REALESTATE NEWS UPDATE Statistics released Wednesday showing a 2.8-per-cent jump in Ottawa housing starts in March are not as positive as they seem, says a spokesman for the Ottawa-Carleton Home Builders' Association.While strong demand for condominium units fueled an uptick in building activity, the association's executive officer John Herbert says the new construction was mainly the result of sales that occurred last year when "things were still relatively healthy." He said since then, sales for new condos and homes have actually slowed by about 60 per cent. "What we are seeing is really the tail end of a good sales period," said Herbert. "And I emphasize the tail end. Because sales really trailed off late last year." Canada Mortgage and Housing Corp. said Wednesday that the new work on 361 units last month was the strongest for the month in five years. "While year-to-date starts are still 22 per cent below the four-year record set in 2008, the present pace of construction remains healthy and consistent with CMHC's forecast," said senior market analyst Sandra Perez Torres. Construction starts on apartment units jumped 42.6 per cent to 134 units, offsetting a 30-per-cent decline in row housing to 87 units. Two new condo apartment projects in downtown Ottawa accounted for 122 of the new units. Builders were also active on new projects in Cumberland but housing starts were well below last year's performance in Kanata and other western areas. Construction of more expensive bigger housing units also rose, but at a slower pace, according to CMHC. Builders started work on 129 single-family units in March, two more units than a year earlier and 11 semi-detached units, five more than a year earlier. Mr. Herbert said he feels Ottawa is going to be "OK," from a building-start perspective, up until June or July, but then expects a considerable decline. "Then the bad news is going to start to hit because we just haven't logged the sales necessary to perpetuate the construction activity," he said. Nationally, CMHC said home construction rose unexpectedly in March, led by Ontario and Quebec. There were 154,700 housing starts on an annualized basis during the month, up from a revised 136,100 units in February, the government agency said. Many economists had expected housing starts to dip to 130,000 units in March. "Higher multiple starts in Ontario and Quebec were the main contributors to the rise in new construction activity in March," said Bob Dugan, CMHC's chief economist. "While the multiples segment experienced the largest increase, the overall boost in starts was broad-based, encompassing the singles segment as well." Urban housing starts were up 17 per cent to 127,900 units in March, the agency said. Urban multiple starts rose 28.3 per cent to 81,500 and urban single starts were 1.3 per cent higher at 46,400. Construction of urban units rose by an annualized 35 per cent in Ontario and 23.3 per cent in Quebec. Meanwhile, urban activity fell 17.3 per cent in British Columbia, 7.9 per cent in Atlantic Canada and by 7.5 per cent in the Prairies. Rural starts were flat at 26,800 units in March. "New home construction is now at a more sustainable level after having been exceptionally strong over the past seven years, exceeding 200,000 units per year," CMHC said. Millan Mulraine, economics strategist at TD Securities, said that "in the grand scheme of things, the key economic fundamental factors continue to point to further weakness in Canadian housing sector activity, and as such we believe that this surprising pickup in construction activity is likely to be a one-month wonder." By Klark Byrd kbyrd@suntelegraph.com
(Created: Friday, April 3, 2009 5:39 PM CDT)
SIDNEY - In stark contrast to other signs of hope for the economy, employers nationwide slashed yet another 663,000 jobs in March as they scrambled to cut payroll costs. The U.S. Department of Labor on Friday announced that the national unemployment rate increased to 8.5 percent in March. According to Nebraska Workforce Development, Nebraska’s economy remains better than the national picture with an unemployment decrease that dropped it to 4.2 percent in February, down from 4.3 percent in January. Cheyenne County reported a decrease in unemployment to 4 percent in February from 4.1 percent in January. From December to January, Cheyenne County’s unemployment rate increased from 2.9 percent, according to NWD information. “Nebraska is a state with relatively low population as compared to its size,” said Labor Commissioner Catherine Lang. “It is unique in that a majority of the nearly 1.8 million residents, 64 percent are located in the far eastern portion of the state. Much of the state is rural so when a large company in a small community closes its doors, the effect on that area is profound. More than half, 56 percent, of layoffs have occurred outside of the two metropolitan statistical areas, Lincoln and Omaha.” The highest unemployment rate in the state went to Hooker County, which reported 8.1 percent unemployment. The second highest unemployment rate was in Blaine County with 8 percent. Nationally, March’s net job loss is yet another steep payroll reduction as seen in prior months, according to figures released Friday. The economy lost 681,000 jobs in December, 655,000 in January, and 651,000 in February. Officials in Washington said that 3.3 million jobs have been lost in the past five months, more than half of the 5.1 million lost since the beginning of the recession in December 2007. The Federal Reserve expects the national unemployment rate to crest near 8.8 percent, but some economists say it will rise above 10 percent — a wrenching forecast for the 13.2 million people in the United States who are currently unemployed. TREB-Torontonians Want Toronto Land Transfer Tax Repealed: PollTORONTO, ONTARIO--(Marketwire - March 30, 2009) - With Toronto City Council scheduled to debate and vote on the City's proposed 2009 Operating Budget tomorrow, public opinion poll results, released today, show that 65 per cent of Torontonians believe that the Toronto Land Transfer Tax should be repealed.
