A run down of what's going on in the market and the company.

Thursday, June 21, 2012

New Mortgage Rules Effective July 9th, 2012

For CMHC insured mortgages - Main Changes:

1) Maximum amortization reduced to 25 years from the current 30 years.
2) Maximum loan-to-value for home equity loans reduced from 85% to 80%.
3) Maximum gross debt service allowed will be capped at 39% instead of 40%+ which many times got approved.
4) Maximum house price will be capped at $1 million for CMHC mortgages. So luxury home buyers will need at least 20% down from now on.

You can read more here: http://www.theglobeandmail.com/news/national/ottawa-tightening-mortgage-rules-no-more-30-year-amortizations/article4358876/?cmpid=rss1

So the big question is, why?

Are these changes actually going to help the economy, or are they making it more difficult for people to get in to the market, thus hurting the economy?

Will these changes hurt our delicate housing market and also risk negatively impacting our economy, or are they positive changes? Everyone has a different opinion, but in the coming months we will soon find out.

I think there will be a mad scramble from investors to refinance their properties to pull out the cash to buy new properties. There will also be a mad scramble to buy houses before the rules come in to affect. Then things might die down a bit in the fall. We will have to see.

Best Regards,


Alex Kruzic
Toronto's Premier Apartment and Rent-to-own Real Estate Investment Firm
200 Evans Ave., Suite 201
Toronto, On, M8Z 1J7
Web: http://www.itstimetoown.com
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Wednesday, June 20, 2012

Why your credit rating may not be as good as you think

You've got lots of cards and hardly ever use them, so you must be considered a good credit risk, right? Wrong
Here's my shameful secret: When I was 20 years old, I had a collection agency on my tail.    

I worked a part-time job at Fairweather clothing store for several years in my teens, and was offered a store credit card. I racked up the card with the floral dresses and blazers (it was the early 90s) that I wore while working. When I switched to a serving job my first year in university, I forgot one important thing – to pay off that Fairweather card. I made small payments now and again, but it was pretty much out of sight, out of mind. Plus, I moved, so the bills stopped getting to me.    

Nine months later, I was faced with a collection agency calling to claim the $800 or so dollars I owed. Shocked and embarrassed, I ended up having to dip into scholarship money to pay off my bill.    

It was a horrifying lesson learned, and it took me several years to get my credit rating back on track. Letting a credit card balance languish is a credit no-no I should have known about (I blame it on foolish youth), but maintaining a good credit score is about more than just paying the bills.    

Here are six other things that can hurt your credit rating:    

Too much credit    

If you have a handful of credits cards and a huge amount of "room" on each of those cards, you might think that would showcase your admirable restraint. However, having a massive amount of credit available to you won't necessarily endear you to a bank when you're applying for a loan, said Jeffrey Schwartz, executive director of Consolidated Credit Counseling Services of Canada [http://www.consolidatedcredit.ca].    

"Having 10 different credit lines with low balances on them, a creditor will look at that and say, 'This person is coming to me for an additional loan, but if they max out on all their different credit lines and credit cards, they are going to have way too much debt in comparison to what they're making, so adding another [loan]could potentially put this person in worse position,'" Mr. Schwartz said.    

Never using your credit card    

You might think that locking your credit card away and never using it is a surefire way to maintain good credit. However, part of your credit score is based on your payment history, so never using your card could hurt you because the creditor can't assess the risk associated with you. "If you have no history, you're a bit of an enigma to the creditor," he said. "But if you do have a history and you're showing repetitive payments ... you become a better risk for the creditor."

This is also the reason why it might be a good idea to hang on to the card you've had since you were 18, as long as you've been using it responsibly all these years. "When it shows on an American Express card, member since "X", it does mean something," Mr. Schwartz said.

Parking tickets

If you don't pay parking tickets or library fines, your municipality will eventually want to collect. "If it ends up in the hands of a collection agency, it's going to affect your credit score," Mr. Schwartz said.

This can be particularly hazardous when you move house. Mr. Schwartz said he had a client who ended up in collections because of a toll bill for Toronto's Highway 407. She had moved a couple times and forgotten about the $20 left outstanding – and it had a drastic effect on her credit rating.


If you and your ex-spouse applied for a credit card or line of credit jointly, be aware that you may be responsible for any debts incurred by your ex, even if you split the debts as part of the divorce agreement.

"You can go to a creditor and say, 'Look, we're divorced and as part of the decree, he was supposed to pay that amount,' but the creditor doesn't care. If [your spouse]isn't paying, then it's your responsibility, unless you get released from that card in court," Mr. Schwartz said. "You need to get permission from the creditor in order for you to be removed off that card, and they may not give you that release. What's their motivation for letting you off the hook? They just want to get their money."

Applying for lots of cards

If you are the type of person who applies for every credit card in every store that you're offered, beware. A large amount of "hard pulls" (inquiries on your credit for the purpose of obtaining new credit) can make you seem like a bigger risk, Mr. Schwartz said.

