• 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.
Friday, March 12, 2010
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 $1,122.300 USD per ounce
Canada's employment outlook looking up: Manpower
TORONTO (Reuters) - Canadian employers plan to hold staffing levels steady in the second quarter, though hiring intentions are up from a year ago, according to a survey released on Tuesday by employment services company Manpower Inc .
The vast majority, 75 percent, of employers expect to maintain their current staffing levels, suggesting stability in a moderate economic recovery.
But the survey also showed 17 percent plan to increase their staffing in the second quarter, while 6 percent expect cutbacks. Two percent are unsure of their hiring intentions.
Hiring intentions were steady across the regions.
The seasonally adjusted Canadian net employment outlook of 7 percent suggests employers see a modest hiring climate for the upcoming quarter. It was a 3 percentage point dip from the prior quarter, but up 6 percentage points from a year ago.
Manpower's index, based on interviews with more than 1,900 Canadian employers, measures the difference between those who plan to add to their workforce and those who expect to cut staff.
The survey comes ahead of Friday's employment report for February, where a median 20,000 jobs is expected to have been added, while the unemployment rate is seen steady at 8.3 percent.
Employers in the education and mining industries reported the most favorable results among the 10 surveyed sectors for the second quarter, with employment outlooks of 15 percent.
The Canadian results were part of the global company's quarterly employment survey, which showed hiring intentions were up in 19 of 35 countries.
Tuesday, March 9, 2010
Financial Update For March 9, 2010
• TSX -11.30
• DOW -13.68.
• Dollar +.27c to 97.31cUS closed higher for a 7th straight sessions and hit a seven-week high against its American counterpart as oil prices continued to rise amid signs of global economic improvement.
• Oil +$.37 to $81.87US per barrel.
• Gold -$11.20 to $1,123.60 USD per ounce
Home purchase intentions full steam ahead: RBC poll
Vast majority of Canadians view buying a home as a good investment
TORONTO, March 8 /CNW/ - Homebuying momentum in Canada continues to gain steam with the portion of Canadians who are very likely to purchase a home in the next two years rising to 10 per cent from seven per cent two years ago, according to the 17th Annual RBC Homeownership Study. Younger Canadians, aged 18 to 24, will lead the charge this year, with those very likely to buy almost doubling to 15 per cent from eight per cent in 2009.
The RBC study conducted by Ipsos Reid found that 91 per cent of Canadian homeowners believe a home is a good investment, the highest level in 12 years, and one-quarter (26 per cent) expect their home to be their primary source of income when they retire.
"With the Canadian housing market showing continued vigour, it's not surprising that Canadians feel more confident in the long-term value of owning a home," said Robert Hogue, senior economist, RBC. "Exceptionally low mortgage rates and improved affordability have been key reasons for the resurgence in the housing market this past year."
Most Canadians who intend to buy a new home in the next two years are planning to take a fixed rate mortgage (44 per cent). However, combination mortgages had the highest increase in popularity this year, with 40 per cent intending to take both a variable and fixed rate component, up from 32 per cent last year.
For Canadians planning to take a fixed rate or combination mortgage, seven-in-10 intend to take a term of five years or longer. Sixteen per cent said they intend to take a variable rate mortgage, down from 20 per cent in 2009.
"Canadians seem to be opting for more caution this year and may be factoring in potential rate increases down the road," said Marcia Moffat, RBC's head of home equity financing. "Choosing a combination mortgage can take some of the guesswork out of making a decision between whether it is better to lock in to a longer-term or stay in a variable rate."
In the wake of the recent housing rebound, most Canadians (six-in-10) also believe housing prices will rise in 2010, up significantly from 25 per cent in 2009. Similarly, a majority (64 per cent) believe mortgage rates will be higher over the next year, also up from 33 per cent a year ago.
"The expectation of higher mortgage rates on the horizon could be motivating buying intentions this year. But it's important that homeowners - especially first time buyers - get solid advice about what they can afford, not only today, but down the road," added Moffat.
