Trends and predictions for Canada’s mortgage market

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The Canadian Association of Accredited Mortgage Professionals has released its Annual State of the Residential Mortgage Market in Canada report for 2012.

The report, authored by CAAMP Chief Economist Will Dunning, offers a number of insights into Canada’s mortgage market, including trends from 2012 that can help shed light on things to expect in 2013.

Mortgage types
According to the CAAMP report, most Canadians chose fixed-rate mortgages for homes purchased throughout 2012. Data shows that fixed-rate mortgages comprised 79 percent of the market. Meanwhile, adjustable-rate mortgages made up 10 percent of the market. Combinations of both took up 11 percent.

These figures mark a considerable change from years past. The CAAMP report shows that in prior years, fixed-rate mortgages comprised approximately two-thirds of the market and adjustable-rate mortgages were closer to one-quarter. Combination mortgages, meanwhile, were well below their current standing of 11 percent. Continue reading

Despite new jobs and small businesses, unemployment still affects many Canadians

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There are always two sides to every story – three, even, depending on whom you ask – and this is no exception. Although there have been great strides lately in the Canadian job market and new jobs have steadily been added over the last five years, some experts believe that now the job market is a bit too good and workers are not qualified for many of the openings that are available. When compared to the U.S employment rate and jobs lost in our southern neighbor's financial recession in the past four years, the Canadian job market doesn't seem so bad.

In contrast, it seems pretty amazing. However, the unemployment rate remains above 7 percent and is well above the average set before the financial crisis. Continue reading

Commercial real estate properties and activity fuel Canadian economy

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Everyone who knows somebody contributing to the commercial mortgage sector – whether he or she is a small business owner who buys office space or part of a larger company that employs commercial real estate professionals to find that perfect available space – needs to thank that person for contributing to the Canadian economy.

Yep, it's true. The latest research from the Real Property Association of Canada and the NAIOP Research Foundation discovered that the commercial real estate sector contributed $63.3 billion to Canadian economic activity last year alone, and the sector is reportedly twice the size of the economies of Newfoundland and Labrador.

But where does all of this economic support come from? Surely it's acknowledged and appreciated, as various rating services have commended Canada on its strong, stable economy. However, the commercial real estate sector provides an abundance of jobs – 340,000 of them, to be exact. Most of these jobs are high-paying professional jobs, according to the report, and equal to the total employment force of the entire Canadian agriculture industry. All of the income from those jobs combined total more than $18.1 billion, roughly twice the income of the agriculture, forestry and fishing industries combined. Continue reading

Canadian dollar, housing starts surpass economists’ expectations

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In wonderful news of the month, the Canadian dollar is up and recently closed at a 13-month high. Way to go, loonie! Although this may be for several reasons, experts suggest it was caused by expectations that the U.S. Federal Reserve is planning a stimulus for the U.S. economy. Recent closing numbers reflected an increase of 0.45 of a cent to the U.S. $1.0275, according to The Globe and Mail.

The value of the U.S. dollar continued to suffer leading up to a two-day meeting that may result in the U.S. government printing more money as a means to keep interest rates low and encourage lending.

However, in more positive news of the month that only strengthened the Canadian dollar's value, economists were pleasantly surprised at the increase of housing starts as reported by the Canada Mortgage and Housing Corporation (CMHC). Instead of its prediction – a decline to 200,000 home starts in August – coming true, housing starts came in at an annual rate of 224,900 during the month. Continue reading

Bank dividend hikes signal a healthy industry

It's likely that everybody – homeowners, potential homeowners, first-time buyers, people who know people with homes, Canadians in general – wants the best for the mortgage industry. Why waste time wishing anything bad on it? After all, it's hard to deal with being called fragile as rumors whiz around about a potentially bursting bubble that could topple the whole thing.

Needless to say, it's always a happy day when the industry boasts some good mortgage news – thankfully, today is that kind of day. News reports reveal that Canadian banks' balance sheets are doing so well that some banks are expected to increase dividends because profit growth will enable them to meet higher capital requirements in 2013.