The poll was conducted by the Environics Research Group Ltd. for the Toronto Real Estate Board.
"REALTORS® strongly believe that Toronto City Council should scrap the Toronto Land Transfer Tax, and the public agrees," said Maureen O'Neill, President of the Toronto Real Estate Board. "The Toronto Land Transfer Tax is not a fair tax and is hurting Toronto's economy."
The poll also found that 57 per cent of Torontonians believe that the Toronto Land Transfer Tax is hurting the real estate market and 62 per cent believe that the City has not taken adequate action to help stimulate the economy.
"Torontonians want more action from the City on the economy, and they understand that the Toronto Land Transfer Tax is having a negative impact," said O'Neill. "One of the best ways that the City can take action to help with the current economic situation is to roll back the Toronto Land Transfer Tax."
A recent study conducted by the C.D. Howe Institute and Economics Professors from the University of Toronto determined that the Toronto Land Transfer Tax is having a significant impact on Toronto's real estate market, reducing housing sales by 16 per cent and values by 1.5 per cent in 2008 alone.
A separate recent study, conducted for the Canadian Real Estate Association, found that one out of every 100 jobs depends on spending associated with re-sale housing sales, on things like renovations, furniture, and appliances. This means that approximately 14,000 jobs in Toronto depend on re-sale housing transactions. TREB believes that, by impacting the real estate market, the Toronto Land Transfer Tax is risking these jobs.
The Environics poll also found that 60 per cent of Torontonians think that the City is not being run as efficiently as possible. REALTORS® are calling on City Councillors to focus their budget efforts on options recommended over a year ago by an independent blue-ribbon panel of business and labour representatives, appointed by Mayor Miller.
"Over a year ago, the Mayor's Fiscal Review Panel identified, literally, hundreds of millions of dollars in savings and efficiencies that the City could be taking advantage of," said O'Neill. "The City's budget efforts should be focusing on fair options, like those recommended by the Mayor's Fiscal Review Panel."
The poll of 500 Toronto residents aged 18 years or over was conducted by telephone between March 12 and March 15, 2009, and is considered accurate to within +/- 4.5%, 19 times out of 20.
Greater Toronto REALTORS® are passionate about their work. They adhere to a strict Code of Ethics and share a state-of-the-art Multiple Listing Service. Serving over 28,000 Members in the Greater Toronto Area, the Toronto Real Estate Board is Canada's largest real estate board. Greater Toronto Area open house listings are now available on WASHINGTON (Reuters) - Sales of newly built U.S. single-family homes unexpectedly rose at their fastest pace in 10 months in February, while prices fell by a record margin from a year ago, a government report showed on Wednesday. The Commerce Department said sales rose 4.7 percent to a 337,000 annual pace, the fastest increase since April last year, from an upwardly revised 322,000 in January. Despite the increase, February sales were the second lowest ever after the drop in January to the slowest pace in records going back to 1963, the department said. Economists polled by Reuters had forecast sales at a 300,000 rate in February. The median sales price in February fell a record 18.1 percent to $200,900 from a year earlier, the department said. The median marks the half-way point, with half of all houses sold above that level and half below. The inventory of homes available for sale in February was at 330,000, the smallest since June 2002. The February sales pace left the supply of homes available for sale at 12.2 month's worth.
