Financial Update For March 24, 2010

• TSX +77.37 led by a rally in financial and mining shares that lifted the index back over the 12,000 mark.
• DOW +102.94
• Dollar +.27c to 98.42cUS
• Oil +$.31 to $81.91US per barrel.
• Gold +$4.20 to $1,103.50 USD per ounce

Canada's housing boom continues to outpace recovery in developed countries
By Sunny Freeman, The Canadian Press
TORONTO - Canada's housing boom will continue this spring as exceptionally low mortgage rates - and the expectation that borrowing costs will soon be headed higher - add a sense of urgency to consumer buying.
A Scotiabank global real estate trends report released Tuesday predicts most Canadian regions will remain sellers' markets for the first half of the year, as strong demand and rising prices continue.
"I think you're going to have a very active spring market, probably some cooling off in the second half of the year," Adrienne Warren, the Scotiabank economist who wrote the report said in a presentation Tuesday.
"We're looking at once in a lifetime interest rates that people are taking advantage of...but certainly confidence is coming back, the job markets are stabilizing," she said.
Scotiabank expects about 510,000 home sales this year, up ten per cent from 2009, but just shy of the 2007 record. Average prices are forecast to increase about eight per cent to a record $345,000, while housing starts are expected to reach 190,000, up from 149,000 last year.
The economic recovery from last year's painful recession has improved consumer confidence, although a bounceback in the jobs market is taking more time. Just over a third of the 417,000 jobs lost in the 2008-2009 recession have been replaced and the jobless rate is still at 8.2 per cent, only half a point below its high last August.
Most experts predict the rise in consumer confidence about the economy, and low interest rates, are behind the continued strength in the housing market.
Warren said the spring rush will be driven by an influx of buyers hoping to preempt tighter lending rules for mortgages and the introduction of the harmonized sales tax in Ontario and B.C. But a steady increase in the number of listings and a rise in construction are helping to restore a more balanced market.
"We're starting to see better balance, we're seeing more listings. There was a real lack of listings for the better part of last year...we're moving back into a better balanced situation," Warren said.
Warren said the hot spring market should give way to more subdued activity in the second half of the year, as higher interest rates and higher home prices erode affordability.
Economists expect the Bank of Canada to raise interest rates by between half a percentage point and a full point over several months beginning in late spring or early summer to fight inflationary pressures in the economy.
With many Canadians taking on larger and larger mortgage debt in expensive markets across the country, higher rates could create financial problems for some homeowners.
Warren added that the incentive for builders to add new houses to the market should also fade as supply increases and prices cool.
The front-loaded activity in the first half of the year will also contribute to lower sales, prices and construction in 2011, she said.
Canada's recovery continues to outpace developed countries around the world with housing prices in the fourth quarter up 19 per cent year over year. The strong performance has carried through into 2010, with sales in the first two months just slightly behind the near-record levels seen in late 2009.
Warren said that year-ago comparisons are amplified by the sharp drop in sales and prices at the end of 2008, but still represent a remarkable turnaround in a short time.
"We're not seeing a lot of evidence of speculative activity, I think you're just looking at a tight market, more buyers than sellers and people have to pay a premium in that environment,"she said.
She added that milder that usual temperatures across the country may have also put a bit of spring into a typically slow winter sales season.
Meanwhile, housing prices in countries including the U.K., Japan and the U.S. were still below year-earlier levels in the final quarter of 2009.
http://ca.news.finance.yahoo.com/s/23032010/2/biz-finance-canada-s-housing-boom-continues-outpace-recovery-developed.html

Financial Update For March 23, 2010

• TSX +19.19 .
• DOW +43.91
• Dollar -.24c to 98.15cUS The Canadian dollar touched a one-week low against the U.S. dollar, weakened by mixed commodity prices and uncertainty about Europe's handling of Greece's debt
• Oil +$.63 to $81.60US per barrel.
• Gold -$8.10 to $1,099.50 USD per ounce

Fight over real estate fees not over
Michael Babad Globe and Mail
The fight over the Multiple Listing Service run by Canada's realtors isn't over yet. The Canadian Real Estate Association said today it approved changes that would give home buyers and sellers more power over their transactions on MLS. Under the change, a consumer will now be able to pay an agent a flat fee to list on the service, where about nine out of 10 of all deals are done. Agents must now pass along a seller's home phone number, if that's what the seller wants, to a potential buyer if asked. The association said in a statement that it believes it has now addressed the issues raised by the Competition Bureau, which has taken the issue to the Competition Tribunal.
But the Competition Bureau immediately responded that it plans to continue to challenge the “anti-competitive rules that deny consumer choice and stifle competition” despite the CREA changes.
“There is nothing in these proposals that we haven't seen before and they do not solve the problem,” Melanie Aitken, the Commissioner of Competition, said in a statement. “They are a step in the wrong direction. These amendments amount to a blank cheque allowing CREA and its members to create rules that could have even greater anti-competitive consequences.”
The bureau said CREA's amendments do not remove “existing roadblocks to real estate agents who list properties on the MLS from offering innovative services and pricing options to consumers.”