"If you're showing a lot of inquiries over a short period of time, a couple of things are happening," he said. "It could be that you're having difficulty managing your money and something is on the horizon that you as the consumer can see but isn't readily evident to the creditors. That's a signal to them to say, 'Whoa, let's take a look at this because all of a sudden, this person is looking for more credit. If one or two or three of these [cards]start to land, they will have all this credit, but not the income to handle it.'"

Renting a car

Car rental companies could be doing credit checks on you when you rent, which could increase the amount of "hard pulls" you're getting. Companies need permission to do a credit check, but you might not even know that you've signed that over (does anyone read all the fine print on rental car contracts?) "You're usually in a hurry and that's the place you want to spend the least amount of time," Mr. Schwartz said.     

June 5, 2012    
By Shelley White
Source: Globe and Mail

Thursday, June 14, 2012

Bully Offer Gets a $101K Premium

ASKING PRICE $1,149,000
SELLING PRICE $1,250,000
TAXES $6,884 (2011)
LISTING AGENT Andrea Morrison, Royal LePage Real Estate Services Ltd.
The Action:
Agent Andrea Morrison was prepared to review offers for this brick and stone residence in the Humber Valley only after several days of exposure. But two out of the seven visitors immediately tried to evade potential rivals with strong proposals, including one presenting $101,000 on top of the list price.

What They Got:
This more than 30-year-old house with a double garage rests on a 50- by 115-foot lot that fronts onto a tree-lined street and backs onto the 15th hole of St. George’s golf course.
The natural surroundings are visible from large windows in the living and dining rooms, a panelled family room with a brick, wood burning fireplace, as well as a south-facing deck and patio off an updated eat-in kitchen and lower level recreation room respectively.
A winding staircase leads to three bedrooms and a master suite with a walk-in closet and one of four bathrooms.

The Agent’s Take:
“This is a really good house, beautifully maintained, and it backs onto a golf course, which is lovely,” Ms. Morrison said. “In this pocket, less than 15 or 20 per cent of the house are on the golf course, so they don’t come up that often.”

Source: The Globe and Mail, Real Estate Section

Market Stretched but Healthy

Investors around the globe are fascinated by Canada’s housing market. When Scotiabank vice-president Derek Holt did the rounds of U.S. cities last week to present Canadian Housing in a Macro Context, he must have been besieged.

Canada’s housing market is stretched but there are lots of mitigating factors that should quell some of the anxiety floating around, according to Mr. Holt, who narrows in on “Why it’s Different from the United States”.

Interest rates in Canada will stay low a while yet according to Mr. Holt and Dov Zigler and Adrienne Warren, who put together some of the forecasts for the road trip. They add that inflation won’t challenge Bank of Canada targets while growth in wages remains weak.

Household debt growth is already cooling, they add, and the central bank shouldn’t push that too far. For one thing, other factors – including the strong Canadian dollar, real wages and regulatory tightening – are already doing the work of the Bank of Canada.

Still, the economists point out some of their worries: Canada’s record-high rate of home ownership has surpassed the rate in Australia, the United Kingdom and the United States, Canada has overshot the United States on average house prices, and the ratio of insured mortgages to uninsured has swelled.

Confidence should be bolstered by the fact that the sellers’ market of the past few years is returning to a better balance between buyers and sellers. There’s no evidence of too much building in the single-family house market, they add, and the rules surrounding long mortgage amortization periods and paltry down payments have already been strengthened.

As for the number of cranes filling the sky in cities such as Toronto, Montreal and Calgary, there are plenty of things driving the demand for high-rise condominium units, say the economists. They point to the fact that condos are more affordable and provide more to choose from than single-family houses. People are moving here from overseas and those who already live here are changing their lifestyles. There’s a trend to urban intensification, vacancies for rental units are tight, and investors are still keen to own condos.

But the economists do note some “pockets of concern”: Vancouver has seen a jump in the inventory of unsold condos compared with the long-term average, while Calgary’s condo market is not lean either. Toronto’s condo boom masks the shrinking amount of building in the market for detached and semi-detached houses, they add.

As for why Canada is different from the United States, the economists look at stronger household finances on this side of the border. Canadians have more home equity and more real estate assets.
Meanwhile, the country’s diversified economy means that economic shocks – when they do hit – never hit all of the local housing markets in various cities in the same way.

Canada’s banks are strongly capitalized and there is far less shadow banking than in the United States. That revolving-door-financing so popular south of the border is not prevalent here.

Canadians don’t default when house prices correct: In Toronto and Vancouver since the late 1980s, mortgage arrears have barely budged even when prices dropped.

The chart showing average existing home prices as a multiple of income per capita is particularly striking: While the line plotting the U.S. numbers turned downwards back in 2006 or so, the Canadian trajectory has been mostly upwards since 2001.

Source: The Globe and Mail

Rental Market Strong in April

Good news? The rental market in Canada tightened slightly in April with the vacancy rate dropping and average rental rates increasing, according to Canada Mortgage and Housing Corporation.

