August 2015 Canadian Economic Fundamentals

[Ally]

Are the critics correct? A vital perspective on Canada's economic record

One of the most egregious examples of failure to present perspective came in the aftermath of the Parliamentary Budget Officer’s report that the federal government’s forecasted $1.4-billion surplus for the 2015-16 fiscal year may turn into a $1.5-billion deficit. Opposition critics smelled blood. NDP Leader Tom Mulcair told reporters, “The Conservatives have always talked a good game on the economy, but they’ve never delivered on either.” Liberal Finance critic Scott Brison said, “Their economic record is in tatters.”

Such over-the-top commentary is just part of the political game, especially so close to an election. But that doesn’t excuse reporters for failing to lend perspective. The most obvious question for Mr. Mulcair and Mr. Brison is, “How significant is a $2.9-billion change in an $890-billion budget?” The answer is that it amounts to less than one-third of 1 per cent.

Read the full article here.

 

[Ally]

Apartment buildings proving to be the place yo be even for publicly traded companies

Investment in the Canadian apartment sector is heating up across the country as vacancy rates remain tight and home prices continue to be out of reach for some households.

Calgary-based Northern Property Real Estate Investment Trust pulled off one of the biggest real estate deals of the year on Monday, buying True North Apartment REIT and a 4,650-suite apartment portfolio that will catapult it to the third-largest publicly traded residential landlord in the country with a market capitalization of $1.2 billion.

Read the full article here.

 

[Ally]

Northern Property deal for True North Apartments creates third-largest trust in ‘bulletproof’ apartment sector

CALGARY — A Calgary-based real estate trust would control one the largest collections of rental apartments in Canada under a proposed three-way deal involving nearly 25,000 residential suites in eight provinces and two territories.

Under the friendly deal announced Monday, Northern Property Real Estate Investment Trust of Calgary will acquire True North Apartment Real Estate Investment Trust of Toronto.

Read the full article here.

 

[Ally]

Is Canada in a recession? The numbers suggest not

Statistics Canada’s release of preliminary merchandise trade figures for June may provide some closure to the debate on Canada’s so-called recession. After a 4-per-cent fall in export volumes over the first five months of 2015, Canada’s sales to foreigners came roaring back, with a 4.8-per-cent increase in June alone. Imports also decreased in volume by 0.9 per cent from May to June.

Read the full article here.

 

[Ally]

How investors can profit from the low Canadian dollar

One of the biggest stories as of late has been the massive decline in the Canadian dollar against the U.S.


dollar. The loonie is currently sitting slightly off an 11-year low, and is trading at only US$0.76. The implications of this for Canadian stocks can be huge, and Canadian companies with assets in the U.S., or revenues in U.S. dollars will see significant boosts to their earnings and their share price due to the Canadian dollar’s weakness (and in fact, many already have).

Read the full article here.

 

[Ally]

When Equalization payments aren't so "Equal" = reform time as it gives incentive to tax dollar waste

VANCOUVER — Why can Quebec’s and Prince Edward Island’s governments, to name just two, spend $12,000 per person per year on services for their citizens, while B.C. can’t quite scrape up $10,000 for each of us?

Other provinces’ deficits and/or higher taxes are a factor. But a key reason they can spend more than we can boils down to this: They are “poor” provinces, and we are not.



Read the full article here.

 

[Ally]

Why Canadian resource industries matter

Rent-to-own, the often ill-perceived home-buying strategy of the cash strapped in the 1990s, has been gradually re-emerging as a successful win-win way to invest in real estate. Its waning popularity was due in primarily to the relaxed lending environment wherein it was easy for many more people (and in the States, almost anyone!) to get a mortgage. Today, its re-emergence in popularity is due to the tightening of lending policies.

Rent-to-own, also called lease options, has two parts: starting with the lease or “rent” part and finishing with the option for the tenant to purchase.

Read the full article here.

 

[Ally]

Price jump, vacancy shrinks for Vancouver, Toronto

After a trying search, Jacob Butula has finally found a place to rent in Vancouver. But the apartment on the top floor of a house is far from ideal. Only a sheet separates his room from the living room that he will soon share with three roommates.

One roommate has promised to build him a makeshift wooden wall to replace the sheet. But it still means everyone living there will have easy access to his room.

Read the full article here.

 

[Ally]

The sky isn't falling in the Canadian housing market

Despite concerns a couple of Canada's key housing markets are getting overheated, Peter Norman, Chief Economist, Altus Group says the sky isn't falling on the market as supply and demand remain largely in sync

Watch the video here.

 

[Ally]

Calgary housing starts dropping to no one's surprise. Remember that last year held record start numbers, so the drop looks worse than normal. Still, a 30% drop y vs y does hurt the construction industry

Total July starts for Calgary were down 43 per cent from a year earlier, falling to 770 units from 1,354. The slowdown touched both the single-detached market — where starts declined 53 per cent to 310 units — and the multi-family segment, down 33 per cent to 460 units.

“Throughout 2015 we have really seen a slower pace of activity especially compared with 2014 but it’s important to keep in mind that last year was also a record year,” said Richard Cho, a CMHC analyst in Calgary. “The economy has slowed down obviously and the price for oil has played a big role in that. We are seeing slower employment growth, slower migration. These are obviously important factors that help drive housing demand.”

Read the full article here.