U.S. Economy: Home Resales Unexpectedly Increased in February
By Timothy R. Homan March 23 (Bloomberg) -- Sales of previously owned homes in the U.S. unexpectedly increased in February as record foreclosures pushed down prices and lured first-time buyers into the market. Purchases rose 5.1 percent to an annual rate of 4.72 million from 4.49 million in January, the National Association of Realtors said today in Washington. The median price slumped 15.5 percent from a year ago, the second-biggest drop on record, and distressed properties accounted for 45 percent of all sales. Stocks, already up after the Obama administration unveiled details of a plan to buy up to $1 trillion in troubled assets, extended the rally after the report. The president’s proposal, combined with last week’s Federal Reserve initiative to commit as much as $1.1 trillion more to unclog credit markets, is raising speculation the global economic slump may soon ease. The plans “will certainly help, but will take time,” said Guy LeBas, chief economist at Janney Montgomery Scott LLC in Philadelphia, who had forecast an increase in sales. “We’re reaching a point where extreme sales declines will not happen, but we haven’t seen stability yet. There’s a long ways to go.” The Standard & Poor’s 500 Index climbed 3.9 percent to 798.46 at 1:57 p.m. in New York. The S&P homebuilder composite index was up 9.6 percent. Year-on-Year Sales Economists forecast resales would fall to a 4.45 million annual rate, according to the median of 65 projections in a Bloomberg News survey. Estimates ranged from 4.26 million to 4.75 million. Sales were down 4.6 percent compared with a year earlier. First-time buyers accounted for about half of all sales last month, led by growing demand for lower-priced properties, said the realtors group’s chief economist Lawrence Yun. That’s contributing to the drop in values, he said. The median price of an existing home decreased to $165,400 from $195,800 in February a year earlier, the group said. Lower prices have drummed up enough demand in some of the most distressed areas of the country to allow values to stabilize. In California, median listing prices rose last month for the first time in three years, Yun said. “Part of the market-clearing process is that distressed properties must be sold, so the fact that this is occurring is good,” Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc., a New York forecasting firm, said in a note to clients. “Still, it certainly depresses prices, and there are plenty more foreclosed -- or soon to be foreclosed -- homes in the pipeline.” He said values will therefore keep falling. Flooded Market The number of unsold homes on the market at the end of February represented 9.7 months’ worth at the current sales pace, the same as in January. The group has said a five to six months supply is usually consistent with a balanced market. Resales of single-family homes increased 4.4 percent to an annual rate of 4.23 million. Sales of condos and co-ops climbed 11.4 percent to a 490,000 rate. All four regions showed an increase in sales last month, led by a 15.6 percent gain in the Northeast. Home sales have been falling since 2005 and prices peaked in 2006. The S&P/Case-Shiller home-price index of 20 metropolitan cities was down 18.5 percent in December from a year earlier, a record decline, the group said last month. The drop in prices and declining mortgage rates have made buying a home more attractive. The realtor group’s affordability index reached a record high in January. Government Action Fed policy makers last week announced the central bank will buy as much as $300 billion in long-term Treasuries and more than double mortgage-debt purchases to $1.45 trillion. The central bank had already committed to buying $600 billion of mortgage-backed securities and bonds sold by government- sponsored housing agencies. The Obama administration plans to use up to $100 billion of the $700 billion in bailout money to spur a public-private effort to purchase illiquid securities and loans that caused credit to dry up. Officials have also pledged to spend $275 billion to help keep as many as 9 million Americans in their homes and stem the rise of foreclosures. The program includes a tax break of as much as $8,000 for first-time homebuyers that wouldn’t require repayment. Buyer traffic was up 5 percent last month, said Charles McMillan, NAR’s president and an agent in the Dallas-Fort Worth area. “It appears most of the increase in buyer traffic occurred in the latter part of the month after the $8,000 first- time buyer tax credit was put in place,” he said in a statement. “We expect to see sales picking up” around the middle of the year, he said. Distressed sales are hurting builders. Toll Brothers Inc., the largest U.S. builder of luxury homes, this month reported its sixth consecutive quarterly loss. Hovnanian Enterprises Inc., New Jersey’s largest homebuilder, had a 10th straight quarterly loss. “We expect demand for all homes, both new and existing, to remain far below normalized levels,” Chief Executive Officer Ara Hovnanian said in a March 10 statement. To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net Last Updated: March 23, 2009 14:02 EDT Globe and Mail Update March 