Central bank forecasts 3% GDP growth in 2010
The Canadian economy is projected to grow by three per cent in 2010 and 3.3 per cent in 2011, the Bank of Canada said in its latest economic forecast Thursday.
The projections are slightly different from those the bank put out in its last update in July. Growth in the second half of this year looks strong, the bank said, with gains in economic output of two per cent and 3.3 per cent in the third and fourth quarters.
That's up from the July estimates of 1.3 per cent and three per cent respectively.
Overall, the Canadian economy is expected to shrink by 2.4 per cent in 2009. That's slightly worse than the 2.3 per cent forecast in July.
The projections for the medium term were downgraded slightly. The three per cent expectation for 2010 in unchanged, but the 3.3 per cent growth the bank now expects in 2011 is 0.2 percentage points off what was expected in July.
"Global economic and financial developments have been somewhat more favourable than expected at the time of the July Report, although significant fragilities remain," the bank said in its latest Monetary Policy Report.
The economy will not reach capacity, when supply and demand are in balance, until 2011, the bank now forecasts.
Despite the generally positive overall tone, the document notes the bank is deeply concerned by the effects of a soaring loonie. "Heightened volatility and persistent strength in the Canadian dollar are working to slow growth and subdue inflation pressures," the bank said.
"The current strength in the dollar is expected, over time, to more than fully offset the favourable developments since July."
The Canadian dollar remained relatively stable from July to early October, trading in a range of 90 to 94 cents US. More recently, however, it has appreciated sharply, averaging about 96 cents US over the past 10 days, much higher than the 87 cents US the bank had assumed at the time of its July report.
In the immediate aftermath of the news, the Canadian dollar fell, slipping a third of a cent to 95.24 cents US at midday. "The Canadian dollar is finished in my mind," currency trader Ian Cochrane at Calgary-based BNH Strategies told CBC News. "Forget about raising rates, they're going the other way. The Bank of Canada governor basically told us this in no uncertain terms."
On Tuesday, the bank maintained its policy rate at 0.25 per cent and reaffirmed its conditional commitment to hold its current policy rate steady until the end of the second quarter of 2010.
"People should manage their affairs prudently in anticipation that at some point rates will return to a more normal level," Bank of Canada governor Mark Carney said at a press conference following the release of the report on Thursday.
"Clearly there are going to need to be adjustments in exchange rate policies in many G20 countries." Carney also expressed some concerns over consumer debt levels, saying it is something the bank keeps a close eye on.
"Consumer borrowing cannot grow faster than the economy forever, to state the obvious," he cautioned. "But Canadian consumer balance sheets are starting from a much firmer starting point than U.S. ones," he noted.
From Sympatico finance page
Friday, October 23, 2009
Monday, October 19, 2009
Good habits we've gained from the recession
Good habits we’ve gained from the recession
Posted on October 14, 2009 by Flyerland
Throughout the recent economic meltdown many people started cutting back on their spending and living on less. The Canadian economy is moving toward recovery, but it still pays to be frugal, especially when you’re saving for the things you really want. Maintaining your recession shopper savings strategies—even in good times—can help you keep more cash in your pocket.
Here are just a few of the valuable lessons learned through the recent financial crisis that we should keep in mind no matter how the economy is doing.
Posted on October 14, 2009 by Flyerland
Throughout the recent economic meltdown many people started cutting back on their spending and living on less. The Canadian economy is moving toward recovery, but it still pays to be frugal, especially when you’re saving for the things you really want. Maintaining your recession shopper savings strategies—even in good times—can help you keep more cash in your pocket.
Here are just a few of the valuable lessons learned through the recent financial crisis that we should keep in mind no matter how the economy is doing.
- Review your spending habits. Do you know where your money is going each week? One tried and true trick is to track every purchase for a week or two. Write down everything from the grocery bill to the cost of your morning latte. You will likely see spending patterns emerge and places where you can cut back and save.
- Use a shopping list. More people are using—and sticking to—lists to plan shopping trips. This helps to avoid over-spending or purchasing items you don’t need. And, why not try shopping for things like groceries online, where there might be less impulse buys if you can’t see and smell the goods.
- Shop the sales. Who doesn’t like buying stuff on sale? Check out Flyerland.ca for the latest flyers—not only for deals on groceries but clothing, electronics, furniture, home improvement and much more!
- Buy in bulk. When you find a great deal on the items you use every day—food staples and non-perishables, cleaning supplies, laundry detergent or dog food—stock up and save.
- Try other stores. If you shop at the same supermarket you could be missing out on super savings. Flyerland.ca posts flyers for all the major stores, making it easy to compare prices.
- Use points cards. When your favourite products are on sale or can earn you bonus points, buy a bunch. The points add up and can save you money on future purchases. Take a few minutes to register for the points program at your local stores. Shopping at Sobey’s, Loblaws, Metro and Shopper’s Drug Mart can earn you points, and that adds up to savings. The caveat is to make sure that you are buying things that you need or use often.
- Invest your savings. People are budgeting smarter and planning better. And with all the money you’re saving there are ways to invest. Contribute to an RESP for your children, or open a Tax-free Savings Account and save up to $5,000 each year without paying tax on the interest. You can also use your savings to pay down your mortgage or up your RRSP contribution—your financial planner can recommend the strategy that’s best for you.
