28 Jan

Canadians Moving To Another Province 20 Year High


Posted by: Kimberly Walker

Migration at 20-year high

Nicolas Van Praet, Financial Post · Thursday, Jan. 27, 2011

MONTREAL — The number of Canadians moving to another province has punched to a high not seen in 20 years as people pack up in search of better jobs and salaries elsewhere.

Roughly 337,000 Canadians were on the move in 2010, says a report on interprovincial migration published Thursday by TD Economics. That’s 45,000 more than the year before and the most since the late 1980s. It also represents the largest share of the overall population since 1998.

“It’s a good sign in the sense that whenever you see that kind of movement, it’s an expression of a labour market that’s healing after a pretty severe recession,” said TD senior economist Pascal Gauthier, who wrote the study. “People are either returning home or moving to areas that didn’t have employment before. For those that are already employed, they’re finding potentially better prospects.”

Interprovincial migration matters because when there is a net movement of people to higher-employment and higher-productivity areas, that generates net economic output gains on a national basis. It’s also crucial for businesses because people often make big-ticket purchases when they move, which can have a significant impact on local housing and retail markets.

Canada’s situation lies in stark contrast with the United States, where census data show long-distance moves across states fell last year to the lowest level since the government began tracking them in 1948. Americans used to be a nation of big movers, with as many as one in five relocating for work every year in the 1950s. Now, experts are debating why they’ve become a nation of “hunkered-down homebodies,” as the New York Times put it.

Richard Florida, director of the Martin Prosperity Institute at the University of Toronto, says the United States is experiencing a new kind of class divide now between “mobile” people who have the resources and flexibility to pursue economic opportunity, and “stuck” citizens who are tied to places with weaker economies.

He argues the U.S. housing crisis is a big factor slowing mobility down. When the housing bubble popped, it left millions of Americans unable to sell their homes. “It’s bitterly ironic that housing, for so many Americans, has gone from being a cornerstone of their American dream to being a burden,” he wrote in a recent opinion piece.

Mr. Gauthier agrees that the housing crash is partly to blame for keeping Americans put. “There’s such a glut of supply that it’s just difficult to sell your house. In Canada, that’s not been an issue.”

In Canada, the biggest impediment to the free flow of labour between provinces and territories remains regulation as occupational requirements fall under provincial jurisdiction.

Workers in regulated professions and skilled trades, such as teachers and engineers, still face major barriers trying to work in provinces other than their own. Solving that problem will be key ahead of the looming labour force crunch, Mr. Gauthier argues.

Alberta, B.C. and Saskatchewan have seen the strongest net inflow of people of all provinces for the past three years and that will not change in the short term, the TD report forecasts. The three jurisdictions are working to implement a newly signed trade and labour mobility agreement between them that could eventually see seamless movement of workers between their borders.

TD says Ontario and Quebec will continue to lose residents to other provinces on a net basis, but the bleeding will be at a slower pace than in previous years. It says Manitoba and Prince Edward Island will be the only provinces still shedding a significant share of residents through the end of 2012.

In Manitoba’s case, it’s not that there aren’t any jobs. The province’s unemployment rate has been consistently lower than that of the rest of Canada since the 1990s. It’s that people are being lured by the prospect of higher-paying jobs in neighbouring provinces.

26 Jan

Consumers More Hopeful About Jobs, Finances and Purchases


Posted by: Kimberly Walker

Canadian, U.S. consumers more hopeful about jobs, finances, purchases

By Julilan Beltrame, The Canadian Press

OTTAWA – North American consumers are starting to feel better about their personal finances and the economy, a hopeful sign for the still fragile recovery.

Two fresh surveys, one by the Conference Board in Canada and another from the International Monetary Fund in the U.S., detected an identical pattern of rising confidence in January, although relative optimism continues to be stronger north of the border.

Canada’s confidence index rose 7.1 per cent this month to 88.1 points, the highest since the initial optimism coming out of the recession in the latter half of 2009 and early 2010.

