Cost of owning a home up slightly in late 2009; will continue to rise
• TSX -5.02 to 12,008 as its energy and materials sectors fell on worries that credit tightening in China could sap demand for Canada's resources. China's central bank is expected to tighten its monetary policy this week to temper its red-hot economy, following a government report that China's annual inflation rate jumped to 2.7 per cent in February from 1.5 per cent in January. spurring concern about the effect that could have on the global economy.
• DOW +17.46
• Dollar -.13c to 98.07cUS closed higher for an 11th straight session hitting a 20 month high
• Oil -$1.44 to $79.80US per barrel.
• Gold +$3.70 to $1,105.40 USD per ounce
Cost of owning a home up slightly in late 2009; will continue to rise: RBC
Sunny Freeman , The Canadian Press
TORONTO - Home prices will continue to rise this spring as buyers scramble to close deals ahead of expected higher interest rates, new mortgage rules and new taxes in two key markets.
A report by RBC Economics issued Monday found that the cost of owning a home in Canada increased slightly across all housing segments in the closing months of 2009.
Strong demand, fuelled by exceptionally low mortgage rates, has increased competition for the limited supply of homes for sale, which continues to drive prices up, the report said.
RBC senior economist Robert Hogue said the problem is likely to get worse with an anticipated rise in interest rates in the second half of the year.
The Bank of Canada has pledged to keep its key overnight rate at 0.25 per cent, where it has been since last spring, until the end of the second quarter. But economists anticipate it will begin rising as early as July.
Historically low interest rates have been cited among reasons for the strong housing market, with sales of existing homes moving higher again in February and setting monthly records in both Ontario and Quebec.
The Canadian Real Estate Association said 36,275 homes were sold across the country in February, up 44 per cent from the same month in 2009, when the recession was still impacting both consumer optimism and loan activity.
But February's year-over-year gain was much smaller than in the previous three months, CREA said. Part of the reason was that February home sales were down in Vancouver as the Olympics impacted activity there even as sales in Toronto logged an equally large gain.
Overall, seasonally adjusted home sales were down 1.5 per cent in February compared with January.
Economists predict that real estate markets in B.C. and Ontario will remain hot in the months prior to the introduction of the harmonized sales tax in those provinces on July 1, which will increase the transaction costs associated with a home purchase.
Douglas Porter, deputy chief economist at BMO Capital Markets, said some buyers in Ontario and B.C., which combined account for over half of national sales, are advancing their purchases to avoid paying the HST.
"It's no coincidence that Ontario and B.C. have seen the biggest gain in sales in the country," he said.
CREA chief economist Gregory Klump said buyers in those provinces are driving national sales activity higher in the first part of the year.
"It should remain a tight market with negotiations favouring the seller in a number of major markets in the first half of this year," he said.
Klump said that strong resale housing demand continues to draw down inventories, but softer sales activity and an increase in new listings in recent months has helped slow the depletion of available properties.
"Those sellers who moved to the sidelines at the depth of the recession will be putting their homes back on the market in response to headline average price increases," he said. "
Porter said the increase in supply from ultra-low levels helps bring the market closer to balance, but that the still-tight market means prices will remain high.
"We're going to get a very hot market in the next few months but it won't overheat," he said.
"I think we'll get one more wave of relatively strong numbers over the spring and then we'll crest and the market will come off the boil in the second half of the year."
He added that Ottawa's recent efforts to "release some steam from the market" will help slow activity, and "the housing market will pull up just short of bubble territory."
Finance Minister Jim Flaherty announced new mortgage qualification rules last month to discourage homeowners from taking out mortgages on homes they might not be able to afford down the road when rates return to more normal levels.
In order to qualify for an insured mortgage, borrowers will have to meet the standards for a five-year, fixed-rate mortgage even if the period they choose is shorter and the interest rate they pay is lower.
Porter said the changes will prompt those affected - primarily first-time buyers and investors - to buy in advance of the new rules, and bump up sales in March.
Still, other buyers could be hesitant to enter the frenzied market this spring and may tolerate a small spike in interest rates and wait for conditions to cool off, he said.
"Some cooler heads will decide they can get a better deal in the second half of the year even if it does come at a higher interest rate."
Tuesday, March 16, 2010
Friday, March 12, 2010
Financial Update For March 12, 2010
• TSX +18.64 to 11,979 reaching its highest close in 17 months and finishing higher for a second straight session, thanks to strength in financials and gold miners
• DOW +44.51
• Dollar +.15c to 97.63cUS closed higher for an 10th straight session hitting its highest level in 5 months
• Oil +$.02 to $82.11US per barrel.