The average rental apartment vacancy rate in Canada's 35 major centres decreased slightly to 2.3 per cent in April 2012, from 2.5 per cent in April 2011, according to the spring Rental Market Survey released by CMHC.

“An overall improving job market over the last year, in conjunction with new migrants coming to Canada’s major centres, are factors that are supporting rental demand in Canada,” said Mathieu Laberge, deputy chief economist at CMHC's Market Analysis Centre. “Immigrants, as well as young workers, usually tend to rent first and then move to homeownership.”

Year-over-year comparisons of average rents can be slightly misleading, according to CMHC, because rents in newly built structures tend to be higher than in existing buildings. Excluding new structures and focusing on structures existing in both the April 2011 and April 2012 surveys provides a better indication of actual rent increases paid by tenants, said the report. Overall, the average rent for two-bedroom apartments in existing structures across Canada’s 35 major centres increased 2.2 per cent between April 2011 and April 2012, the same level that was observed between April 2010 and April 2011.

The results of CMHC’s spring survey reveal that, in April 2012, the major centres with the lowest vacancy rates were: Regina (0.6 per cent); Québec and Saguenay (0.7 per cent); and Guelph (1.0 per cent). At the provincial level, Manitoba has the lowest vacancy rate at 1.2 per cent.

The survey reveals that the major centres with the highest vacancy rates were: Saint John (8.4 per cent); Windsor (7.7 per cent); Kelowna (5.2 per cent); and Moncton and Charlottetown (5.0 per cent). On a provincial basis, the highest vacancy rate was in New Brunswick (6.2 per cent).

The Canadian average two-bedroom rent in both new and existing structures was $887 in April 2012, with highest rents seen in Vancouver ($1,210), Toronto ($1,164) an dCalgary ($1,113). Provincially, the highest average monthly rents were in Alberta ($1,055), British Columbia ($1,036) and Ontario ($1,014).
The lowest average monthly rents for two-bedroom apartments were seen in Trois-Rivières ($543), Saguenay ($553) and Sherbrooke ($581). On a provincial basis, the lowest monthly rents were in Quebec ($677), New Brunswick ($696) and Newfoundland and Labrador ($727).

Source: CMHC

Wednesday, May 30, 2012

Home Prices Go Up Again in April

OTTAWA – May 25th, 2012 – According to statistics released today by The Canadian Real Estate Association (CREA), the MLS® Home Price Index, the leading measure of Canadian home prices, increased in April 2012. Highlights: * The Aggregate Composite MLS® Home Price Index in April 2012 was up 5.2% year-over-year. * Toronto again posted the largest year-over-year increase (7.9%), with more modest gains in Calgary (4.0%), Vancouver (3.7%), the Fraser Valley (2.7%), and Montreal (2.3%). * Year-over-year price gains accelerated in April in Toronto and Calgary but slowed in Vancouver and the Fraser Valley and were little changed in Montreal. * Single family home prices again posted the biggest gains (6.4%), with apartment unit and townhome sales making more modest headway (3.6% and 2.7% respectively). The MLS® Home Price Index (MLS® HPI) rose 5.2 per cent year-over-year in April 2012. The increase was similar to those for the previous two months and among the smallest since last August. However, the moderation in overall price gains in recent months masks diverging trends among the major Canadian markets. In April, the MLS® HPI again posted the largest year-over-year increase in Toronto (7.9%), followed by Calgary (4.0%), Vancouver (3.7%), the Fraser Valley (2.7%), and Montreal (2.3%). Year-over-year price growth in Greater Vancouver slowed markedly in April and moderated in the nearby Fraser Valley. By contrast, Montreal — a market that tends towards more stable price growth — saw a small uptick in line with the aggregate index. Toronto’s price index accelerated for the second straight month, consistent with its market balance where negotiations continue to favour the seller. Calgary is also now seeing prices begin to advance in earnest, supported by a strong economic outlook, recent gains in in-migration, and strong full-time job growth. “Canadian home price gains are generally expected to moderate, but there are a few hot spots where prices are being fuelled by some very strong housing market fundamentals,” said Wayne Moen, CREA’s President. “Toronto has less than two months of supply compared to six months nationally, so it ranks among the tightest of Canadian housing markets. With prices moderating in some housing markets and bucking the trend in others, buyers and sellers should talk to their local REALTOR® to best understand how home price trends are evolving where they live.” Among the different housing types tracked by the index, single family homes again posted the biggest year-over-year gains in April (6.4%), led by two-storey single family homes (6.9%). The MLS® HPI for one-storey single family homes rose 5.6 per cent from April 2011, while townhouses and apartments saw gains of 3.6 per cent and 2.7 per cent, respectively. “Just as there are some pretty clear differences emerging across markets right now, there have also been some interesting developments in price trends across housing types,” said Gregory Klump, CREA’s Chief Economist. “The one that really stood out in April was accelerating price growth for the townhouse segment right across the board. In Vancouver and the Fraser Valley, it was the only segment in which prices gains accelerated.” Source: CREA, May 25th, 2012

Thursday, April 19, 2012

Supply challenges lift Toronto home prices

The appetite for real estate in Toronto has continued to grow, but supply is lagging behind, putting upward pressure on prices, according to the latest stats.