 

[Ally]

Chinese Capital seeks expanded global property diversification

According to CBRE's recently published report, The Expanding Role of Chinese Capital in Global Real Estate Markets, over the past four years, annual China-sourced outbound flows to commercial real estate experienced a compound annual growth rate (CAGR) of approximately 72% to reach over $10 billion for the year 2014. This is the first time annual flows have exceeded the $10 billion mark. China also accounted for over a quarter of total outbound commercial real estate investment from Asia during 2013 and 2014.

What began with China's sovereign wealth funds (SWFs) and tier-one insurers purchasing high-profile trophy assets abroad has now spread to acquisitions by mid-tier insurers and corporate investors. Meanwhile, Chinese real estate developers have also been quite active, expanding into overseas markets in a bid to meet increasing demand from mainland HNWIs for residential assets in key destinations.

Read the full article here.

 

[Ally]

Excellent overview how one set of parents are using rel estate, ether than RESPs, to fund their children's future education

People said getting married, starting a new family, moving and having a new career are the most stressful events in life. It is suggested that you should NOT do more than one of these events in one year. And yet we did all of them in one year!

Like most new parents, we had no idea what to do with the new born. I wasn’t expecting how difficult breastfeeding could be and how exhausting my body would become when taking care of a new born. We didn’t know much about sleep training or white noise machines. We let Robin guide us through the new parenting experience.

Read the full article here.

 

[Ally]

There’s no question that over the last 12 months the job market in Alberta has deteriorated. The rate of joblessness in the province has risen from a recent low of 4.3 per cent in early 2014 to 6.0 per cent last month. While that is too high let’s put it into a national and international perspective

There’s no question that over the last 12 months the job market in Alberta has deteriorated. The rate of joblessness in the province has risen from a recent low of 4.3 per cent in early 2014 to 6.0 per cent last month. While that is too high, we still compare favourably with many of our global peers.

The chart below shows a selection of countries around the world and the most recent unemployment rates. Some of the lowest rates in the world are in countries like China and Japan. While the latter of these two countries is struggling economically, its rate of joblessness always remains low.


Read the full article here.

 

[Ally]

Record-breaking outlook for Canada's housing market 2015

Canadas residential real estate market is looking to beat all post-crisis records despite the oil shock according to a new report by Tranio, international real estate broker. Our experts explain how and why the countrys property market is still on course for strong growth.

Price growth: Average prices are growing but the market has chosen its favourites. Location and property type are fundamental factors here. Canadian buyers prefer single-family bungalows, preferably in Toronto and Vancouver, Canadas major business hubs. Agencies and banks disagree as to the forecast of things to come.

Read the full article here.

 

[Ally]

Canadian home prices rise in July to hit another record, despite slump in Calgary and Edmonton

TORONTO — Canadian home prices rose in July from the previous month, the seventh consecutive monthly increase, to hit another record level despite weakness in nearly half of the cities surveyed, the Teranet-National Bank Composite House Price Index showed on Wednesday.

The index, which measures price changes for repeat sales of single-family homes, showed national home prices rose 1.2 per cent last month from June. Prices were up 5.1 percent from a year earlier to a record high.

Read the full article here.

 

[Ally]

Shipping oil through pipeline much safer than on rails report says (revealing the obvious)

Transporting oil and gas by rail is more dangerous than moving it by pipeline, a new study has found.

Oil shipments by rail are 4 1/2 times more likely to have a spill or incident than those pumped through a pipeline, says a report from the Fraser Institute, which examined data from Canada’s Transportation Safety Board and Transport Canada between 2003 and 2013.

Read the full article here.

 

[Ally]

Western Canada leads in first-quarter job vacancies: Statistics Canada

Resource-rich western Canada led the country in job vacancies in the first quarter, a new survey from Statistics Canada showed on Thursday.

The federal agency's largest business survey showed an estimated 399,900 job vacancies in the quarter, with a job vacancy rate of 2.6 percent. By comparison, Statistics Canada's labor force survey had shown an average of 1.3 million unemployed people in the quarter.

Read the full article here.

 

[Ally]

A reality check on the current state of the Canadian Economy ( facts only, no political spin or empty rhetoric)

EDMONTON - The outlook for Canada’s sputtering economy has become a big issue in the most hotly contested federal election campaign in decades.

Unfortunately, many voters have only a tenuous grasp of what makes the economy tick. That makes it easy for vote-hungry politicians to cherry-pick the facts to suit their own agendas.

Read the full article here.

 

[Ally]

More international perspective Stephen Harper wins 'world statesman' award for being a champion of democracy, freedom and human rights

Read the full article here.

 

[Ally]

CMHC’s new rules on allowing Income from secondary suites comes with some strings attached, better check out the WHOLE picture here (rather than the summaries you’ve read on-line):

How the Strategy Works
Secondary suites are an important supply of rental housing in many cities, towns and rural communities across Canada. For example, in 2014, it was estimated that there were about 26,600 secondary units in Vancouver, forming about a fifth of the rental stock. About a fifth of the rental stock in Edmonton is in secondary suites and accessory dwellings, as well. Rents in secondary suites are often lower than those for apartments in conventional rental buildings, and the suites can be developed with no or minimal government assistance. Secondary suites enable low- and moderate-income households to live in ground-related housing in a residential setting.

Not only are secondary suites a source of affordable rental housing, they can also provide the needed extra income to first-time homebuyers for whom that additional income makes housing affordable in high-cost areas. For older households who no longer need a large house, the addition of a suite can generate needed income and security, as well as allow them to continue to live in their neighbourhoods and age in place.

Read the full report here.