20 Dec

Christmas Is A Home Buyer’s Market


Posted by: Kimberly Walker

Christmas is a homebuyer’s market

Garry Marr, Financial Post · Friday, Dec. 17, 2010

Don’t over do it this Christmas, if you want to sell your house, that is.

Royal LePage Real Estate Services says it’s time to start thinking about a smaller tree this year if you plan to list your home for sale over the holiday season. Those large, decorated trees can take over a room and make it appear smaller to potential customers.

The week between Christmas and New Year’s is a slow period for real estate transactions, meaning sellers need any advantage they can muster.

“When people are selling their houses at Christmas time, they are selling under some other stress. They are usually highly motived to sell,” says Dianne Usher, a vice-president with Royal LePage. “You’ve got the euphoria of the holiday season and, oops we have to sell. It’s a great time to buy.”

The real estate company is not being a total Scrooge about the season, it’s just calling for less of everything.

Among its other suggestions are avoiding too many lights and opting for white lights instead of multi-colored flashing bulbs to give your home a neutral glow.

Forget the stacks of presents under the tree too, they just give your home a cluttered look. And those holidays meals may smell great to you, but they are a strange odour to a potential buyer.

“You want to try to tone it down a bit. Take the personal aspect of your home out of it,” says Ms. Usher, adding Christmas marks your home more than usual. “It just adds too much of a distraction to the room.”

But should you have no Christmas decorations? Would that be a turn off to buyers?

“Not in major urban centres because we are so multicultural today,” says Ms. Usher, adding in some rural and suburban centres, a touch of Christmas can be important to selling.

Mary Helen Rosenberg, a partner in Stage To Sell, says the whole idea behind staging is to keep your home as neutral as possible, so it appeals to the widest audience of buyers.

“No, I wouldn’t get rid of the tree all together, but I wouldn’t overdo it with decorations, too,” Ms. Rosenberg says. “You can’t rob the family of traditions. I wouldn’t put the tree up Dec. 1 and take it down Jan. 20. I might close that window and keep it fairly short and allow the family to enjoy its regular traditions. If it’s serious and we need to sell your house, you bring the tree down a little earlier.”

Even the guys who grow the trees say it’s probably not a good idea to have a giant one in the middle of your living room during an open house.

“When it comes to selling a house, it is important to not fill the room with a large and wide tree loaded with decorations. The eyes of the buyer will look at how big a tree is and how small the room is, even if it’s in the basement,” said Lewis Downey, executive director of Canadian Christmas Tree Growers Association.

“I think you do need a tree though. It’s Christmas time and it’s natural to have a tree. If you don’t have a tree, it can have reverse effect and people may say, ‘What’s the matter, there’s no tree. They’re not happy to live there.’”


16 Dec

Showing Your Home Over The Holidays


Posted by: Kimberly Walker

Top 10 Things To Avoid When Selling Your Home Over The Holidays, According To Royal LePage

TORONTO, Dec. 16 /CNW/ – Vacation time and slower work schedules create an ideal time for open houses. However, as homes fill up with presents, decorations and visitors, sellers are often faced with the challenge of striking the right balance between cozy and crammed. Keeping your home tidy and sparingly-decorated doesn’t mean sellers can’t celebrate the season in style, but remember that buyers are looking for just the right amount of sparkle.

“Potential buyers expect that there may be some decorations, but when they arrive they are trying to envision how they would spend their day-to-day lives in the home,” says Phil Soper, president and chief executive, Royal LePage Real Estate Services. “Keeping the holiday decorations to the right level will be easier if you remember the goal is to bring out the home’s structural charm,” Soper adds.

We know that potential buyers can be put off by a home that has too many personal items. So while trying to manage the Christmas clutter, sellers should also remove items that remind buyers that the home belongs to someone else. To assist sellers, Royal LePage compiled a top ten list of things to avoid when selling a home during the holiday season.