3, 2009 at 9:46 AM EST OTTAWA - The Bank of Canada cut its benchmark lending rate within spitting distance of zero and signalled that it is prepared to ease credit markets by purchasing bonds and other assets. As most economists expected, the central bank cut its overnight lending rate by half a percentage point to 0.5 per cent, the lowest ever. Major banks cut their prime lending rate almost by half a percentage point, to 2.5 per cent. “Consistent with returning total [consumer price index] inflation to 2 per cent, the target for the overnight rate can be expected to remain at this level or lower at least until there are clear signs that excess supply in the economy is being taken up,” policy makers said in the press release explaining their decision. The surprise in Tuesday's statement was the declaration that Governor Mark Carney and his advisers on the governing council are preparing the ground for a program of “credit and quantitative easing.” Such an effort would see the central bank become a buyer in credit markets in hopes that their purchases would lower prices for corporate debt and other riskier assets that hold little appeal to investors in the midst of a global recession. “Given the low level of the target for the overnight rate, the bank is refining the approach it would take to provide additional monetary stimulus, if required, through credit and quantitative easing,” the statement said. The central bank said it will “outline a framework for possible use of such measures” when it publishes its next quarterly report on economic conditions on April 23. Mr. Carney is struggling to reverse Canada's first recession in almost two decades. The collapse of the market for U.S. subprime loans more than a year ago sparked a global financial crisis that is now shrinking the economies of the world's richest countries. Statistics Canada reported Monday that gross domestic product declined at an annual rate of 3.4 per cent in the fourth quarter. The United States economy contracted at a 6.2 per cent over the same period. The European Union's GDP reversed at a 5.9 per cent pace and Japan's economy collapsed at a 12.7 per cent pace. Canada's fourth-quarter contraction was faster than the 2.3 per cent rate the central bank predicted in January. In the statement, the Bank of Canada acknowledged that economic growth through the first half of the year will be weaker than it expected, noting that the “output gap” – the difference between current economic activity and the pace policy makers reckon the economy can set without stoking inflation – is wider now than it was at the start of the year. “Potential delays in stabilizing the global financial system, along with the larger-than-anticipated confidence and wealth effects on domestic demand, could mean that the output gap will not begin to close until early 2010,” the statement said. Because so much of Canada's wealth comes from exports, the central bank said a rebound will depend heavily on the efforts of U.S. President Barack Obama to stabilize the world's largest economy. The Obama administration is spending hundreds of billions in an effort to stimulate demand and buttress some of the world's largest banks, which teeter on the edge of insolvency. Mr. Carney has slashed the benchmark lending rate by 4 percentage points since December, 2007, to buoy spending in Canada and loosen credit markets. Interest rate cuts act with a lag. The central bank said Monday that its efforts over the past year will begin show up in the second half of the year and into 2010. “Once the global financial system stabilizes and global growth recovers, the underlying strength of the Canadian economy and financial sector should ensure a more rapid recovery in Canada than in most other industrialized nations,” the Bank of Canada said. cut its benchmark lending rate within spitting distance of zero and signalled that it is prepared to ease credit markets by purchasing bonds and other assets. As most economists expected, the central bank cut its overnight lending rate by half a percentage point to 0.5 per cent, the lowest ever. Major banks cut their prime lending rate almost by half a percentage point, to 2.5 per cent. “Consistent with returning total [consumer price index] inflation to 2 per cent, the target for the overnight rate can be expected to remain at this level or lower at least until there are clear signs that excess supply in the economy is being taken up,” policy makers said in the press release explaining their decision. The surprise in Tuesday's statement was the declaration that Governor Mark Carney and his advisers on the governing council are preparing the ground for a program of “credit and quantitative easing.” February 19, 2009 at 9:29 AM EST OTTAWA — Home building is expected to scale back considerably in Canada this year, with housing starts falling 24 per cent in 2009, followed by a barely discernible increase in 2010, Canada's federal housing agency says in a newly downgraded forecast. “Overall, housing starts will decline in all areas of Canada over the course of 2009. The largest declines will be seen in Western Canada and Ontario,” Canada Mortgage and Housing Corp. says in its quarterly outlook. Housing starts reached 211,056 units in 