July 2013 Canadian Economic Fundamentals

[Ally]

Home sales heat up, but rising rates could cool the market



Home buyers extended a trend of increasing sales into its fourth consecutive month, according to the Canadian Real Estate Association as mortgage rates also crept up last month.





However, economists suggested Monday the higher rates could help cool the market through the second half of the year.





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[Ally]

Canadian property prices up almost 5% year over year





The national average sale price in Canada has increased by almost 5% year on year and sales are up 3.2% on a monthly basis, according to the latest data from the Canadian Real Estate Association (CREA).







The actual, not seasonally adjusted, national average price for homes sold in June 2013 was $386,585, an increase of 4.8% from the same month last year.





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[Ally]

Canada to see employment fall, says OECD





PARIS ` Unemployment rates in Canada and the United States will fall significantly by the end of next year but the overall rate among some of the world's advanced economies will remain high, the OECD forecasts in a report issued Tuesday. For the 34-country Organization for Economic Co-operation and Devepment, overall unemployment is projected to fall slightly next year to 7.8 per cent from eight per cent. In Canada, which weathered the latest recession better than many other advanced countries, the unemployment rate was 7.1 per cent in the first quarter of this year and is projected to fall to 6.7 per cent by the end of 2014.







Read the full article here.

 

[Ally]

Canadian housing starts stronger than expected



TORONTO ` Canadian housing starts were stronger than expected in June and May figures were revised higher, according to data released on Tuesday, the latest report to show the property market rebounding from last year`s government-induced slowdown.





The seasonally adjusted annualized rate of housing starts was 199,586 units in June, according to data from the Canadian government`s housing agency. Analysts polled by Reuters had expected 187,000 starts in June.





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[Ally]

Overnight rate to remain at 1%




The overnight rate target will remain at 1%, the Bank of Canada announced this morning, keeping the interest rate at the same level it has been since September 2010.










This is the first interest rate decision by Stephen Poloz, who took the reins as central bank governor in June.





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[Ally]

Canada's invisible housing correction





Fears that Canada`s residential real estate market is headed for a downturn appear to have subsided following a positive June sales report from the Canadian Real Estate Association (CREA). Month-over-month resales (on a seasonally adjusted basis) rose for the fourth consecutive time in June. The Multiple Listing Service (MLS) Home Price Index is also up for the fifth straight month.





Read the full article here.

 

[Ally]

Poloz's first decision




Bank of Canada Governor Stephen Poloz kept his main interest rate unchanged at his first policy decision and said there will be a `gradual normalization` of borrowing costs over time as slack in the economy disappears and inflation picks up.




Policy makers led by Poloz kept Canada`s benchmark rate on overnight loans between commercial banks at 1 percent for the 23rd consecutive announcement in Ottawa today, as forecast by all 20 economists in a Bloomberg News survey.





Read the full article here.

 

[Ally]

The top 4 risks facing Canada's economy



The Bank of Canada maintained on Wednesday its trendsetting policy rate at the super-low level of 1% and declared the monetary stimulus will remain until economic conditions improve.





The bank did adjust upwards Canada`s growth rate for this year to 1.8% from its previous call of 1.5%, but that was almost entirely due to a stronger than anticipated first quarter.





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[Ally]

Bubbles forever




NEW HAVEN ` You might think that we have been living in a post-bubble world since the collapse in 2006 of the biggest-ever worldwide real-estate bubble and the end of a major worldwide stock-market bubble the following year. But talk of bubbles keeps reappearing ` new or continuing housing bubbles in many countries, a new global stock-market bubble, a long-term bond-market bubble in the United States and other countries, an oil-price bubble, a gold bubble, and so on.




Nevertheless, I was not expecting a bubble story when I visited Colombia last month. But, once again, people there told me about an ongoing real-estate bubble, and my driver showed me around the seaside resort town of Cartagena, pointing out, with a tone of amazement, several homes that had recently sold for millions of dollars.



Read the full article here.

 

[Ally]

We're missing jobs, not skills, says Mr. Kenny


This week`s cabinet shuffle was probably the first in history unveiled on Twitter. And cabinet`s most pugnacious tweeter, Jason Kenney (the new Minister of Employment and Social Development), wasted no time going online to map out his coming approach. Within minutes of his appointment, he tweeted, `I will work hard to end the paradox of too many people without jobs in an economy that has too many jobs without people.`







Read the full article here.

 

[Ally]

Job gains in Canada slow during June




Canadian employment was little changed in June, government figures showed, following the biggest gain in a decade the month before.