Tuesday, October 13, 2009
Mortgage Rate On The Rise
Mortgage rates on the rise...some lenders still offer current rates until midnight tonight
Several Canadian banks raise rates for closed, fixed rate mortgages
THE CANADIAN PRESS TORONTO -
Several Canadian banks (TSX:BNS, TSX:CM, TSX:BMO) raised their posted rates for closed, fixed rate mortgages by up to 0.35 percentage points effective Wednesday.
Scotiabank, CIBC and the Bank of Montreal all raised their five-year closed rate by 0.35 percentage points. Increases for other mortgages ranging from one year to 10 years ranged from no change to 0.35 percentage points.
The change follows a similar move by the Royal Bank to raise rates last week.
Several Canadian banks raise rates for closed, fixed rate mortgages
THE CANADIAN PRESS TORONTO -
Several Canadian banks (TSX:BNS, TSX:CM, TSX:BMO) raised their posted rates for closed, fixed rate mortgages by up to 0.35 percentage points effective Wednesday.
Scotiabank, CIBC and the Bank of Montreal all raised their five-year closed rate by 0.35 percentage points. Increases for other mortgages ranging from one year to 10 years ranged from no change to 0.35 percentage points.
The change follows a similar move by the Royal Bank to raise rates last week.
Monday, October 12, 2009
How to know if you qualify for the new Home Buyers' Tax Credit
How to know if you qualify for the new Home Buyers' Tax Credit
www.newscanada.com
Find out if you meet the criteria to claim federal government money
Before you claim the proposed First-Time Home Buyers' Tax Credit, there are some things you should know about qualifying:
Neither you, your spouse or common-law partner lived in a house that either of you owned in the year of purchase or any of the four preceding years.
- If you are a person with a disability or are buying a house for a relative with a disability, you don't have to be a first-time home buyer. However, the home must be purchased to allow the person with a disability to live in a more accessible dwelling or in an environment better suited to the personal needs and care of that person.
- A qualifying home is a housing unit located in Canada that already exists or is being built.
- A share in a co-operative housing corporation that entitles you to possess, and that gives you an equity interest in a housing unit located in Canada, also qualifies. However, a share that only provides you with a right to tenancy in the housing unit does not qualify.
- The home must have been acquired after January 27, 2009.
The HBTC is part of the Government of Canada's $62 billion economic stimulus announced in the Economic Action Plan to give first-time home buyers up to $750 in tax relief.
For more information, visit www.cra-arc.gc.ca.
www.newscanada.com
Find out if you meet the criteria to claim federal government money
Before you claim the proposed First-Time Home Buyers' Tax Credit, there are some things you should know about qualifying:
Neither you, your spouse or common-law partner lived in a house that either of you owned in the year of purchase or any of the four preceding years.
- If you are a person with a disability or are buying a house for a relative with a disability, you don't have to be a first-time home buyer. However, the home must be purchased to allow the person with a disability to live in a more accessible dwelling or in an environment better suited to the personal needs and care of that person.
- A qualifying home is a housing unit located in Canada that already exists or is being built.
- A share in a co-operative housing corporation that entitles you to possess, and that gives you an equity interest in a housing unit located in Canada, also qualifies. However, a share that only provides you with a right to tenancy in the housing unit does not qualify.
- The home must have been acquired after January 27, 2009.
The HBTC is part of the Government of Canada's $62 billion economic stimulus announced in the Economic Action Plan to give first-time home buyers up to $750 in tax relief.
For more information, visit www.cra-arc.gc.ca.
Saturday, October 10, 2009
Wednesday, October 7, 2009
In the News
Housing market recovering: Royal LePage
08/10/2009 8:49:49 AM
The Canadian housing market is on the road to recovery, a new report by real estate brokerage Royal LePage suggests.
The average price of a two-storey home in Canada in the third quarter of 2009 was comparable to a year ago, up 0.1 per cent to $409,335. Average bungalow values increased 0.06 per cent year-over-year to $341,146, while the price of an average condominium increased 0.09 per cent to $243,748, the company said.
After the recession caused a sales drought and declining prices in the fourth quarter of 2008 and first quarter of 2009, there's actually a "pronounced undersupply" of homes in Ontario and other parts of the country.
Bidding wars in some cities. A shortage in housing supply is leading to bidding wars in several cities, including Toronto, Richmond Hill, Ont., Markham, Ont., Montreal, St. John?s, Saint John, Moncton, Edmonton, Calgary, North and West Vancouver, and Victoria, the company said.
But the company stopped well short of predicting a boom to come. The data suggests a "normal market correction and not the beginning of another aggressive expansionary cycle," the company said.
"Once housing supply returns to normal levels, we believe the economy will support modest pricing growth into 2010,? Royal LePage president Phil Soper said in a statement.
Regionally, the Atlantic provinces saw a strong recovery in home prices with double-digit percentage increases year-over-year in some markets in the third quarter of 2009.
Western provinces, especially British Columbia and Alberta, have been slower to recover from the significant price corrections that occurred in 2008, the company said.
Ontario and Quebec saw home prices stabilize or gain slightly year-over-year with much of the recovery occurring throughout the strong third quarter.
The Royal LePage survey is the largest monitor of seven types of housing in more than 250 neighbourhoods across the country.
08/10/2009 8:49:49 AM
The Canadian housing market is on the road to recovery, a new report by real estate brokerage Royal LePage suggests.
The average price of a two-storey home in Canada in the third quarter of 2009 was comparable to a year ago, up 0.1 per cent to $409,335. Average bungalow values increased 0.06 per cent year-over-year to $341,146, while the price of an average condominium increased 0.09 per cent to $243,748, the company said.