In addition to seeking customized advice from a financial advisor, Moffat provides the following tips:
For homebuyers:
1. Lock in your rate when you apply for your mortgage.
Depending on your situation, there are rate guarantees that allow you to lock in your mortgage rate for up to 120 days.
2. "Stress test" your mortgage for rate increases.
If you are concerned about affordability down the road, knowing what your payments would be with a one - three per cent rate increase will give you greater peace of mind that your new home is affordable both today and in a few years time, when rates might be higher.
3. For first time homebuyers, leave some wiggle room.
With a pre-approved mortgage you will know what you can afford today. But before making a decision to find a home at the top of your pre-approval amount, also consider your current lifestyle preferences and how future changes in your circumstances could impact your payment comfort zone.
For homeowners renewing their mortgage:
1. Take advantage of early renewal options.
Some mortgages allow you to renew up to 120 days before the end of your term. This means you can lock in your new mortgage rate early.
2. Consider a combination (hybrid) mortgage to manage your interest costs.
If you are unsure of where rates are headed, consider splitting your mortgage into part fixed and part variable. You will have rate protection on the fixed rate mortgage portion, while you benefit from today's low interest rates on the variable rate mortgage portion. Transmitted by CNW Group
More young Canadians taking advantage of low interest rates in housing market
By Luann Lasalle, The Canadian Press
MONTREAL - Younger Canadians are expected to lead the way with home buying this year as they take advantage of low interest rates, new jobs and what they consider "good prices," a bank survey says.
The survey for the Royal Bank suggested that 15 per cent of Canadians between the ages of 18 and 24 were very likely to buy, almost double from eight per cent in 2009.
It's a marked shift in the attitudes of younger Canadians, who have tightened their budgets over the past few years to cope with tough jobs markets and the recession.
"Our poll found that 35 per cent of younger Canadians, between the ages of 18 and 24, are intending to buy a home due to good real estate prices," Marcia Moffat, RBC's head of home equity financing in Toronto, said Monday.
The national average price for a home was $328,537 in January, according to the Canadian Real Estate Association.
Thirty-one per cent of 18 to 24-year-olds surveyed in the online poll said they would buy a house because of a new job. The survey also found 22 per cent in that young age group wanted to buy a home because they considered interest rates were good.
CIBC World Markets senior economist Benjamin Tal said more young people are getting into the real estate market, taking advantage of low interest rates, lower down payments and more years to pay off their mortgages.
Tal said he estimates the young people getting into the market as a bit older, between the ages of 22 and 28.
"Basically parents are begging their kids to buy now because they remember when they were paying 12 to 15 per cent mortgage interest," Tal said.
"So there's a sense of urgency to get into the market and young people are a part of it."
Tal described the coming real estate market of the next three or four years as "boring."
"I think that what we are doing now is that we are basically stealing activity from the future."
The RBC survey also suggested that overall attitudes are changing as more Canadians return to shopping for homes as the economy recovers, even though it's considered a seller's market.
"Confidence in the housing market is back, essentially," RBC senior economist Robert Hogue said.
Royal Bank said the study found more Canadians are "very likely" to buy a new home in the next two years.
Ten per cent of the 2,047 people of all ages surveyed for the study said they planned to buy a home within two years - up from seven per cent two years ago.
The RBC study also found that 91 per cent of Canadian homeowners believe a home is a good investment, the highest level in 12 years.
"At this stage last year, there was doom and gloom all around and it definitely affected the housing market," Hogue said.
One-quarter of those surveyed, 26 per cent, said they expect their home to be their primary source of income when they retire.
However, the surge in optimism doesn't necessarily mean that Canadians have forgotten about past economic troubles.
The survey found they are still more cautious when it comes to mortgages. Forty-four per cent of those surveyed who plan to buy a home in the next two years said they would take a fixed-rate mortgage.
Also on Monday, the latest new homes numbers showed that the annual rate of housing starts were up in February.
The Canada Mortgage and Housing Corp. said that the seasonally adjusted annual rate of housing starts reached 196,700 units in February, an increase from 185,400 in January 2010.
Senior CMHC economist Bill Clark said the market is seeing a lot of "catch-up" and consumers in Ontario and B.C. are likely trying to avoid the harmonized sales tax before the summer.
