attract customers.
Royal Bank will report its third-quarter results on Friday.
Monday, August 15, 2011
Shall I rent or shall I own?
Mark Wahlberg buys a Toronto condo despite real estate bubble
Golden Girl Finance, On Thursday August 11, 2011, 10:00 am EDT
Donnie Wahlberg may have been a New Kid on The Block, but his cutie-boy brother Mark Wahlberg, (Marky Mark to those who remember the 90s) has become a new kid on a block in Toronto…in the form of a $12 million penthouse condo. The posh bachelor pad is close to Wahlberg's usual digs at The Hazelton Hotel, where rooms run between $500 to $2400 a night. Given that the star of Boogie Nights, The Fighter and former leader of hip-hop group The Funky Bunch spends an increasing amount of time filming movies in the city and hanging out at the Toronto International Film Festival, it seems he's decided to quit forking over money in hotel room rentals and instead buy his own place.
Wahlberg probably has the advantage of owning his new condo outright, giving him full equity ownership. For the rest of us mortgage-carrying mortals, however, now is not an ideal time to be investing in a condo in Toronto. According to Ben Rabidoux, financial adviser, real estate expert and author of the website The Economic Analyst (www.TheEconomicAnalyst.com), in most Canadian cities right now (but certainly not all), the house price versus rent ratio and the house price versus income ratio are at or near their all-time highs. This suggests that, overwhelmingly, it makes better financial sense to rent in these markets and invest your equity elsewhere.
There is no free equity
Building equity is undeniably a wise financial move. The mistake many people make is equating equity with a mortgage. A mortgage doesn't give you equity; equity is only as much as you pay. A down payment is equity. Anything you pay toward the principle of your mortgage is equity. Paying interest to the bank is as useful to your financial situation as paying rent to your landlord.
If you start out with a very small down payment and arrange for a long future of low monthly payments, your ability to build equity before selling your home becomes seriously limited. With less than 15 per cent equity, you may end up merely trading one mortgage for another. If there is a drop in the housing market, the value of your home could fall to the point that if you were to sell it, you would owe more on your mortgage than the actual selling price of the house. Once it's sold, you'd have to write the bank a cheque to make up for the difference. This is called a 'negative equity' situation and while it's a worst case, it happens more often than you might realize.
Renting space or renting money?
Most likely, everyone from your father to your banker has drilled the idea into your head that renting is a waste of money and buying a home is the only prudent way to build equity. According to Rabidoux, this is not always the case, especially in markets that are currently overvalued and highly vulnerable to a real estate crash, such as Vancouver, Victoria and the Toronto condo market.
"There is a very unfortunate stigma attached to renting," Rabidoux says. "This is dangerous and damaging to many people's finances. The reality is that the majority of new home 'owners' are still renters; they've just gone from renting space to renting money." With rents in large cities exceptionally cheap compared to owning, home ownership becomes a very steep tax on those unwilling to crunch the numbers or who give into the societal pressure to buy. Don't be that girl!
Comparing the costs
Rabidoux suggests wannabe-homeowners start by figuring out the monthly costs of owning a home. Calculate the mortgage principal and interest, taxes, insurance and any additional monthly payments such as condo fees. Also add the often ignored but very necessary maintenance costs — two per cent of the cost of the house per year is a good rule of thumb — then divide by 12 to get a monthly cost.
Next, figure out what it would cost you to rent a similar property in the area. Kijiji and online classifieds are a good place to start. Realtors can also help with rent statistics. Remember that rent is often negotiable, particularly if you don't have pets or kids, if you do have a stable job, are a non-smoker and have good references. Landlords often give steep discounts to 'good tenants' they believe will care for their property.
Most importantly, consider the lost opportunity cost of your down payment: what you could be earning by investing your equity in something other than real estate. With stocks or bonds, for example, you can earn a minimum of three to four per cent with a very conservative, low-risk investment. If you have a $20,000 down payment, that means you are foregoing at least $600-$800 a year that this money could be earning you.