The Vancouver Sun Employment fell by 400 last month after May's surge of 95,000, while the jobless rate was unchanged at 7.1 per cent, Statistics Canada said in Ottawa. Economists surveyed by Bloomberg News projected a 7,500 job decline The Vancouver Sun brand is a highly visible to ensure it always appears consistent





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[Ally]

Canada's inflation rate jumped 1.2% in June





OTTAWA ` Consumer prices picked up speed last month, fueled by higher the cost of gasoline and cars, but that is unlikely to nudge Canada`s monetary policymakers any closer to a change in interest rates.




The annual rate of inflation was 1.2% in June, up from 0.7% the previous month, but in line with economists` forecasts and matching the level last seen in February.





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[Ally]

Pick the right term, pay of mortgage faster




The trick to making a mortgage disappear faster is to minimize your total borrowing cost. And nothing dictates total borrowing cost more than the term you chose.




Picking the right term is even more important than selecting the best lender, choosing the appropriate mortgage features and finding the lowest rate. Choosing the wrong term can lock you into a punitive rate for years to come or, conversely, expose you to rising rates because you haven`t locked in for long enough.





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[Ally]

Forestry firms eye $1B in spending





J.D. Irving Ltd. and other forest companies are willing to spend $1 billion on mill upgrades and silviculture if the provincial government will guarantee the companies enough long-term access to Crown land, according to an official.







Read the full article here.

 

[Ally]

Canadian oil storage hubs set to expand 25% by 2015




CALGARY ` The Canadian crude oil hubs of Hardisty and Edmonton in Alberta are embarking on a major round of storage expansion that should boost capacity by about 25 percent and provide more scope for trading oil sands crude production.




According to company data and estimates from energy intelligence firm Genscape, the projects should add around 9 million barrels of capacity over the next two years.





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[Ally]

Canada, U.S. in economic role reversal




It's hard to believe, but true: Canada and the United States are now entering the fifth year of economic recovery from the recession that hit both countries over 2008-09.




In the U.S., the downturn first took hold in late 2007 and extended through the next 18 months. After enduring its worst slump in 50 years, the American economy officially stopped shrinking in June 2009. Since then, the U.S. has enjoyed 15 consecutive quarters of growth in inflation-adjusted gross domestic product (GDP), although the expansion has been sluggish by historical standards. Indeed, America's economy has been growing at barely half the pace typical of previous recession-recovery cycles. Moreover, per capita GDP has yet to return to its 2007 level, and employment remains well below its prerecession peak.





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[Ally]

Foreign workers doubled as youth joblessness peaks




Despite an unemployment rate that spiked in 2009 and remains high, the number of temporary foreign workers in Canada has more than doubled over the last six years, according to the Conference Board of Canada.




In 2006, there were 150,000 temporary foreign workers employed in Canada. By December 2012, that number had more than doubled to 340,000.





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[Ally]

Stunning jump in retail sales point to stronger economic growth: economists





OTTAWA ` Canadian consumers went on a shopping spree in May, triggering a stunning jump in retail sales that will almost certainly help boost second-quarter economic growth beyond expectations.



The raw numbers stunned economists who had expected a modest 0.4-per-cent bump. Instead, Statistics Canada said the retail sector boosted sales five times that by 1.9 per cent during the month to $40.4 billion.





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[Ally]

Designing a rental unit calls for a different approach




There are definitely dos and don`ts when it comes to designing a rental space. You`ll want to consider the needs of your dream tenant, without being so specific with your design choices that you alienate good potential renters. Like staging a home for sale, you want to remove personal furnishings, so that people can envision themselves living in your condo. Pink chairs, nude art and bar carts are not in everyone`s vision.




Like you, Susan Rogers of Susan Rogers Design Consulting (RogersDesign.ca), who designed the fabulous living room in the photo, bought this condo with her husband, Scott, as an investment property. You can checkout their fully furnished rental condo on fivehanna.com.





Read the full article here.

 

[Ally]

Home values will survive boomer sell-off




It's a question that can create severe anxiety disorder among baby boomers: who will buy their single-family homes when they decide to downsize into smaller units? Pessimists believe baby boomers will soon flood the market with detached homes as health and financial issues force them to sell, creating an oversupply situation that forces prices down.




But a Conference Board of Canada report Monday said new young families and increased levels of international immigration should boost the demand for single-family homes in the future, at least partly offsetting any increase in the supply of baby boomers' homes for sale.





Read the full article here.