Housing market will be stable next two years: RBC. A stronger economy will offset the effects of higher mortgage rates and keep Canadian house prices stable over the next two years, according to the Royal Bank of Canada. In a market update that has the bank forecasting price gains of 0.5 per cent in 2011 and 1.3 per cent in 2012, economist Robert Hogue said that after two years of "gyrating wildly," the Canadian housing market is likely to be a much less interesting place for the next several years.
"Going forward, we see nearly perfectly offsetting forces driving Canada's housing market," he said. "On the upside, the economic recovery will gather strength in 2011, continuing to boost employment and family incomes. On the downside, interest rates are expected to rise. " The Bank of Canada will likely raise interest rates by 100 basis points this year and another 150 basis points in 2012, he said, making mortgage payments more expensive for the majority of homeowners. Mark Carney cites rebound, still sees risk. Bank of Canada Governor Mark Carney left his benchmark interest rate at 1 per cent Tuesday, acknowledging that the domestic recovery is showing more strength than anticipated while continuing to flag a series of global risks that now includes upheaval in oil-producing countries such as Libya.
In explaining the decision to leave borrowing costs alone for a fourth consecutive time, as expected, the central bank said Canada's rebound ``is proceeding slightly faster than expected," with early signs of a comeback for exports and ``more evidence of the anticipated rebalancing of demand" away from consumer spending and government stimulus. However, the bank said, the export sector still faces ``considerable challenges" from the strong Canadian dollar and companies' poor productivity performance, obstacles which policy makers have said would impede Canada's ability to get all that it can out of improving conditions in the United States. Speaking to the U.S. House price gains likely to recede. Gains in house prices are likely to "recede" starting next month as shorter mortgage terms keep some buyers out of an already softening market, the Canadian Real Estate Association said Tuesday. February sales slipped 1.6 per cent compared to January across the country, CREA said, and were 5.9 per cent lower than a year ago.
CREA said the average resale price in the month was $365,674, up 5.8 per cent from January's $343,675. "When you take Vancouver out of the equation, the year-over-year increase in the national average price drops to 3.4 per cent," said Gregory Klump, the association's chief economist. "While that's still stronger than in the past six months or so, national average price gains may recede after tighter mortgage regulations take effect in March. " The Federal government wiped out 35-year amortizations earlier this year, and they will be unavailable by Friday. "Still, sales should continue to be well supported by a number of factors. Canadians are still in deep trouble on household debt. These are stories Report on Business is following today. Get the top business stories through the day on BlackBerry or iPhone by bookmarking our mobile-friendly webpage.
Follow Michael Babad on Twitter. Net worth continues to climb Wealth in Canada continues to rebound from the great crash. Overall household net worth increased 2.2 per in the fourth quarter to $6.2-trillion, following on the third quarter's 3-per-cent climb, Statistics Canada said today. On a per capita basis, that's an increase to $181,700 from $178,200. "The gain in the Standard and Poor's/Toronto Stock Exchange composite index of about 9 per cent in the fourth quarter was reflected in rising values of household equities (including mutual funds) and pension assets, albeit at a slower pace than the previous quarter," the statistics gathering agency said. "Equity holdings of the household sector increased by $129-billion in 2010 while they increased by $194-billion in 2009, after a $306-billion drop in 2008. " Carnage not over in U.S. housing industry. Bloodied though it may already be, the U.S. housing industry is in for still more.
Tuesday, the latest reading of the widely watched S&P/Case-Shiller home price index showed house prices slipping again in December, falling a further 0.4 per cent from November despite better economic signs from the world’s largest economy. That shows the U.S. real estate sector firmly in a double-dip, economists say, and some believe the carnage isn’t over. “The second leg in house prices that began last year will continue throughout this year and take prices to a new cycle low, some 5 per cent below current levels,” Paul Dales, the senior U.S. economist at Capital economics, said in a new report. “If a vicious circle of falling prices and rising foreclosures were to develop, prices would fall much further.” “At this point in the housing cycle, declining prices are not necessarily the best gauge of the broader housing market given the disproportionate share of sales from distressed properties,” Mr.