You may be tempted to think that you can easily earn that kind of return on the value of a home, as house prices climb to teetering levels and buyers engage in wild bidding wars for the luxury of overleveraging themselves to buy their dream home. Yet, the definition of a housing 'bubble' is an unreal, overly inflated market where people expect prices to rise forever. Depending on the market where you live, you must consider the risk of when the bubble may burst and how you might safely build equity elsewhere. This needs to be factored into the 'true' cost of ownership.
Save the difference
If you find a substantial cost difference between owning and renting and choose to rent, you have a great opportunity to have the best of both worlds — rent the place you want and bank the difference. Of course, there is no financial benefit if you end up using the cost savings to splash out every month on Frette linens, Fall & Barrow paint and a fabulous home theatre system. The wise renter is disciplined enough to invest her monthly cost savings and therefore build that equity that everyone has told you can only come from home ownership.
The long-term view
If you plan to buy a home and live in it for many years or even decades, you will likely ride out numerous market fluctuations, will be more likely to sell at a profit and less likely to find yourself in a negative equity situation. As for Marky Mark, he's probably not in it for the profit; he has his movies for that. We do hope, however, that his foray into Canadian real estate means that he and his "Good Vibrations" will be here for a very long time.
Golden Girl Finance, On Thursday August 11, 2011, 10:00 am EDT
Donnie Wahlberg may have been a New Kid on The Block, but his cutie-boy brother Mark Wahlberg, (Marky Mark to those who remember the 90s) has become a new kid on a block in Toronto…in the form of a $12 million penthouse condo. The posh bachelor pad is close to Wahlberg's usual digs at The Hazelton Hotel, where rooms run between $500 to $2400 a night. Given that the star of Boogie Nights, The Fighter and former leader of hip-hop group The Funky Bunch spends an increasing amount of time filming movies in the city and hanging out at the Toronto International Film Festival, it seems he's decided to quit forking over money in hotel room rentals and instead buy his own place.
Wahlberg probably has the advantage of owning his new condo outright, giving him full equity ownership. For the rest of us mortgage-carrying mortals, however, now is not an ideal time to be investing in a condo in Toronto. According to Ben Rabidoux, financial adviser, real estate expert and author of the website The Economic Analyst (www.TheEconomicAnalyst.com), in most Canadian cities right now (but certainly not all), the house price versus rent ratio and the house price versus income ratio are at or near their all-time highs. This suggests that, overwhelmingly, it makes better financial sense to rent in these markets and invest your equity elsewhere.
There is no free equity
Building equity is undeniably a wise financial move. The mistake many people make is equating equity with a mortgage. A mortgage doesn't give you equity; equity is only as much as you pay. A down payment is equity. Anything you pay toward the principle of your mortgage is equity. Paying interest to the bank is as useful to your financial situation as paying rent to your landlord.
If you start out with a very small down payment and arrange for a long future of low monthly payments, your ability to build equity before selling your home becomes seriously limited. With less than 15 per cent equity, you may end up merely trading one mortgage for another. If there is a drop in the housing market, the value of your home could fall to the point that if you were to sell it, you would owe more on your mortgage than the actual selling price of the house. Once it's sold, you'd have to write the bank a cheque to make up for the difference. This is called a 'negative equity' situation and while it's a worst case, it happens more often than you might realize.
Renting space or renting money?
Most likely, everyone from your father to your banker has drilled the idea into your head that renting is a waste of money and buying a home is the only prudent way to build equity. According to Rabidoux, this is not always the case, especially in markets that are currently overvalued and highly vulnerable to a real estate crash, such as Vancouver, Victoria and the Toronto condo market.
"There is a very unfortunate stigma attached to renting," Rabidoux says. "This is dangerous and damaging to many people's finances. The reality is that the majority of new home 'owners' are still renters; they've just gone from renting space to renting money." With rents in large cities exceptionally cheap compared to owning, home ownership becomes a very steep tax on those unwilling to crunch the numbers or who give into the societal pressure to buy. Don't be that girl!
Comparing the costs
Rabidoux suggests wannabe-homeowners start by figuring out the monthly costs of owning a home. Calculate the mortgage principal and interest, taxes, insurance and any additional monthly payments such as condo fees. Also add the often ignored but very necessary maintenance costs — two per cent of the cost of the house per year is a good rule of thumb — then divide by 12 to get a monthly cost.