  1. Too many lights: A home will dazzle more if lights are kept to a tasteful minimum. Sellers should opt for white lights instead of multi-coloured flashing bulbs to provide a more neutral glow to a home.
  2. Forgetting to clear the snow:  Snow can look beautiful on trees, but driveways and walkways should be cleared as soon as the flakes fall.  Buyers should be able to move freely during an open house so it’s important to remember all the outdoor paths and patios around your home.
  3. No life or landscape: Give buyers a chance to imagine the potential in your landscape. Frost-resistant plants like flowering kale or miniature trees allow sellers to liven up walkways without taking away the buyer’s ability to envision his or her dream outdoor spaces
  4. Not cozy: Everyone appreciates a warm, cozy home – especially in the winter. Set the thermostat at a warm temperature for the whole day, and be mindful that some thermostats have low temperature pre-sets during the day when no one is at home. When the home is attended, fireplaces and candles could also be lit to create a comfortable environment throughout the day.
  5. Engage the senses: Simmering a pot of cider with cinnamon during open houses or showings will create a warm and festive feeling.
  6. Lingering odours: Be aware of those holiday dishes that may leave a strong odour. If possible, wait until showings are completed before cooking those traditional favorites — potential buyers will appreciate a neutral environment.
  7. Hiding a home’s seasonal bests: Photos of the home’s back and front yards, gardens and patios in spring and summer will show potential buyers what the house looks like when it is not buried under snow and when the leaves are still on trees.
  8. Don’t let the tree take over: A smaller Christmas tree, with minimal decorations, will create the appearance of more space. A huge tree, on the other hand, will make the room look smaller, and busy decorations can intensify clutter.
  9. Presents should not be present: It is important to cut back on clutter when showing a home; hide the wrapped presents to keep them out of eyesight.
  10. Too many decorations: Remember, when selling a home during the holidays, less is always more. Whimsical ornaments can be great accents during the holidays, but be mindful not to go overboard. When it doubt, remove it!


15 Dec

Blanket Drive "Best Year Ever"


Posted by: Kimberly Walker

For your information, the following news release was issued by the Fraser Valley Real Estate Board, Real Estate Board of Greater Vancouver and the Chilliwack and District Real Estate Board earlier today.


VANCOUVER, BC – Facing down predictions for severe winter weather this year, the 16th annual REALTORS Care® Blanket Drive received its most overwhelming response to date. The Blanket Drive, which officially took place from November 29 to December 6, collected 5,186 bags of clothing, coats and blankets for dozens of charities across the Lower Mainland.

“The Blanket Drive has always relied on the efforts of our volunteers and the support of our communities,” said Jake Moldowan, President of the Real Estate Board of Greater Vancouver. “Seeing a response of this magnitude, I think everyone involved across the Lower Mainland deserves a pat on the back.”

Support for the Drive, now the largest collection of its kind in the Lower Mainland, ranges from individuals to corporations and retailers, all partnering with local REALTORS® to round-up quality items. In Coquitlam, West49 donated all the jackets (nearly 150) they received from their trade-in program. In Surrey, Terasen Gas employees again held their own mini-campaign collecting 69 bags of donations, as well as the company issuing a cheque to one of the Drive’s recipient charities. For the third year in a row, one of Vancouver’s largest clothing wholesalers, FX Fashion Exchange, donated dozens of boxes and bags of brand new men’s and women’s clothing and coats.

“One of our largest charity recipients in the Fraser Valley told us that the donations were so generous this year that they’ll have enough warm clothing to distribute to people who need it until next spring,” said Deanna Horn, President of the Fraser Valley Real Estate Board.

“Our Drive may last only 10 days, but the assistance lasts for months. This has got to make Blanket Drive supporters feel so good to know the difference they’re making.”

Kyle Hislop, President of the Chilliwack and District Real Estate Board added, “We’ve only been at this for five years now, but the response this year has been one of the strongest.

“When you think about the Blanket Drive being around for as long as it has, it’s pretty amazing to think about how much it has grown and the influence it has developed.”

The previous best year for the Blanket Drive was in 2009 when REALTORS® collected 4,396 bags of donations. Since its inception in 1994, the Blanket Drive has collected more than 27,000 bags of blankets, coats, winter clothing and other items. Donations are distributed for free and stay within the communities in which they are donated, or if the volumes are too large, are shared with the nearest community in greatest need.

For more information, go to www.blanketdrive.ca  or visit our Facebook page at www.facebook.com/realtorscareblanketdrive.