After the recession caused a sales drought and declining prices in the fourth quarter of 2008 and first quarter of 2009, there's actually a "pronounced undersupply" of homes in Ontario and other parts of the country.
Bidding wars in some cities. A shortage in housing supply is leading to bidding wars in several cities, including Toronto, Richmond Hill, Ont., Markham, Ont., Montreal, St. John?s, Saint John, Moncton, Edmonton, Calgary, North and West Vancouver, and Victoria, the company said.
But the company stopped well short of predicting a boom to come. The data suggests a "normal market correction and not the beginning of another aggressive expansionary cycle," the company said.
"Once housing supply returns to normal levels, we believe the economy will support modest pricing growth into 2010,? Royal LePage president Phil Soper said in a statement.
Regionally, the Atlantic provinces saw a strong recovery in home prices with double-digit percentage increases year-over-year in some markets in the third quarter of 2009.
Western provinces, especially British Columbia and Alberta, have been slower to recover from the significant price corrections that occurred in 2008, the company said.
Ontario and Quebec saw home prices stabilize or gain slightly year-over-year with much of the recovery occurring throughout the strong third quarter.
The Royal LePage survey is the largest monitor of seven types of housing in more than 250 neighbourhoods across the country.
In the News
Resale housing on rebound: TD
07/10/2009 4:57:10 PMCBC
News Markets for resale housing have rebounded sharply in nine Canadian cities, TD economists reported Wednesday.
Their report said the number of home resales, after dropping by nearly a third in the last six months of 2008, climbed back 61 per cent from January through August. The economists attribute the bounce back to pent-up demand, lower prices and low interest rates.
The report looked at markets in Vancouver, Calgary, Edmonton, Saskatoon, Winnipeg, Toronto, Ottawa, Montreal and Halifax.
"We estimate that between 45,000 and 53,000 sales that would normally have occurred in [the last three months of] 2008 did not, because of the fear and uncertainty created by the financial market turmoil," the report said.
After the dust settled and it became clearer that the economy was not tilting into deflation and depression, potential buyers had another look.
What they were looking at in most markets was an incredible window of opportunity: an environment in which price concessions had been made and where mortgage rates were at rock bottom low levels."
TD predicts that demand will level off by November and that more homes will come on the market and prices will rise only modestly the rest of 2009 and through 2010.
TD expects rising prices in 2011 will weaken demand but, as more houses will come on the market, the rate of price increases will ease.
07/10/2009 4:57:10 PMCBC
News Markets for resale housing have rebounded sharply in nine Canadian cities, TD economists reported Wednesday.
Their report said the number of home resales, after dropping by nearly a third in the last six months of 2008, climbed back 61 per cent from January through August. The economists attribute the bounce back to pent-up demand, lower prices and low interest rates.
The report looked at markets in Vancouver, Calgary, Edmonton, Saskatoon, Winnipeg, Toronto, Ottawa, Montreal and Halifax.
"We estimate that between 45,000 and 53,000 sales that would normally have occurred in [the last three months of] 2008 did not, because of the fear and uncertainty created by the financial market turmoil," the report said.
After the dust settled and it became clearer that the economy was not tilting into deflation and depression, potential buyers had another look.
What they were looking at in most markets was an incredible window of opportunity: an environment in which price concessions had been made and where mortgage rates were at rock bottom low levels."
TD predicts that demand will level off by November and that more homes will come on the market and prices will rise only modestly the rest of 2009 and through 2010.
TD expects rising prices in 2011 will weaken demand but, as more houses will come on the market, the rate of price increases will ease.
How to use the Equity in Home to Take Advantage of the Home Renovation Tax Credit
Have you been putting off some needed or wanted renovations? With the available Home Renovation Tax Credit offered by the government, now is a good time to get some renovations done.
The basics are spend $10, 000 on approved home renovations and receive up to a $1350 tax credit. *see blog post for infomation on government site for details
Did you know you can use your exisiting equity in your home to do those home renovations?
A couple of options are
1) Refinance plus improvement
2) Equity line of Credit
3) Equity Visa
4) Purchase plus improvement
These products combined with the great mortgage rate available make putting in a new kitchen or finishing your basement affordable.
The basics are spend $10, 000 on approved home renovations and receive up to a $1350 tax credit. *see blog post for infomation on government site for details
Did you know you can use your exisiting equity in your home to do those home renovations?
A couple of options are
1) Refinance plus improvement
2) Equity line of Credit
3) Equity Visa
4) Purchase plus improvement
These products combined with the great mortgage rate available make putting in a new kitchen or finishing your basement affordable.
Put Your Tax Dollars Back Into Your Home-The Home Renovation Tax Credit
Put Your Tax Dollars Back Into Your Home
13 July 2009
Save up to $1,350 on home improvements purchased before February 1, 2010.
The Home Renovation Tax Credit applies to eligible expenses of more than $1,000, but not more than $10,000, resulting in a maximum non-refundable tax credit of $1,350 [($10,000 - $1000) x 15%].
The Home Renovation Tax Credit is subject to Parliamentary approval.
You can claim a non-refundable tax credit on your 2009 income tax return. This tax credit is based on eligible expenses incurred for work performed or goods acquired after January 27, 2009 and before February 1, 2010. Only agreements entered into after January 27, 2009 and related to a qualified dwelling are eligible.
Where can you get Home Renovation Tax Credit envelopes?
Home Renovation Tax Credit envelopes will be available by the beginning of September. [more...]
Can you claim the HRTC?
Eligibility, time limits, dwelling and eligible expenses [more...]