2008, which was already lower than the 228,343 starts seen in 2007, a boom year. But this year will be even grimmer, with just 160,250 starts expected, CMHC said. In 2010, as the economic downturn levels off, housing construction should increase ever so slightly to 163,350 starts. The downturn is not limited to construction in the housing sector. Existing home sales are expected to take a big hit too, and prices will slide significantly, CMHC said in its forecast. Existing home sales are expected to drop 14.6 per cent in 2009, and then rise 9.3 per cent in 2010. Average home prices are forecast to fall 5.2 per cent to $287,900 in 2009. Next year, prices should stay flat. “The economic downturn will result in a decrease in demand for home ownership leading to a decline in housing starts and existing home sales in 2009,” said Bob Dugan, chief economist at CMHC. “Housing market activity will begin to strengthen as the Canadian economy rebounds in 2010 and the level of housing starts over the forecast period will be more in line with demographic fundamentals.” The scale-back in home construction is hitting all types of housing and all regions of the country, the CMHC forecast warned. The entire Canadian economy is already feeling the effects of a sharp deceleration in housing activity noted since October, Statistics Canada noted. Its composite leading indicator in January fell 0.8 per cent, the largest and widespread decrease since the index began falling in September, Statscan said. The housing part of that indicator contracted by 7.0 per cent – the largest monthly decline since June, 1990 – as existing home sales and housing starts have dropped off. Housing starts are now about half of what they were at the pinnacle of the spring of 2008, Statscan noted, with the biggest drop in Western Canada. The Western Canada moderation will continue in spades, CMHC said. Construction of single family homes in Saskatchewan, for example, is expected to contract 39.1 per cent in 2009, a reversal of its real-estate boom. Still, Alberta and Saskatchewan are expected to lead the rebound in single-family home construction in 2010. CMHC sees construction of single detached homes growing by almost 12 per cent in Alberta next year, and 9 per cent in Saskatchewan. British Columbia, on the other hand, is expected to see declines in both years. Economists say Canada's housing decline won't be pretty but also won't be anything like the ongoing crash plaguing the U.S. economy. Rather, Canada's housing starts are expected to decline because of overbuilding in the past few years, economists say. And once the excess level of housing is worked off, home construction should resume at a pace better suited to Canada's demographics. Jan 20 2009 "History is being made today with Obama being the world's current hero. A man worth listening, learning, admiring and most of all dying for if he calls on you" Pajman Talat. Maclean Magazine called him "We Wish He Was Ours" and I agree. Canada's Real Estate Market. Click to see video Don Drummond, chief economist and senior vice-president for the TD Bank Financial Group, expects the economy to shrink for more than a year before starting to recover. (CBC) 100 basis points of [Bank of Canada] and Fed cuts that could come at any time. This is not just made-in-U.S.A. weakness as Canada faces its own home-grown recession signals," Scotiabank economists Derek Holt and Karen Cordes said in a morning commentary. A recession is commonly defined as two or more quarters of negative GDP growth. In Toronto, these practitioners of the dismal science were decidedly more dour as to their expectations of the national economy even into the next year. TD Bank's Don Drummond said he sees the economy shrinking until late 2009 and then only gradually recovering. On the campaign trail for the Oct. 14 election, Prime Minister Stephen Harper said that while the country's economic fundamentals were relatively strong compared with other countries, Canada still might need to work up a strategy to fight a possible slowdown. “We are also watching to make sure that any actions that are taken [elsewhere] don't have any rebound effects on us, so we are putting some secondary plans in place if that becomes necessary,” he said at an event Monday morning in Ottawa. Global oil prices fell below $90 US a barrel at the start of the week; other commodity prices have likewise slipped in recent weeks in the face of slowing world economic growth. Canadian housing prices have begun to slide as well, although the country will not face a home sector deterioration along the lines of what occurred in the United States, Scotiabank said. Finally, exports to the United States will dry up as American demand for Canadian products evaporates, economists said. Scotiabank currently has the Canadian economy growing 0.7 per cent this year and 1.4 per cent in 2009. This prediction, however, was made on Sept. 9, before the full force of the Wall Street financial meltdown was evident. BMO Capital Markets expects the economy to grow 1.7 per cent in the July-to-September period but then contracting by 0.4 per cent in the final three months of the year. Along with Scotiabank, BMO has Canada's economy growing in the 2009, up 1.0 per cent.
