As was universally anticipated, the Bank of Canada opted to hold its target overnight rate at 1 per cent this morning. Ongoing uncertainty in the Euro-zone continues to weigh heavily on the Bank's outlook. In its statement accompanying the interest rate decision, it was noted that the bank is now projecting a contained Euro-crisis, but also a brief recession in the Euro-area due to ongoing deleveraging and fiscal austerity. The Bank also expects continued weakness, but no recession, in the United States through the first half of 2012 before a resumption of stronger growth. Given various challenges in the global economy, the Bank of Canada trimmed its outlook for Canadian economic growth to 2.1 per cent in 2011, 1.9 per cent in 2012 and 2.9 per cent in 2013 which is in line with our own forecast. On inflation, the Bank now expects slack in the economy to persist longer than originally forecast, leading to a closing of the output gap at the end of 2013. This implies softer than expected inflation in coming quarters, with consumer price growth moderating before returning to the Bank's 2 per cent target by the end of 2013.
Overall, this morning's statement shows a very cautious Bank of Canada that is unlikely to make any significant movements on interest rates over the next two to three quarters. Further monetary tightening will be highly contingent on a brighter growth outlook in the United States and a credible solution to the Euro sovereign debt crisis. Therefore we expect the Bank of Canada to remain on the sidelines through the end of 2011 and the first half of 2012.
Copyright BCREA reprinted with permission
Tuesday, October 25, 2011
Tuesday, October 18, 2011
Canadian home sales pick up in September
According to statistics released today by The Canadian Real Estate Association (CREA), national resale housing activity picked up in September 2011.
Highlights:
Sales activity rose 2.7 per cent in September from the previous month.- Holding in line with the ten-year average, activity during the first nine months of this year pulled ahead of sales over the same period last year.
- The number of newly listed homes held steady when compared to the previous month.
- The national housing market tightened in September from the month before, but remains firmly entrenched in balanced territory.
- The national average price posted the smallest year-over-year increase since January.
Actual (not seasonally adjusted) national sales activity came in 11 per cent above levels in September 2010. As was the case over the summer, the year-over-year increase reflects weakened activity one year ago.
A total of 361,749 homes have traded hands via Canadian MLS® Systems to date this year. This is 1.2 per cent above levels for the same period in 2010, and in line with the ten-year average.“The Canadian housing market remains a bright spot against a backdrop of mixed headline news about the global economy,” said Gary Morse, CREA President. “Low mortgage rates continue to draw buyers to the housing market, while recently tightened mortgage regulations are working as intended. That said, housing market trends often diverge from national trends due to local factors, so buyers and sellers should talk to a local REALTOR® to understand housing market trends at play where they live.”
The number of newly listed homes nationally was little changed from each of the previous two months. New listings were up from the previous month in a number of major markets including Toronto, Montreal, Ottawa, Oakville and Vancouver, offset by fewer new listings in other markets including Edmonton and the Fraser Valley.The monthly rise in sales resulted in a tighter national housing market that remains firmly planted in balanced territory. The national sales-to-new listings ratio, a measure of market balance, stood at 52.8 per cent in September, up from 51.6 per cent in August.
Based on a sales-to-new listings ratio of between 40 to 60 percent, nearly two-thirds of all local markets in Canada were in balanced market territory in September, with an even split of buyer’s and seller’s markets among the remainder.The number of months of inventory stood at 6.1 months at the end of September on a national basis, little changed from the end of August (6.2 months). It represents the number of months it would take to sell current inventories at the current rate of sales activity, and is another measure of balance between housing supply and demand. Months of inventory have held steady at about six months since April.
The actual (not seasonally adjusted) national average price for homes sold in September 2011 stood at just under $352,600, remaining below record level heights reached earlier this year. While up 6.5 per cent from September 2010, the year-over-year increase is the smallest since January.“Canada’s housing market remains stable amid continuing financial market volatility, contributing to Canadians’ confidence in the economy and providing support for Canadian economic growth,” said Gregory Klump, CREA’s Chief Economist. “Interest rates are expected to remain low for longer, and evidence suggests that recent changes to mortgage regulations are preventing the kind of excesses they were designed to avert. Both of these developments are good news for the housing market.”