In Greater Vancouver contact: Fiona Youatt, CommunicationsCoordinator, Real Estate Board of Greater Vancouver
Tel: 604.730.3068 email: fyouatt@rebgv.org
In Fraser Valley contact: Laurie Dawson, Communications Coordinator,Fraser Valley Real Estate Board
Tel: 604.930.7657 email: laurie.dawson@fvreb.bc.ca
In Chilliwack & District contact: Joanne Reid, CommunicationsCoordinator, Chilliwack & District Real Estate Board
Tel: 1.604.792.6795 email:

15 Dec

D Stands For Debt


Posted by: Kimberly Walker


Industry News
Monday was D-Day. Statistics Canada reported on it. Bay Street’s economists pontificated on it. And Mark Carney, in his own way, declared war on it. 
“D” stands for debt, and Canada Monday reached a high-water mark: For the first time, household debt hit 148% of disposable income and, for the first time since the late 1990s, topped the US equivalent. 
Carney, the Bank of Canada Governor, warned of the rising debt burden among Canadian families, and the risks they face when interest rates inevitably rise. 
“Experience suggests that prolonged periods of unusually low rates can cloud assessments of financial risks,” he said in a speech in Toronto. “Low rates today do not necessarily mean low rates tomorrow. Risk reversals when they happen can be fierce: The greater the complacency, the more brutal the reckoning.”
Click here for the full Globe and Mail article.
Ask questions first, regulate later. The potential for new mortgage restrictions is again making headlines.
This latest bout of concern is being fuelled, among other things, by:

1) Record consumer debt
2) Mark Carney’s debt warning
3) Concern by TD & BMO’s CEOs over 35-year amortizations
It’s clear that debt-to-income ratios cannot be left unchecked forever. Eventually consumers will have to reign in credit or the government will do it for them. The repercussions are undeniable. Unabated debt can put Canada’s economy in peril. If macro shocks occur, high debt ratios mean people have less ability to weather income reductions or home price declines.
The nightmare scenario is runaway defaults. Defaults sparked by economic crises can create a “negative feedback loop” says Mark Carney. That occurs when desperate home sellers drive down prices and beget more desperate home sellers.
The good news is that Canada’s regulators are keenly aware of these risks. The Bank of Canada, default insurers and major lenders regularly collaborate on ways to control systemic risk. One important tool is “stress testing,” which involves creating “what-if” scenarios using dire economic assumptions.
Click here to read the CanadianMortgageTrends.com article.
BMO encourages Canadians to consider choosing a mortgage with a 25-year maximum amortization to help them save interest costs and pay down their mortgage faster. 
A BMO survey showed that 69% of Canadians are open to the idea of a shorter amortization. 
“While the purchase of a home represents an important investment for many Canadians, those looking to get into the housing market now or in the near future should be considering financially responsible options, such as a 25-year amortization, to ensure they can pay down debt faster and begin saving more for their long-term goals,” said Martin Nel, Vice President, Lending and Investment Products, BMO Bank of Montreal. 
“Canadians should be realistic in measuring what they are able to afford when it comes to the purchase of a home. Taking on a larger mortgage with a longer amortization in order to afford a ‘faux chateau’ will mean carrying the debt load longer and ultimately paying more in interest over the full term.”
Click here to read the BMO press release.
National resale housing activity continues its return to normal levels, having risen in November 2010 for the fourth consecutive month, according to statistics released today by the Canadian Real Estate Association.
Seasonally adjusted national home sales activity via the MLS Systems of Canadian real estate Boards climbed 4.8% in November 2010. Although this is well short of record level activity for the month of November posted a year ago, seasonally adjusted sales now stand 19.5% above levels recorded in July 2010, when it reached this year’s low point.
“Sales activity rose in many local markets but eased in others,” said Georges Pahud, CREA President. “Home buyers and sellers need to recognize that local and national market trends may differ, and for that reason, they would do well to consult their local realtor in order to understand how the housing market is shaping up in their market.”
Click here for the CREA press release.
As some of us are watching our gift budget balloon, it’s easy to think about financial atonement in the year ahead. It’s also easy to feel paralyzed by the endless choices for how to spend, save and invest. 
Stop sweating it. Think about how personal trainers help people get fit: They don’t show them a fancy new way to do a sit-up; they just make sure they do the sit-up. 
The same applies to your financial health, so start by focusing on three core areas.
Click here to read more from the Globe and Mail.
I recently wrote about Mint.com, the personal finance website that now has me poring over every cent I spend. 
Mint helps you keep track of your money by pulling all your income and expenses into one central dashboard. 
Like any new discovery, I was all over the site in the beginning. I could break down my spending by category, set budgets and look at the company’s suggested ways to save money – all of which I find highly entertaining. (I know, I’m a weirdo.) 
But some of the shine has since come off my new-found toy. To be fair, I don’t blame Mint for this. I still think it’s a great site. The problem is my “entertainment” expenses. In the words of Jimmy McMillan, they’re too damn high.
Click here to read more from MoneySense. 