The Toronto Real Estate Board released its mid-April statistics Wednesday, showing that the average price for detached homes, townhouses, and condos were all up 5% from a year earlier. Semi-detached units were up 3%. The average price for the entire GTA was $506,954, up 5% from last year.

Sales were also up 7% in the first two weeks in April compared to the same time a year earlier, totaling 4,557 this time around. But despite all the new condo construction happening in the city, supply is still lagging overall, especially for single family homes, said TREB’s Senior Manager of Market Analysis Jason Mercer.

“Growth in listings has not kept up with growth in sales,” he said. “In the city of Toronto, new listings for low-rise home types during the first half of April were actually down compared to last year,” he said. “This helps explain why some of the tightest market conditions in the GTA can be found within the ‘416’ area code.”

The lack of listings to meet the demand has resulted in strong competition for properties in Toronto this month, said TREB President Richard Silver.

“Strong competition meant that, on average, sellers priced within market value range received offers that matched their asking price within three weeks,” he said.

The largest price gains were not in the 416 area code, however, but in the more affordable 905. Condos in the latter, for example, were up 8% in average price to reach $290,105, compared to 4% in 416 to reach $364,516. Similarly, detached houses in 905 had an average of $569,252 in mid-April, up 7%, while the average of $798,092 in 416 was up 3%.

Written by: Kit Kadlec
Wednesday, 18 April 2012 17:33
Source: http://www.canadianrealestatemagazine.ca/index.php/news/item/1127-supply-challenges-boost-toronto-home-prices

Monday, April 16, 2012

There Might Be No Rush for Carney to Raise Interest Rates

Just how 'hawkish' the Bank of Canada Governor might sound this week is subject of some speculation
After a month of sounding more upbeat, Mark Carney heads into a key week for Canadian monetary policy with the economic outlook almost as murky as ever.

The Bank of Canada Governor may well have hoped to use a policy decision this Tuesday, and a quarterly economic forecast the next day, to reshape expectations about when he will lift his main interest rate from the current 1 per cent for the first time since September, 2010.

Mr. Carney is surely aware that his campaign to warn households about the dangers of binging on cheap debt is not affecting consumer behaviour anywhere near as much as an interest rate hike would. And while he has said there are limits to how much his benchmark rate can diverge from the U.S. Federal Reserve's near-zero rate in order to keep Canada's currency from soaring, he cannot be happy with the assumption that has taken hold among investors (and borrowers) that his hands are mostly tied until the Fed is slated to start tightening again - in 2014.

As things started looking up over late winter and early spring, both at home and abroad, Mr. Carney appeared to be seizing the opportunity to counter the notion that low-for-long necessarily means low-for-a-great-deal-longer.

If it was a conscious strategy, it was starting to work. Markets tied to future interest-rate levels still reflect a sense there will be no move until next year. But a string of comments from Mr. Carney - such as his last decision in March when he said the economy was recovering more quickly than expected, and in an April 2 speech when he said "headwinds" like the euro crisis were abating - fuelled debate on Bay Street about just how "hawkish" he might sound this week.

"They would very much like the market to be expecting them to raise rates at some point over the next few quarters," said Michael Gregory, a senior economist with BMO Nesbitt Burns. "Higher long-term interest rates would go a long way toward raising mortgage rates to higher levels, which would help cool housing further. To me, the hawkish rhetoric is designed to do that."

But by late last week, with fears the euro crisis could flare up again, signs the U.S. recovery may have hit another wall, and a report indicating the slowdown in China's economy is worsening, analysts were second-guessing whether the global backdrop - crucial to Canada's export-heavy economy - has really brightened much at all.

"On the ground, things have become a little less certain again," Mr. Gregory noted. "You and I may be talking Tuesday about how they have become doves again."

Domestically, conditions argue for a clearer hint from the central bank that interest rate hikes are coming, and likely sooner than expected.

The bank's latest survey of Canadian businesses, released last Monday, found executives are more optimistic about future sales than they've been in two years, in part because they've taken steps to make themselves more competitive as Mr. Carney has been urging. A few days earlier, Statistics Canada reported that March was the best month for job creation since 2008.

Most evidence suggests inflation is under control. For some economists, though, it is high time the central bank gets ready to break its longest pause in six decades.

"If a few weeks later something happens in the U.S. or Europe, it's not like you've made a massive move," said Chris Ragan, the C.D. Howe Institute's David Dodge Chair in Monetary Policy, adding that Mr. Carney should start hiking this June to slowly arrive at a 2-per-cent rate a year from now. "All you've done is signal you'd like to be going up. And, each time, you've sent a message to people that are accumulating lots of debt, and to people building condos."