How to calculate your HRTC
Worksheet and examples of calculations [more...]
How to claim your HRTC
Acceptable supporting documentation, medical expense tax credit and other tax credits [more...]
For more information about the Home Renovation Tax Credit, please call 1-888-959-1-CRA or visit www.cra.gc.ca/hrtc
The Home Renovation Tax Credit is subject to Parliamentary approval.
13 July 2009
Save up to $1,350 on home improvements purchased before February 1, 2010.
The Home Renovation Tax Credit applies to eligible expenses of more than $1,000, but not more than $10,000, resulting in a maximum non-refundable tax credit of $1,350 [($10,000 - $1000) x 15%].
The Home Renovation Tax Credit is subject to Parliamentary approval.
You can claim a non-refundable tax credit on your 2009 income tax return. This tax credit is based on eligible expenses incurred for work performed or goods acquired after January 27, 2009 and before February 1, 2010. Only agreements entered into after January 27, 2009 and related to a qualified dwelling are eligible.
Where can you get Home Renovation Tax Credit envelopes?
Home Renovation Tax Credit envelopes will be available by the beginning of September. [more...]
Can you claim the HRTC?
Eligibility, time limits, dwelling and eligible expenses [more...]
How to calculate your HRTC
Worksheet and examples of calculations [more...]
How to claim your HRTC
Acceptable supporting documentation, medical expense tax credit and other tax credits [more...]
For more information about the Home Renovation Tax Credit, please call 1-888-959-1-CRA or visit www.cra.gc.ca/hrtc
The Home Renovation Tax Credit is subject to Parliamentary approval.
Monday, October 5, 2009
Grandma Thompson's Prize-Winning Apple Pie
Just in time for Thanksgiving!
Grandma Thompson's Prize-Winning Apple Pie
By Adell Shneer and The Canadian Living Test Kitchen (canadianliving.com)
Related Content- Maple Magic with Cheddar- Peach Blackberry Cobbler- Crispy Oven-Baked Chicken Fingers with Zesty Caesar Dip
Thanksgiving weekend last year and The Village at Blue Mountain, Ont., was filled with the fragrance of freshly baked apple pies. For the first-ever Quintessential Apple Pie contest, bakers from this apple-growing region that rings Georgian Bay carried their pies – double crust, single crust, lattice top, streusel, Cheddar crust, even a chocolate apple combo – to the judging tables. Collingwood baking enthusiast Brenda Hall took first prize with a classic double-crust pie – a family recipe that's not too sweet but full and juicy with freshly harvested local McIntosh apples.
Servings: 8
Ingredients: Double-Crust sour_cream Pastry 1 egg_yolk2 tbsp (25 mL) coarse_sugarFilling:8 apples (such as McIntosh or Northern Spy), about 3 lb (1.5 kg)3/4 cup (175 mL) granulated_sugar2 tbsp (25 mL) cornstarch1 tsp (5 mL) cinnamonPinch each ground nutmeg and salt2 tbsp (25 mL) butter, softened
Filling: Peel and core apples; cut into 1/4-inch (5 mm) thick slices and place in large bowl. In small bowl, toss together sugar, cornstarch, cinnamon, nutmeg and salt ; add to apples and toss to coat. On lightly floured surface, roll out half of the pastry to generous 1/8-inch (3 mm) thickness; fit into 9-inch (23 cm) pie plate. Trim to leave 3/4-inch (2 cm) overhang; fold under and flute edge. Scrape filling into pie shell; dot with butter.Roll out remaining pastry. Whisk egg yolk with 1 tbsp (15 mL) water; brush over pastry rim. Fit pastry over filling; trim to leave 3/4-inch (2 cm) overhang. Fold overhang under bottom pastry rim; seal and flute edge. Brush egg mixture over pastry. Cut steam vents in top; sprinkle with coarse sugar. Bake in bottom third of 450°F (230°C) oven for 10 minutes. Reduce heat to 350°F (180°C); bake for 65 minutes or until bottom is deep golden and filling is bubbling and thickened. Let cool on rack. (Make-ahead: Set aside for up to 24 hours.)
Grandma Thompson's Prize-Winning Apple Pie
By Adell Shneer and The Canadian Living Test Kitchen (canadianliving.com)
Related Content- Maple Magic with Cheddar- Peach Blackberry Cobbler- Crispy Oven-Baked Chicken Fingers with Zesty Caesar Dip
Thanksgiving weekend last year and The Village at Blue Mountain, Ont., was filled with the fragrance of freshly baked apple pies. For the first-ever Quintessential Apple Pie contest, bakers from this apple-growing region that rings Georgian Bay carried their pies – double crust, single crust, lattice top, streusel, Cheddar crust, even a chocolate apple combo – to the judging tables. Collingwood baking enthusiast Brenda Hall took first prize with a classic double-crust pie – a family recipe that's not too sweet but full and juicy with freshly harvested local McIntosh apples.