Next, figure out what it would cost you to rent a similar property in the area. Kijiji and online classifieds are a good place to start. Realtors can also help with rent statistics. Remember that rent is often negotiable, particularly if you don't have pets or kids, if you do have a stable job, are a non-smoker and have good references. Landlords often give steep discounts to 'good tenants' they believe will care for their property.
Most importantly, consider the lost opportunity cost of your down payment: what you could be earning by investing your equity in something other than real estate. With stocks or bonds, for example, you can earn a minimum of three to four per cent with a very conservative, low-risk investment. If you have a $20,000 down payment, that means you are foregoing at least $600-$800 a year that this money could be earning you.
You may be tempted to think that you can easily earn that kind of return on the value of a home, as house prices climb to teetering levels and buyers engage in wild bidding wars for the luxury of overleveraging themselves to buy their dream home. Yet, the definition of a housing 'bubble' is an unreal, overly inflated market where people expect prices to rise forever. Depending on the market where you live, you must consider the risk of when the bubble may burst and how you might safely build equity elsewhere. This needs to be factored into the 'true' cost of ownership.
Save the difference
If you find a substantial cost difference between owning and renting and choose to rent, you have a great opportunity to have the best of both worlds — rent the place you want and bank the difference. Of course, there is no financial benefit if you end up using the cost savings to splash out every month on Frette linens, Fall & Barrow paint and a fabulous home theatre system. The wise renter is disciplined enough to invest her monthly cost savings and therefore build that equity that everyone has told you can only come from home ownership.
The long-term view
If you plan to buy a home and live in it for many years or even decades, you will likely ride out numerous market fluctuations, will be more likely to sell at a profit and less likely to find yourself in a negative equity situation. As for Marky Mark, he's probably not in it for the profit; he has his movies for that. We do hope, however, that his foray into Canadian real estate means that he and his "Good Vibrations" will be here for a very long time.
Wednesday, August 10, 2011
Housing could get boost from market chaos
The upside in a global stock market rout may ironically be a healthier housing market – at least in the short term, say economists.
“The housing market has nine lives. Every time interest rates are supposed to go down, something happens and it helps to keep the market going,” said Benjamin Tal, senior economist at CIBC World Markets.
Interest rates were supposed to be headed up before the crisis of terrorist attacks in New York on 9/11, and the last crash in 2008. But that didn’t happen. And it looks like rates will be staying down for a while, says Tal.
The market is already betting that Bank of Canada Governor Mark Carney’s plans to hike interest rates as soon as September will have to be put off until the end of next year.
South of the border, the Federal Reserve said Tuesday that it expects “exceptionally low levels of the federal funds rate at least through mid-2013.”
And ironically, while the U.S. has experienced a downgrade in its credit rating from Standard & Poors, investors have continued to pile into the Treasuries market.
The U.S. dollar remains the global reserve currency as investors head for shelter as they find few safe haven options out there.
The demand for treasuries means that yields have gone even lower. Which means there is downward pressure on longer-term interest rates. Long-fixed term rates are affected by a variety of factors such as competition for funds in financial markets and to prices in the bond market. Short-term rates are more affected by the key overnight central bank rate.
“The interest rate environment will continue to be very attractive for homebuyers for both short term and longer term borrowing costs. With the safety of U.S. bonds that’s keeping longer term rates low,” said Scotiabank economist Adrienne Warren.
Industry groups are warning, meanwhile, that during an already tough recovery, any sudden move upward in rates could have dire consequences on real estate sales.
“The very recent global economic news demonstrates the Bank of Canada needs to consider any future rate hikes with extreme caution, as the recovery may be more fragile than believed,” said Ontario Home Builders’ Association President Bob Finnigan.
Some investors may also be looking at real estate assets for a place to park their money because of the volatile stock market, said Tal.
Lance Dore, a member of the U.S.-based Royal Institution of Chartered Surveyors, says investment in real estate may be a beneficiary from those looking for safe haven.
“The sell-off of stocks is a clear signal that people are not confident in the future and want safety now. What has also happened in the past declines in the stock market is a flight to quality,” said Dore. “Real estate tends to be the recipient as part of this flight. Real estate values are at all-time lows with returns at all-time highs. The convergence of excess cash due to stock sell-off and corporations flush with cash for investment will push these excess funds into the inevitable diversification to real estate.”