Copyright CREA reprinted with permissionSunday, October 16, 2011
Nelson, Canada, in living color
Nelson, a picturesque mountain hamlet in British Columbia, was built on mining 125 years ago. Today it's known for its spectacular fall foliage, outdoor sports and relaxed, artistic vibe.
| Summer may be Nelson, Canada's busiest season, but "fall is the most beautiful time," says Virginia Wassick, co-proprietor of Grand Lakefront Bed & Breakfast on nearby Kootenay Lake. Nelson is about 150 miles north of Spokane, Wash. (Graham Edwards) |
By Christopher Reynolds Los Angeles Times staff writer
October 16, 2011
Reporting from Nelson, Canada ——
Up in the northwest forest where Washington, Idaho and British Columbia converge, there's a lazy little international border crossing called Nelway, about the size of a gas station.
"Where are you headed?" a Canadian border patrol agent asked when my family rolled up a few months ago, heading north from Washington.
"Nelson," I told him as he began his search of our car.
"It's OK," said the officer, unenthusiastically. "Kinda hippie-ish. Very laid-back."
Not a problem, sir. The town of Nelson, semi-Victorian, substantially bohemian, sportier and more artsy than your average hamlet of 9,700 souls, sits in the Selkirk Mountains of British Columbia, about 30 miles north of the U.S. border. Picture a college town that has misplaced its university.
It has dramatic leaves in fall, skiing in winter, swimming and boating in summer, hiking and mountain biking much of the year. Thousands of American draft resisters and back-to-the-landers chose this area as a haven 40 years ago, and hundreds are said to remain, but it gets barely a trickle of U.S. tourists.
Just below the town lies the west arm of photogenic Kootenay Lake. Just above town rises Toad Mountain, where the discovery of silver prompted the founding of Nelson about 125 years ago. Nelson's stone and brick Victorians, once the province of off-duty miners and loggers, now house or neighbor eccentric shops, galleries and restaurants. The Sacred Ride (on Baker Street) peddles bikes. Downward Dog (Front Street) offers pet supplies. The Funky Monkey (Front Street) grills burgers. ROAM (Baker Street) promises gear for rivers, oceans and mountains.
Summer may be the busiest season, but "fall is the most beautiful time," said Virginia Wassick, who, with her husband, Duncan, runs the three-room Grand Lakefront Bed & Breakfast in a rambling old house near the lake's edge. In September and October, Wassick said, the guests "come and stay a week or two and sit on the deck, look at the colors and read books. I love the September-October people. They're so laid-back."
Nelson — about 150 miles north of Spokane, Wash., more than 400 miles east of Vancouver, Canada — is too little and isolated to stand as a major destination by itself. But you can fly into Spokane or Castlegar, British Columbia (about 25 miles south of Nelson), and spend a few days driving a 135-mile loop from Nelson past the mountains, lakes, rivers, meadows and towns of Kaslo, New Denver, Silverton and Slocan. Or follow the 280-mile International Selkirk Loop (www.selkirkloop.org), which includes handsome chunks of Idaho and Washington.
For us, Nelson was a three-day respite at the northernmost point of a 1,200-mile road trip that began in Seattle and ended in Portland, Ore. We window-shopped on Baker Street; bought many "Magic Treehouse" volumes in Otter Books for our 7-year-old daughter, Grace; paced the little pier that juts into the lake; took a skiff for a buzz around on the water; and drove across the big orange bridge — which locals call "BOB" because, remember, it's a Big Orange Bridge — toward the postcard views at Pulpit Rock overlook and Kokanee Creek Provincial Park.