Others, though, stress the risk that higher borrowing costs could spark a nasty correction in the housing market, or cripple overstretched consumers' ability to spend at a time when they are already struggling with high gasoline prices. (Indeed, Mr. Carney has said his new forecast will include an analysis of how global oil prices affect the economy. If he concludes that at certain price levels, the impact on consumer behaviour cancels out some of the benefits of being a major oil-producing nation, that would be more reason to think twice about speeding up a rate increase.)

Plus, on top of last week's reminders that the global rebound remains fragile, Derek Holt of Scotia Capital points out that banks are scaling back on lending as they adapt to tougher global financial rules, Ottawa and the provinces are entering a period of belt-tightening, and brutal fiscal restraint in the U.S. is expected to begin soon after the presidential election.

Taking all of that into account, Mr. Holt said he suspects the central bank's forecast this week may downgrade its January forecast of 2.8-per cent growth for Canada next year, which would strongly suggest there is no rush to start raising interest rates.

"There's a long list of reasons why [Mr. Carney] should be very careful about pulling away the punch bowl," Mr. Holt said. "We're getting other forms of tightening, even if he stands pat."

April 15, 2012
Will Mark Carney reset expectations on rates?
From Monday's Globe and Mail
Article Link: http://www.theglobeandmail.com/report-on-business/economy/interest-rates/will-mark-carney-reset-expectations-on-rates/article2403077/

Monday, March 26, 2012

Ontario's Budget Pain Will Affect Entire Country

Rest of Canada will feel pinch if biggest province can't get its house in order

It's hard to believe that a single provincial budget could be more important to the Canadian economy than Thursday's long-awaited federal budget.

But Ontario is in a bind. Growth is stuck in low gear as the province struggles with high unemployment, and challenges in its key manufacturing sector. Meanwhile, just when the province's economy could use a helping hand from government, business-friendly moves are set to be scaled back as part of an austerity drive aimed at protecting its credit rating from a possible downgrade.

With the resources boom driving the economy in the West, Ontario isn't the economic engine it used to be. But at around 40 per cent of Canada's economy, Ontario still matters, and if the province can't figure a way out of its current bind the rest of the country will feel the pinch.

"[This] Ontario budget will be more closely watched than the federal one, largely because there are so many questions about how Ontario returns to fiscal balance," says former federal finance minister John Manley, who now heads the Canadian Council of Chief Executives.

Like other provinces, Ontario cranked up the deficits starting in the 2008-09 fiscal year amid the onset of global economic turmoil. What has put the Dalton McGuinty government in the crosshairs of fiscal critics, however, is the extent of its indebtedness - an estimated $238-billion, up from $157-billion four years ago. Ontario's deficit, at 2.3 per cent of GDP last year, was the highest among the provinces, and debt service costs of $10-billion this year will represent its third-largest expenditure after health and education.

Further, Ontario plans to take three to four years more than any other province to balance its books. Its most recent target for balance is 2017-18, and some are skeptical even that is achievable.

Economists are concerned about the province's output heading into a period of rising global economic uncertainty, fearing Ontario may not hit already anemic targets of growth in the 2-per-cent range for this year and next. "The amount of budgetary space they have to [boost] economic growth is quite limited," said Colin Busby, senior policy
analyst with the C.D. Howe Institute.

For Ontario Finance Minister Dwight Duncan, delivering a budget Tuesday that fosters economic growth while putting the province on a track to balance its books is a huge challenge.

Corporate Canada is eager for Ontario to get serious about putting its fiscal house in order while remaining competitive for business. One fear is that if deficits aren't reined in investors may push interest rates higher, adding debt-service costs that could eventually be funded through higher taxes. But for business there's a cost to balancing the books.

Ontario is backing away from plans to cut its corporate tax rate to 10 per cent from 11.5 per cent until the deficit is erased. At the same time, the government has promised to cancel or delay major capital spending projects and hem in business support programs. This depressed spending will reduce economic output, but is part of what is needed to keep Ontario an attractive place to invest in the longer term.

And Ontario may have much more work ahead to fix its fiscal mess. Federal Finance Minister Jim Flaherty - a former Ontario cabinet minister who is often at odds with Mr. McGuinty - is already predicting excuses from the province. "I'm concerned about Ontario," he said last week. "What we've basically seen in Ontario is eight, almost nine, years of spending mismanagement. They need to focus ... for the good of the country."
The federal government, which tables its budget on Thursday, is facing pressure in the opposite direction.

Some economists say Ottawa can afford to ease up on cuts and still balance the books around 2015.

While Ottawa says its budget cuts will be "modest," Prime Minister Stephen Harper's first budget written with a majority is expected to stir controversy with major changes to research and innovation programs, immigration policy and environmental regulation. But the most explosive debate will likely focus on Ottawa's plans to raise the eligibility age
for Old Age Security.

