July 2011 Canadian Economic Fundamentals

[Ally]

House Price Indicators





SCARCELY has one bubble deflated when another threatens to pop. While America's housing bust`the crash that began the global financial crisis`is near an end, adjustments elsewhere are incomplete. In a few countries, like China and France, values look dangerously frothy. There is always trouble somewhere. And because buying a house usually involves taking on lots of debt, the bursting of this kind of bubble hits banks disproportionately hard. Research into financial crises in developed and emerging markets shows a consistent link between house-price cycles and banking busts.






The Economist has been publishing data on global house prices since 2002. The interactive tool above enables you to compare nominal and real house prices across 20 markets over time. And to get a sense of whether buying a property is becoming more or less affordable, you can also look at the changing relationships between house prices and rents, and between house prices and incomes.





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[Ally]

Politics hamper efforts to solve world's debt crisis





Political bickering in the U.S. and Europe is threatening to derail the economic recovery, as leaders confront the challenge of how to pay down their massive debts.




U.S. President Barack Obama warned Wednesday that budget politics in the United States risk something `worse` than a recession, in an extraordinary sign of his frustration over Republicans` refusal to lift the U.S.`s debt ceiling without significant concessions.








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[Ally]

Most Canadian companies hiring in coming months: Survey





OTTAWA ` Canadians should see a "solid" jobs market for the remainder of the year, according to a newly released survey of hiring managers.









Job-posting website CareerBuilder.ca said the survey conducted on its behalf by Harris Interactive showed 61 per cent of companies questioned said they intend to hire new employees between July and December. That was up slightly from 58 per cent when the same poll was done a year earlier.









"The job growth trend in Canada remains solid, as employers expect to continue to add more positions in the second half of this year,"

CareerBuilder said in a statement.





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[Ally]

House prices may have hit the top






House//www.theglobeandmail.com/report-on-business/economy/housing/house-prices-may-have-hit-the-top/article2089425/#" id="itxthook0" rel="nofollow" class="itxtrst itxtrsta itxthookactive" style="margin-top: 0px !important; margin-right: 0px !important; margin-bottom: 0px !important; margin-left: 0px !important; padding-top: 0px; padding-right: 0px; padding-bottom: 1px; padding-left: 0px; border-style: initial; border-color: initial; outline-width: initial; outline-style: none; outline-color: initial; font-weight: normal; font-style: inherit; font-size: 12px; font-family: inherit; vertical-align: baseline; text-decoration: underline; color: #006400; float: none !important; left: auto; right: auto; top: auto; bottom: auto; border-top-style: none; border-right-style: none; border-bottom-style: solid; border-left-style: none; border-width: initial; border-color: initial; background-color: transparent; line-height: normal; text-align: left; position: static !important; display: inline !important; white-space: normal; font-variant: normal; border-bottom-color: #006400;"> prices have likely peaked after a strong six months, Royal LePage Real Estate Services said Thursday in a market update.


While prices saw big year-over-year price increases in the second quarter, `high house prices are concealing early signs of a moderating market.`


`The market has seen its near-term peak in house pan" style="margin-top: 0px !important; margin-right: 0px !important; margin-bottom: 0px !important; margin-left: 0px !important; padding-top: 0px !important; padding-right: 0px !important; padding-bottom: 2px; padding-left: 0px !important; border-style: initial; border-color: initial; outline-width: 0px; outline-style: initial; outline-color: initial; font-weight: inherit; font-style: inherit; font-size: inherit; font-family: inherit; vertical-align: baseline; color: #006400; float: none; left: auto; right: auto; top: auto; bottom: auto; border-width: initial; border-color: initial; background-color: transparent; line-height: normal; text-align: left; position: static; display: inline; white-space: normal; font-variant: normal; text-transform: none !important; border-width: initial; border-color: initial; border-width: initial; border-color: initial; border-width: initial; border-color: initial; background-image: initial; background-repeat: initial; background-attachment: initial; -webkit-background-clip: initial; -webkit-background-origin: initial;border-style: none;">price appreciation, and a slower second half of the year is expected,` the real estate brokerage said in a statement.