With more time, we would have soaked at Ainsworth Hot Springs (about 30 miles northeast) and caught the free ferry at nearby Balfour (a 35-minute ride across the lake to Kootenay Bay). But we did ride an antique streetcar along the Waterfront Pathway to Lakeside Park, where you'll find an organic concession stand (summer only) and busy playground. Downtown, we shared a good but pricey brunch at BiBO, followed by a great (and pricier) dinner at the All Seasons Café, Nelson's top restaurant. Uptown, I took a ride on old BNSF railroad track that has been converted into a mountain-biking trail.
One day I drank hemp ale. Another, I ate a hemp cookie. But there were no purchases at the hemp boutique on Ward Street, so no hemp hat trick.
We stayed at the Prestige Resort, a pricey hotel at the water's edge that should be the greatest place in town, given its location. Instead, it felt like an opportunity squandered — a dull, dark building best suited to the housing of Dunder-Mifflin business travelers. Next time we'll look more closely at the New Grand Hotel (more character, lower rates) or a local B&B.
This being Canada, the town has a hockey team and a curling club, both busy from fall through late winter or early spring. The Whitewater Ski Resort, about 20 minutes outside Nelson, is a small operation (three chairlifts, 1,184 skiable acres, no lodgings) that gets big powder — an average of 40 feet of snow per winter. The resort's Fresh Tracks Café is a favorite among B.C. foodies, many of whom revere the "Whitewater Cooks" cookbook by former resort chef Shelley Adams.
"I just moved here to retire," Aza Samchuck told me one afternoon as he sat astride a bicycle and watched teenagers leap from a piling into the chilly water. He is 35, Samchuck said, but because he's done well in his profession, he can arrange a few lucrative days of out-of-town work per month, then hang loose in Nelson the rest of the time. Of course, I had to ask his profession.
"I tattoo people," he said.
For a less bohemian, more Victorian Nelson, head to Vernon and Ward streets, where you can nurse a drink inside the stone-faced Hume Hotel (1898) and gaze north to the old ivy-cloaked courthouse (1902) or east to the Touchstones Nelson Museum of Art and History (1902 again). Nearby on Victoria Street, there's the restored Capitol Theatre (1927) and the old jail, now Selkirk College's Kootenay School of the Arts. Near Latimer and Ward streets, there's the big, old red-brick fire hall (1913) and the old brewery (1899), now home to the new Nelson Brewing Co., which specializes in organic ales.
Uncommon heritage
As the buildings were going up, Nelson and environs were getting more than the usual influx of miners and woodsmen. A Pacific agrarian sect of Russian Christians known as Doukhobors also arrived, about 5,000 of them, and with them a militant fringe group, the Sons of Freedom, that staged hundreds of nude marches, arsons and anti-government bombings. Then during World War II, the Canadian government set up internment camps and imprisoned about 8,000 Japanese Canadian men, women and children.
As the Vietnam War stretched from the 1960s into the '70s, came the Americans — perhaps as many as 10,000 draft resisters (a.k.a. draft dodgers, a.k.a. conscientious objectors) by some estimates, along with others eager to start communes in the countryside. Most of the communes fell apart fast, and President Carter pardoned the draft resisters in 1977. But like many Doukhobors and Japanese Canadian families before them, many of these immigrants stayed, raised families and worked as farmers, artisans or entrepreneurs.
In the late '70s, Nelson boosters started tidying up the town's then-bedraggled old buildings. By the summer of 1986, the renewed downtown was fetching enough to attract Steve Martin, who arrived with a prosthetic nose and film crew to work on "Roxanne." The film, released the following year, features Martin as the big-nosed chief of a bumbling small-town fire department and Daryl Hannah as the bespectacled astronomer of his dreams.
Controversial statue
After learning all that, it was a letdown to meet no avowed draft resisters, Doukhobors, Japanese Canadians or movie stars. But I did hear plenty about the furor of 2004, when Isaac Romano of Nelson proposed a monument to the draft resisters, stirring scorn from many sides, prompting denunciations from local business leaders and inspiring a New York Times headline that dubbed Nelson "Resisterville."