Mr. Duncan, meanwhile, must balance carefully, placating rating agencies with deep cuts while containing the political damage to his minority government - all without further damaging the economy. Mr. Duncan can't promise gushier royalties as resource-rich provinces have done; his prospects for increasing revenues are scattershot, ranging from
drivers' licence fee increases to approving construction of a casino in Toronto. Tax hikes and privatizing Ontario's booze distribution business are non-starters.

The government already has a blueprint for fiscal shock therapy, courtesy of economist Don Drummond, who has warned deficits could balloon if the government strays from his list of 362 recommendations. Mr. Drummond is a hero to fiscal hawks but his prescription for cutbacks is stirring some resistance: last Wednesday, he was temporarily chased from a lecture at Carleton University in Ottawa after some students began shouting at him.
But while Mr. Duncan has said his budget "will lay out the path to balance with some difficult choices in it," he and Mr. McGuinty have indicated they won't heed several of Mr. Drummond's big cost-saving ideas, such as cutting full-day daycare and electricity bill rebates.

Mr. McGuinty is, however, expected to take on teachers, demanding wage freezes and a rollback of sick-day benefits - which has faced a hostile response from unions.

Overall, Mr. Duncan must limit spending growth in health, education and debt service - which account for a combined 71 per cent of the his estimated $124-billion budget - while cutting 2.4 per cent per year in other areas.

If not, a credit downgrade could boost Ontario's borrowing costs and make matters worse.

"No finance minister wants to be downgraded," Mr. Manley said. "When the federal government was downgraded by Moody's in 1994 ... that was a pretty critical factor in forcing some fairly drastic action in the next budget."

March 25, 2012
Ontario's budget pain will affect entire country
From Monday's Globe and Mail
Article link: http://www.theglobeandmail.com/report-on-business/economy/ontarios-budget-pain-will-affect-entire-country/article2380816/

Wednesday, March 7, 2012

Home Ownership Becoming More Affordable

Prices soften in fourth quarter of 2011, while low interest rates through this year should continue to keep costs at bay: report Housing affordability is improving in Canada as home prices soften, while low interest rates through this year should continue to keep costs at bay.

A national measure shows housing became more affordable in the fourth quarter of last year, the second improvement in a row, Royal Bank of Canada's quarterly release showed Wednesday. It found all housing categories became more affordable, led by the two-storey home category.

The measure comes amid a debate over whether some Canadians are overextending themselves by taking out mortgages they can't afford - particularly in hot markets like Toronto and Vancouver. Canadian household debt burdens, meantime, remain a key concern to economists.

The quarterly improvement in affordability was modest, but still enough to "dial back the deterioration that impacted the market in spring last year," said Craig Wright, RBC's chief economist, in the report.
"Continued low interest rates in 2012 will help keep housing costs at bay in the near term."

The erosion of affordability levels in the first half of last year stemmed mostly from dramatic increases in a single market - Vancouver. In the second half of the year, though, this market became more aligned with the rest of Canada.

Vancouver remains - by far - the least affordable large city in Canada to own a detached bungalow. Toronto is next, followed by Montreal.

At this point, housing in Canada is as affordable as it was a year ago,
and "only slightly" less affordable on average than it has been over the long term, Mr. Wright noted.

The bank's affordability measure tracks the proportion of pre-tax household income that would be needed to service the costs of owning a home at current market values.

It comes on the same week the Canadian Real Estate Association predicted average home prices will fall 1.1 per cent this year, to an average of $359,100, before rebounding 0.9 per cent in 2013.

Article Link: http://www.theglobeandmail.com/report-on-business/economy/housing/home-ownership-becoming-more-affordable/article2361147/

Tavia Grant
Globe and Mail Update
Published Wednesday, Mar. 07, 2012 5:08AM EST
Last updated Wednesday, Mar. 07, 2012 12:58PM EST

Friday, February 24, 2012


Only 5 days left! If you do not run out at lunchtime today and do the following, you are truly not financially savvy at all.

Step 1: Buy a Tax Software and install it on your PC tonight. I like Turbo-Tax.
Step 2: Even though you may not have all of your T4's and forms yet, do your taxes as best as you can. Use last years figures if you're not sure, or guess as best as you can.
Step 3: Use the built-in RRSP contribution tool of the tax software to figure out how much RRSP contribution you need in order to receive the exact same amount back as a tax refund.
Step 4: Once you have this amount, say it's $5,000, RUN to your bank and get an RRSP loan for $5,000 and contribute it to your RRSP account RIGHT AWAY! Remember the deadline is end of February!
Step 5: The bank will give almost anybody an RRSP loan. File your taxes claiming your $5,000 RRSP contribution. A few weeks later you will receive your tax return for $5,000 which will pay off your RRSP loan from the bank.