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[Ally]

Housing market has peaked, say Royal LePage





Canada's housing market has hit a peak and will likely slow in the next six months, says one of the country's largest real estate companies, Royal LePage.




"The market has seen its near-term peak in house price appreciation," the company said in a forecast released Thursday. "A slower second half of the year is expected."





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[Ally]

Food prices high, but inflation pressure may ease: FAO





MILAN ` Inflationary pressure from world food prices may be lower in 2011/12 than a year ago as crops are improving, but prices will remain at high historical levels, a senior economist at the United Nations` food agency said.




The UN`s Food and Agriculture Organisation (FAO) raised on Thursday its 2011/12 global grain output view to reflect the latest U.S. data and unexpectedly said world food prices it measures rose one percent in June on higher sugar prices.




Falls in the prices of wheat, corn and soybeans as well as a broad pullback across a wide range of commodity markets in June had been expected to drag on the index and defuse price food inflation, one of the factors which sparked unrest in Arab countries earlier in the year.











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[Ally]

Canada new home prices beat estimates in May





OTTAWA ` New home prices rose 0.4% in May, following a 0.3% gain in the previous month, Statistics Canada said Thursday.







Economists had expected prices to rise by 0.2% for the month.







The federal agency said the biggest month-over-month increase were in Regina, up 1.7 %, the Kitchener`Cambridge`Waterloo region of Ontario, up one per cent, and Toronto-Oshawa, up 0.9%.







Prices were unchanged in seven of the 21 metropolitan regions surveyed by the agency.





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[Ally]

More Canadians planning to buy first home







TORONTO, July 7, 2011 /CNW/ - With a renewed feeling of financial confidence, more Canadians are planning to take the plunge into homeownership in the next two years. According to a poll sponsored by Genworth Financial Mortgage Insurance Company Canada ("Genworth Financial Canada") in collaboration with the Canadian Association of Credit Counselling Services ("CACCS") there has been a significant increase in the number of people planning to purchase their first home, moving from six per cent in 2010 to 11 per cent in 2011.




This annual survey reviews the financial fitness levels of Canadians yearly, as well as their views on homeownership. Of those Canadians who are considering a first home purchase in the next two years, the most likely group to take the plunge include people under 35 (14 per cent), those with children (12 per cent) and those with incomes between $75,000 and $99,000 (11 per cent).




"Canadians recognize that one of the best steps towards financial security is owning a home," said Debbie McPherson, Senior Vice-President, Sales and Marketing of Genworth Financial Canada. "As The Homeownership Company, we help Canadians responsibly achieve homeownership and we're encouraged to see that more people are planning to pursue their dreams of homeownership over the next two years."





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[Ally]

Affordability: How does our housing measure up?





In order for housing to be deemed affordable in our fair country, the cost of maintaining a dwelling must be no more than 30% of the household`s income. Let`s see how some of Canada`s major cities measure up:



See the graph here.

 

[Ally]

Real estate discounters merge





Two companies in Canada's residential real estate market announced a merger Thursday that they promise will create a new network of discount agencies offering lower commission rates.




Moncton-based PropertyGuys.com runs an online network where owners sell their properties themselves. It has 106 locations in more than 600 communities handling thousands of home sales annually.




Realtysellers is a Toronto brokerage firm that offers its services for low commissions or flat fees.




The two said their deal will create one of Canada's largest real estate enterprises. Realtysellers will get access to PropertyGuys.com's customer database while PropertyGuys can offer its clients access to its new partner's discount brokerage services.





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[Ally]

Goldman predicts 20% jump in commodity prices





Commodity prices will move as much as 20 percent higher in the second half of the year and into 2012 as global demand tightens in key markets, a new report by Goldman Sachs says.







`On net, while growth is expected to slow in 2011 from 2010`s above-trend pace, it is expected to remain substantially positive and generally supportive of rising commodity demand,` the authors write. Goldman is advising clients to open a long position in the ICE Brent December 2012 contract.







Goldman says price increases will be the most pronounced `for those markets where supply constraints will become binding, even on slower economic growth.`





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[Ally]

Analysts: Cannadian dollar seen succumbing to U.S. dollar





TORONTO ` Currency analysts polled by Reuters expect Canada`s dollar to stick to current levels over the next few months as the central bank holds rates steady, but they say a wide array of global risks threatens to drag it closer to parity with the U.S. dollar within 12 months.