Overall, the U.S. measure still lags Canada but in January it reached its highest level in eight months, rising to 60.6 from 53.3 in December, according to a Conference Board survey there.

Releases from both the IMF and the Conference Board note that levels are still below what would be considered positive, although they are improvements over recent months. Analysts generally welcomed the stronger consumer sentiment.

“In all, better consumer expectations in January bode well for a continued upturn in consumption…which will in turn prove supportive of overall economic activity,” said Martin Schwerdtfeger and economist with the TD Bank.

The increases follow a month of generally more upbeat economic news, particularly in the U.S., which has seen the early stages of an employment recovery and strong manufacturing activity.

But Conference Board of Canada economist Pedro Antunes said while positive news played a part, both in Canada and the U.S., there is also a predictive element to the surveys.

“This is really about looking ahead…and people are a little more optimistic,” he said.

Still, some economists cautioned against reading too much into surveys — for instance, whether more upbeat consumers will translate into more sales of homes, cars and appliances.

“It’s actions that speak louder than words,” said Scotiabank economist Derek Hold. “The way people manage their money and spend can be very different from how they say they will.”

While conditions appear to be improving, that comes after last year’s summer period faced generally downbeat news, when Canada’s recovery slowed to one per cent and the U.S. became so weak both the central bank and the government launched a second round of stimulus measures.

On Monday, the International Monetary Fund gave a modified thumbs up to the global recovery, while noting that advanced countries, including Canada and the U.S., will continue in the slow-growth lane for the next two years.

The IMF predicted Canada’s growth will average 2.3 per cent this year and 2.7 per cent in 2012 — one-tenth of a point less than the Bank of Canada’s estimate of the previous week. The U.S. will grow by three per cent and 2.7 per cent in the next two years, largely thanks to stimulus, the Washington-based financial institution said.

Both countries will get a better measure on how their economies are progressing in just over a week’s time when employment figures for January are released.

Canadians’ rising confidence was seen across a range of measures, but not uniformly across the country.

One of the clearest signals was that 28.1 per cent of respondents said they expect their financial situation to improve in the coming six months, up 3.3 percentage points. The number who felt the next six months looked worse, dropped by 0.7 point to 15.1 per cent.

The respondents were also more confident about Canadian labour markets, with those who felt job opportunities would increase over the next six months rising 1.4 percentage points, while those who felt conditions would get worse falling 2.7 points.

There was also a clear signal that more respondents felt good about making a major purchase, although the optimistic camp and pessimistic group each represented about 44 per cent of respondents.

“Whether this sudden improvement on the major purchases question can be sustained remains to be seen. But, coupled with the increasing optimism about future employment opportunities, it does suggest healthy consumer consumption going forward,” the Conference Board said.

Regionally, confidence rose the strongest in Ontario and the Prairies. Quebec registered a modest increase and British Columbia and Atlantic Canada were slightly less optimistic than they were in December.

The Canadian finding is based on the result of over 2,000 interviews conducted between Jan. 6 and 17. The margin of error is estimated at plus or minus 2.2 percentage points.

19 Jan

What’s Affecting Your Credit Score?


Posted by: Kimberly Walker

What’s affecting your credit score?

Garry Marr, Financial Post · Tuesday, Jan. 18, 2011

I still have an Eaton’s department store credit card even though there is no where to shop with it.

That hasn’t stopped the long-forgotten card from making its way on to my credit report and ultimately affecting my credit score.

When contacted by a representative of TransUnion LLC — one of two companies providing credit ratings in Canada, the other being Equifax Inc. — for a story about how to improve credit ratings I decided it would be a good time to check my own score.

TransUnion gave me a code to download my score, something that normally costs $14.95 for a one-time credit profile and another $7.95 to get your credit score. The company also offers a program that allows you to monitor both whenever you want for $14.95 a month.