• Gold +$.10 to $1,108.20 USD per ounce
In Canadian economic news, Statistics Canada said the country's trade surplus with the world came in at $799 million in January as exports grew 0.5 per cent during the month while imports declined 1.7 per cent.
Understanding house prices
A home may be one of the biggest investments you ever make. Saving up a down payment is just the first step. Find out more.
What factors affect the value of a home?
• Location: Real estate people always say “Location, location, location.” That’s because the area you live in will be the biggest factor affecting your home’s price. It’s smart to buy a home where housing prices are likely to increase. Also, the people who may buy your home from you one day may be willing to pay more for a home that is close to schools, sports centres, stores, services, and so on. Keep that in mind as you look.
• The condition of the home and the property it is on: Does the home need a lot of repairs? How is the roof, plumbing, and electrical wiring? A home in good repair may be worth more. Also, the condition of the outside of the home, the lawn, gardens, driveway, and trees will all affect the value of a home. These are the first things that buyers see, and are together known as curb appeal.
• Renovations and updates: An older home might need some work to keep it safe, modern, and comfortable. If you are buying at a home that has had some renovations, check the quality. When you do work on a home you own, do it as well as you can. Poor work can lower the value.
• The economy: There are some things you can’t control that affect house prices, like interest rates. Higher interest rates mean it costs more for a mortgage, so fewer people buy homes. When that happens, the prices of homes can fall. Lower interest rates, on the other hand, can boost buying and drive prices up. House prices often go up for a while, and then come down a bit. Try to find out as much as you can about how prices are changing, or may change, when deciding to buy or sell a home. Often there will be stories in the paper about housing prices.
How much is my home worth today?
If you’re considering buying a home, or you just bought one, you know how much it’s worth. But if you’ve owned your home for a while, its value has probably changed. Here’s how you can find out how much it’s worth now:
• Call a real estate agent: Ask them for an estimate of your home’s value. You may be able to get an agent to do this for free, because they hope to get your business in the future.
• Ask an appraiser: Your bank or a real estate agent should know a number of appraisers. Banks use them to estimate house values before they approve mortgages. You can also look in the yellow pages. An appraiser will charge a fee for the service.
• Check to see what other homes in your area have sold for recently: Compare your home with similar ones that have sold. Unless you keep up with what’s happening in your area, this information may be hard to get. Ask your real estate agent if you can’t find it yourself.
How much will my home be worth in the future?
To estimate a home’s future value, you will have to do some informed guessing. Start with finding out what has happened to prices in your location over several years.
City Price, 1990 Price, 2005 Total % increase, 1990–2005 Average % increase per year
Halifax 97,238 188,484 93.84% 6.26%
Saint John 78,041 119,718 53.40% 3.56%
Quebec City 81,462 141,485 73.68% 4.91%
Montreal 111,197 203,720 83.21% 5.55%
Ottawa 141,562 248,358 75.44% 5.03%
Toronto 254,890 336,176 31.89% 2.13%
Windsor 106,327 163,001 53.30% 3.55%
Greater Sudbury 108,596 134,440 23.80% 1.59%
Winnipeg 81,740 137,062 67.68% 4.51%
Saskatoon 76,008 144,787 90.49% 6.03%
Calgary 128,484 250,832 95.22% 6.35%
Vancouver 226,385 425,745 88.06% 5.87%
Source: Canadian Real Estate Association (MLS®) http://www.theglobeandmail.com/globe-investor/investment-ideas/investor-education/understanding-house-prices/article658078/
Should I buy a home now, or wait and save more money?
Sometimes people can’t wait to buy a home because of family or personal reasons. For example, they may have a new baby coming and need more room. Or, they are worried about house prices going up faster than they can save.
What if you don’t have the down payment you need for the house of your dreams? Should you wait and save more, or find another way to borrow the money you need? You won’t be able to get a standard mortgage but you could get another type of loan.
Should I save more or borrow more?
Here is a summary of the reasons to buy now, or wait.
Should you: Reasons for: Reasons against:
Wait and build up a large down payment? You will pay less interest. You can avoid paying for mortgage insurance. You reduce the risk of not being able to pay back the loan if the value of your home drops and you have to sell. You have to wait to own a home and you will pay more rent. You could have put that rent towards paying a mortgage, and owning more of your home faster. You have to be disciplined or you could spend your savings on other things. In some areas, house prices may rise faster than you can save the down payment.