Bada-bing-bada-boom, you just made an easy $5,000 of tax-free investment money in your RRSP. Now if you want to kick it up a notch, keep dumping money in your self directed RRSP account until you have $35,000 or more saved up. Then invest it into Secure Real Estate Investments to receive 10% to 20% tax-free returns per year! Not many people know about this because obviously the banks loose money on this and don't advertise it, but this is the ONLY way savvy investors use RRSP's. They DO NOT invest in Mutual Funds, Stocks, Bonds, or all the other crap out there where people have to put up all the money with no leverage, take all the risk, and the Bank/Financial Advisor makes all the money wether you win or loose. Think about it.

That's my tip for today. For more info, please follow me online at my links below.

To Your Success!


Alex Kruzic
Toronto's Premier Apartment and Rent-to-own Real Estate Investment Firm
200 Evans Ave., Suite 201
Toronto, On, M8Z 1J7
Web: http://www.itstimetoown.com
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Thursday, February 16, 2012

Toronto real estate prices edge closer to $500,000 despite market cooling across Canada

Greater Toronto Area housing prices increased from December to January despite an overall softening of the Canadian real estate market. Low housing industry in the Toronto area helped push up prices.

House sales have softened across the country — Toronto included — although the average price of a home in the GTA continued to edge closer to $500,000 in January.

Sales activity was down in over half of Canada’s housing markets, led by an almost 3 per cent decline in sales across the GTA when adjusted for seasonal fluctuations, according to January housing statistics released Wednesday by the Canadian Real Estate Board (CREA.)

New listings were also down a seasonally adjusted 4.3 per cent across the GTA, as the low inventory of new resale properties on the market continues to be a problem, especially in the 416 regions of Toronto.

That helped drive up the average house price across the GTA by 3.8 per cent just from December to January to $486,654, according to CREA.

The average GTA home was worth about 8.5 per cent more in January than over the same period a year ago, the statistics show.

Across Canada as a whole, sales were down in January, which shifted the national market further into balanced territory. The average price of a Canadian home hit $348,178 in January, up just 1.2 per cent from a year earlier.

“The national housing market is stabilizing and remains well balanced,” said CREA president Gary Morse in a statement. “That said, forecasts for economic and job growth going forward vary widely for different parts of the country, suggesting a possible continuation of a softening trend in some markets, as well as the potential that demand will pick up based on strong fundamentals in others.”

CREA warned that average price comparisons could become “volatile and may turn negative” in the coming months. That’s because an unprecedented surge in sales in high-end Vancouver neighbourhoods, largely driven by Asian investors, pushed home prices there to such record-high levels at the beginning of 2011, they actually skewed the national house price average.

“A replay of this phenomenon is not expected this year,” said CREA chief economist Gregory Klump. “For this reason, year-over-year comparisons should be kept in perspective,” in the coming months, he warned.

Published: February 15, 2012
By: Susan Pigg
The Toronto Star
Article Link: http://www.thestar.com/business/article/1131737--toronto-real-estate-prices-edge-closer-to-500-000-despite-market-cooling-across-canada

Monday, February 13, 2012

Two steady housing years ahead: CMHC

Crown corporation sees low interest rates and a 'moderately' expanding economy keeping price corrections at bay

Canada's housing market has two good years ahead [http://www.cmhc-schl.gc.ca/en/corp/nero/nere/2012/2012-02-13-0815.cfm] of it
yet, Canada Mortgage and Housing Corp. said Monday, with low interest rates and a "moderately" expanding economy keeping price corrections at bay.

The Crown corporation - which insures Canadian mortgages - has had a
consistently rosier view of the market than many private sector forecasters.

Canadian banks have recently issued reports probing the consequences of cheap money, and trying to predict whether there is a bubble in prices that will eventually pop and cause prices to crash. They are particularly concerned about Vancouver and Toronto, where some have predicted price corrections of up to 10 per cent because of overbuilding in the condo market.

But CMHC said Monday Canadian markets would "remain steady in 2012 and 2013. "With the Canadian economy set to expand at a moderate pace and mortgage rates expected to remain low, activity levels in 2012 in both new home construction and sales of existing homes will stay close to levels seen in 2011," said Mathieu Laberge, deputy chief economist.

Also in the forecast: "Housing starts will be in the range of 164,000 to 212,700 units in 2012, with a point forecast of 190,000 units. In 2013, housing starts will be in the range of 168,900 to 219,300 units, with a point forecast of 193,800 units.

Existing home sales will be in the range of 406,000 to 504,500 units in 2012, with a point forecast of 457,300 units. In 2013, MLS sales are expected to move up in the range of 417,600 to 517,400 units, with a point forecast of 468,200 units.

The average MLS price is forecast to be between $330,000 and $410,000 in 2012 and between $335,000 and $430,000 in 2013. CMHC's point forecast for the average MLS price is $368,900 for 2012 and $379,000 for 2013. The moderate increases in the average MLS price are consistent with the balanced market conditions that occurred in 2011, and that are expected to continue in 2012 and 2013."

February 13, 2012
Two steady housing years ahead: CMHC
Globe and Mail Update
The Globe and Mail, Inc.