************Toronto Real Estate Board stats for October created some heated dialogue in the industry in recent weeks. While many believe that the dismal statistics reflect the recent volatility in financial markets, some are now asking if they also identify an emerging trend in the Greater Toronto Area. The simple answer is no. Although there are some serious negative factors influencing the marketplace, one month does not make a market. We need several consecutive months of momentum – one way or another – before we can really determine the direction of the market. Make no mistake. 2008 has presented our industry with challenges across the board. Unit sales are down 16 per cent from one year ago, hovering at approximately 70,000, while average price at $380,654 is up marginally over year–to–date figures for the same period in 2007. And the prognosis will get worse before it gets better, considering the new land transfer tax rate implemented in January, 2008 artificially inflated housing values during the fourth quarter of 2007. Average price hovered close to $400,000 in October, November, and December of last year – which will be the measuring stick in the months ahead. Clearly, market conditions have shifted in favour of the buyer. There are more homes listed for sale than one year ago and houses are taking longer to sell. Our forecast for 2008 – released in October of 2007 – said as much. Sellers are adjusting to new market realities – albeit reluctantly – while buyers are taking it all in. Some are sitting on the fence, waiting for housing values to fall further or interest rates to decline a percentage point or two more. The courageous are jumping into the market, taking advantage of lower prices, greater selection, and less competition. For those that are trading in the same market, it’s all relative. Sellers may get less than they thought for their homes, but they’ll also pay less on the other side of the transaction. With market conditions stabilizing, first–time buyers now have the luxury of time in making their housing decisions. They also have greater purchasing power than they had one year ago – and their dollar will go much farther. Unlike other investment vehicles, residential real estate serves two purposes. It’s still considered an investment, but it is also a roof over your head. We know from past experience that housing appreciates at a rate of five per cent annually. It’s cyclical, so it may rise and fall, but the risk involved will never be as steep or as serious as in the stock market, where the value of your portfolio can drop 30 per cent overnight and some of your stocks can fall to 0. You also can’t live in your mutual fund. Real estate in the Greater Toronto Area has faced many challenges over the years but continued to experience steady growth. In 2009, there are some announcements that are expected to have a positive impact on the housing market and they are as follows: 1. The Bank of Canada has indicted that lending rates may fall further in 2009. 2. Federal government intervention in the form of a $75 billion mortgage purchase from the CMHC will free up additional credit. 3. Measures will be introduced by both the Federal and Provincial government to bolster the economy. In Ontario, that could mean a bailout package for the ailing manufacturing sector. 4. A lower Canadian dollar – hovering at 85 cents American – may provide a much–needed boost to manufacturing. 5. Job employment rates continue to hold steady in the GTA, despite upward momentum at the provincial level. The unemployment rate was 6.8 per cent in October, down from 6.9 per cent in September. 6. Population in the GTA continues to grow through migration, with 60,000 plus households expected to form in 2009. Last, but not least, we must remember that the Greater Toronto Area generates about 10 per cent of the country’s total wealth – that’s comparable to what New York, Chicago, Boston, and San Francisco make to the US economy. There’s no question that we are a world–class city – in a have–not province. We may be in for some challenges over the next six to nine month period, but we should see clear signs of recovery by late 2009. The good news is that lifecycle events will continue to occur, whether real estate is experiencing a bull or bear market. Sincerely,
Michael Polzler
Executive Vice President and Regional Director
RE/MAX Ontario-Atlantic Canada Inc. 
CANBERRA, Oct 9 - Canada has the world's soundest banking system, closely followed by Sweden, Luxembourg and Australia, a survey by the World Economic Forum has found as financial crisis and bank failures shake world markets.
But Britain, which once ranked in the top five, has slipped to 44th place behind El Salvador and Peru, after a 50 billion pound ($86.5 billion) pledge this week by the government to bolster bank balance sheets.
The United States, where some of Wall Street's biggest financial names have collapsed in recent weeks, rated only 40, just behind Germany at 39, and smaller states such as Barbados, Estonia and even Namibia, in southern Africa.
The United States was on Thursday considering buying a slice of debt-laden banks to inject trust back into lending between financial institutions now too wary of one another to lend.
The World Economic Forum's Global Competitiveness Report based its findings on opinions of executives, and handed banks a score between 1.0 (insolvent and possibly requiring a government bailout) and 7.0 (healthy, with sound balance sheets).
Canadian banks received 6.8, just ahead of Sweden (6.7), Luxembourg (6.7), Australia (6.7) and Denmark (6.7).
UK banks collectively scored 6.0, narrowly behind the United States, Germany and Botswana, all with 6.1. France, in 19th place, scored 6.5 for soundness, while Switzerland's banking system scored the same in 16th place, as did Singapore (13th).
The ranking index was released as central banks in Europe, the United States, China, Canada, Sweden and Switzerland slashed interest rates in a bid to end to panic selling on markets and restore trust in the shaken banking system.
The Netherlands (6.7), Belgium (6.6), New Zealand (6.6), Malta (6.6) rounded out the WEF's banking top 10 with Ireland, whose government unilaterally pledged last week to guarantee personal and corporate deposits at its six major banks.