While the future for the stock market looks shaky, the real estate sector is improving due to improving fundamentals based on increasing rents, absorption of distressed supply and increased interest for diversification, said Dore.
However, if the stock market continues on a downward path, housing will not escape unscathed. While lower interest rates are a huge mitigating factor, the losses on the market may eventually translate into job losses.
For one thing, it takes confidence to plunk down that down payment for a home. It usually means that you’ve got a job, some savings, and hope for the future.
But confidence is not in abundance in global stock markets this week as concerns over sovereign debt have panicked investors. Without confidence, the housing market – the biggest ticket item on the consumer checklist will suffer no matter how low rates go, say economists.
In the United States, where more than a quarter of borrowers have negative equity – meaning they owe more than their homes are worth – this could mean another setback for the already beleaguered market.
In Canada, where markets have been stable, and have been forecast to cool down next year, this could mean that sales and valuations may come down to earth quicker than expected.
“Assuming the volatility and uncertainty continues in the markets it will have negative implications for both potential home buyers and for builders,” said Scotiabank economist Warren. “There is still a big difference between Canada and the U.S. But it certainly reinforces our view that growth in Canada and internationally will be on the soft side.”
So far, economists have not changed their outlook on the Canadian housing market. Most expect the market to flatline or correct slightly by next year. But that could change if the rout continues.
“If this is the precipitation of a larger more protracted slowdown for the economy it will certainly affect housing,” said Peter Norman, chief economist real estate consultancy Altus Group.” If we get into a soft patch with slower employment growth then we will see slower home sales. For investors who are speculating on future events this adds another layer of uncertainty in the market. So this would cause them to sit on the sidelines.”
In separate reports on Tuesday, Canadian housing starts surprised by rising unexpectedly in July, climbing to a 15 month high, up 4.3 per cent to 205,100 units according to the Canada Mortgage and Housing Corporation. And U.S. home values actually had the smallest drop in four years in the second quarter according to figures released by Zillow Inc.
But this was before the impact of the stock market drop which will affect confidence as consumers suffer from a declining wealth effect. During a recession, the high end of the market, of purely discretionary purchases such as cottages and luxury condos might be the first to feel the impact. But a lack of confidence will affect all sectors of the market.
“We continue to hold that new home construction will start to cool in the second half of the year, but this may come more slowly than anticipated as rates remain low for longer,” said Arlene Kish, principal economist for IHS Global Insight. “On the other hand, if the recent slide in financial markets remains persistent, consumers will become less optimistic and will likely stay away from home purchases.”
“The housing market has nine lives. Every time interest rates are supposed to go down, something happens and it helps to keep the market going,” said Benjamin Tal, senior economist at CIBC World Markets.
Interest rates were supposed to be headed up before the crisis of terrorist attacks in New York on 9/11, and the last crash in 2008. But that didn’t happen. And it looks like rates will be staying down for a while, says Tal.
The market is already betting that Bank of Canada Governor Mark Carney’s plans to hike interest rates as soon as September will have to be put off until the end of next year.
South of the border, the Federal Reserve said Tuesday that it expects “exceptionally low levels of the federal funds rate at least through mid-2013.”
And ironically, while the U.S. has experienced a downgrade in its credit rating from Standard & Poors, investors have continued to pile into the Treasuries market.
The U.S. dollar remains the global reserve currency as investors head for shelter as they find few safe haven options out there.
The demand for treasuries means that yields have gone even lower. Which means there is downward pressure on longer-term interest rates. Long-fixed term rates are affected by a variety of factors such as competition for funds in financial markets and to prices in the bond market. Short-term rates are more affected by the key overnight central bank rate.
“The interest rate environment will continue to be very attractive for homebuyers for both short term and longer term borrowing costs. With the safety of U.S. bonds that’s keeping longer term rates low,” said Scotiabank economist Adrienne Warren.
Industry groups are warning, meanwhile, that during an already tough recovery, any sudden move upward in rates could have dire consequences on real estate sales.