Servings: 8
Ingredients: Double-Crust sour_cream Pastry 1 egg_yolk2 tbsp (25 mL) coarse_sugarFilling:8 apples (such as McIntosh or Northern Spy), about 3 lb (1.5 kg)3/4 cup (175 mL) granulated_sugar2 tbsp (25 mL) cornstarch1 tsp (5 mL) cinnamonPinch each ground nutmeg and salt2 tbsp (25 mL) butter, softened
Filling: Peel and core apples; cut into 1/4-inch (5 mm) thick slices and place in large bowl. In small bowl, toss together sugar, cornstarch, cinnamon, nutmeg and salt ; add to apples and toss to coat. On lightly floured surface, roll out half of the pastry to generous 1/8-inch (3 mm) thickness; fit into 9-inch (23 cm) pie plate. Trim to leave 3/4-inch (2 cm) overhang; fold under and flute edge. Scrape filling into pie shell; dot with butter.Roll out remaining pastry. Whisk egg yolk with 1 tbsp (15 mL) water; brush over pastry rim. Fit pastry over filling; trim to leave 3/4-inch (2 cm) overhang. Fold overhang under bottom pastry rim; seal and flute edge. Brush egg mixture over pastry. Cut steam vents in top; sprinkle with coarse sugar. Bake in bottom third of 450°F (230°C) oven for 10 minutes. Reduce heat to 350°F (180°C); bake for 65 minutes or until bottom is deep golden and filling is bubbling and thickened. Let cool on rack. (Make-ahead: Set aside for up to 24 hours.)
Sunday, October 4, 2009
2009 E-Waste Events
Keep electronics out of the landfill. Bring your unwanted and broken electronic and electrical equipment for FREE recycling at one of the local events. No appliances are excepted.
Satellite Systems
Computers, monitors, printers and accessories
Fax machines and photocopiers
Gaming systems
Televisions
Phones and PDAs
Calculators and electronic cash registers
Radios, amplifiers, turntables and stereos
VCR, DVD players and projectors
Cameras and recorders
Sat Oct 17 9am to 1pm
Municipality of Clarington
178 Darlington/Clarke
Townline Rd. Bowmanville
Sat Oct 24 9am to 1pm
Town of Whitby
Whitby Operations Centre
333 Mc Kinney Dr Whitby
Durham Region Works Department www.durhamregionwaste.ca
Satellite Systems
Computers, monitors, printers and accessories
Fax machines and photocopiers
Gaming systems
Televisions
Phones and PDAs
Calculators and electronic cash registers
Radios, amplifiers, turntables and stereos
VCR, DVD players and projectors
Cameras and recorders
Sat Oct 17 9am to 1pm
Municipality of Clarington
178 Darlington/Clarke
Townline Rd. Bowmanville
Sat Oct 24 9am to 1pm
Town of Whitby
Whitby Operations Centre
333 Mc Kinney Dr Whitby
Durham Region Works Department www.durhamregionwaste.ca
Saturday, October 3, 2009
In the News
With mortgage rates dropping, it's strategy time
ROB CARRICK
September 15, 2009
It was a little less than a year ago that the global financial crisis began to hit home, which is to say that mortgage rates spiked higher.
Now, the cost of mortgages is coming down. If you're buying a home or renewing a mortgage, it's time to review your options.
Fixed-rate mortgages declined a little last week, but the most dramatic changes can be seen in variable-rate mortgages. For the first time in almost a year, it's possible to get a variable-rate mortgage at the prime rate used by most major financial institutions, which is currently 2.25 per cent.
Pre-crisis, variable-rate mortgages came with discounts that ranged from 0.75 percentage points to as much as 0.9 points off prime. By late last fall, crisis conditions prompted lenders to start charging prime plus a full percentage point or more. Now, some lenders are starting to unwind their crisis-rate premiums.
"Variable-rate mortgages are all over the map right now," said Gary Siegle, regional manager with the mortgage brokerage firm Invis Inc. in Calgary. "We're seeing them right in the area of prime with some lenders."
An example of a variable-rate mortgage at prime: ResMor Trust, a small player that deals through mortgage brokers, is offering four-year variable-rate mortgages at prime in all provinces except Quebec. The catch: You have to have your mortgage approved by Sept. 30 and close the purchase within 45 days.
Can variable-rate mortgages fall back to their pre-crisis lows any time soon?
"Definitely, 100 per cent, no," said Robert McLister, a mortgage broker and author of the Canadian Mortgage Trends blog (canadianmortgagetrends.com). "Could they get a little below prime? Definitely."
Okay, it's strategy time. With prime at 2.25 per cent and fully discounted five-year fixed-rate mortgages going for something in the area of 3.9 to 4.1 per cent, you're got some thinking to do if you're buying a home or renewing a mortgage.
The variable rate looks tempting. Sure, the prime is going to rise in the medium term, but it's expected to stay put until next spring at least. Even when prime does move higher, it will have to increase by roughly 1.75 percentage points to get to where today's five-year mortgages are.
"The risk is obviously that rates go up a lot more," Mr. McLister warned. "Rates went down four percentage points from December, 2007, through April, 2009. They could easily go up four - why not?"
Variable-rate mortgages allow you to lock into a fixed-rate mortgage, so there's no reason why you have to ride interest rates all the way up. Still, you have to recognize that fixed-rate mortgages could be significantly more expensive by the time you decide to lock in.
An academic study of rates between 1950 and 2007 found variable-rate mortgages were the money-saving choice over five-year fixed-rate mortgages 89 per cent of the time. If you're willing to ride rates higher for a while in hopes of longer-term savings on interest costs, then consider a possible approach suggested by Mr. McLister.
Instead of arranging a variable-rate mortgage now, go for a one-year fixed-rate mortgage. Then, when you're renewing in one year's time, you'll move into a variable-rate mortgage that will ideally have a rate that is discounted below prime.
Fully discounted one-year closed mortgages today go for about 2.55 per cent, so you're not paying much of a penalty at all compared with what variable-rate mortgages are pegged at right now.