Wednesday, February 8, 2012

Canada's future is in the West: 2011 Census

Alberta and Saskatchewan are booming as both immigrants and native-born Canadians flock to the oil fields and resource industries
Power and population are shifting to the Prairies and B.C. as Ontario enters a period of relative decline.

The results of the 2011 census released Wednesday confirm what many Canadians already instinctively understand. The country is re-orienting itself away from Central Canada and toward the Pacific. Oil, gas, potash and other resources are drawing migrants and the region's political and economic influence is growing as a result.

Alberta and Saskatchewan are booming as both immigrants and native-born Canadians flock to the oil fields and resource industries.

Ontario, long the central engine of growth, was the only province in the country to see its rate of growth drop since 2006. It's also the first time in 25 years that Ontario slipped below the symbolic threshold of the national growth rate.

Overall the Canadian population increased by 5.9 per cent since the last census to 33.5 million, a slight increase from the 5.4 per cent growth between 2001 and 2006.

Canada is the fastest growing country in the Group of 8 industrialized nations, thanks largely to its immigration program, which accounts for about two-thirds of the increase in population.

But the end is near for that kind of fast growth. The report estimates that population growth could, within 20 years, be close to zero - unless there is a sustained level of immigration or a substantial increase in fertility.

Alberta, in many ways the centre of the Canadian economy today, leads the country in population growth at nearly double the national average. Its two big cities, Edmonton and Calgary, were the two-fastest growing cities in the country. A significant portion of its population increase came from interprovincial migration, as it has traditionally. Alberta also saw a significant increase in immigration from abroad.

Saskatchewan's turnaround has been stunning. From 1996 to 2006 the province lost more than 1 per cent of its population, an indictment that saw young people leaving for opportunities elsewhere. But as the price of commodities rose over the last five years Saskatchewan grew by 6.7 per cent to pass the 1 million mark, as it did once before in 1986. More than a quarter of that growth was due to Canadians re-locating to Saskatchewan from other provinces.

Manitoba doubled its rate of growth since the last census, to 5.9 per cent. Much of that was due to a doubling of immigration under the provincial nominee program.

When combined with strong, immigration driven-growth in British Columbia, the Western provinces for the first time have a greater share of the Canadian population than the sum of Quebec and Atlantic Canada.

The decline of manufacturing in Ontario, which cost the province more than 300,000 jobs over the last decade, was a major contributor to tens of thousands of Ontarians leaving the province for greener pastures, twice as many as between 2001 and 2006. Ontario also welcomed about 100,000 fewer immigrants over the last five years than it did in the first half of the decade. While it's still growing at a healthy rate, it's not growing the way it used to.

"What is significant is that all other provinces had higher rates of population growth," said Laurent Martel, senior demographer at Statistics Canada. "It's not a huge decrease but it's the only province showing that kind of trend."

Quebec saw its share of the Canadian population dip a little further, as it has for several years. It's now down to 23.6 per cent, from 29 per cent in 1951. All four Atlantic provinces showed higher growth rates than in 2006, but all were still below the national average.

Newfoundland grew for the first time in 25 years, as fewer people moved away.

Wednesday's data marks the first of four releases from the 2011 mandatory short form census and the information is limited to data on population and dwellings.

Part of the census data released Wednesday looks at population growth from 1851 to 2061 and it underscores many of the demographic trends that are currently at the heart of political debate.

Prime Minister Stephen Harper is provoking heated debate across the country with two major policy announcements in recent months. The first is his decision to curb the rate of growth in provincial health transfers over time so that they grow in line with the economy. The second was his decision to open up a debate about raising the eligibility age for Old Age Security, arguing the shrinking ratio of workers to retirees will not be able to support the current age of 65 as an increasing number of baby boomers qualify for the federal program.

The numbers show the aging of Canada's population will be most pronounced during this decade and the next.

"The aging of the population will accelerate between 2011 and 2031 as baby boomers reach the age of 65," states the census report. "In 2026, the first of the baby boomers will reach the age of 80, an age when mortality is high. As a result, the number of deaths will increase significantly."

Statistics Canada projects that the number of births and deaths will be nearly the same in Canada from about 2030 to 2060, meaning any population growth will rely almost entirely on immigration.

On May 29, Statistics Canada will release the second of its four census reports. It will break down the census information based on age and sex. Then data on families, households, marital status, and other dwelling information will come out on Sept. 19, followed by a final report on Oct. 24 dealing with language.

Information in these reports are not affected by last year's controversy over the long-form census. The Conservative government decided to replace the mandatory long-form census and its more detailed questions with a voluntary household survey. The change prompted the resignation of the head of Statistics Canada amid concern about the reliability of a voluntary survey and the compatibility of the results with previous research.

February 8, 2012
By Bill Curry and Joe Friesen
Globe and Mail Update
Link: http://www.theglobeandmail.com/news/national/canadas-future-is-in-the-west-2011-census/article2330716/