“The very recent global economic news demonstrates the Bank of Canada needs to consider any future rate hikes with extreme caution, as the recovery may be more fragile than believed,” said Ontario Home Builders’ Association President Bob Finnigan.
Some investors may also be looking at real estate assets for a place to park their money because of the volatile stock market, said Tal.
Lance Dore, a member of the U.S.-based Royal Institution of Chartered Surveyors, says investment in real estate may be a beneficiary from those looking for safe haven.
“The sell-off of stocks is a clear signal that people are not confident in the future and want safety now. What has also happened in the past declines in the stock market is a flight to quality,” said Dore. “Real estate tends to be the recipient as part of this flight. Real estate values are at all-time lows with returns at all-time highs. The convergence of excess cash due to stock sell-off and corporations flush with cash for investment will push these excess funds into the inevitable diversification to real estate.”
While the future for the stock market looks shaky, the real estate sector is improving due to improving fundamentals based on increasing rents, absorption of distressed supply and increased interest for diversification, said Dore.
However, if the stock market continues on a downward path, housing will not escape unscathed. While lower interest rates are a huge mitigating factor, the losses on the market may eventually translate into job losses.
For one thing, it takes confidence to plunk down that down payment for a home. It usually means that you’ve got a job, some savings, and hope for the future.
But confidence is not in abundance in global stock markets this week as concerns over sovereign debt have panicked investors. Without confidence, the housing market – the biggest ticket item on the consumer checklist will suffer no matter how low rates go, say economists.
In the United States, where more than a quarter of borrowers have negative equity – meaning they owe more than their homes are worth – this could mean another setback for the already beleaguered market.
In Canada, where markets have been stable, and have been forecast to cool down next year, this could mean that sales and valuations may come down to earth quicker than expected.
“Assuming the volatility and uncertainty continues in the markets it will have negative implications for both potential home buyers and for builders,” said Scotiabank economist Warren. “There is still a big difference between Canada and the U.S. But it certainly reinforces our view that growth in Canada and internationally will be on the soft side.”
So far, economists have not changed their outlook on the Canadian housing market. Most expect the market to flatline or correct slightly by next year. But that could change if the rout continues.
“If this is the precipitation of a larger more protracted slowdown for the economy it will certainly affect housing,” said Peter Norman, chief economist real estate consultancy Altus Group.” If we get into a soft patch with slower employment growth then we will see slower home sales. For investors who are speculating on future events this adds another layer of uncertainty in the market. So this would cause them to sit on the sidelines.”
In separate reports on Tuesday, Canadian housing starts surprised by rising unexpectedly in July, climbing to a 15 month high, up 4.3 per cent to 205,100 units according to the Canada Mortgage and Housing Corporation. And U.S. home values actually had the smallest drop in four years in the second quarter according to figures released by Zillow Inc.
But this was before the impact of the stock market drop which will affect confidence as consumers suffer from a declining wealth effect. During a recession, the high end of the market, of purely discretionary purchases such as cottages and luxury condos might be the first to feel the impact. But a lack of confidence will affect all sectors of the market.
“We continue to hold that new home construction will start to cool in the second half of the year, but this may come more slowly than anticipated as rates remain low for longer,” said Arlene Kish, principal economist for IHS Global Insight. “On the other hand, if the recent slide in financial markets remains persistent, consumers will become less optimistic and will likely stay away from home purchases.”
Tuesday, August 9, 2011
v
Harper urges calm as stock markets tumble on financial woes
BRASILIA - Don’t panic.
That was Stephen Harper’s message today as the Toronto stock market plunged to its lowest point in almost a year on the first day of trading after the United States had its credit rating bumped down a tier.
“To date, this doesn’t change our overall assessment,” the prime minister said during a visit to the Brazilian capital.
“Notwithstanding the fragility of the economy and the headwinds that are there, we believe that a gradual recovery can continue. Our policies have been achieving that in Canada.”
The Toronto Stock Exchange and Wall Street’s main market both fell 300 points in afternoon trading, while the price of gold soared as investors looked for shelter in a rout sparked by the historic downgrading by Standard & Poor’s.