U.S. housing data may have understated extend of collapse-report. Global house prices: Floor to ceiling. The Economist vs. BMO Nesbitt Burns: is Toronto real estate overpriced or ridiculously overpriced? | To Market, To Market. Apparently, nobody is willing to argue with a straight face that Toronto real estate is a bargain. That’s the lesson we learned while reading up on the debate between The Economist and Canadian investment bank BMO Nesbitt Burns. A few weeks ago, the British economy mag put out an article saying that Canada’s real estate market was overpriced by almost 24 per cent, compared to the U.S., where the terminal real estate market is underpriced by 2.1 per cent. Of course, this might give people the idea that it was time to stop buying and start selling, so BMO Nesbitt Burns has today released a study telling those Limeys to brush up on their figures. In our view, comparing house prices with personal income, rather than rent, provides a superior methodology… the historical trend for this ratio has a zero slope, meaning prices tend to rise alongside incomes over time.
This makes sense, since a family’s income largely determines how much it can pay for a house… Hooray! 2011 housing drop seen less severe. The Canadian Real Estate Association has raised its sales forecast for the rest of the year, calling for a smaller decline than it originally expected as low interest rates keep buyers in the market. The association now expects sales to fall by 1.6 per cent in 2011, compared to its November call for a drop of almost 9 per cent.
Prices are also expected to do better than forecast, with a gain of 1.3 per cent instead of a slight decline. "The hand-off going into 2011, together with the highs and lows for sales activity posted in 2010, provided guidance for CREA's revised forecast," said chief economist Gregory Klump. "The announcement of the new changes to mortgage rules will likely bring forward some sales into the frost quarter that would otherwise have occurred later in the year. " For 2012, CREA expects sales to slightly outpace 2011 and prices to advance by another 1.3 per cent. B.C. households most at risk to debt shocks. Canadians are struggling with record debt loads - though not every province is equally at risk. Households in British Columbia are most vulnerable to an unexpected economic shock like falling house prices, swift interest rate hikes or a surging jobless rate, a paper by Toronto-Dominion Bank said Wednesday.
Those in Alberta and Ontario are the next most at risk, with Alberta's vulnerability rising at the fastest pace in the country, the bank's report said. Households in Manitoba, by comparison, are cushioned with relatively low debt loads, it noted. Canadians' debt-to-income levels have swelled to a record in recent months, surpassing levels in the U.S., prompting warnings from the Bank of Canada that households need to start reigning in debt. Their measure of household vulnerability is not meant to predict the future.
If Canadians don't slow the rate at which they're piling on debt, the risks of a consumer "adjustment" will only intensify, they added. Among TD's conclusions: Rate hikes could spark house price collapse, economist warns. Any move by the Bank of Canada could "easily" cause house prices to collapse, Capital Economics warns in a bleak report that suggests the Canadian housing market is likely to suffer the same sort of crash that has plagued countries such as the United States. The report released Thursday suggests that house prices in Canada have climbed at the same pace as that in the United States, but have not fallen at the same rate. In the United States, some markets have seen prices fall as much as 50 per cent through the recession. As the central bank raises interest rates, mortgages will become more expensive for Canadians.
Add inflation to the mix, and Capital Economics predicts prices could fall 25 per cent over the next few years. "Even small rises in official interest rates have been shown to have a big effect on homeowner confidence in other countries under similar circumstances as they can change perceptions towards the housing market very quickly," said economist David Madani. Home buyers race to beat tighter mortgage rules. "the end of america” porter stansberry sees the future ... and it's grim: Tech Ticker, Yahoo! Finance. Five secrets you never knew about the casino world Nicole Goodkind at Daily Ticker2 days ago The Daily Ticker joined up with Edward Farrell, President of Resorts World Casino New York City to snag some insider insight into the top secrets of the gaming world.
Secret #1: Casinos want you to bet within your means You may be surprised but casinos prefer it when you spend within your means, even if that’s just $75 per visit. At Resorts World, the average customer spends under $100 on games, says Farrell. “It certainly benefits us when customers spend what they’re comfortable with and to their budget because then they’re able to come back again.” Related: Secrets of the online dating industry Casinos don’t expect you to be a high roller and you certainly don’t need to spend more than you’re comfortable with to receive perks like free food, drinks, and more. Secret #2: Casinos make a big impact on the economy.