Median forecasts in a Reuters poll of 49 global foreign exchange strategists released on Wednesday showed the currency is seen at C$0.961 to the U.S. dollar, or $1.0406, in one month and C$0.96, or $1.0417, in three months.









In six months, the Canadian dollar is seen weakening to C$0.975, or $1.0256, and then dropping closer to a one-for-one level with the U.S. dollar in 12 months. The one-year forecast is C$0.99, or $1.0101.















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[Ally]

Economic indicators suggest maybe things aren't so bad




Are things really so bad? Thursday`s indicators suggest perhaps not.




While it would be wonderful if politicians in Europe and Washington would devise coherent strategies to solve their very serious debt problems, the global economy would be put on much surer footing if American companies start hiring people at a decent pace and if China and other emerging markets put a lid on inflation.





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[Ally]

Canada's job creation betas expectations, U.S. falls short




OTTAWA`The Canadian economy created 28,000 jobs last month, helped by a gain in part-time jobs to post its third consecutive month of growth.




By comparison, U.S. employers added just 18,000 workers in June, the fewest number in nine months. Expectations by 85 economists surveyed by the Bloomberg news service for overall payroll increases ranged from 40,000 to 175,000.




Statistics Canada said Friday the country's unemployment rate held steady in June at 7.4 per cent as the number of people entering the workforce increased.





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[Ally]

Employment grows more than expected





OTTAWA ` Canada saw more job gains than expected last month, with most gains in the part-time sector and a hefty decline in self-employed individuals.







There were 28,400 more people employed last month, Statistics Canada said Friday. Economists expected employment growth of 15,000.







The unemployment rate for June was 7.4 per cent, unchanged from May as more people jumped into the job hunt.







It was the third-straight month of job gains. There has been just one month of declines in the last nine, and that was a relatively minor loss of 1,500 in March.




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[Ally]

Canada Post stops accepting mail from corporate clients




Canada Post shut down collection for corporate clients Thursday in its struggle to deal with a mountain of backlogged mail.




`Due to the backlog caused by the recent work disruption, we are unable to accept certain types of mail in the Greater Toronto Area today,` spokeswoman Anick Losier told the Star.




`We simply do not have the space available to induct the mail as we need to process what is currently in the plant and holding areas.




`This situation is temporary and we review this difficult decision daily.`





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[Ally]

Video: Where Canada's jobs are





A look at what the latest labour force survey is telling us about Canadian job and wage growth, as well as how the numbers will be viewed by the Bank of Canada. Derek Holt, Vice-President, Economics, Scotia Capital, explains





Watch the video here.

 

[Ally]

Overheated property markets to flatten: Campbell



RBC raised residential mortgage rates Monday by as much as 15 basis points.





Don Campbell, president of the Real Estate Investment Network, tells BNN the increase will `barely, barely` affect mortgage payments and most of the banks won`t follow RBC's lead.





Campbell says he`d be very cautious about buying properties in overheated areas and to be very aware of what `average price` means. `When you see a 39 percent increase in Vancouver on $3 million dollar sales` that`s obviously skewing the price. It turns the headline into `Average Price in Vancouver is $1 million.`





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[Ally]

Wages lagging behind rising costs




Canadians are being squeezed at either end, trying to keep pace with rising costs as their pay levels lag.




The annual pace of wage growth was 2 per cent in June, according to a Statistics Canada report Friday, a level far below the 3.7-per-cent pace of inflation, an eight-year high. That means real wages are falling.





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[Ally]

Toronto Real Estate Board says competition bureau is 'reckless'




The Competition Bureau is `pressuring` the Toronto Real Estate Board to break the law by releasing private data on the Internet in an effort to make the market more competitive, the board says.




Releasing such information would be a `reckless` move, said the organization in a strongly worded statement Friday in response to new charges by the federal regulator.




`The commissioner is pressuring TREB to make changes to TREB's own property listing system that TREB believes would violate consumer privacy laws, reduce the quality of the system, and diminish protection for consumers who list their homes in the Greater Toronto real estate market,` said board president Richard Silver.





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