Also scoring well were Chile (6.5, 18th) and Spain, South Africa, Norway, Hong Kong and Finland all ending up in the top 20. At the bottom of the list was Algeria in 134th place, with its banks scoring 3.9 to be just below Libya (4.0), Lesotho (4.1), the Kyrgyz Republic (4.1) and both Argentina and East Timor (4.2).
Decline in new listings brings balance to real estate market: CREAThe number of homes listed for sale across Canada fell in August, indicating the real estate market has reached a comfortable balance, figures from the Canadian Real Estate Association show.In August, there were 74,993 new listings nationally, compared with 80,147 in July. That represents a monthly drop of 5.4 per cent, and a 3.4-percent decline year over year."Things are not as bad as some would have us believe. They're not bad at all," Gregory Klump, CREA's chief economist told CBCNews.ca.In July, Canadians saw the first real drop in house prices in a decade after statistics showed the number of listings had increased, but not the number of sales.Last week, a Merrill Lynch Canada report suggested Canada's housing market was in for a major correction similar to what is being seen in the U.S.The Merrill Lynch report suggested that housing was more than 10 per cent overvalued in a number of cities, including Vancouver, Calgary, Edmonton, Sudbury and Montreal.But Klump disputed that report, saying evidence of a balanced market comes in the form of fewer homes being listed for sale."I expected listings to drop. Not as soon as this, but it was anticipated," said Klump.Downward pressure on housing prices occurs when the number of listings rises while the number of sales fall. Seeing that the number of listings fell is actually a good thing, he said."As our analysis shows, the Canadian housing market is stable and home sellers are not under pressure to sell. This is in stark contrast to the U.S. housing market, where there are a large number of distress sales," said Klump.Of 94 markets across Canada, 52 were considered a balanced or even a seller's market. New listings remain most elevated relative to sales in British Columbia and Saskatchewan.Close to 70 per cent of real estate boards in Canada reported year-over-year average price gains in August. However, lower activity in some of Canada’s priciest housing markets pulled the national average price lower by 4.6 per cent year-over-year in August.The last time Canada saw a buyer's market nationally was April 1995."We're past the peak," said Klump. "The housing market has ended a cycle."Great News... Toronto's Market Will Continue To Be Strong Despite the bail out.Strong new home sales, near record sales in the resale market and sustained job growth are three of the predictions for 2008 according to the Canada Mortgage and Housing Corporation 2008 Housing Market Outlook for the Greater Toronto Area released recently.Total new home sales will be slightly lower than in 2007, partly due to fewer existing home buyers moving into the new home market. Of the 38,000 total new home sales predicted for 2008, half that number or 19,000 will be in high-rise apartment sales. The remaining 50% of pre-construction sales will be made up of low rise sales (i.e., single-detached, semi-detached and row/town houses, including stacked townhouses). Single-detached homes will only account for 30% of the homes sold in the GTA next year, the lowest number ever.
CMHC predicts that the average price in 2008 for single-detached homes in the GTA will be $540,000. Based on our industry’s recommended gross debt service ratio of 32%, the annual combined gross household income required to carry this mortgage would be $121,385. Because many first-time buyers and owner households will have incomes below this amount, many buyers will opt to purchase a less-expensive multiple-family home. In this market, condominium apartments will be the most popular choice.In the City of Toronto, condominium apartments will make up the great majority of home starts in 2008. Single-detached starts will decline to 12,500 with most of those occurring in municipalities where prices are lower than the GTA average, such as Durham Region.Condominium apartment completions are expected to rebound in 2008. Based on CMHC’s Fall Rental Market Survey, investors owned between 20 and 21 per cent of registered condominium apartment stock and could hold a greater share in unregistered projects. As projects complete, some of these investors will choose to sell their apartments to take advantage of increases in market value which occurred during the construction period. These increased sales are NOT forecast to result in declining values for condominium apartments.
Currently, the resale market is very tight, with sales accounting for almost half of active listings. Further, the number of completed and unoccupied units is very low, ranging between 1,500 and 2,000 units. These tighter market conditions have resulted in average condominium apartment prices growing at an annual rate of close to 10 per cent in 2007. As more supply comes onto the market over the next year, however, the anticipated rate of price growth should be closer to five percent.The resale market will edge slightly lower in 2008 but sales will remain at a near record close to 90,000 throughout the year.
Sustained job growth and labour income, choices in mortgage products that keep borrowing costs low and an ample choice in resale homes will keep the demand for resale homes strong during 2008.CMHC suggests that as home owners list their homes in order to move into completed new homes or to trade up or down size, more listings relative to sales will translate into more choice for buyers.