13 Dec

Workers Ages 17 to 24 Years – Limited Jobs


Posted by: Kimberly Walker

Canada’s young workers: the group the economic recovery left behind

By Julian Beltrame, The Canadian Press

OTTAWA – Canada’s falling unemployment rate is hiding an unpleasant truth — tens of thousands are leaving the labour market in frustration, and none more so than young workers.

Last week’s labour force survey for November presented a distorted hall-of-mirrors picture of employment — with the jobless rate falling to a two year low of 7.6 per cent on the strength of little job creation.

For young workers in the 15 to 24-year-old category, the picture was even more distorted — the unemployment rate plummeted from 15 per cent to 13.6 per cent with virtually no new jobs added.

The mathematical disconnect comes about because Statistics Canada does not measure the number of workers against those who want jobs, but against those who are actively looking for work. There have been fewer of those.

Young people are leaving the labour force in droves. According to the agency, the youth participation rate is the lowest in over a decade.

What’s more, while the economy has created over 440,000 jobs since the recession there are 228,000 fewer young people employed.

“A lot of young people are throwing in the towel, saying forget it,” said Brian Bethune, chief Canadian economist with IHS Global Insight.

“There’s an inter-generational imbalance happening. You have a big bulge of baby boomers who have gotten into established positions entitled to three and four weeks vacation and young people can’t find jobs.”

Canadian Auto Workers economist Jim Stanford says there is another “perversity” in the challenge facing youth. As governments toy with the idea of raising the retirement age, young people can’t break into the market at all because older workers are tying up jobs.

Ironically, Canadians 55 and over have done the best since the recession and are the only age group that has seen the participation rate rise in the past year.

Statistics Canada cannot say for certain why more young people have been leaving the workforce, although analyst Lahouaria Yssaad notes that since the numbers are not as stark in the over 20-24 age sub-category, many in the youngest cohort may have gone back to school.

What is obvious, however, is that young people were disproportionately left behind during the recession, and one year removed from the official start of the recovery, they are still having a difficult time re-connecting with the economy.

Nancy Schaefer, president of Youth Employment Services in Toronto, calls it a “crisis” in youth unemployment, and is calling on governments to offer incentives for employers to hire young workers.

YES, which has units across the country, sees the wide range of youth, from those who have never had a job to those who were laid off during the downturn; from those with little education, to graduates. Many struggle, she says, but particularly those with less than a college or university education.

Young workers like 20-year-old Chantelle of Newfoundland, who left her job as a restaurant manager in August and moved to Toronto because she had been told it was a city of opportunity.

It was a decision she wishes she could take back because five months later, she has run out of money and has had to move into a homeless shelter.

“I’ll take anything, but there’s nothing out there,” she says, asking her full name be withheld. “People say they’ll call back, but they never do. I’m not going to stop looking, though, because I want to get out of here.”

Single mother Huda Eldardiry, 23, went through retraining because she was unable to keep working nights as a shoe saleswoman, but has been unable to find work since October. She is not given up, however, so technically she is not yet a frustrated worker.

Unless she gets lucky, though, the data suggest the odds of her finding a job quickly are slim. Schaefer says she’s seen university grads take up to a year to find a job, and in many cases they’ve had to settle for part-time or work outside their area of expertise.

The repercussions for the individual lives in terms of anxiety and living conditions can be severe, but there is also a societal cost to long-term unemployment, she says.

“I hate to say this, but they might find alternative means of employment — working under-the-table or doing illegal activities and that’s not good for anybody.”

Human Resources Minister Diane Finley’s office says the government has programs to help young workers, including for training and tax incentives to employers to hire apprentices. It is unclear whether the next budget will contain any specific measures for youth, although Finance Minister Jim Flaherty has signalled there will be no significant new spending.