The monument idea was quickly shelved, but in 2006 a reunion of resisters was staged (with Doukhobor help) in nearby Castlegar. Locals say a 3-foot-high bronze model of artist Naomi Lewis' proposed draft-resister memorial now resides at the Vallican Whole Community Centre in the nearby Slocan Valley, a favored haunt of countercultural folk.
Yet when author Ernest Hekkaman and his partner, Margrith Schraner, were looking to relocate from Vancouver 11 years ago, Hekkaman told me, they chose Nelson "because it's a small town with an active arts community and literary community.... I didn't realize there was such a large antiwar population here, so many draft dodgers from the '60s and '70s."
But since Hekkaman is a draft dodger himself — having moved from Seattle to Vancouver in 1969 — that was hardly a problem. He helped underwrite the 2006 reunion and briefly housed the model draft-resister sculpture at his home-gallery. When I reached him by phone after our visit, he estimated that perhaps 300 draft resisters remain in Nelson and surrounding areas. But good luck spotting them among the other free spirits.
On our last morning in town, we grabbed breakfast at the Kootenay Bakery Café (vegetarian), then watched as the real firefighters of Nelson — an entirely competent-looking bunch, noses unremarkable — fanned out from their truck, shut down Baker Street and sent a man skyward on the ladder. His task: to string up a banner for an upcoming event.
Half an hour later, amid nods of approval from a dozen sidewalk superintendents, they reopened the street. Through it all, traffic was unaffected, and you could nearly hear, on the surrounding slopes, a billion leaves fluttering in the Sunday morning breeze. Nelson was at peace, and we were due to head south again.
chris.reynolds@latimes.com
"Where are you headed?" a Canadian border patrol agent asked when my family rolled up a few months ago, heading north from Washington.
"Nelson," I told him as he began his search of our car.
"It's OK," said the officer, unenthusiastically. "Kinda hippie-ish. Very laid-back."
Not a problem, sir. The town of Nelson, semi-Victorian, substantially bohemian, sportier and more artsy than your average hamlet of 9,700 souls, sits in the Selkirk Mountains of British Columbia, about 30 miles north of the U.S. border. Picture a college town that has misplaced its university.
It has dramatic leaves in fall, skiing in winter, swimming and boating in summer, hiking and mountain biking much of the year. Thousands of American draft resisters and back-to-the-landers chose this area as a haven 40 years ago, and hundreds are said to remain, but it gets barely a trickle of U.S. tourists.
Just below the town lies the west arm of photogenic Kootenay Lake. Just above town rises Toad Mountain, where the discovery of silver prompted the founding of Nelson about 125 years ago. Nelson's stone and brick Victorians, once the province of off-duty miners and loggers, now house or neighbor eccentric shops, galleries and restaurants. The Sacred Ride (on Baker Street) peddles bikes. Downward Dog (Front Street) offers pet supplies. The Funky Monkey (Front Street) grills burgers. ROAM (Baker Street) promises gear for rivers, oceans and mountains.
Summer may be the busiest season, but "fall is the most beautiful time," said Virginia Wassick, who, with her husband, Duncan, runs the three-room Grand Lakefront Bed & Breakfast in a rambling old house near the lake's edge. In September and October, Wassick said, the guests "come and stay a week or two and sit on the deck, look at the colors and read books. I love the September-October people. They're so laid-back."
Nelson — about 150 miles north of Spokane, Wash., more than 400 miles east of Vancouver, Canada — is too little and isolated to stand as a major destination by itself. But you can fly into Spokane or Castlegar, British Columbia (about 25 miles south of Nelson), and spend a few days driving a 135-mile loop from Nelson past the mountains, lakes, rivers, meadows and towns of Kaslo, New Denver, Silverton and Slocan. Or follow the 280-mile International Selkirk Loop (www.selkirkloop.org), which includes handsome chunks of Idaho and Washington.