“One of the benefits of checking your credit report is to make sure information is accurate and up to date,” says Tom Reid, director of consumer solutions for TransUnion.ca, referring to opened accounts you may have forgotten about.

So how did I do? I scored 786 out of 900, considered “good” and better than 66.02% of the population. But I somehow feel like the kid who got a B on an assignment. I want that A.

According to my report, I have too many bank or national revolving accounts on my credit report. I have three major credit cards, American Express, Visa and MasterCard. I have a car loan and an unused line of credit with my bank.

That Eaton’s card probably didn’t help my score and then there’s the Hudson’s Bay card account that was still open that I haven’t used in a decade. Show me a Canadian who hasn’t opened up one of those to get the 10% discount. I just never closed mine.

There are five different categories that go into a credit score. The first is on-time record of payment — got that covered. Next up is the number of inquiries or applications for credit.

You remember getting that credit card for a free tee-shirt at a hockey game or signing up for the department store card to get the discount and then destroying it. You think that doesn’t matter? Think again.

“It could potentially have a negative impact on your score,” says Mr. Reid, about applications I’ve made to various department stores over the years. Fortunately, I haven’t made any in the last two years.

Your utilization of credit is also a major factor — that’s your balance divided by available credit. It’s not based on whether you have a balance at the end of the month but it’s the balance outstanding at a given moment divided by your available credit.

“If that number exceeds 40%, that is typically a warning sign,” says Mr. Reid, noting a higher credit limit will keep that percentage down.

The last factors are longer term credit history and the breadth of your credit, somebody who has just one credit card doesn’t look as strong as someone who also has a line of credit and say a mortgage.

“It’s a fantastic credit score,” says Mr. Reid, about my result, adding I shouldn’t have a problem getting credit. Yeah but my editor who took the same test scored 831.

All of this may just seem like a vanity project but there are real problems you can encounter with bad credit and a poor rating, says Vince Gaetano, a principal broker with Monster Mortgage.

“A number of things can happen if you don’t have a good score. Right now 680 seems to be the cut off for buying a home with mortgage [default] insurance,” says Mr. Gaetano. “If you are below 600, you are in real trouble, you are going to a B leader.”

Those lenders will just kill you on interest rates — 5% to 6% compared to 2.25% —not to mention the fact you’ll need to have at least a 20% deposit on your home.

Then there’s the fees for bad credit. Lenders charge 1% of the value of the mortgage for people with bad credit. Who wants to pay $3,000 extra on a $300,000 mortgage. The broker will also demand 1% because your bad credit means the bank is not compensating the broker for you, the questionable customer.

What’s the worst score Mr. Gaetano has seen. “Somebody had like 430-something. I mailed them a bullet. I wouldn’t lend a guy like that $5 for lunch. That’s happens when you stop paying everybody,” he says.

I’m starting to feel better about my score. But I still cancelled my open HBC card and started to investigate how one goes about cancelling a credit card for a store that no longer exists.  : http://www.financialpost.com/personal-finance/What+affecting+your+credit+score/4126038/story.html#ixzz1BTyII8NL

17 Jan

New Tighter Mortgage Rules


Posted by: Kimberly Walker

The Finance Minister announced some new mortgage rules that will affect the mortgage and real estate industry. I would suggest you contact any clients and Realtors that you are dealing with that may be sitting on the fence about purchasing or re-financing to make their decision now.


Here’s a summary of the decisions made:


  1. High ratio financing amortized at a maximum of 30 years instead of 35 years. This is for purchase and refinances with less than 20% down, however, you may see some lenders follow suit with conventional financing.
  2. Refinances can only go to a maximum of 85% instead of the current 90%.
  3. Removing federal government backing on HELOCs (home equity lines of credit).


These changes take effect March 18th, except for the HELOC rule which takes effect April 18th.


Again, if you have anyone who has been sitting on the fence waiting out the interest rates to purchase a property or refinance their home and they need to refinance at 90% or need the 35 year amortization I suggest you contact them immediately to get them in before the deadline date.