Buy earlier with some other type of loan? • You can stop paying rent sooner and get into a home faster. • You have the chance to own more of your home sooner. • You don’t risk house prices rising more than you can afford. • You will pay more interest. • You will have more worries if you take on more debt than you can handle. • If you have to sell and the value of your home drops, you may not be able to pay back the loan.
• DOW +44.51
• Dollar +.15c to 97.63cUS closed higher for an 10th straight session hitting its highest level in 5 months
• Oil +$.02 to $82.11US per barrel.
• Gold +$.10 to $1,108.20 USD per ounce
In Canadian economic news, Statistics Canada said the country's trade surplus with the world came in at $799 million in January as exports grew 0.5 per cent during the month while imports declined 1.7 per cent.
Understanding house prices
A home may be one of the biggest investments you ever make. Saving up a down payment is just the first step. Find out more.
What factors affect the value of a home?
• Location: Real estate people always say “Location, location, location.” That’s because the area you live in will be the biggest factor affecting your home’s price. It’s smart to buy a home where housing prices are likely to increase. Also, the people who may buy your home from you one day may be willing to pay more for a home that is close to schools, sports centres, stores, services, and so on. Keep that in mind as you look.
• The condition of the home and the property it is on: Does the home need a lot of repairs? How is the roof, plumbing, and electrical wiring? A home in good repair may be worth more. Also, the condition of the outside of the home, the lawn, gardens, driveway, and trees will all affect the value of a home. These are the first things that buyers see, and are together known as curb appeal.
• Renovations and updates: An older home might need some work to keep it safe, modern, and comfortable. If you are buying at a home that has had some renovations, check the quality. When you do work on a home you own, do it as well as you can. Poor work can lower the value.
• The economy: There are some things you can’t control that affect house prices, like interest rates. Higher interest rates mean it costs more for a mortgage, so fewer people buy homes. When that happens, the prices of homes can fall. Lower interest rates, on the other hand, can boost buying and drive prices up. House prices often go up for a while, and then come down a bit. Try to find out as much as you can about how prices are changing, or may change, when deciding to buy or sell a home. Often there will be stories in the paper about housing prices.
How much is my home worth today?
If you’re considering buying a home, or you just bought one, you know how much it’s worth. But if you’ve owned your home for a while, its value has probably changed. Here’s how you can find out how much it’s worth now:
• Call a real estate agent: Ask them for an estimate of your home’s value. You may be able to get an agent to do this for free, because they hope to get your business in the future.
• Ask an appraiser: Your bank or a real estate agent should know a number of appraisers. Banks use them to estimate house values before they approve mortgages. You can also look in the yellow pages. An appraiser will charge a fee for the service.
• Check to see what other homes in your area have sold for recently: Compare your home with similar ones that have sold. Unless you keep up with what’s happening in your area, this information may be hard to get. Ask your real estate agent if you can’t find it yourself.
How much will my home be worth in the future?
To estimate a home’s future value, you will have to do some informed guessing. Start with finding out what has happened to prices in your location over several years.
City Price, 1990 Price, 2005 Total % increase, 1990–2005 Average % increase per year
Halifax 97,238 188,484 93.84% 6.26%
Saint John 78,041 119,718 53.40% 3.56%
Quebec City 81,462 141,485 73.68% 4.91%
Montreal 111,197 203,720 83.21% 5.55%
Ottawa 141,562 248,358 75.44% 5.03%
Toronto 254,890 336,176 31.89% 2.13%
Windsor 106,327 163,001 53.30% 3.55%
Greater Sudbury 108,596 134,440 23.80% 1.59%
Winnipeg 81,740 137,062 67.68% 4.51%
Saskatoon 76,008 144,787 90.49% 6.03%
Calgary 128,484 250,832 95.22% 6.35%
Vancouver 226,385 425,745 88.06% 5.87%
Source: Canadian Real Estate Association (MLS®) http://www.theglobeandmail.com/globe-investor/investment-ideas/investor-education/understanding-house-prices/article658078/
Should I buy a home now, or wait and save more money?
Sometimes people can’t wait to buy a home because of family or personal reasons. For example, they may have a new baby coming and need more room. Or, they are worried about house prices going up faster than they can save.
What if you don’t have the down payment you need for the house of your dreams? Should you wait and save more, or find another way to borrow the money you need? You won’t be able to get a standard mortgage but you could get another type of loan.