For us, Nelson was a three-day respite at the northernmost point of a 1,200-mile road trip that began in Seattle and ended in Portland, Ore. We window-shopped on Baker Street; bought many "Magic Treehouse" volumes in Otter Books for our 7-year-old daughter, Grace; paced the little pier that juts into the lake; took a skiff for a buzz around on the water; and drove across the big orange bridge — which locals call "BOB" because, remember, it's a Big Orange Bridge — toward the postcard views at Pulpit Rock overlook and Kokanee Creek Provincial Park.
With more time, we would have soaked at Ainsworth Hot Springs (about 30 miles northeast) and caught the free ferry at nearby Balfour (a 35-minute ride across the lake to Kootenay Bay). But we did ride an antique streetcar along the Waterfront Pathway to Lakeside Park, where you'll find an organic concession stand (summer only) and busy playground. Downtown, we shared a good but pricey brunch at BiBO, followed by a great (and pricier) dinner at the All Seasons Café, Nelson's top restaurant. Uptown, I took a ride on old BNSF railroad track that has been converted into a mountain-biking trail.
One day I drank hemp ale. Another, I ate a hemp cookie. But there were no purchases at the hemp boutique on Ward Street, so no hemp hat trick.
We stayed at the Prestige Resort, a pricey hotel at the water's edge that should be the greatest place in town, given its location. Instead, it felt like an opportunity squandered — a dull, dark building best suited to the housing of Dunder-Mifflin business travelers. Next time we'll look more closely at the New Grand Hotel (more character, lower rates) or a local B&B.
This being Canada, the town has a hockey team and a curling club, both busy from fall through late winter or early spring. The Whitewater Ski Resort, about 20 minutes outside Nelson, is a small operation (three chairlifts, 1,184 skiable acres, no lodgings) that gets big powder — an average of 40 feet of snow per winter. The resort's Fresh Tracks Café is a favorite among B.C. foodies, many of whom revere the "Whitewater Cooks" cookbook by former resort chef Shelley Adams.
"I just moved here to retire," Aza Samchuck told me one afternoon as he sat astride a bicycle and watched teenagers leap from a piling into the chilly water. He is 35, Samchuck said, but because he's done well in his profession, he can arrange a few lucrative days of out-of-town work per month, then hang loose in Nelson the rest of the time. Of course, I had to ask his profession.
"I tattoo people," he said.
For a less bohemian, more Victorian Nelson, head to Vernon and Ward streets, where you can nurse a drink inside the stone-faced Hume Hotel (1898) and gaze north to the old ivy-cloaked courthouse (1902) or east to the Touchstones Nelson Museum of Art and History (1902 again). Nearby on Victoria Street, there's the restored Capitol Theatre (1927) and the old jail, now Selkirk College's Kootenay School of the Arts. Near Latimer and Ward streets, there's the big, old red-brick fire hall (1913) and the old brewery (1899), now home to the new Nelson Brewing Co., which specializes in organic ales.
Uncommon heritage
As the buildings were going up, Nelson and environs were getting more than the usual influx of miners and woodsmen. A Pacific agrarian sect of Russian Christians known as Doukhobors also arrived, about 5,000 of them, and with them a militant fringe group, the Sons of Freedom, that staged hundreds of nude marches, arsons and anti-government bombings. Then during World War II, the Canadian government set up internment camps and imprisoned about 8,000 Japanese Canadian men, women and children.
As the Vietnam War stretched from the 1960s into the '70s, came the Americans — perhaps as many as 10,000 draft resisters (a.k.a. draft dodgers, a.k.a. conscientious objectors) by some estimates, along with others eager to start communes in the countryside. Most of the communes fell apart fast, and President Carter pardoned the draft resisters in 1977. But like many Doukhobors and Japanese Canadian families before them, many of these immigrants stayed, raised families and worked as farmers, artisans or entrepreneurs.
In the late '70s, Nelson boosters started tidying up the town's then-bedraggled old buildings. By the summer of 1986, the renewed downtown was fetching enough to attract Steve Martin, who arrived with a prosthetic nose and film crew to work on "Roxanne." The film, released the following year, features Martin as the big-nosed chief of a bumbling small-town fire department and Daryl Hannah as the bespectacled astronomer of his dreams.
