June 2013 Canadian Economic Fundamentals

[Ally]

Condo building pushes housing starts higher




Condo construction in big cities pushed Canada's rate of housing starts up by almost 25,000 units in May to 200,178, Canada's housing agency said Monday.




The Canada Mortgage and Housing Corporation said the figure was up from 175,922 in April. Urban starts were up by 14.6 per cent, led by a 22.2 per cent rise in multiple urban starts such as condos to 114,346 units.





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[Ally]

Canada among best places to live




Canada is among the best places in the world to live, according to a new quality of life measure from a leading international organization that compared rich industrialized nations.




The "Better Life Index" from the Organization for Economic Co-operation and Development launched Tuesday finds Canada among the leaders in most of the 24 indicators measured, everything from hard data dealing with jobs and income, to perceptions of something the OECD calls "life satisfaction."





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[REIN]

Upbeat new housing number could be last hurrah



New housing already purchased and in the pipeline continues to propel the Canadian real estate market but worries persist about what happens when that tap turns off.





For now, the industry got another bit of good news Monday with Canada Mortgage and Housing Corp. saying new home construction or starts reached the lofty 200,000 level in May on a seasonally adjusted annualized basis.





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[REIN]

Where is the job market going? Forward, with some bumps




Job seekers ` and employers ` trying to pinpoint trends in the labour market could be forgiven for feeling whiplash.




Hiring has been bumpy lately, with three months of job creation this year (including a near-record jump in May) and two months of losses. Smoothed-out averages show employers have been adding about 19,000 a month, which is consistent with modest economic growth.





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[REIN]

Small business confidence hits one-year high in May





WASHINGTON (Reuters) - Small business optimism rose to a one year-high in May, a hopeful sign for an economy that has hit a soft patch.




The National Federation of Independent Business said on Tuesday its Small Business Optimism Index increased 2.3 points to 94.4 last month, the highest level since May last year. It was the second straight month of gains in the index.





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[REIN]

May 2013 housing starts in Canada






OTTAWA, ONTARIO`(Marketwired ` June 10, 2013) - Housing starts in Canada were trending at 182,756 units in May compared to 182,971 in April, according to Canada Mortgage and Housing Corporation (CMHC). The trend is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR)[sup]1[/sup] of housing starts.




`The trend in total housing starts was essentially unchanged in May as gains in the multiple starts segment partly offset the moderation in activity that was observed in previous months, especially in Atlantic Canada and Ontario. As a result, the trend in housing activity remains close to its historical average and is in-line with estimates of household formation,` said Mathieu Laberge, Deputy Chief Economist at CMHC.





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[REIN]

TD Canada trust is changing its residential mortgage rates
TD Canada Trust is changing its mortgage interest rates, effective June 11, 2013, as follows:

Special Fixed Rate Offers*

To:

Change:

4-year closed


3.09%


+0.10%






5-year closed


3.29%


+0.20%

*Interest calculated semi-annually, not in advance. This rate is a discount off of posted rate. Offer may be changed, withdrawn or extended at any time, without notice. Not available in combination with any other rate discounts, offers or promotions





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[REIN]

Rise in building permits reflects sense of optimism




As housing starts continue their ho-hum-but-steady pace through 2013, a surge in the number of building permits shows stronger numbers might be around the corner.




The six-month trend for housing starts in Metro was nearly identical in May, at 16,324 units started, compared to April, at 16,370 units started, Canada Mortgage and Housing Corporation reported Monday. The seasonally adjusted annual rates are down significantly from April to May, however, reflecting a swing from 17,986 in April to 14,690 in May.





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[REIN]

Laurentian Bank changes its mortgage rates




MONTREAL, June 11, 2013 /CNW Telbec/ - Laurentian Bank has changed its mortgage rates. The change is as follow:

TERM

RATE

VARIATION

1 year close:





from


3.09%


to


3.14%





+


0.05%






18 month close:





from


3.14%


to


3.19%





+


0.05%






2 year fixed rate:





from


3.14%


to


3.19%





+


0.05%






3 year fixed rate:





from


3.55%


to


3.65%





+


0.10%

Read the full article here.

 

[REIN]

TD Canada Mortgage Rate Hike follows identical move by RBC




TD Canada Trust has joined RBC in hiking its fixed-rate mortgage rates, and experts predict further hikes because Canada`s lenders are seeing their own costs rise.




Effective Tuesday, a five-year closed offer mortgage will go for 3.29 per cent, up from 3.09 per cent, the bank said in a statement.




