January 2010

[Ally]

GTA resale home prices fall, analyst says

Prices of existing homes in the Toronto area are likely to come down a bit in 2010, a forecast says.

The average price of a home at the end of 2009 was $396,200, but housing analyst Will Dunning says he expects that to fall by about 1.6 per cent, to $389,000, by the end of this year.

The big reason is that job creation is still slow relative to the demand experienced in the market, the economist says.

"Housing demand is hugely ahead of the key economic fundamental of job creation. The recent surge of sales and prices is due to low interest rates and fears that rates will rise," says the report, released Thursday.

"This wave has to dissipate eventually and the next nine months will be disappointing compared to the past nine."

So far, the year started off with a bang for realtors, with sales in the first two weeks of January almost double the number from the same time in 2009. Last year was the second-best year on record in the Toronto market.

Read the full article here.

 

[Ally]

Best-ever December for home sales

The strongest December in history for sales of existing homes helped power the Canadian real estate market to a strong finish in 2009.

The Canadian Real Estate Association reported today that 27,744 homes traded hands in December, up 72 per cent from a year ago.

"Sales activity in 2009 came in like a lamb and went out like a lion," said CREA president Dale Ripplinger.

The national residential price was $337,410 in December, up 19 per cent year over year. On an annual basis, prices are up 5 per cent to a record $320,333. Sales are up 7.7 per cent, representing the fourth best year on record.

"The large year over year increase in the national average price in December reflects the high degree to which it was skewed downward in late 2008 by unusually low activity," said the association.

Another reason for rising prices last year was the lack of inventory. However, the trend in December seems to be reversing, with new listings that month up 4.8 per cent from the prior year, the first year over year gain in a year.

Strong prices are driving sellers back into the market, says CREA.

In the Toronto market existing home sales bettered 2008 by 17 per cent, while the average price of a home was up 4 per cent to $395,460.

Read the full article here.

 

[Ally]

Toronto Rising Prices make Home Ownership less affordable

Housing affordability in Toronto continued to deteriorate sharply in the fourth quarter of 2009, thanks to rising home prices.

This is the second consecutive quarter to show a decline, according to Desjardins bank`s housing affordability index.

"The comeback in prices in the second half of the year was very strong," said Hélène Bégin, senior economist with Desjardins. "Nationally, Toronto was the winner in terms of price appreciation, but that caused the drop in affordability."

Even a dip in mortgage rates at the end of the year was not enough to offset housing price appreciation, according to the bank.

"Prices fell sharply after the recession and it bounced right back," Bégin said.

Toronto was in unaffordable territory for much of 2006 and 2007 as the market peaked. But a sharp drop in prices in the fourth quarter of 2008 meant homes became affordable again for much of last year.

However, Bégin forecasts that homes will become unaffordable this year as prices continue to rise in the first quarter. The second shoe to drop will be a rise in mortgage rates in the second half of the year, which will further hurt affordability. The bank forecasts a maximum of one percentage point increase.

Read the full article here.

 

[Ally]

Transition to HST hits sour note

Grant Clark thinks he`s the kind of business owner Ontario wasn`t thinking of when it developed plans for the new, harmonized sales tax.

Mr. Clark is president of Solutions for HR Inc., a small consulting shop he`s operated for the past 15 years. In this economy, potential customers are trying to minimize spending on outside expertise. He`s getting a lot of requests to cut his hourly rate or do some kind of deal.

So he`s not sure what`s going to happen in July when, as a service provider, he`ll need to begin charging clients a full 13 per cent HST, or harmonized sales tax. Previously, his services were exempt from Ontario`s provincial sales tax, and he had to add only the 5 per cent federal Goods and Services Tax, or GST, to his bills.

"My cost to clients is going up 8 per cent, as is anyone`s who sells professional services," he said. "I can see the logic behind it – I understand the goal is to encourage investment by businesses in Ontario. It`s going to be beneficial overall, but there`s going to be an impact on any professional services firm, and I don`t think that was a major consideration by the provincial government."