At a signing ceremony with Harper for several modest bilateral deals, Brazilian President Dilma Rousseff criticized the credit-rating agency for an “incorrect assessment.”
“We do not agree with the rushed evaluation, a little bit too quick evaluation, and I would even say incorrect assessment made by Standard & Poor’s which reduced the credit rating of the United States.”
The Prime Minister’s Office later clarified that Rousseff was speaking on behalf of Brazil, not Canada.
Harper opened a four-country tour of Latin America by announcing agreements with Brazil on air transport, social security, Olympic co-operation and international development aid effectiveness.
Harper and Rousseff also announced a business leaders’ forum that would see Canadian and Brazilian executives meet on the margins of high-level diplomatic talks.
“Brazil is a major global economic player and a key priority market for Canada,” Harper said in a press release.
“These agreements will benefit both countries by promoting greater two-way flow of people, goods and services, enhancing our competitiveness and further strengthening our partnership in key areas of shared interest.”
Canada is seeking bilateral free trade deals with a number of countries, placing a special emphasis on the countries of Latin America and the Caribbean.
The Conservative government is eager to make inroads with Brazil in particular, the world’s seventh-largest economy and expected to rise to No. 5 within a few years.
But doing a deal with Brazil is tricky. Brazil needs the consent of Argentina, Paraguay and Uruguay — members of a common South American economic bloc called Mercosur — to enter into such an agreement.
Harper said Canada has begun exploratory talks with Mercosur on a free-trade deal.
Harper’s trip takes him to Brazil, Colombia, Costa Rica and Honduras.
BRASILIA - Don’t panic.
That was Stephen Harper’s message today as the Toronto stock market plunged to its lowest point in almost a year on the first day of trading after the United States had its credit rating bumped down a tier.
“To date, this doesn’t change our overall assessment,” the prime minister said during a visit to the Brazilian capital.
“Notwithstanding the fragility of the economy and the headwinds that are there, we believe that a gradual recovery can continue. Our policies have been achieving that in Canada.”
The Toronto Stock Exchange and Wall Street’s main market both fell 300 points in afternoon trading, while the price of gold soared as investors looked for shelter in a rout sparked by the historic downgrading by Standard & Poor’s.
At a signing ceremony with Harper for several modest bilateral deals, Brazilian President Dilma Rousseff criticized the credit-rating agency for an “incorrect assessment.”
“We do not agree with the rushed evaluation, a little bit too quick evaluation, and I would even say incorrect assessment made by Standard & Poor’s which reduced the credit rating of the United States.”
The Prime Minister’s Office later clarified that Rousseff was speaking on behalf of Brazil, not Canada.
Harper opened a four-country tour of Latin America by announcing agreements with Brazil on air transport, social security, Olympic co-operation and international development aid effectiveness.
Harper and Rousseff also announced a business leaders’ forum that would see Canadian and Brazilian executives meet on the margins of high-level diplomatic talks.
“Brazil is a major global economic player and a key priority market for Canada,” Harper said in a press release.
“These agreements will benefit both countries by promoting greater two-way flow of people, goods and services, enhancing our competitiveness and further strengthening our partnership in key areas of shared interest.”
Canada is seeking bilateral free trade deals with a number of countries, placing a special emphasis on the countries of Latin America and the Caribbean.
The Conservative government is eager to make inroads with Brazil in particular, the world’s seventh-largest economy and expected to rise to No. 5 within a few years.
But doing a deal with Brazil is tricky. Brazil needs the consent of Argentina, Paraguay and Uruguay — members of a common South American economic bloc called Mercosur — to enter into such an agreement.
Harper said Canada has begun exploratory talks with Mercosur on a free-trade deal.
Harper’s trip takes him to Brazil, Colombia, Costa Rica and Honduras.
Monday, August 8, 2011
U.S. will take a long time to dig out of this hole
By David Olive Business Columnist
How to put this politely? While not a deadbeat, the U.S. is no longer among the world’s most creditworthy nations. America now has a lower credit rating than Liechtenstein. And the Toronto-Dominion Bank.
Mind you, that’s a matter of opinion.
On Friday, U.S. credit rating agency Standard & Poor’s for the first time in 70 years stripped the world’s largest economy of its top, triple-A rating on America’s $14.3 trillion in government debt. S&P dropped its rating a notch, to AA-plus.
