The Canadian economy experienced some good news recently when the International Monetary Fund proclaimed that their outlook for the country was better than expected.
“Our outlook for the Canadian economy is a relatively rosy one,” said Roberto Cardarelli, mission chief for the IMF in Canada.
The IMF’s outlook includes growth for the economy during the second half of 2013 due to expanding capital expenditure budgets and a rise in exports. While growth is forecast to be subdued during 2013, reaching 1.8 percent, it is expected to increase to 2.5 percent annually by 2014. Continue reading
With all the attention focused on Canada’s residential housing market, the country’s commercial real estate prospects are often forgotten. Mortgage rates and regulations affect more than just family homes, and the commercial real estate market is frequently a bellwether of economic trends, influencing everything from employment to retail.
A report from the Richard Ivey School of Business could leave some analysts with concerns about commercial real estate in the country. Data from the Ivey Entrepreneurs Index shows that two-thirds of surveyed entrepreneurs believe the Canadian economy will grow over the next year. While that may not seem like an earth-shattering revelation, it marks a 12 percent decrease from six months ago.
"Entrepreneurs in Canada are becoming more cautious," said Stewart Thornhill, executive director at the Pierre L. Morrissette Institute for Entrepreneurship at the Richard Ivey School of Business. "This may be indicative of a wait and see attitude amongst this normally bullish group. External factors such as warnings surrounding the looming fiscal cliff in the United States and unpredictable economic developments in Europe have dampened the spirits of high-growth private business in this country.” Continue reading
While financial analysts love to exalt the health of the market one minute and beat the drum for doom and gloom the next, the truth usually falls somewhere in the middle. It doesn’t make for as exciting newspaper copy, but all markets work in cycles and waves, growing and shrinking based on any number of economic factors. Despite the amount of ink being devoted to Canada’s cooling housing market, consumers should feel safe in the knowledge that while there may be some financial belt-tightening on the horizon, it’s not the end of the world.
At least, that’s the takeaway from the new forecast by the Canada Mortgage and Housing Corporation.
“A weaker outlook for global economic conditions and the waning of the effect of pre-sales from late 2010 and early 2011, which contributed to support multi-family starts this year, will bring moderation in housing starts next year,” said Mathieu Laberge, deputy chief economist at CMHC. “Nevertheless, employment growth and net migration will help support housing starts activity going forward.” Continue reading
Hurricane Sandy has dominated all aspects of the news for the last few days, as it rightly should. The toils and troubles of everyday life tend to take a backseat when a force as powerful and volatile as Mother Nature rears its head.
Besides obvious fears regarding the safety of family and friends, the biggest speculation has come from the financial world. The full effect of Hurricane Sandy won’t be known for some time, but that hasn’t stopped analysts from trying to figure out the costs.
The CBC has estimated that the hurricane may cause as much as $45 billion in losses, affecting 25 percent of the U.S. economy.
"It seems likely that Sandy will impose greater destruction of property [than last year's Hurricane Irene], and add to that the loss of about two days commercial activity, spread over a week across 25 percent of the economy, an initial estimate of the economic losses imposed by Sandy is about $35- to $45-billion,” said macroeconomist Peter Morici in the CBC report. Continue reading
Canada’s housing market is cooling down, which is a good thing, according to Fitch Ratings.
The global rating agency said that the cool-down will help stabilize Canada’s banking system, thereby ensuring prolonged economic growth.
In other words, what’s good for the goose is good for the gander.
“The latest sales numbers provide some initial evidence that risks of near-term overheating in the Canadian housing market may be subsiding,” the agency said. “This could be a positive development for Canadian financial institutions as long as the labour market remains relatively stable.”
And therein lies the rub. Fitch’s forecast is predicated on the labor market remaining stable, but Capital Economics estimates that 115,000 construction jobs alone will be lost due to the cool-down. Continue reading
As uncertain as the economy and housing market seem to be ever since the words "housing bubble" were first uttered, Canadians are gathering 'round family tables in owned or rented homes and taking time from their busy lives to be thankful for life's fortunes.
In honor of Thanksgiving on October 8, here are four of housing-related things Canadians can be happy about while they enjoy their turkey and all the trimmings:
1. Low interest rates: Despite what experts say about potentially increasing interest rates in the near future and beyond, the rates remain low for the time being. The prevalence of mortgage brokers, financial experts and helpful friends and family make it easier than ever for homebuyers to find record-breaking low interest rates and save money on their next home. Continue reading
We're used to hearing about governmental disagreements every now and then, but nothing has come close to all the mortgage news surrounding this so-called housing bubble. Will it burst? Is it a figment of everyone's imagination? Will Finance Minister Jim Flaherty's latest mortgage rules lessen the stress the economy is feeling and do away with the bubble rumors once and for all?
The news seems to be changing from week to week, and it may be difficult for residents, homeowners and hopeful first-time buyers to keep up with the market's status. Thankfully, the news this week seems good – for the most part – and Canadians should take note.
The housing bubble – is it a real thing?
Reuters Canada recently reported that Flaherty said the property market isn't in danger of a bubble nor a hard landing, which is great considering the man knows what he's talking about. Continue reading
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
In a recent article, we addressed the fact that analysts and mortgage pros are a bit concerned by the state of Canada's housing market and likened it to a "slow-motion version of what happened in the U.S." Remember that?
The good news for Americans is that the U.S. housing market is improving – maybe not by leaps and bounds, vast improvements nonetheless. The even better news is that U.S. housing market gains can be a really great thing for the Canadian economy and even stimulate economic growth in many different ways.
According to a recent article in the Winnipeg Free Press, the increased American housing activity and positive change for U.S. homeowners and prospective buyers marks the possible end of the four-year recession and plenty of economic woes. Unemployment rates are still soaring and improving at a snail's pace – if that. However, economic recovery is on the horizon, despite its recovery rate hovering near 1.7 percent annually. Continue reading
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