What’s happening to youth is an indication that the government’s boasts about a recovering economy are hollow, responded Scott Brison, the Liberal finance critic. He said it is clear some segments of the population are still suffering through a recession.

Analysts consider youth unemployment a the litmus test of labour market strength overall, and by that measure, Canada has still a long way to go before employment stages a comeback.

The trouble with trumpeting that all jobs lost during the recession have been recouped, as the government does, is that it doesn’t take into account that Canada’s population has grown by about almost one million since, and those people need jobs too, says Stanford. As well, many of the added jobs are part-time, or lower-paying service jobs.

Stanford’s analysis of labour trends since the recession shows that if the lower participation among youth and also core workers, those in the 25-54 age category, is taken into account, the jobless rate would be 9.1 per cent, 1.5 percentage points higher than the official rate.

And the number of unemployed would rise to 1.71 million — about 600,000 more than before the recession..

Stanford says there are risks that if the situation persists, cyclical unemployment caused by a recession could become a permanent state of affairs for some workers.

“Sometimes long-term unemployment becomes structural unemployment,” he explained. “Economists call it hysteresis where individuals get used to not working, they lose their contacts, their skills become less sharp and that makes it all the harder to get back to work when conditions improve.”



10 Dec

Watch out for rising debt levels, bank warns


Posted by: Kimberly Walker

Watch out for rising debt levels, bank warns

By Michael Lewis | Thu Dec 9 2010

As shoppers cram the malls this holiday season, the Bank of Canada has a Scrooge-like warning for consumers: Step away from the credit card and think about your ability to pay if borrowing costs rise or you lose your job.

In its twice-a-year economic assessment Thursday, the bank warned that heavily indebted consumers are in the danger zone as the uneven global recovery makes them vulnerable to financial shocks.

In its Financial System Review, the bank said economic risks have increased over the summer on worries about European sovereign debt, the widening global trade imbalance and consumer credit levels that surged during the recession and the early stage of recovery.

It said household debt has risen to 145 per cent of disposable income, with Canadians taking advantage of record low interest rates to buy homes and consumer goods on credit.

Issued two days after the bank held its key interest rate unchanged at 1 per cent, and after Ottawa said the economy contracted in September, the report urged institutions to use caution in issuing loans to Canadian consumers.

The bank said that while there has been moderation in the pace of debt accumulation since June, credit continues to grow faster than incomes.

And while the household sector’s debt-service ratio edged down in the second quarter and remains below the historical average thanks to low borrowing rates, the bank said mortgage and credit card loans in arrears were well above pre-credit crisis levels in the quarter.

Sal Guatieri, senior economist at BMO capital markets, noted that consumer spending has propelled growth in Canada this year, but debt levels will force spending to cool in 2011.

He said households could face the prospect of selling assets to meet credit obligations if interest rates rise and employment falls, a development that would hurt Canada’s finance sector as consumers struggle to make payments.

In a report earlier this month, however, BMO Capital Markets said it does not expect consumers to cut off spending entirely to focus on reducing debt.

It said savings levels remain healthy, while a 12 per cent gain in the value of the TSX main index this year and increased home values, have lifted household net worth to about six times disposable income, up from five times in the 1990s.

“While we are not blasé, we think the singular focus on debt portrays an overly negative picture and therefore an overly negative take on consumer spending,” BMO deputy chief economist Doug Porter said in a roundtable discussion last week.

“We think households can boost spending by 3 per cent next year and while we see a mild slowdown, the emphasis is on mild.”

The central bank review, however, said that “the risk of a system-wide disturbance arising from financial stress in the household sector is elevated and has edged higher since June. This vulnerability is unlikely to decline quickly, given projections of subdued growth in income.”

The central bank also cited threats from trade imbalances that fuel protectionism, arguing that a trade war could not be ruled out, and said sovereign debt impacts may spill over into Canada. It said market concerns over the debt could force countries to reduce deficits more rapidly, resulting in slower global growth.

“A key concern is that acute fiscal strains in peripheral Europe and weaknesses in the European financial system could reinforce each other and have adverse effects on other countries,” the bank said.

Despite its assessment that the domestic financial system remains comparatively sound, the bank said “global financial stability could be undermined by an adverse feedback loop between weak economic activity, fiscal strains and the financial system.”