13 Jan

Loonie Will Stay At Par


Posted by: Kimberly Walker

Flaherty: loonie will stay at par with U.S. thanks to “sound” fiscal situation

By Lee-Anne Goodman, The Canadian Press

WASHINGTON – The Canadian loonie will hover at parity with the U.S. dollar for some time to come, and deservedly so thanks to Canada’s economic strength, Finance Minister Jim Flaherty said Wednesday.

“This is a new world,” Flaherty told reporters after speaking about controlling debt at a think-tank discussion at the Woodrow Wilson International Center for Scholars in the U.S. capital.

The high Canadian dollar reflects a “sound fiscal situation” in Canada, he added.

“It is unreasonable, given those fundamentals, for anyone in Canada to expect the Canadian dollar to go back to the days when it was significantly devalued vis-a-vis the U.S. dollar…. it makes sense for the Canadian dollar to be much closer to the U.S. dollar that it was for some years.”

The Canadian dollar hit a two-and-a-half year high earlier Wednesday of $0.9848, or US$1.0154. It closed the day at $0.9869 to the U.S. dollar, or US$1.0133. The loonie’s been at or near parity with the U.S. currency for weeks, a state of affairs that causes headaches for Canadian exporters who get paid in American dollars.

That’s why Ottawa is throwing a lifeline to exporters and manufacturers by lowering corporate taxes, reducing tariffs and extending an accelerated capital cost write-off, Flaherty said.

The capital cost measure allows companies to accelerate the rate at which they can write off investments. It was scheduled to expire in 2011.

The finance minister spoke to the media after an event that proved something of a Canadian love-in. Those in attendance included Gary Doer, the Canadian ambassador to the U.S., and astronaut Julie Payette, who recently signed on for an eight-month stint as a public policy scholar at the Woodrow Wilson Center.

“We look at Canada as a good example of what we ought to do on several different fronts,” David Biette, the director of the centre’s Canada Institute, told Flaherty.

The finance minister also said Canada would put global financial standards in place well before deadlines imposed by the Basel Committee of international bank regulators.

The new regulations, dubbed Basel Three, are supposed to be in place by 2019. But Flaherty said Canada will move much faster than that, adding the new rules aren’t onerous for Canadian financial institutions since they already practise so many of them.

The new standards would require banks to prepare for economic recessions by holding onto more cash and assets that can be easily sold off. They aim to ensure taxpayers aren’t on the hook when a financial institution fails amid a global financial meltdown.

“It’s an advantage for our financial system to move more quickly to the Basel III standards,” Flaherty said. “It creates more business confidence. It creates more confidence outside of Canada for direct investment in Canada.”

Have a great day!

11 Jan

Home Equity Loan Surge


Posted by: Kimberly Walker

Home-equity loans surge twice as fast as mortgage growth: BoC

Paul Vieira, Financial Post · Monday, Jan. 10, 2011

OTTAWA — Home-equity lines of credit surged 170% over the past decade, or twice the rate of mortgage growth, a Bank of Canada deputy governor said Monday as she acknowledged keeping interest rates low “create their own risks” for the economy as they pertain to household debt levels.

Agathe Côté said home equity loans, whose popularity grew as housing prices climbed and interest rates remained low, helped Canadians buy goods, such as additional real estate, or pay off higher-interest consumer debt. So-called HELOCs — secured loans that carry lower rates of interest compared to unsecured financing — now account for 12% of all household debt, which as of the third quarter was at a record high, or the equivalent to 148% of disposable income.

“If there were a sudden weakening in the Canadian housing sector, it could have sizable spillover effects on other areas of the economy, such as consumption, given the high debt loads of some Canadian households,” she said in remarks delivered to the Canadian Club of Kingston, Ont.

Data collected on behalf of the central bank suggest roughly one-third of the financing made available via HELOCs are used to pay off other debt, while another 20% is used for stock-market investments. The roughly 50% of financing remaining, Ms. Côté said, is used on current consumption, and renovating or purchasing other properties.