Controversial statue
After learning all that, it was a letdown to meet no avowed draft resisters, Doukhobors, Japanese Canadians or movie stars. But I did hear plenty about the furor of 2004, when Isaac Romano of Nelson proposed a monument to the draft resisters, stirring scorn from many sides, prompting denunciations from local business leaders and inspiring a New York Times headline that dubbed Nelson "Resisterville."
The monument idea was quickly shelved, but in 2006 a reunion of resisters was staged (with Doukhobor help) in nearby Castlegar. Locals say a 3-foot-high bronze model of artist Naomi Lewis' proposed draft-resister memorial now resides at the Vallican Whole Community Centre in the nearby Slocan Valley, a favored haunt of countercultural folk.
Yet when author Ernest Hekkaman and his partner, Margrith Schraner, were looking to relocate from Vancouver 11 years ago, Hekkaman told me, they chose Nelson "because it's a small town with an active arts community and literary community.... I didn't realize there was such a large antiwar population here, so many draft dodgers from the '60s and '70s."
But since Hekkaman is a draft dodger himself — having moved from Seattle to Vancouver in 1969 — that was hardly a problem. He helped underwrite the 2006 reunion and briefly housed the model draft-resister sculpture at his home-gallery. When I reached him by phone after our visit, he estimated that perhaps 300 draft resisters remain in Nelson and surrounding areas. But good luck spotting them among the other free spirits.
On our last morning in town, we grabbed breakfast at the Kootenay Bakery Café (vegetarian), then watched as the real firefighters of Nelson — an entirely competent-looking bunch, noses unremarkable — fanned out from their truck, shut down Baker Street and sent a man skyward on the ladder. His task: to string up a banner for an upcoming event.
Half an hour later, amid nods of approval from a dozen sidewalk superintendents, they reopened the street. Through it all, traffic was unaffected, and you could nearly hear, on the surrounding slopes, a billion leaves fluttering in the Sunday morning breeze. Nelson was at peace, and we were due to head south again.
chris.reynolds@latimes.com
Copyright © 2011, Los Angeles Times
Home Sales Edge Higher in September
The British Columbia Real Estate Association (BCREA) reports that Multiple Listing Service® (MLS®) residential unit sales in the province rose 8.8 per cent to 5995 units in September compared to the same month last year. The average MLS® residential price increased 6 per cent to $523,568 last month compared to September 2010.
"MLS® home sales edged up 3 per cent in September compared to August on a seasonally adjusted basis,” said Cameron Muir, BCREA Chief Economist. “Housing demand last month was bolstered by persistent low mortgage interest rates and a surge in employment."
"Despite a modest gain in unit sales, total active residential listings in the province remained elevated in September,” added Muir. A total of 55,616 homes were listed on the MLS® in the province at the end of September.
Year-to-date, BC residential sales dollar volume increased 17.5 per cent to $34.8 billion, compared to the same period last year. Residential unit sales increased 3.2 per cent to 61,127 units, while the average MLS® residential price rose 13.9 per cent to $569,922 over the same period.
Copyright BCREA reprinted with permission
Thursday, October 6, 2011
Nelson rental market remains tight
By Greg Nesteroff - Nelson Star
Renters in Nelson can expect to pay an average of $776 per month for a one-bedroom apartment, according to the latest market survey by the Nelson Committee on Homelessness.
The organization conducts a snapshot each spring and fall of rental prices in the city.
Recently-hired coordinator Katie Tabor says the new figures are “quite similar” to last year’s.
“If somebody’s living in a place, there are rent controls around how much it can go up if they continue to live there,” she says. “But once a place opens up, the landlord has discretion over what to charge.”
The average price for a two-bedroom suite was $1,038 and for three bedrooms, $1,320, the survey found.
Conducted over a week in early September, it relied on ads in the Nelson Star and Pennywise, websites including craigslist, kijiji, and discovernelson, plus Coldwell Banker’s rental list, and calls to apartment buildings.