But the two other members of the U.S. ratings oligopoly, Moody’s Investors Service and Fitch Ratings, earlier in the week reconfirmed their top rating on U.S. debt.
Just 16 of the 126 nations whose debt is rated by S&P earn its coveted triple-A rating, Canada among them.
For S&P, last week’s panicky, acrimonious budget-cutting deal that narrowly averted a first-ever default by Washington was a factor in its U.S. debt downgrade.
“(S&P’s) conclusion was pretty much motivated by all of the debate about the raising of the debt ceiling,” John Chambers, chairman of S&P’s sovereign ratings committee, told The Wall Street Journal Friday.
“It involved a level of brinkmanship greater than what we had expected.”
A furious Obama administration pleaded with S&P to hold off on its announcement for a few weeks of further assessment, arguing that such a historic decision should be free of political considerations. But S&P was having none of that.
In S&P’s view, the intransigence of hard-right U.S. deficit hawks, notably the so-called Tea Partiers, is highly relevant in determining a nation’s ability or willingness to honour its debt obligations.
“The kind of debate we’ve seen over the debt ceiling has made us think the United States is no longer in the top echelon on its political settings.” That’s Chambers’ gentle way of saying that America’s political class can no longer be relied upon to expertly manage the nation’s finances.
China’s central banker, Zhou Xiaochuan, was a little blunter, depicting the Americans as a threat to the world economy. “Big fluctuations and uncertainty in the U.S. Treasury market will influence the stability of international monetary and financial systems, thus hurting the global economic recovery,” the chief of the People’s Bank of China said last week.
China, the world’s largest creditor nation, holds about $2 trillion worth of U.S.-denominated securities.
For years, the U.S. has been hectoring Beijing on everything from its allegedly overvalued currency to human rights abuses to intellectual property theft.
You can sense Zhou relishing this moment to return fire: “We hope that the U.S. government and the Congress will take concrete and responsible policy measures . . . to properly deal with its debt issues, so as to ensure smooth operation of the Treasury market and investor safety.”
Stop playing with matches, is Beijing’s humiliating admonition to the U.S. And really, there’s no snappy comeback to that, although the state Xinhua News Agency was piling it on in labelling the recent Washington budget debate a “madcap farce” (we know, we know) and U.S. debt a “ticking bomb.”
Typically, a lower debt rating means steeper borrowing costs, for consumers, business and government. Debt issuers must offer a higher rate of interest to attract buyers of higher-risk securities.
But hold on.
As noted, S&P is an “outlier” in banishing the U.S. from the triple-A club. Also, the U.S. owes most of its debt to itself. Less than one-third of U.S. government debt is held by foreigners, while most of crisis-stricken Greece’s debt is owed to offshore lenders. And U.S. Treasurys are still unmatched as a safe store of value for investors worldwide.
Yet for many economic observers, S&P’s move is overdue.
Across a range of factors — including anemic GDP growth, still-declining house values, a 9.1 per cent jobless rate, stagnant middle-class incomes and recent inflation in food, gasoline and apparel prices — the U.S. economy has been underperforming for years. Layering unmanageable debt atop that plethora of sickly leading indicators made a U.S. debt downgrade inevitable.
Felix Salmon, the top economics analyst who blogs at Reuters, expects the U.S. has lost its triple-A rating forever. “If we came that close to defaulting,” Salmon writes, “there’s no way that our securities can be risk-free.” The downgrade, he says, is “merely a late-to-the-party recognition of that fact.”
I don’t know about forever. But it will take a lot of convincing for S&P to restore America’s membership in the triple-A fraternity. We should know. S&P downgraded Canada in 1992, when we seemed blasé about a record $43 billion deficit.
Not until Canada was well into its 11-year run of consecutive budget surpluses — unmatched by any G8 nation — did S&P deign to restore our triple-A status, in 2002.
Elapsed time: nine years and nine months.
How to put this politely? While not a deadbeat, the U.S. is no longer among the world’s most creditworthy nations. America now has a lower credit rating than Liechtenstein. And the Toronto-Dominion Bank.