This real estate-related spending has a domino effect, she added, as it can accelerate the increase in house prices, “reinforcing the growth in collateral values and access to additional borrowing, thus leading to a rise in household spending.”

Analysts say this type of cycle could spell trouble for Canada’s growth prospects in an environment of rising rates and softer housing prices. That’s why the Bank of Canada is pressing individuals and lenders to proceed with caution now in terms of taking on or issuing debt.

“The issue is not whether we are going to see a wave of defaults,” said Benjamin Tal, deputy chief economist at CIBC World Markets. “It is how higher interest rates will lead to a softening in credit demand, and then consumer spending.”

In a recent interview, Finance Minister Jim Flaherty singled out the rapid-fire growth in home-equity loans as a cause for concern and that was one area the federal government may target should it move to try to cap household debt levels.

Since the trough of the recession, household credit has grown about twice as fast as personal disposable income.

Meanwhile, Ms. Côté tried to address the dilemma the central bank faces as it continues to warn about record levels of household debt while keeping its benchmark policy rate at extraordinarily low levels in the face of a still-fragile recovery. Bank of Canada policy is to set interest rates in an effort to reach or maintain 2% inflation.

“Some have asked if increasing interest rates poses such a threat to households, why raise them? Yet others have asked if household debt is such a concern, why not raise rates and discourage borrowing?” she said, noting rates are set to achieve or maintain 2% inflation. Annual headline inflation was 2% in November, although the core rate, which strips out volatile-priced items, fell to 1.4% in the month.

“The bank recognizes that low interest rates, while necessary to achieve our inflation target, create their own risks,” said Ms. Côté, who was appointed deputy governor last June.

7 Jan

Housing market should be resilient in 2011 thanks to low interest rates: LePage


Posted by: Kimberly Walker

Housing market should be resilient in 2011 thanks to low interest rates: LePage

Sunny Freeman, The Canadian Press

TORONTO – The Canadian real estate market will follow a similar pattern this year as that seen in 2010 as buyers pull sales forward into the early months in anticipation of higher interest rates, according to a report from one of Canada’s largest real estate firms.

The aftershocks of the recession, including a lingering low interest rate environment, will continue to influence the Canadian real estate market in 2011 — a year that will be stronger than expected, said the report released Thursday by Royal LePage.

Royal LePage predicts that average home prices will rise three per cent to $348,600 in 2011, driven largely by a rush to buy in the first half of the year in advance of anticipated interest and mortgage rate hikes in the second half.

“Canadians realize that interest rates are unsustainably low and that homes will become effectively more expensive when mortgage rates return to normal levels,” said Phil Soper, president of Royal LePage.

“2011 is expected to unfold much like 2010, when close to 60 per cent of sales volume occurred in the first half of the year in anticipation of interest rate increases that never materialized.”

However, the number of transactions will be slightly lower than last year and activity will be modestly closer to the norm because the pull forward phenomenon last year was exacerbated by a tightening of mortgage qualification rules and the introduction of the HST in Ontario and British Columbia in the middle of the year.

Soper said the extension of low mortgage rates will be an unexpected boon to the market this year.

“Like many Canadians, we anticipated an end to the ultra-low interest rate era before year-end 2010,” he said.

“Paradoxically, global economic weakness, particularly in the United States, allowed policy-makers and financial institutions to keep borrowing costs low, resulting in a stronger Canadian housing market and a better than forecast fourth quarter.”

Average house prices rose between 3.9 per cent and 4.6 per cent in the fourth quarter of 2010, while price appreciation is expected to continue a moderate and steady climb throughout the current year.

The report contrasts with some recent predictions by economists that prices should remain flat or decline over the next year.

The Canadian Real Estate Association has predicted prices will fall by 1.3 per cent to a national average of $326,000, this year, tied to weakness in British Columbia and Ontario — the hottest real estate markets of 2010. It has also forecasted a nine per cent decline in sales.