Should I save more or borrow more?
Here is a summary of the reasons to buy now, or wait.
Should you: Reasons for: Reasons against:
Wait and build up a large down payment? You will pay less interest. You can avoid paying for mortgage insurance. You reduce the risk of not being able to pay back the loan if the value of your home drops and you have to sell. You have to wait to own a home and you will pay more rent. You could have put that rent towards paying a mortgage, and owning more of your home faster. You have to be disciplined or you could spend your savings on other things. In some areas, house prices may rise faster than you can save the down payment.
Buy earlier with some other type of loan? • You can stop paying rent sooner and get into a home faster. • You have the chance to own more of your home sooner. • You don’t risk house prices rising more than you can afford. • You will pay more interest. • You will have more worries if you take on more debt than you can handle. • If you have to sell and the value of your home drops, you may not be able to pay back the loan.
Wednesday, March 10, 2010
Financial Update For March 10, 2010
• TSX -45.13 as weaker oil and gold prices pulled resource issues lower and most bank stocks dropped amid profit-taking. Mar 9 marked 12 months after the market hit bottom in the depths of the financial crisis, which was sparked by the collapse of the U.S. housing sector. Stocks have surged since hitting multi-year lows on March 9 of last year, with the turnaround starting a day later when U.S. bank Citigroup said it was turning a profit.
• DOW +11.86.
• Dollar +.12c to 97.43cUS closed higher for an 8th straight session approaching the highest level of the year.
• Oil -$.38 to $81.49US per barrel.
• Gold -$1.70 to $1,122.300 USD per ounce
Canada's employment outlook looking up: Manpower
TORONTO (Reuters) - Canadian employers plan to hold staffing levels steady in the second quarter, though hiring intentions are up from a year ago, according to a survey released on Tuesday by employment services company Manpower Inc .
The vast majority, 75 percent, of employers expect to maintain their current staffing levels, suggesting stability in a moderate economic recovery.
But the survey also showed 17 percent plan to increase their staffing in the second quarter, while 6 percent expect cutbacks. Two percent are unsure of their hiring intentions.
Hiring intentions were steady across the regions.
The seasonally adjusted Canadian net employment outlook of 7 percent suggests employers see a modest hiring climate for the upcoming quarter. It was a 3 percentage point dip from the prior quarter, but up 6 percentage points from a year ago.
Manpower's index, based on interviews with more than 1,900 Canadian employers, measures the difference between those who plan to add to their workforce and those who expect to cut staff.
The survey comes ahead of Friday's employment report for February, where a median 20,000 jobs is expected to have been added, while the unemployment rate is seen steady at 8.3 percent.
Employers in the education and mining industries reported the most favorable results among the 10 surveyed sectors for the second quarter, with employment outlooks of 15 percent.
The Canadian results were part of the global company's quarterly employment survey, which showed hiring intentions were up in 19 of 35 countries.
• DOW +11.86.
• Dollar +.12c to 97.43cUS closed higher for an 8th straight session approaching the highest level of the year.
• Oil -$.38 to $81.49US per barrel.
• Gold -$1.70 to $1,122.300 USD per ounce
Canada's employment outlook looking up: Manpower
TORONTO (Reuters) - Canadian employers plan to hold staffing levels steady in the second quarter, though hiring intentions are up from a year ago, according to a survey released on Tuesday by employment services company Manpower Inc .
The vast majority, 75 percent, of employers expect to maintain their current staffing levels, suggesting stability in a moderate economic recovery.
But the survey also showed 17 percent plan to increase their staffing in the second quarter, while 6 percent expect cutbacks. Two percent are unsure of their hiring intentions.
Hiring intentions were steady across the regions.
The seasonally adjusted Canadian net employment outlook of 7 percent suggests employers see a modest hiring climate for the upcoming quarter. It was a 3 percentage point dip from the prior quarter, but up 6 percentage points from a year ago.
Manpower's index, based on interviews with more than 1,900 Canadian employers, measures the difference between those who plan to add to their workforce and those who expect to cut staff.
The survey comes ahead of Friday's employment report for February, where a median 20,000 jobs is expected to have been added, while the unemployment rate is seen steady at 8.3 percent.
Employers in the education and mining industries reported the most favorable results among the 10 surveyed sectors for the second quarter, with employment outlooks of 15 percent.
The Canadian results were part of the global company's quarterly employment survey, which showed hiring intentions were up in 19 of 35 countries.
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