That concern from the businesses on the front lines, who deal directly with the consumers who will pay higher taxes on certain services, is injecting a sour note into a tax-reform program that accomplishes major, long-standing goals of the business communities in Ontario and British Columbia, which will also fold its provincial sales tax into the federal one this summer.

Read the full article here.

 

[Ally]

Waterloo Region Trendy developments in the right location fill up quickly

WATERLOO REGION — To paraphrase Charles Dickens, it was a tale of two buildings.

While vacant office space was snapped up quickly in the new Bauer Buildings development in downtown Waterloo when it came on the market in the middle of last year, Cambridge Place remains half empty nearly two years after the city vacated the building for its new city hall.

The fate of the two buildings reflects sharp differences in the local office market among the three cities in Waterloo Region at the close of 2009.

With a vacancy rate of 11.5 per cent, office space is scarce in Waterloo. With a rate of 28.5 per cent, anyone looking for desk space in Cambridge can strike a pretty good deal. Aided by spillover from Waterloo, Kitchener falls roughly in between at 17.5 per cent.

Cambridge also has the smallest supply at 800,000 square feet, compared to 2.5 million in Kitchener and 2.1 million in Waterloo.

By year`s end, the office vacancy rate for the region stood at 16.5 per cent, up 1.7 per cent from the previous quarter.

Those figures were presented today during a seminar on the local commercial and industrial real estate markets hosted by Colliers International.

Read the full article here.

 

[Ally]

Municipalities looking at tax levies to raise Hospital cash

The option of a hospital levy to collect part of the funds for Jo Brant`s expansion places Burlington on a growing list of communities looking to special taxes to help fund local health care.

In York Region, a levy could see residents pay $60 more a year on the average bill, part of a commitment to give area hospitals more than $250 million in capital funds through 2031.

Municipal investment in hospital construction and medical equipment is rising, partly due to a change in recent years in the government`s formula for hospital funding.

One of the influences was the decision in the late 1990s to exempt developers from their traditional role in helping to pay for new hospitals to serve the communities they were building.

Today, the province effectively funds 65 per cent of the total cost of hospital construction, including bricks and mortar, furniture and other equipment.

The balance must now come from the local community, whether through taxes, lotteries or other fundraisers.

Read the full article here.

 

[Ally]

Six Nations, Samsung to build $40M Solar farm

Six Nations has inked a deal with Korean corporate giant Samsung to develop a $40-million solar power farm on reserve lands.

The Six Nations project with Samsung C&T Corporation -- part of the $7-billion renewable energy initiative Ontario signed with Samsung and Korea Electric Power Corp. earlier this week -- will cover 40.5 hectares and generate 10 megawatts.

That`s enough to power 2,100 homes.

"Including construction, operations and maintenance, we would employ about 100 people," Cheolwoo Lee, Samsung`s senior executive vice-president, said yesterday.

The reserve would create a utility company to distribute the solar-generated electricity to Six Nations customers and sell excess capacity to the province`s electricity grid, said Chief Bill Montour of the elected band council.

Read the full article here.

 

[Ally]

Camaro races ahead of GM`s profit expectations

DETROIT -- The Oshawa-produced Chevrolet Camaro has become far more profitable to General Motors than original forecasts, company vice-chairman Bob Lutz said.

GM is making an average of $8,000 to $9,000 (US) more per sale than it anticipated on models with transaction prices in the $35,000 to $40,000 range, he said.

"What is especially remarkable is the average transaction price," Mr. Lutz told reporters at the North American International Auto Show.

"It`s way, way higher than we expected it to be and the profitability of the vehicle has turned out to be far better than our expectations."

Mr. Lutz said one of the reasons for the strong profitability is, ironically, fuel economy. GM promoted the V-6, 300-horsepower, more fuel-efficient model with lower pricing and less profit to encourage sales.

The company then overpriced the V-8, the more powerful, less fuel-efficient model, to keep its sales down.

Read the full article here.

 

[Ally]

Better year for new homes in Oshawa predicted in 2010

DURHAM -- Last year wasn`t great for new home construction in the region, but 2010 should be better.