CREA has yet to release year-end data for 2010, but preliminary reports from two of the biggest markets, Toronto and Vancouver, released this week indicate 2010 declined as expected.

Sales were down by one per cent compared with 2009 in Toronto, while the average home selling price was $431,463, up nine per cent from 2009.

In Vancouver, sales declined 14.2 per cent from 2009, and were 10.3 per cent below the 10-year average for sales in the region. The average selling price in B.C.’s largest city was up 2.7 per cent at $577,808.

Canada’s real estate market has been on a rebound over much of the past year after sales dried up in late 2008 and hit a multi-year low in January 2009.

The housing market’s sudden plunge was sparked by a credit crunch that developed in the U.S. housing and lending industries, and gradually spread across the globe, causing a worldwide recession in the late summer and early fall of 2009.

The commercial real estate market experienced a similar plunge as investors lost confidence in the sector. However, the commercial market, which includes office and retail spaces, had a stronger than expected year in 2010 and that momentum is projected to strengthen throughout 2011, according to a report released Thursday by CB Richard Ellis Ltd. Some market observers had predicted a glut of vacancies in Canada’s major business centres, but that didn’t happen, said John O‘Bryan, vice-chairman of CB Richard Ellis Canada.

We‘ve had good news over the past twelve months with respect to interest rates, housing trends and employment gains, with many companies announcing plans for expansion, he wrote in the report.

“2011 may well be another good, stable year but should be viewed with cautious optimism in light of the concentration in employment growth on part-time jobs rather than the full-time positions that indicate confidence in long-term, sustainable growth.”


5 Jan

News Release: Jan. 5, 2011 – Real Estate Market – Fraser Valley


Posted by: Kimberly Walker

News Release: January 5, 2011



(Surrey, BC) – Stable property sales and a steady erosion of inventory for the last seven months of 2010 have brought equilibrium to Fraser Valley’s real estate market.


“Our market was a bit of a rollercoaster in 2010 with buyers appearing earlier than expected in the year, tapering in the summer and returning in the fall,” says Deanna Horn, Board president.


“As consumers regained their confidence in the overall economy, we saw a normalization of the market with sales at or slightly below average, inventory dropping and modest changes in home prices.”


A total of 895 sales were processed on the Board’s Multiple Listing Service® (MLS®) in December, a decrease of 17 per cent compared to November and a decrease of 29 per cent compared to 1,260 sales in December of last year. The Board’s 10-year average for December sales in the last decade is 1,020.  


In terms of listings, the Board finished 2010 with 8,139 active listings, 10 per cent fewer than in November and an increase of 25 per cent compared to the 6,534 properties available in December 2009. December’s inventory represents a 28 per cent drop from 2010’s peak of 11,411 active listings reached in May.


Horn adds, “If there’s one lesson buyers and sellers can take from our market in 2010, it’s to recognize there are real differences in home values based on their type and location making it prudent to have your REALTOR® show you comparisons specific to your property type and neighbourhood.


“For example, benchmark prices of condominiums in North Surrey have decreased by 3.8 per cent in the last year while benchmark prices of detached homes in west Abbotsford have increased by 4 per cent.”


Overall, the benchmark price for Fraser Valley detached homes in December was $506,145, an increase of 0.3 per cent compared to November and 1.7 per cent higher compared to $497,732 in December 2009.    


The benchmark price of Fraser Valley townhouses in December was $322,054, an increase of 0.8 per cent compared to November and a 1.2 per cent increase compared to December 2009 when it was $318,174. Year-over-year, the benchmark price of apartments increased 1.2 per cent going from $237,157 in December 2009 to $240,101 in December 2010 and 0.9 per cent lower compared to November 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 2,895 real estate professionals who live and work in the communities of North Delta, Surrey, White Rock, Langley, Abbotsford, and Mission.