Dividends – money paid to shareholders from a company's profits or reserves – are signs that companies are healthy and profitable, according to a recent Financial Post article. Toronto-Dominion Bank, Canadian Imperial Bank of Commerce, Bank of Montreal and Bank of Nova Scotia all "join the ranks," as the article nobly states, of banks that really have their financials in order. Royal Bank of Canada and National Bank of Canada may also be in the elite club, though experts aren't going on the record to predict bolstered dividends for either bank. Continue reading

Million-dollar homes doing well as housing market softens

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The new rules governing Canadian home loans might be putting a serious crimp in some peoples' housing plans, but for wealthier homebuyers, they haven't even caused a wrinkle. In fact, sales of million-dollar homes have stayed strong as the rest of the market continues to soften.

Four of the country's biggest markets – Toronto, Calgary, Montreal and Vancouver – saw solid upward trends when it came to high-end realty during the first half of the year, according to a new report from Sotheby's International Realty Canada.

• Toronto: Sales of homes valued at $1 million or more increased by a whopping 29 percent between January and June, over the same period in 2011, more than in any other market.
• Calgary: This city saw a 19 percent increase in million-dollar sales, but had an amazing 92 percent increase in the number of high-end properties for sale compared to last year.
• Montreal: Though growth here was more modest, Montreal still reported strong numbers, with a 15 percent increase in sales and an 11 percent increase in inventory.
• Vancouver: The only one of the four major markets to see a decline in sales of million-dollar houses (35 percent), the reigning hot spot for high-end realty still saw an increase in the number of expensive homes listed during the first half of this year. Continue reading

Canadian economy gets down to the limbo beat

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Where once Canada's economy and housing market looked like a rollercoaster, today it more closely resembles a bizarre limbo contest – as mortgage rates dip lower and lower, ministers in Ottawa are bending over backward trying to prepare for some kind of recession.

A little bit lower now

You may have noticed that fixed-rate mortgages have been pretty low for a good long while, now. Part of this is because the Bank of Canada's overnight target rate of 1 percent hasn't moved since 2010 – and probably isn't going to move any time soon. But while interest on home loans is definitely affected by national lending rates, they are even more influenced by Canadian bond yields, and those have been racing to the bottom for months. Continue reading

Canadian housing market slowing, but remains the envy of the world

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After what seems like years of increasing home sales and low mortgage rates, could it be that the Canadian housing market is finally slowing down? Let's take a look at the evidence:

• Housing prices rose 5 percent during May – an increase, yes, but a much smaller one than in previous months.
• Growth in home sales in Toronto – the hottest market in the country – dropped by more than one-third compared with previous months.
• Home sales in British Columbia, particularly in Vancouver, continued to slide at dramatic rates, with the number of units sold falling roughly 16 percent from 2011.

This information, released earlier this week from the Canadian Real Estate Association, is among the first signs that the market as a whole may be coming to an end of the roller coaster ride of recent years. You may recall that the Royal Bank of Canada came out with similar numbers recently. Its analysis showed a decrease in the value of building permits, which could indicate slower growth down the line. Continue reading

Canadian confidence grows, but what’s causing shaky U.S. recovery?

As the American economy continues its climb out of recession, more Canadian financial experts are gaining confidence in their southern neighbors. Still, any slips stateside could carry significant consequences for Canada.

Canadian optimism in the U.S. market was recently measured by the Canadian Institute of Chartered Accountants, along with the Royal Bank of Canada. The agencies found just 22 percent of chartered accountants feel the United States is likely to fall back into a recession, down from nearly two thirds over the previous two quarters. Positive views on the Canadian economy rose during that time as well, with 32 percent now reporting confidence at home.

Still, fears abound. Roughly 63 percent say continued economic calamity in America would negatively impact their business, and 43 percent see the United States as the biggest hurdle to continued Canadian growth. Continue reading

Majority of Canadians say 2011 was a successful year

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Despite rising household debt and severe global economic issues causing low consumer confidence, most Canadians say 2011 was a successful year.

According to a recent Postmedia News report, 74 percent of respondents to a survey said 2011 was a "good year," while 26 percent believe the year was "very bad." Meanwhile, 59 percent of Canadians think the year was "somewhat good."

"In most places across the country, people have secure jobs, they have a country that they’re very proud of, and they've had a good year with economic consistency in most places across the country," John Wright, senior vice president for research firm Ipsos Reid, told the source. Continue reading