Another suggestion from Mr. McLister is to consider a three-year mortgage, which offers an attractive blend of low rates and security against interest rate surges. Three-year mortgage typically go for around 3.39 per cent on a fully discounted basis, but he knew of one small lender offering 2.9 per cent through the mortgage broker channel.
The case for going with a five-year fixed rate is that rates are very cheap by historical standards. Rates were a little bit lower last spring, but they're not as high as they were a month or two ago thanks to a pullback in bond yields that has trickled down to fixed-rate mortgages.
Mr. Siegle said over half of his firm's clients are locking into a fixed-rate mortgage right now. "You can't ever time the bottom of the market, but are these good rates that you can be comfortable with? A lot of people are saying, 'yeah, they are.' "
Bank of Canada expected to keep rates at record low
Paul Vieira, Financial Post Published: Tuesday, September 08, 2009
OTTAWA -- Analysts appear to be unanimous in believing the Bank of Canada will hold its record-low policy rate steady at its meeting Thursday, and maintain its commitment to keep the rate at 0.25% until June 2010.
The only item to look for in the pending rate statement, they indicate, is any change in nuance or tone, and possibly further concern about the rise of the Canadian dollar.
"The fact that the major economic data has largely evolved in line with the Bank of Canada's forecasts suggests (the central bank) is likely to reiterate its conditional statement to keep the overnight rate at 0.25% until the end of the second quarter of 2010," said Charmaine Buskas, senior economics strategist with TD Securities.
"And with no expected change to the overnight rate, all the focus will be on the nuances in the statement. It is likely to be very similar to the July 21 statement."
For the record, 21 economists in a Bloomberg News survey anticipate no change in the Bank of Canada rate, nor do the 11 members of the C.D. Howe Institute's monetary policy council.
The C.D. Howe said the Bank of Canada should stick to its mid-2010 commitment, adding that growth prospects remain uncertain as council members questioned how sustainable Canadian exports growth abroad will be, with "the dependence of U.S. and Chinese growth on government stimulus being a particular point of concern."
CMHC expects housing market to rebound strongly this year and next
Financial Post Published: Friday, September 04, 2009
Canada's housing market will rebound strongly in the second half of this year and into 2010, the federal housing agency said yesterday. Housing starts will reach 141,900 this year and increase to 150,300 for 2010, said Canada
Mortgage and Housing Corp. "Improving activity on the resale market and lower inventory levels in both the new and existing home markets are expected to prompt builders to increase residential construction," CMHC said.
Bob Dugan, CMHC's chief economist, said, "Economic uncertainty and lower levels of employment tempered new housing construction in the first half of this year. In the second half of 2009 and in 2010, we expect housing markets across Canada to strengthen."
Housing activity on brink of rebound, Canada Mortgage and Housing says
Canada's national housing agency predicts home construction to make a comeback in the second half of this year and into 2010, however economists say it could be a long time before we see the same building frenzy that has dominated this decade.
Canada Mortgage and Housing Corp. said Thursday it believes housing starts will hit 141,900, of which 68,400 will be single-family detached homes and 73,500 multiple-housing units, such as condos.
CMHC chief economist Bob Dugan said economic uncertainty and lower employment tempered new-housing construction in the first half of this year."In the second half of 2009 and in 2010, we expect housing markets across Canada to strengthen," he said in releasing the agency's third-quarter outlook.CMHC says improving activity on the resale market and lower inventory levels in both the new-and existing-home markets should prompt builders to increase residential construction.CMHC predicts overall starts to reach 150,300 in 2010.That compares to 211,056 housing starts recorded in 2008, of which 93,202 were single-family and 117,854 were multiple-housing units.Annual housing starts have surpassed the 200,000 mark every year since 2002.
However, CIBC World Markets economist Benjamin Tal believes the recovery in housing starts will be much slower."I think those number are a bit on the high side," he said, predicting a "not very weak, but not very strong" recovery of about 140,000 units in 2010.Tall also believes housing starts won't surpass 200,000 annually again for quite some time."We simply can't justify it. We don't have the demand," Tal said.The new normal will be about 170,000 to 180,000 starts annually, which we could hit by 2011, Tal said.Slower population growth and higher costs for new homes after provincial sales taxes are harmonized with the GST in provinces such as Ontario and B.C. next year will soften near-term growth in new home construction, Tal said.
Scotiabank economist Adrienne Warren also sees a slow recovery in new home building due to oversupply in some major markets, particularly in the condominium sector.But Warren said the CMHC forecast is yet another sign Canada's real estate market is on the rebound, and performing better than previously thought."It reaffirms that the market is far exceeding expectations across the board," Warren said.
CMHC also said Thursday it expects total sales on the Multiple Listing Service (MLS) to hit 420,700 in 2009 compared with 433,990 in 2008.That forecast is slightly higher than the Canadian Real Estate Association's recently revised 2009 resale forecast of 432,000 units.CREA boosted its outlook last week, saying it expects resale activity to drop by 0.4 per cent in 2009 versus 2008. That's better than its previous forecast of a 14.7 per cent drop year-over-year.
CHMC said the average price of a home across Canada last year was $303,607 and is expected to fall slightly to $301,400 in 2009, before climbing to $306,300 in 2010.
Warren predicts 2009 sales and prices will be on par with last year's levels."By and large we are looking at matching last year's levels, and holding steady on average, which is far from what anyone expected a few months ago," she said.She expects a "modest pickup" in sales in 2010."We will be looking at more of a balanced market."