CMHC anticipates that a better-supplied existing home market translates into moderate annual price growth. When buyers have more homes from which to choose, they are less likely to make offers at or above list, or to enter into “bidding wars” with other buyers. The average existing home sale price in 2008, across all housing types from single-detached through condominium apartments, will be $388,000 or approximately a 4.6 per cent increase over 2007.It is expected that the City of Toronto will remain the tightest market across all housing types, with average price growth close to three times the rate of inflation. Durham Region will continue to offer the most choice for home buyers with price growth at around 1.5 times the rate of inflation. The Regions of Halton, Peel and York will continue to be a seller’s market, but not as tight as in the City of Toronto. These Regions can anticipate an average price growth around 2.5 times inflation.The cost of home ownership will remain manageable for the average household in the GTA over the next year. Even though home prices will continue to grow at more than twice the rate of inflation, low borrowing costs will moderate these increases. The required combined gross household income to carry a mortgage on a home priced at the forecast average of $388,000 will be $87,217. This number is approximately six per cent less than the estimated average household income in the GTA and suggests that a great number of households in the GTA planning on purchasing a home will be able to comfortably manage home ownership.
The unemployment rate in Toronto is forecast at 6.4 per cent for 2007 and 2008 - below the average unemployment rate experienced over the past two decades. Average earnings will rise faster than inflation next year and suggest that households will continue to look at improving their housing situation.Mortgage rates are expected to remain flat through the end of 2007. While still low by historical norms, mortgage rates are expected to rise gradually by 25-50 basis points in 2008. The one year posted mortgage rate is forecast to be in the 6.50-7.50 per cent range, while three and five year posted mortgage rates are forecast to be in the 6.75-7.75 per cent range in 2008.
UPDATE 2-Canada housing market rebounds, Ontario leads way(Recasts and adds details) By Frank Pingue TORONTO, Sept 9 (Reuters) - Canadian housing starts rebounded in August, beating expectations, but some economists cautioned against reading too much into the number since it followed a weak reading in July. Housing starts rose 13 percent in August to a seasonally adjusted annualized rate of 211,000 units from 186,500 units in July, Canada Mortgage and Housing Corp said on Tuesday. The bulk of the overall gain, which topped the consensus analysts' expectation for 195,000 starts, was in Ontario, where there was an 81 percent jump. Government-owned CMHC attributed the surge to multiple-unit starts, which shot up 25.2 percent to 114,700 units following a 20.2 percent slide in July. Starts on urban single-family residences rose 2 percent to an annual rate of 71,200 units, while rural starts in August were estimated at an annual rate of 25,100 units, unchanged from July. "After a brief pause in July, the volatile multiple segment bounced back to a level of activity that is more consistent with our forecast for this year," Bob Dugan, chief economist at CMHC, said in a statement. The data contrasts with the state of the housing market in the United States, which has been hit by a crisis that began in the subprime mortgage sector and spread across other sectors of the market and the broader economy. But some experts were quick to suggest that since the bounce back in housing starts followed weakness, it does not mean that housing activity in Canada is buoyant. "It should be taken for what it is - a snapback from a previously large decline," Charmaine Buskas, senior economics strategist at TD Securities, wrote in a note. "The Canadian housing market does have some headwinds that will bring down activity in the next couple quarters, which suggests a softer trend in the housing market and a smaller contribution to growth." The Canadian dollar showed little reaction to the data but eventually relinquished gains recorded earlier and headed lower along with oil prices. The rise in housing starts is in keeping with data released earlier this week that showed the value of Canadian building permits rose unexpectedly in July from June, led by a rise in projects to build multifamily housing. "MORE DOWNWARD PRESSURE" Housing starts in Ontario, Canada's most populous province, shot up to 86,500 in August. But starts fell in all other regions, including a 8 percent slide in British Columbia to 30,400, and a 22.5 percent drop in the Prairie region to 23,700. Starts fell by 8.7 percent to 37,600 in Quebec and by 11.5 percent in the Prairies to 23,700. "Canadian residential construction activity has held steady since 2003 thanks to strong multiple-unit starts and strength in Western Canada," Robert Kavcic, an economic analyst at BMO Capital Markets wrote in a note. "However, with that region slowing and other factors - job losses, declining confidence - pointing to further housing market weakness, expect more downward pressure on housing in the coming quarters." (Editing by Peter Galloway) |