Suites, apartments, and homes within city limits were included in the survey.
In total, they found three bachelor suites, ranging from $550 to $650 per month; 16 single-bedroom apartments going for $625 to $1,000; 19 two-bedroom apartments between $700 to $1,300, and 18 three-bedroom apartments for $950 to $1,650. Some prices included utilities, but most didn’t.
The figures are comparable to last spring’s survey, which pegged one-bedroom rents at an average $850, and two and three bedrooms at $1,000 and $1,500, respectively.
A Canadian Mortgage and Housing rental market survey of the southern interior conducted a year ago found slightly lower figures for Nelson — an average of $542 for a bachelor suite, $610 for one bedroom, $719 for two bedrooms, and $1,007 for three bedrooms.
However, it only looked at apartments in buildings of three or more units, and included prices for currently rented units, which Tabor says may reflect units held by the same tenants for a long time.
“In comparison, the numbers in the September snapshot from our office reflect the cost of rentals actually available on the market, and the prices are much higher,” she says.
Even so, the CMHC report found rentals in Nelson were the highest in West Kootenay. In Castlegar, the average one-bedroom rented for $565 per month and in Greater Trail (not counting Rossland), $512.
Only Revelstoke had even higher rents, with one bedrooms going for $690 per month and two bedrooms $902.
Nelson’s vacancy rate was also the lowest by far at 1.8 per cent in 2010, compared to 19.5 per cent in Revelstoke, 11.8 per cent in Rossland, and 5.4 per cent in Cranbrook.
Tailwinds point towards a soft landing
- Tailwinds include low mortgage rates, relatively low unemployment and strong immigration
- Headwinds include high prices, elevated household debt and slowing employment
- More buyers are turning to variable rate mortgages on expectations that rates could stay low for some time, or even decline.
- Average Canadian house prices were a record two-thirds more than average U.S. house prices
TORONTO, September 30, 2011 – After a decade of strong growth in the Canadian housing market, residential real estate is headed for a “soft landing” with prices moderating in the months ahead, according to a Special Report from BMO Economics.
Low interest rates have fuelled Canada’s housing market in the past decade, pushing prices to new highs in most regions. Sales are now close to their past-decade norm, and well below pre- and post-recession peaks, while residential mortgage demand has also moderated. However, a weaker economy and new mortgage rules have dimmed activity recently.
“Since the prudent and timely mortgage rule changes announced early this year by Finance Minister Jim Flaherty, Canadian house prices have moderated,” said Sal Guatieri, Senior Economist and Vice President, BMO Capital Markets. “House price gains are slowing. Although average resale prices rose a brisk 7.7 per cent year-over-year in August, the rate of increase has slowed from nearly 9 per cent earlier this year.”
Mr. Guatieri noted in the report that housing activity should remain moderate in the year ahead, with tailwinds including low mortgage rates, relatively low unemployment and strong immigration. Furthermore, a weak global economy and Europe’s debt crisis will likely keep the Bank of Canada on the sidelines until early 2013, while further easing measures by the Federal Reserve should suppress long-term rates in both countries, thereby supporting affordability.
On the flip side, Mr Guatieri noted that the housing market also faces several challenges, including high prices, elevated household debt and slowing employment.
“Prices have risen twice as fast as incomes in the past decade, lifting the current ratio 16 per cent above its norm. Although the current overvaluation is below levels that triggered price corrections in Canada in 1989 and the U.S. in 2006, it will remain a thorn in the side of first-time buyers,” said Mr. Guatieri. He added that for bargain hunters, Canadian houses, on average, cost a record two-thirds more in local currency terms than properties in the U.S.
The upshot is that home sales are likely to remain steady in 2012 and prices should also stay put. However, the resource-rich provinces, notably Alberta and Saskatchewan, should outperform other regions since their economies are expected to grow the fastest. Because housing is moderately overpriced in most regions (and considerably so in Vancouver), it’s vulnerable to a correction.