That follows an identical move by RBC, which hiked its five-year fixed rate to 3.29 per cent last week.





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[REIN]

Spring puts bounce back in Canadian housing prices




TORONTO ` Canadian home prices jumped in May from April as a spring rebound in real estate continued in most cities, offsetting a couple of weak markets, 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 overall prices rose 1.1% in May, the ninth time in 15 years that May prices were up 1.0% or more from April.





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[REIN]

Pace of Canadian hiring to slow





Job seekers should shed any illusions they have that the near-record number of jobs added in May means that the country`s labour market is suddenly booming, according to a new employment forecast.




The pace of new jobs added over the summer months will slow both compared to the previous quarter and last year, says the Manpower Employment Outlook released Tuesday.





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[REIN]

Global energy companies 'dead serious' about BC's natural gas




VICTORIA - Global energy corporations are "dead serious" about investing in British Columbia's potential as a world supplier of liquefied natural gas, said provincial Natural Gas Development Minister Rich Coleman after a $16 billion announcement on Tuesday.




Malaysian national oil company Petronas said the investment would go towards a natural pipeline, LNG plants and an export terminal near Prince Rupert, on B.C.'s northern coast.





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[REIN]

Scotia report counters '30% overvalued' concerns




The bank released its new Global Real Estate Trends report just days after the OECD ranked Canada as the third most overvalued market in the world. Scotia's analysis is relatively cheery by comparison.




Its report argues that Canadian house prices have "levelled out alongside the return of balanced market conditions," with inflation-adjusted prices remaining unchanged compared to the same quarter last year.





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[REIN]

Home prices rise 2%: a crash isn't forecast, but neither are big gains





Canadian home prices rose 2 per cent in May, a slow ascent in an overall reading that masks regional differences.



While prices in Vancouver and Victoria sank, others climbed over the course of the year, according to today`s Teranet-National Bank house price index.





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[REIN]

OECD chief on Canadian housing: It's not a bubble (just way overvalued)





The OECD may rank Canada`s real estate market as one of the most overvalued in the world, but don`t equate that with bubbly.



Angel Gurria, the secretary-general of the Organization for Economic Co-operation and Development told The Wall Street Journal that Canada`s housing market, which has cooled of late, is not in bubble territory, and, separately, that the Canadian economy is in decent shape.





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[REIN]

Sharper housing correction is possible, says BoC





The patient is doing better but is still in intensive care: That`s the Bank of Canada`s latest assessment of risks to the Canadian financial system amid a prolonged period of fragility for the global economy.




Risks to the Canadian financial system `have decreased somewhat` in the past six months, the Bank of Canada said in a report issued Thursday, the first release from the bank under the watch of new governor Stephen Poloz. The bank cited an easing of short-term risks in the U.S. and Europe, the modest global economic recovery ` and a `constructive evolution of imbalances` in Canada`s housing sector as the growth of household lending has tempered.





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[REIN]

What's really wrong with Canada's growth market?




Behind the headline that is our national unemployment rate ` 7.1% at last count, according to Statistics Canada ` is a remarkable story about something called job quality. To understand the labour market, it is necessary to measure more than just how many people are working. We need to look at what those jobs pay, whether they`re full- or part-time roles and who is writing the paycheques. A report published by CIBC World Markets on Monday says that on those measures, the country is moving sideways at best.





The CIBC Employment Quality Index is down more than 14% from the high it reached in the late 1980s, according to the report. Benjamin Tal, deputy chief economist with the firm, writes that `lower-quality employment means that, on average, we have to generate more jobs to maintain the same pace of income growth.`





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[REIN]

Why rising mortgage rates won't tank the economy





Earlier this week, some Canadian banks hiked the fixed rate on their five-year mortgage term by 20 basis points to 3.29%. Not surprisingly, housing bears are proclaiming that mortgage rates are now in an uptrend that will collapse the housing market. While we may be headed into an era of heightened volatility, I`m still not convinced the bell is tolling. Here are some reasons why.







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[REIN]

Two views on jobs and economy




One is that Canada weathered the financial crisis better than any other G-7 country, and that we have more jobs today than before the financial crisis. In other words, we are doing reasonably well.




The other view is that while we have more jobs than before the crisis, the quality of jobs has declined, pay and benefits have fallen for many workers, close to one million workers are stuck in part-time jobs because they cannot find full-time jobs and young Canadians are facing tough times in finding decent entry-level jobs that will set them on a trajectory for promising careers.





Read the full article here.