It said progress was made to ease trade imbalances between consumer and producing nations during the recession, but the gap is widening again as China and other emerging economies continue to fix their currencies at depressed values to encourage exports and discourage consumption of foreign goods.

The bank said governments can reduce risks by acting on plans to rein in deficits, by moving to floating currency exchange rates and by closely monitoring consumer debt.



8 Dec

Interest Rates Held In Check


Posted by: Kimberly Walker

Interest rate held in check


By Julian Beltrame  OTTAWA — Canada’s economy is taking a battering from the high dollar combined with low productivity and still needs the stimulus of low interest rates, the Bank of Canada says.

In a previously telegraphed move, the central bank announced Tuesday it will keep its trendsetting interest rate at one per cent until next year — and likely much longer.

But analysts focused on the accompanying statement from governor Mark Carney, which conceded that both the Canadian and global recoveries are struggling under stiffening headwinds of risk, as a signal of future intentions.

“The global economic recovery is proceeding largely as expected, although risks have increased,” the statement said, citing renewed concerns that European debt woes will spill into global financial markets.

The bank said demand in the U.S., Canada’s largest export market, remains weak, and even generally robust emerging markets such as China and India are seeing a deceleration of economic activity.

“The recovery in Canada, in the second half of 2010, appears slightly weaker than the bank projected” largely as a result of falling exports, it added.

“This underlines a previously identified risk that a combination of disappointing productivity performance and persistent strength in the Canadian dollar could dampen the expected recovery of net exports.”

Statistics Canada reported two weeks ago that the third-quarter current account deficit had hit a record $17.5 billion, with net trade slicing 3.5 percentage points off gross domestic product growth. The strong currency contributes to the deficit in two ways — by making Canadian exports more expensive in foreign markets, and foreign imports less expensive for Canadians.

TD Bank economist Diana Petramala said the cautionary tone of the bank statement likely means it won’t act on interest rates until at least next July.

“At this juncture in time, hiking too soon can be more detrimental to the Canadian economy than keeping rates stimulative for a longer period of time,” she said.

Carney has long expressed concerns about an extended period of super-low interest rates, fearing they could lead to inflation and irresponsible borrowing by consumers, such as occurred in the U.S. following the recession.

But with the U.S. Federal Reserve keeping rates effectively at zero, and in the middle of a second round of quantitative easing that deflates the U.S. dollar, increasing the rate spread between the two countries risks boosting the loonie to even higher altitudes.

The bank had expected the second half of 2010 to be weaker than the first, but nothing like what has come to pass.

After a torrid start to the year that appeared to convince Carney the recovery was well-entrenched — at least enough to hike rates three times over the summer — the last two quarters have sowed doubts.

The first quarter’s 5.6 per cent advance was followed by a cold-shower 2.3 per cent in the second quarter, and a further wake-up call in the third, when growth braked to one per cent. All were lower than the bank had expected.

Meanwhile, Canada’s robust labour market has similarly fizzled — with no appreciable gain in employment since June.

Economists have said most of the problems emanate from the U.S., particularly that country’s weak housing and auto markets, which cut into Canadian exports.

There was some good news on that front Monday with an agreement between President Barack Obama and the Republican Congress to extend Bush-era tax cuts another two years.

In a conference call Tuesday morning, Scotiabank economists predicted next year’s growth in North America, Europe and Japan will be slower than this year’s, although they added a double-dip recession was unlikely.

“The lengthy process of bringing outsized fiscal deficits under control, withdrawing unprecedented monetary stimulus and restructuring the global financial system will impede growth prospects in many countries through mid-decade,” said chief economist Warren Jestin.

The third quarter did see business investment pick up and a better-than-expected bump from consumer spending, but not enough to offset the exports hit, the Bank of Canada said.

Although the bank seldom offers clear guidance on future direction of monetary policy, it noted that “any further reduction in monetary stimulus would need to be carefully considered.”

The statement accompanying the interest rate decision was shorter than normal, suggesting Carney may be preparing for another downward revision on his projections for the economy on Jan. 18, the next scheduled policy announcement date.