In 2009, construction started on about 980 homes in the Oshawa Census Metropolitan Area, less than half of the 2008 total, according the Canadian Mortgage and Housing Corporation.

"The deterioration of economic conditions during the last months of 2008 and early part of 2009 led fewer households to buy new homes in the area," said Inna Breidburg, CMHC market analyst, in a news release.

But there were more new home sales in the later months of 2009, which will mean more home construction starting in 2010.

There has always been a lag between home sales and the start of construction on homes because developers want to sell a number of homes before starting to build a new community. But higher sales should mean that shovels will be in the ground for new projects, Ms. Breidburg said in an interview.

Historical trends for the year after a recession probably won`t help predictions for 2010 because this cycle is so different from previous cycles, she said.

Read the full article here.

 

[Ally]

$20M eyed for flooding fixes

It could cost $20 million over the next three years to fix the flooding problem in west Ottawa, city councillors learned Friday.

Staff have identified $4 million worth of work needed in 2010, including installation of inlet control devices, improvements to drainage, improvements to the Hazeldean pumping station, modifications to the Monahan drain and improvements to sewer capacity and hydraulics.

Many of those same projects are expected to carry over in 2011 and 2012, but the funding requirements could extend beyond those years, councillors were told Friday in a memo from city infrastructure staff.

Kanata South Coun. Peggy Feltmate said money has been put aside in draft budget estimates for 2010.

"I think it`s an estimate at this point. It will get things well-started for sure," Feltmate said.

A massive rainstorm on July 24 devastated several Kanata-area communities as water seeped into basements, destroying belongings and frustrating residents, many of whom panned the city for not responding fast enough.

Nearly 1,500 basements flooded, plus two sewage pumping stations overflowed and seven road culverts failed. It was billed as a once-in-a-lifetime rainstorm, which dumped more than 100 mm of rain over a 24-hour period in some areas.

The most severely affected community was around Glamorgan Dr. in the Glen Cairn community. Nearly 400 homes in that area experienced basement flooding.

Read the full article here.

 

[Ally]

Auto Industry leads jump in Wholesale sales: StatsCan

Gains in the automotive products sector in Ontario were the main catalyst for a 3.5% jump in wholesale sales in the province in November.

According to Statistics Canada, $21.7 billion in sales were recorded making it the most robust month since September 2008.

Nationally, wholesale numbers gained 2.5% in November to $42.4 billion, the fifth increase in six months. In volume terms, wholesale sales were up 2.1%.

During that period, Canadian wholesalers regained one-third of the losses incurred since the last peak in July 2008.

November`s solid growth was the result of widespread gains, with six of the seven sectors reporting increased sales.

The automotive products sector contributed the most to the rise in November, followed by the food, beverages and tobacco products sector.

Sales in the automotive products sector rose 7.8% in November to $7.3 billion, the eighth increase since the beginning of 2009.

The Stat Can report said it benefited from strong sales in the motor vehicles trade group, reflecting the strength of Canadian imports.

According to the latest Canadian international merchandise trade release, Canadian imports of automotive products rose 9.4% in November, mainly due to increased imports of trucks and other motor vehicles.

Read the full article here.

 

[Ally]

Aaron: Make indoor air quality test a standard part of Real Estate purchases

I`ve always found it strange that the organized real estate community in Ontario is still highly concerned about urea formaldehyde foam insulation (UFFI) in houses, years after it was proved that it carries no health risks, and yet radon gas and other environmental contaminants – which exist in many homes and can be fatal – are hardly ever mentioned in residential purchase agreements.

For several decades, the standard Ontario Real Estate Association agreement of purchase and sale has contained a warranty that the seller has not insulated the house with UFFI. This, despite the fact that 15 years ago a Quebec court ruled, after an eight-year trial, that there was no basis for fear of health risks and no justification for removing UFFI from houses.

Radon, on the other hand, has one known health risk – exposure above certain levels increases the risk of developing lung cancer.