"So if you roll all of that together it's really sort of one big recipe for housing starts to go up," Clark said.
The report showed the gain was concentrated in the multiple starts segment, particularly in Toronto.
Urban starts increased nine per cent to 179,100 units in February.
Urban multiple starts increased by 19.1 per cent to 89,900 units, while single urban starts increased by 0.5 per cent to 89,200 units.
The annual rate of urban starts increased 28.6 per cent in Ontario in February, 14.3 per cent in Atlantic Canada, 10.8 per cent in the Prairies and by eight per cent in British Columbia.
In Quebec, urban starts fell 14.1 per cent.
Rural starts were estimated at a seasonally adjusted annual rate of 17,600 units in February.
• DOW -13.68.
• Dollar +.27c to 97.31cUS closed higher for a 7th straight sessions and hit a seven-week high against its American counterpart as oil prices continued to rise amid signs of global economic improvement.
• Oil +$.37 to $81.87US per barrel.
• Gold -$11.20 to $1,123.60 USD per ounce
Home purchase intentions full steam ahead: RBC poll
Vast majority of Canadians view buying a home as a good investment
TORONTO, March 8 /CNW/ - Homebuying momentum in Canada continues to gain steam with the portion of Canadians who are very likely to purchase a home in the next two years rising to 10 per cent from seven per cent two years ago, according to the 17th Annual RBC Homeownership Study. Younger Canadians, aged 18 to 24, will lead the charge this year, with those very likely to buy almost doubling to 15 per cent from eight per cent in 2009.
The RBC study conducted by Ipsos Reid found that 91 per cent of Canadian homeowners believe a home is a good investment, the highest level in 12 years, and one-quarter (26 per cent) expect their home to be their primary source of income when they retire.
"With the Canadian housing market showing continued vigour, it's not surprising that Canadians feel more confident in the long-term value of owning a home," said Robert Hogue, senior economist, RBC. "Exceptionally low mortgage rates and improved affordability have been key reasons for the resurgence in the housing market this past year."
Most Canadians who intend to buy a new home in the next two years are planning to take a fixed rate mortgage (44 per cent). However, combination mortgages had the highest increase in popularity this year, with 40 per cent intending to take both a variable and fixed rate component, up from 32 per cent last year.
For Canadians planning to take a fixed rate or combination mortgage, seven-in-10 intend to take a term of five years or longer. Sixteen per cent said they intend to take a variable rate mortgage, down from 20 per cent in 2009.
"Canadians seem to be opting for more caution this year and may be factoring in potential rate increases down the road," said Marcia Moffat, RBC's head of home equity financing. "Choosing a combination mortgage can take some of the guesswork out of making a decision between whether it is better to lock in to a longer-term or stay in a variable rate."
In the wake of the recent housing rebound, most Canadians (six-in-10) also believe housing prices will rise in 2010, up significantly from 25 per cent in 2009. Similarly, a majority (64 per cent) believe mortgage rates will be higher over the next year, also up from 33 per cent a year ago.
"The expectation of higher mortgage rates on the horizon could be motivating buying intentions this year. But it's important that homeowners - especially first time buyers - get solid advice about what they can afford, not only today, but down the road," added Moffat.
In addition to seeking customized advice from a financial advisor, Moffat provides the following tips:
For homebuyers:
1. Lock in your rate when you apply for your mortgage.
Depending on your situation, there are rate guarantees that allow you to lock in your mortgage rate for up to 120 days.
2. "Stress test" your mortgage for rate increases.
If you are concerned about affordability down the road, knowing what your payments would be with a one - three per cent rate increase will give you greater peace of mind that your new home is affordable both today and in a few years time, when rates might be higher.
3. For first time homebuyers, leave some wiggle room.
With a pre-approved mortgage you will know what you can afford today. But before making a decision to find a home at the top of your pre-approval amount, also consider your current lifestyle preferences and how future changes in your circumstances could impact your payment comfort zone.
For homeowners renewing their mortgage:
1. Take advantage of early renewal options.
Some mortgages allow you to renew up to 120 days before the end of your term. This means you can lock in your new mortgage rate early.