The Canadian Press http://news.therecord.com/Business/article/826512


3 Dec

Bank of Canada seen hiking rates in first half of 2011


Posted by: Kimberly Walker

Bank of Canada seen hiking rates in first half of 2011

Claire Sibonney, Reuters ·  

TORONTO – The Bank of Canada is unanimously expected to keep interest rates on hold next week, but the uneven economic recovery has primary dealers and global forecasters divided on the timing of the next hike in 2011.

The Reuters poll, released on Thursday, showed 93% median probability that the Bank of Canada will keep its key rate at 1% at its next policy announcement date on Dec. 7, with all 44 forecasters polled predicting no move.

Among the 42 that forecast the central bank’s next hike, the majority saw it happening in the first half. The median forecast for the May 31 policy date has the rate rising to 1.25%.

But among the 12 Canadian primary dealers — the institutions that deal directly with the central bank to help it carry out monetary policy — the majority forecast rate hikes in the second half with a median prediction of a first hike in July.

When compared with a similar poll taken in October, the more recent survey showed rate hike forecasts had been moved deeper into 2011.

Thirty of the 44 forecasters surveyed say the central bank will still be at 1 percent after March 1, a more pessimistic view than the last poll.

“Given that the Bank of Canada had indicated that they didn’t want to see that great a divergence with U.S. rates and the Fed was actually doing quantitative easing, it made sense to push out the Canadian rate hike as well as opposed to adamantly defending a Q1 move,” said David Watt, senior fixed income and currency strategist at RBC Capital Markets.

“We’ve had a lot of recovery and we’re seeing some fade at the present time, so you get that caution that maybe the domestic side of the economy is not strong enough to offset the still sizable trade hit and currency strength.”

A report out on Tuesday showed Canada’s economy disappointed in the third quarter with the weakest growth rate in a year, while the economy shrank outright in September, adding pressure on policy makers to safeguard the patchy recovery.

Bank of Canada Governor Mark Carney in October gave a blunt assessment of the global and Canadian economic recoveries, saying the central bank would plot its next move with extreme caution.

Massive new monetary stimulus by the U.S. Federal Reserve to support a flagging U.S. economy also prolongs low rates south of the border, and Canada is seen not wanting to race too far ahead of its largest trading partner.

Mr. Watt noted that a concern for the central bank has been a Canadian dollar strengthening near parity without having seen a strong rebound in oil and natural gas prices.

“Sluggish Canadian growth and an elevated exchange rate will keep the Bank of Canada on hold until well into 2011 if, as we expect, core inflation readings return to their more muted earlier monthly trend,” said Avery Shenfeld, chief economist at CIBC World Markets.

“The U.S. Fed should still be on hold at a near-zero funds rate in early 2012, and wider interest-rate differentials would push the (Canadian dollar) to levels that would be too damaging to Canada’s export prospects.”

Estimates of the central bank’s target for the overnight rate by the end of 2011 range between 1% and 2.5%.

Next on the domestic data front, analysts will keep a close eye on the monthly jobs report on Friday and inflation figures later in the month.

Read more: http://www.financialpost.com/news/Bank+Canada+rate+hike+seen+first+half+2011/3916924/story.html#ixzz1707v8WNk


2 Dec

Fraser Valley Real Estate: News Release: December 2, 2010


Posted by: Kimberly Walker

News Release: December 2, 2010


(Surrey, BC) – For the fifth consecutive month, sales processed on the Fraser Valley Real Estate Board’s Multiple Listing Service® (MLS®) have remained stable with November’s figures showing a modest increase over October.


“Consumers are responding to how prices have moderated in the last six months, in addition to the double dip in mortgage rates,” says Deanna Horn, Board president.


“Buyers are optimistic because of the improved economic conditions, which is why we’re seeing consistency in homes sales in the Fraser Valley.”


A total of 1,084 sales were processed on the Board’s MLS® in November, an increase of 7 per cent compared to 1,014 sales in October and a decrease of 29 per cent compared to 1,522 sales in November of last year.


The Board received the fewest number of new listings this year to date with 1,773 new properties coming on stream in November, a 17 per cent decrease from October and a 15 per cent decrease compared to November 2009. The Board finished November with 9,049 active listings, 5 per cent fewer than in October and an increase of 9 per cent compared to the 8,334 properties available in November 2009.