Mind you, that’s a matter of opinion.
On Friday, U.S. credit rating agency Standard & Poor’s for the first time in 70 years stripped the world’s largest economy of its top, triple-A rating on America’s $14.3 trillion in government debt. S&P dropped its rating a notch, to AA-plus.
But the two other members of the U.S. ratings oligopoly, Moody’s Investors Service and Fitch Ratings, earlier in the week reconfirmed their top rating on U.S. debt.
Just 16 of the 126 nations whose debt is rated by S&P earn its coveted triple-A rating, Canada among them.
For S&P, last week’s panicky, acrimonious budget-cutting deal that narrowly averted a first-ever default by Washington was a factor in its U.S. debt downgrade.
“(S&P’s) conclusion was pretty much motivated by all of the debate about the raising of the debt ceiling,” John Chambers, chairman of S&P’s sovereign ratings committee, told The Wall Street Journal Friday.
“It involved a level of brinkmanship greater than what we had expected.”
A furious Obama administration pleaded with S&P to hold off on its announcement for a few weeks of further assessment, arguing that such a historic decision should be free of political considerations. But S&P was having none of that.
In S&P’s view, the intransigence of hard-right U.S. deficit hawks, notably the so-called Tea Partiers, is highly relevant in determining a nation’s ability or willingness to honour its debt obligations.
“The kind of debate we’ve seen over the debt ceiling has made us think the United States is no longer in the top echelon on its political settings.” That’s Chambers’ gentle way of saying that America’s political class can no longer be relied upon to expertly manage the nation’s finances.
China’s central banker, Zhou Xiaochuan, was a little blunter, depicting the Americans as a threat to the world economy. “Big fluctuations and uncertainty in the U.S. Treasury market will influence the stability of international monetary and financial systems, thus hurting the global economic recovery,” the chief of the People’s Bank of China said last week.
China, the world’s largest creditor nation, holds about $2 trillion worth of U.S.-denominated securities.
For years, the U.S. has been hectoring Beijing on everything from its allegedly overvalued currency to human rights abuses to intellectual property theft.
You can sense Zhou relishing this moment to return fire: “We hope that the U.S. government and the Congress will take concrete and responsible policy measures . . . to properly deal with its debt issues, so as to ensure smooth operation of the Treasury market and investor safety.”
Stop playing with matches, is Beijing’s humiliating admonition to the U.S. And really, there’s no snappy comeback to that, although the state Xinhua News Agency was piling it on in labelling the recent Washington budget debate a “madcap farce” (we know, we know) and U.S. debt a “ticking bomb.”
Typically, a lower debt rating means steeper borrowing costs, for consumers, business and government. Debt issuers must offer a higher rate of interest to attract buyers of higher-risk securities.
But hold on.
As noted, S&P is an “outlier” in banishing the U.S. from the triple-A club. Also, the U.S. owes most of its debt to itself. Less than one-third of U.S. government debt is held by foreigners, while most of crisis-stricken Greece’s debt is owed to offshore lenders. And U.S. Treasurys are still unmatched as a safe store of value for investors worldwide.
Yet for many economic observers, S&P’s move is overdue.
Across a range of factors — including anemic GDP growth, still-declining house values, a 9.1 per cent jobless rate, stagnant middle-class incomes and recent inflation in food, gasoline and apparel prices — the U.S. economy has been underperforming for years. Layering unmanageable debt atop that plethora of sickly leading indicators made a U.S. debt downgrade inevitable.
Felix Salmon, the top economics analyst who blogs at Reuters, expects the U.S. has lost its triple-A rating forever. “If we came that close to defaulting,” Salmon writes, “there’s no way that our securities can be risk-free.” The downgrade, he says, is “merely a late-to-the-party recognition of that fact.”
I don’t know about forever. But it will take a lot of convincing for S&P to restore America’s membership in the triple-A fraternity. We should know. S&P downgraded Canada in 1992, when we seemed blasé about a record $43 billion deficit.
Not until Canada was well into its 11-year run of consecutive budget surpluses — unmatched by any G8 nation — did S&P deign to restore our triple-A status, in 2002.
Elapsed time: nine years and nine months.
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