2. Consider a combination (hybrid) mortgage to manage your interest costs.
If you are unsure of where rates are headed, consider splitting your mortgage into part fixed and part variable. You will have rate protection on the fixed rate mortgage portion, while you benefit from today's low interest rates on the variable rate mortgage portion. Transmitted by CNW Group
More young Canadians taking advantage of low interest rates in housing market
By Luann Lasalle, The Canadian Press
MONTREAL - Younger Canadians are expected to lead the way with home buying this year as they take advantage of low interest rates, new jobs and what they consider "good prices," a bank survey says.
The survey for the Royal Bank suggested that 15 per cent of Canadians between the ages of 18 and 24 were very likely to buy, almost double from eight per cent in 2009.
It's a marked shift in the attitudes of younger Canadians, who have tightened their budgets over the past few years to cope with tough jobs markets and the recession.
"Our poll found that 35 per cent of younger Canadians, between the ages of 18 and 24, are intending to buy a home due to good real estate prices," Marcia Moffat, RBC's head of home equity financing in Toronto, said Monday.
The national average price for a home was $328,537 in January, according to the Canadian Real Estate Association.
Thirty-one per cent of 18 to 24-year-olds surveyed in the online poll said they would buy a house because of a new job. The survey also found 22 per cent in that young age group wanted to buy a home because they considered interest rates were good.
CIBC World Markets senior economist Benjamin Tal said more young people are getting into the real estate market, taking advantage of low interest rates, lower down payments and more years to pay off their mortgages.
Tal said he estimates the young people getting into the market as a bit older, between the ages of 22 and 28.
"Basically parents are begging their kids to buy now because they remember when they were paying 12 to 15 per cent mortgage interest," Tal said.
"So there's a sense of urgency to get into the market and young people are a part of it."
Tal described the coming real estate market of the next three or four years as "boring."
"I think that what we are doing now is that we are basically stealing activity from the future."
The RBC survey also suggested that overall attitudes are changing as more Canadians return to shopping for homes as the economy recovers, even though it's considered a seller's market.
"Confidence in the housing market is back, essentially," RBC senior economist Robert Hogue said.
Royal Bank said the study found more Canadians are "very likely" to buy a new home in the next two years.
Ten per cent of the 2,047 people of all ages surveyed for the study said they planned to buy a home within two years - up from seven per cent two years ago.
The RBC study also found that 91 per cent of Canadian homeowners believe a home is a good investment, the highest level in 12 years.
"At this stage last year, there was doom and gloom all around and it definitely affected the housing market," Hogue said.
One-quarter of those surveyed, 26 per cent, said they expect their home to be their primary source of income when they retire.
However, the surge in optimism doesn't necessarily mean that Canadians have forgotten about past economic troubles.
The survey found they are still more cautious when it comes to mortgages. Forty-four per cent of those surveyed who plan to buy a home in the next two years said they would take a fixed-rate mortgage.
Also on Monday, the latest new homes numbers showed that the annual rate of housing starts were up in February.
The Canada Mortgage and Housing Corp. said that the seasonally adjusted annual rate of housing starts reached 196,700 units in February, an increase from 185,400 in January 2010.
Senior CMHC economist Bill Clark said the market is seeing a lot of "catch-up" and consumers in Ontario and B.C. are likely trying to avoid the harmonized sales tax before the summer.
"So if you roll all of that together it's really sort of one big recipe for housing starts to go up," Clark said.
The report showed the gain was concentrated in the multiple starts segment, particularly in Toronto.
Urban starts increased nine per cent to 179,100 units in February.
Urban multiple starts increased by 19.1 per cent to 89,900 units, while single urban starts increased by 0.5 per cent to 89,200 units.
The annual rate of urban starts increased 28.6 per cent in Ontario in February, 14.3 per cent in Atlantic Canada, 10.8 per cent in the Prairies and by eight per cent in British Columbia.
In Quebec, urban starts fell 14.1 per cent.
Rural starts were estimated at a seasonally adjusted annual rate of 17,600 units in February.
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