Horn says, “It’s not unusual to see a dip in new listings at this time of year, however the level of home-buying interest, in particular for homes priced competitively, is stronger than we expected given we’re approaching the holiday season. That combination continues to have a stabilizing effect on home prices in the Fraser Valley.”


The benchmark price for Fraser Valley detached homes in November was $504,848, down 0.2 per cent compared to October and 1.4 per cent higher compared to $497,697 in November 2009.   


The benchmark price of Fraser Valley townhouses in November was $319,623, a 0.2 per cent increase compared to October and a 1.2 per cent increase compared to November 2009 when it was $315,890.


Year-over-year, the benchmark price of apartments increased 2.7 per cent going from $235,842 in November 2009 to $242,276 last month and 0.7 per cent higher compared to October 2010.


Information and photos of all Fraser Valley Real Estate Board listings can be found on the national, public web site www.REALTOR.ca. Further market statistics can be found on the Board’s web page at www.fvreb.bc.ca. The Fraser Valley Real Estate Board is an association of 2,918 real estate professionals who live and work in the communities of North Delta, Surrey, White Rock, Langley, Abbotsford, and Mission.

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1 Dec

Economy growth slows during summer months


Posted by: Kimberly Walker

Economy growth slows during summer months

By Julian Beltrame

OTTAWA — Canada’s economic recovery all but flatlined during the summer, as the high dollar sabotaged the ability of manufacturers to sell their goods to foreign markets.

Statistics Canada reported Tuesday that the July to September period saw the economy slow to a crawl, eking out a one per cent gain in gross domestic product.

That’s about half a point less than analysts and the Bank of Canada had been expecting, and compares unfavourably to the U.S.’s 2.5 per cent advance during the same period.

“The story is staring us in the face. We can thank a strong Canadian dollar for a not-so-strong Canadian economy,” said CIBC chief economist Avery Shenfeld.

“Our exports to the U.S. are floundering in quarters in which the U.S. has seen a huge rise in its overall imports.”

Exports declined 1.3 per cent on a quarter-to-quarter basis, a whopping five per cent on an annual basis. The trade imbalance — imports rose 6.4 per cent annualized — sliced about 3.5 per cent off the gross domestic product.

The other major weakness was residential construction, which fell an annualized 5.3 per cent annualized.

Economists had expected a weak quarter, but not this weak. The consensus was for a growth rate of about 1.5 per cent, while the Bank of Canada had forecast a 1.6 per cent advance.

Part of the surprise was that September, the last month of the quarter, showed the economy contracting 0.1 per cent, when a flat or tiny uptick had been expected.

The September data is also giving a weak send-off to the fourth-quarter performance, which won’t be known for some time.

“In a nutshell, this result is a clear disappointment,” said Douglas Porter of BMO Capital Markets. “Bottom line for the Bank of Canada — there’s zero rush to raise (interest) rates again.”

Bank governor Mark Carney is due to make his next interest rate announcement next week, but few expect him to move the policy rate above the current one per cent.

TD Bank economist Diana Petramala said her bank’s view is that Carney won’t move again on interest rates until the third quarter of next year, an opinion shared by Shenfeld.

Still, she said she expects the third quarter to have been the bottom of the economic deceleration, and that the fourth quarter will see a modest improvement to about two per cent.

The markets saw little to like in the GDP numbers, taking it out on the loonie in early morning trade. The dollar fell over 80 basis points to 97.34 US.

Statistics Canada did upgrade second-quarter growth somewhat by three-tenths of a point to 2.3 per cent, but that effect was offset by a downward revision of the first quarter to 5.6 per cent from the previously reported 5.8.

For the year so far, Canada’s economic speed is barely ahead of the U.S.

Based on recent performance, however, it’s no contest — the U.S. economy advanced by 2.5 per cent in the third quarter, compared to Canada’s one per cent.

The welcome news in the report was that, as expected, Canadian businesses were finally taking advantage of the high dollar to purchase machinery and equipment and gear up for future production. Investments in machinery and equipment rose 6.5 per cent in the quarter — 29 per cent annualized — led by purchases in industrial machinery, and computers and other office equipment.

On a year-to-year basis, business investment was up 8.7 per cent, as opposed to the 20-per-cent decline of 2009.

Consumers also played their part, spending 3.5 per cent annualized more on services, cars, and clothing and footwear. The Canadian Press http://news.therecord.com/Business/article/822230

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