“Regardless of the current low interest rates, it is still important for homeowners or potential buyers to be prudent and stress-test their mortgage against a higher interest rate to ensure they can afford what they signed up for. Total housing expenses should not consume more than one-third of total household income,” said Katie Archdekin, Head of Mortgage Products, BMO Bank of Montreal.
Ms. Archdekin added that Canadians need to be continually examining ways to reduce overall housing costs. “BMO has developed products, such as the low rate mortgage with a maximum 25-year amortization, that we believe are directly relevant to today’s environment and specifically designed to help Canadian consumers manage their debt. Furthermore, the lower amortization can significantly reduce the amount of interest paid over the life of the mortgage.”
Additional factors expected to affect the future of Canada’s housing market:
- The biggest threat stems from the perceived one-in-three chance of a recession, and the attendant loss of jobs.
- Another risk, though far smaller, is if interest rates spike higher next year. Even a moderate 2 percentage point increase in rates would severely impact affordability. Low rates are a threat too, since they could cause the market to heat up again, only to correct when rates eventually rise.
- Mortgage growth is expected to moderate as Canadians turn more cautious in managing their debt. Despite slower personal credit growth, household debt hit a record 1½ times disposable income in Q2, as residential mortgages continued to outrun income.
- Meanwhile, job and income growth should moderate next year, as the economy is expected to grow just 1.8 per cent versus about 2.2 per cent this year.
- More buyers are turning to variable rate mortgages on expectations that rates could stay low for some time, or even decline.
Sunday, October 2, 2011
RCMP’s New National Marihuana Grow Strategy
The Royal Canadian Mounted Police stands united with the Government of Canada and its business and community partners to launch the RCMP’s national strategy to combat marihuana grow operations (MGOs) entitled the Marihuana Grow Initiative (MGI).
“Marihuana grow operations pose a serious threat to Canadians, the safety of our communities and the law enforcement officers fighting against these illegal operations,” said Shelly Glover, Member of Parliament for St. Boniface on behalf of the Honourable Vic Toews, Minister of Public Safety. “The Government of Canada is taking action to combat illicit marihuana cultivation in Canada, as well the organized crime elements behind it.”
Complimentary to the National Anti-Drug Strategy, the MGI was developed in collaboration with subject matter experts from across the country and represents the RCMP’s renewed commitment to fight marihuana production controlled by organized crime groups. Based on three key components: Awareness, Deterrence and Enforcement; the MGI outlines how the RCMP will work with partners and community members. It helps inform the Canadian public about the consequences, inherent hazards and destructive impacts these activities and criminal groups have on their communities.
“MGOs harm communities. Wherever they exist, there’s the potential for an increase in criminal activity and a greater chance of fire, explosions, and violence,” stated RCMP A/Commr. Mike Cabana. “This initiative is part of the RCMP’s renewed commitment and priority to combat marihuana production controlled by organized crime groups.”
The RCMP is also launching a new page on the public website that will act as a centralized database of residences where a MGO or clandestine lab was dismantled by the RCMP under the authority of a search warrant. This site will be consistently updated with new properties and it will also provide guidance and feature resources for landlords and buyers alike concerning the damagesMGOs and clandestine labs have on a property and its occupants.
“IBC shares the concerns of the RCMP and we have some clear advice for property owners on how to prevent grow ops from taking root in their homes and buildings" says Ralph Palumbo, VP, Ontario, Insurance Bureau of Canada. “Property insurance is not designed to cover the destruction and loss resulting from an illegal marihuana grow operation. It is not an accident or a random act of violence, like a break-in or damage caused by a storm.
“Grow ops have become a major concern for homebuyers and REALTORS® across the country. REALTORS® are committed to protecting the interests of our clients and believe that buyers should be able to determine whether a house for sale has housed a grow op in the past, stated Gary Morse, CREA President. The structural integrity and inhabitability of such houses may be compromised and prospective buyers need to know that costly remediation may be needed to correct health and safety issues.”
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