Meantime, sales of existing homes rose in major centres across Canada in August compared to the month before.In the Greater Toronto Area, sales were up 27 per cent last month to 8,035 units compared to August 2008. The average price was $387,921, up by six per cent compared to the same month last year.Year-to-date sales in the Toronto area were 58,421 were up two per cent compared to the first eight months of 2008, the Toronto Real Estate Board reported this week. The average price of $385,978 was up by less than one-half of one per cent.
In Greater Vancouver, residential property sales increased 119.5 per cent in August to 3,441 compared to 1,568 in August 2008, according to the The Real Estate Board of Greater Vancouver.It said prices were down 1.1 per cent to $539,600 in August compared to the same month last year, but up 11.4 per cent from the start of the year.
ROB CARRICK
September 15, 2009
It was a little less than a year ago that the global financial crisis began to hit home, which is to say that mortgage rates spiked higher.
Now, the cost of mortgages is coming down. If you're buying a home or renewing a mortgage, it's time to review your options.
Fixed-rate mortgages declined a little last week, but the most dramatic changes can be seen in variable-rate mortgages. For the first time in almost a year, it's possible to get a variable-rate mortgage at the prime rate used by most major financial institutions, which is currently 2.25 per cent.
Pre-crisis, variable-rate mortgages came with discounts that ranged from 0.75 percentage points to as much as 0.9 points off prime. By late last fall, crisis conditions prompted lenders to start charging prime plus a full percentage point or more. Now, some lenders are starting to unwind their crisis-rate premiums.
"Variable-rate mortgages are all over the map right now," said Gary Siegle, regional manager with the mortgage brokerage firm Invis Inc. in Calgary. "We're seeing them right in the area of prime with some lenders."
An example of a variable-rate mortgage at prime: ResMor Trust, a small player that deals through mortgage brokers, is offering four-year variable-rate mortgages at prime in all provinces except Quebec. The catch: You have to have your mortgage approved by Sept. 30 and close the purchase within 45 days.
Can variable-rate mortgages fall back to their pre-crisis lows any time soon?
"Definitely, 100 per cent, no," said Robert McLister, a mortgage broker and author of the Canadian Mortgage Trends blog (canadianmortgagetrends.com). "Could they get a little below prime? Definitely."
Okay, it's strategy time. With prime at 2.25 per cent and fully discounted five-year fixed-rate mortgages going for something in the area of 3.9 to 4.1 per cent, you're got some thinking to do if you're buying a home or renewing a mortgage.
The variable rate looks tempting. Sure, the prime is going to rise in the medium term, but it's expected to stay put until next spring at least. Even when prime does move higher, it will have to increase by roughly 1.75 percentage points to get to where today's five-year mortgages are.
"The risk is obviously that rates go up a lot more," Mr. McLister warned. "Rates went down four percentage points from December, 2007, through April, 2009. They could easily go up four - why not?"
Variable-rate mortgages allow you to lock into a fixed-rate mortgage, so there's no reason why you have to ride interest rates all the way up. Still, you have to recognize that fixed-rate mortgages could be significantly more expensive by the time you decide to lock in.
An academic study of rates between 1950 and 2007 found variable-rate mortgages were the money-saving choice over five-year fixed-rate mortgages 89 per cent of the time. If you're willing to ride rates higher for a while in hopes of longer-term savings on interest costs, then consider a possible approach suggested by Mr. McLister.
Instead of arranging a variable-rate mortgage now, go for a one-year fixed-rate mortgage. Then, when you're renewing in one year's time, you'll move into a variable-rate mortgage that will ideally have a rate that is discounted below prime.
Fully discounted one-year closed mortgages today go for about 2.55 per cent, so you're not paying much of a penalty at all compared with what variable-rate mortgages are pegged at right now.
Another suggestion from Mr. McLister is to consider a three-year mortgage, which offers an attractive blend of low rates and security against interest rate surges. Three-year mortgage typically go for around 3.39 per cent on a fully discounted basis, but he knew of one small lender offering 2.9 per cent through the mortgage broker channel.
The case for going with a five-year fixed rate is that rates are very cheap by historical standards. Rates were a little bit lower last spring, but they're not as high as they were a month or two ago thanks to a pullback in bond yields that has trickled down to fixed-rate mortgages.
Mr. Siegle said over half of his firm's clients are locking into a fixed-rate mortgage right now. "You can't ever time the bottom of the market, but are these good rates that you can be comfortable with? A lot of people are saying, 'yeah, they are.' "
Bank of Canada expected to keep rates at record low
Paul Vieira, Financial Post Published: Tuesday, September 08, 2009
OTTAWA -- Analysts appear to be unanimous in believing the Bank of Canada will hold its record-low policy rate steady at its meeting Thursday, and maintain its commitment to keep the rate at 0.25% until June 2010.
The only item to look for in the pending rate statement, they indicate, is any change in nuance or tone, and possibly further concern about the rise of the Canadian dollar.
"The fact that the major economic data has largely evolved in line with the Bank of Canada's forecasts suggests (the central bank) is likely to reiterate its conditional statement to keep the overnight rate at 0.25% until the end of the second quarter of 2010," said Charmaine Buskas, senior economics strategist with TD Securities.
"And with no expected change to the overnight rate, all the focus will be on the nuances in the statement. It is likely to be very similar to the July 21 statement."
For the record, 21 economists in a Bloomberg News survey anticipate no change in the Bank of Canada rate, nor do the 11 members of the C.D. Howe Institute's monetary policy council.