A detailed guide on the website of Canada Mortgage and Housing Corp., CMHC, explains that radon is a radioactive gas that is colourless, odourless and tasteless. It is formed by the breakdown of uranium, a natural radioactive material found in soil, rock and ground water.

When radon escapes from the ground into the outdoor air, it gets diluted and is not a concern.

But when it seeps from the ground into an enclosed, unventilated space like a house, it can sometimes accumulate to high levels and contaminate the inside air.

Read the full article here.

 

[Ally]

Video: Mortgage Analysis: Fixed or Floating?

A discussion with Avery Shenfeld, chief economist at CIBC and dFazil Mihlar about what to do as mortgage rates begin to climb.

Too see the video, click here.

 

[Ally]

Number of EI recipients dips slightly in November: StatsCan

OTTAWA — The number of people receiving employment insurance benefits fell by 7,300, or 0.9 per cent, to 795,940 in November, Statistics Canada reported Friday.

The number has declined slightly since peaking in June at 829,300, the federal agency said. In comparison, from October 2008 to June 2009 the number rose by an average of 41,100 on a monthly basis.

Declines in November were largest in Quebec, down by 3,720, or 1.8 per cent, and British Columbia, down 2,020, or 2.1 per cent.

In all, declines were recorded in seven of the 10 provinces. Saskatchewan`s number didn`t change, while gains were recorded in Manitoba, up 1.5 per cent, and Alberta, up 1.6 per cent.

Nevertheless, compared with 12 months earlier, the number of people receiving regular benefits was higher in November in all census metropolitan areas, which include cities and their surrounding areas.

Read the full article here.

 

[Ally]

Casino Rama signs 20-Year agreement

Rama First Nation breathed a sigh of relief Tuesday after anxiously waiting to hear if Casino Rama would be granted a new operating and development agreement with the Ontario Lottery and Gaming Corporation (OLG).

The Chippewas of Rama will get a 1.9% share of gross revenues from the casino under a new 20-year agreement with OLG.

Casino Rama has had more than $5.2 billion in gross revenues, and profits of about $500 million, since it opened in 1996, and had revenues of $498.4 million for the year ending March 31, 2009.

The share for the Rama First Nation in the first year of the new deal would be approximately $8.8 million, up from $5.8 million under the current arrangement.

The deal includes one-time funding of $2.3 million for a new training and development centre in Rama, $900,000 for a new staff parking lot, a continuation of a $7.8 million service contract for snow removal, fire and police services and another $6.5 million in additional land and building leases.

The long-term agreement ensures the casino`s future for up to 35 years, announced Chief Sharon Stinson Henry along with Chris Bentley, minister of aboriginal affairs.

"So I say to all of you who have been waiting patiently, who have been concerned about your jobs and about your future and about your families, to all of you who have been waiting for new opportunities in your respective communities, the time has come," Stinson Henry told the large crowd inside Casino Rama`s hotel lobby on Tuesday morning.

Negotiations took longer than Rama First Nation had hoped, with the turnover of personnel at OLG slowing discussions.

Read the full article here.

 

[Ally]

Toyota halts sales of eight models

Toyota says it is halting the production and sale of eight recalled models – including its three most popular vehicles in Canada – so it can catch up to accelerator pedal repairs.

The auto giant revealed late Tuesday that it had instructed dealers across the country to halt sales of models already part of a wider recall of 270,000 vehicles that the company announced last week to resolve possible problems with sticking accelerator pedals.

"We are stopping sales and production so we can meet the needs of current Toyota owners of these affected models," Toyota Canada Inc. spokeswoman Sandy DiFelice said.

The company said it needs the accelerator pedals that it normally would use on the assembly line to meet the demand for repairs on cars in the recall list, including the Corolla compact, RAV4 sport utility, Matrix crossover, Avalon and Camry cars, Highlander and Sequoia sport utes and the Tundra truck.

As a result, Toyota will idle output of the Corolla and Matrix in Cambridge and the RAV4 sport utility vehicle in nearby Woodstock during the week of Feb. 1

Read the full article here.