The C.D. Howe said the Bank of Canada should stick to its mid-2010 commitment, adding that growth prospects remain uncertain as council members questioned how sustainable Canadian exports growth abroad will be, with "the dependence of U.S. and Chinese growth on government stimulus being a particular point of concern."
CMHC expects housing market to rebound strongly this year and next
Financial Post Published: Friday, September 04, 2009
Canada's housing market will rebound strongly in the second half of this year and into 2010, the federal housing agency said yesterday. Housing starts will reach 141,900 this year and increase to 150,300 for 2010, said Canada
Mortgage and Housing Corp. "Improving activity on the resale market and lower inventory levels in both the new and existing home markets are expected to prompt builders to increase residential construction," CMHC said.
Bob Dugan, CMHC's chief economist, said, "Economic uncertainty and lower levels of employment tempered new housing construction in the first half of this year. In the second half of 2009 and in 2010, we expect housing markets across Canada to strengthen."
Housing activity on brink of rebound, Canada Mortgage and Housing says
Canada's national housing agency predicts home construction to make a comeback in the second half of this year and into 2010, however economists say it could be a long time before we see the same building frenzy that has dominated this decade.
Canada Mortgage and Housing Corp. said Thursday it believes housing starts will hit 141,900, of which 68,400 will be single-family detached homes and 73,500 multiple-housing units, such as condos.
CMHC chief economist Bob Dugan said economic uncertainty and lower employment tempered new-housing construction in the first half of this year."In the second half of 2009 and in 2010, we expect housing markets across Canada to strengthen," he said in releasing the agency's third-quarter outlook.CMHC says improving activity on the resale market and lower inventory levels in both the new-and existing-home markets should prompt builders to increase residential construction.CMHC predicts overall starts to reach 150,300 in 2010.That compares to 211,056 housing starts recorded in 2008, of which 93,202 were single-family and 117,854 were multiple-housing units.Annual housing starts have surpassed the 200,000 mark every year since 2002.
However, CIBC World Markets economist Benjamin Tal believes the recovery in housing starts will be much slower."I think those number are a bit on the high side," he said, predicting a "not very weak, but not very strong" recovery of about 140,000 units in 2010.Tall also believes housing starts won't surpass 200,000 annually again for quite some time."We simply can't justify it. We don't have the demand," Tal said.The new normal will be about 170,000 to 180,000 starts annually, which we could hit by 2011, Tal said.Slower population growth and higher costs for new homes after provincial sales taxes are harmonized with the GST in provinces such as Ontario and B.C. next year will soften near-term growth in new home construction, Tal said.
Scotiabank economist Adrienne Warren also sees a slow recovery in new home building due to oversupply in some major markets, particularly in the condominium sector.But Warren said the CMHC forecast is yet another sign Canada's real estate market is on the rebound, and performing better than previously thought."It reaffirms that the market is far exceeding expectations across the board," Warren said.
CMHC also said Thursday it expects total sales on the Multiple Listing Service (MLS) to hit 420,700 in 2009 compared with 433,990 in 2008.That forecast is slightly higher than the Canadian Real Estate Association's recently revised 2009 resale forecast of 432,000 units.CREA boosted its outlook last week, saying it expects resale activity to drop by 0.4 per cent in 2009 versus 2008. That's better than its previous forecast of a 14.7 per cent drop year-over-year.
CHMC said the average price of a home across Canada last year was $303,607 and is expected to fall slightly to $301,400 in 2009, before climbing to $306,300 in 2010.
Warren predicts 2009 sales and prices will be on par with last year's levels."By and large we are looking at matching last year's levels, and holding steady on average, which is far from what anyone expected a few months ago," she said.She expects a "modest pickup" in sales in 2010."We will be looking at more of a balanced market."
Meantime, sales of existing homes rose in major centres across Canada in August compared to the month before.In the Greater Toronto Area, sales were up 27 per cent last month to 8,035 units compared to August 2008. The average price was $387,921, up by six per cent compared to the same month last year.Year-to-date sales in the Toronto area were 58,421 were up two per cent compared to the first eight months of 2008, the Toronto Real Estate Board reported this week. The average price of $385,978 was up by less than one-half of one per cent.
In Greater Vancouver, residential property sales increased 119.5 per cent in August to 3,441 compared to 1,568 in August 2008, according to the The Real Estate Board of Greater Vancouver.It said prices were down 1.1 per cent to $539,600 in August compared to the same month last year, but up 11.4 per cent from the start of the year.
Friday, October 2, 2009
Mortgage Rates as of Oct 2/09
1 year Bank posted rate 3.70%...my rate 2.55%
2 years Bank posted rate 3.85%...my rate 2.85%
3 years Bank posted rate 4.35%...my rate 3.35%
4 years Bank posted rate 4.94%... my rate 3.64%
5 years Bank posted rate 5.49%...my rate 3.84%
7 years Bank posted rate 6.60%...my rate 4.35%
10 years Bank posted rate 6.75%..my rate 5.30%
Bank Prime 2.25%
Variable Bank posted rate2.45%..my rate 2.25%
* rates subject to change without notice
*quick close discounts available
2 years Bank posted rate 3.85%...my rate 2.85%
3 years Bank posted rate 4.35%...my rate 3.35%
4 years Bank posted rate 4.94%... my rate 3.64%
5 years Bank posted rate 5.49%...my rate 3.84%
7 years Bank posted rate 6.60%...my rate 4.35%
10 years Bank posted rate 6.75%..my rate 5.30%
Bank Prime 2.25%
Variable Bank posted rate2.45%..my rate 2.25%
* rates subject to change without notice
*quick close discounts available
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