 

[Ally]

Fall in U.S. new home sales fans fears on recovery

WASHINGTON—Sales of newly built U.S. single-family homes fell unexpectedly in December as the bounce from an initial tax credit fizzled, the latest sign that the government-led housing recovery might be losing some steam.

The government report Wednesday came in the wake of a report showing a plunge last month in sales of previously owned homes and continued decline in sentiment among homebuilders, which could bode ill for the broader economic recovery.

New home sales fell 7.6 percent to a 342,000 unit annual rate last month from an upwardly revised 370,000 units in November. It was the second straight month that new home sales declined. Markets had expected a 370,000 unit annual pace from November`s previously reported 355,000 units.

"The figures add to recent evidence that the recovery in the housing market will falter once the fiscal support is removed," said Paul Dales, U.S. economist at Capital Economics in Toronto.

The weak report and investor wariness ahead of the Federal Reserve`s policy statement and President Barack Obama`s State of the Union address later on Wednesday hurt U.S. stocks.

Read the full article here.

 

[Ally]

Ready for less heady home pricing?

Home price appreciation will slow in the Toronto market this year as a looming supply of new homes is completed, giving consumers more choice and helping to mitigate future gains, a bank study said.

"The stock of new construction is rising and that will have the effect of slowing any price increases," National Bank of Canada senior economist Marc Pinsonneault said Tuesday.

Toronto prices were up 4 per cent at the end of 2009, with sales rising 17 per cent year over year, as homes sold in an average of 23 days, the shortest interval in recent history.

However, a record number of completions this year will help bring more listings to the market. Move-up buyers, meanwhile, are expected to put more homes up for sale, alleviating the supply crunch.

Given those factors, the bank echoes other analysts who say price appreciation likely will be much slower, or flat line this year.

"Certain factors lead us to believe the price growth will slow soon," said Pinsonneault in the bank report on real estate.

"The number of homes on the market has been mounting since November and could continue to do so. Recent price increases and the current tight conditions on the resale market have stimulated housing starts ... Once these dwellings are completed and enter the market, they will reduce the scarcity of available homes."

Shaun Hildebrand, senior market analyst for Canada Mortgage and Housing Corp. estimates 36,000 condominiums are under construction for Toronto alone. Another 7,000 single-family homes were being built at the end of 2009.

Read the full article here.

 

[Ally]

Learning tax rules saves time, frustration and earns rewards

Filing your income tax and benefit return is about as much fun as having kids invite you to play Monopoly. Both are long and tedious, and "I`m too busy" is no excuse.

But at least with tax returns there are real dollars to be saved and refunds to be collected. There are also potential benefit cheques (or direct deposits) at stake for parents, low-wage earners, senior homeowners and others.

We will try to point you in the right direction to play a winning game.

The first thing you should know for this year and next, is there`s a new reward, just for filing before April 30.

Most everyone in Ontario past the age of 18 will get cash back in June: $330 for couples and single parents with an income of less than $160,000, $100 for single tax filers with an income of less than $80,000.

The same amounts are to be paid in a second installment in December, and a third in June, 2011, provided you file another return next year.

Partial payments under what`s called the Sales Tax Transition Benefit will go to those with a somewhat higher incomes.

Read the full article here.

 

[Ally]

Signs of growth returning to T.O.

Toronto`s struggling manufacturing sector is set to turn a corner this year, according to a report by the Conference Board of Canada.

"The manufacturing sector has been falling in Toronto since 2006 and we are finally starting to see some signs of life, not only in Toronto but other parts of Ontario as well," said Jane McIntyre, board economist and one of the authors.

The report shows that Toronto will rank second among Canadian cities in economic growth this year, with rebounds expected in all sectors, led by manufacturing and construction.

"Both employment and income in the city are expected to show good growth in 2010, so that will drive the service sector as well," McIntyre said.

Vancouver received top ranking, with the Olympic Games expected to fuel estimated economic growth of 4.5 per cent.

McIntyre said Toronto will experience an estimated 3.5 per cent boost in real gross domestic product in 2010, compared with an estimated 2.3 per cent decline last year. In 2009, Toronto was ranked 15th, she said.

Read the full article here.