30 Sep

Good News For Harper And The Canadian Economy


Posted by: Cory Kline

Real gross domestic product (GDP) for July was posted at an better-than-expected 0.3 percent, confirming that the economy rebounded in the third quarter from the contraction in the first half of the year. Although oil prices remain depressed and commodity prices in general have fallen, the economy has been bolstered by the fall in the Canadian dollar and its resulting boost to manufacturing and exports. Moreover, the Bank of Canada rate cuts in January and July have also contributed to strong housing activity and rising consumer spending on autos and other durable good. 

Even the hard hit mining, quarrying, and oil and gas extraction sectors expanded in June and July following seven consecutive monthly contractions. Some of this improvement was simply a rebound from maintenance shutdowns and wildfire-related production problems in April and May, as support activities for mining and oil and gas extraction continued to decline.

Manufacturing is growing again, particularly durable goods manufacturing. Transportation equipment has been a notable winner in recent months. The finance and insurance sectors also posted gains.

The Bank of Canada’s most recent forecast assumed a return to positive growth in the third quarter led by strengthening exports. Incoming data confirm this view, which is likely to preclude the Bank from cutting rates further this year. Last July, the Bank forecast a 1.5 percent gain in third quarter GDP. Given the strength in recent data, I expect growth in the 2.0-to-2.5 percent range, and possibly better.

In the meantime, Federal Reserve officials have taken to the airwaves in recent days to confirm they expect to begin to raise interest rates in 2015. Markets were actually disappointed by the Fed’s inaction at their September meeting on concern regarding market volatility and a slowdown in China. The key policymakers have been quick to suggest that a rate hike is coming soon. There are only two meetings left this year–in October and December.

This morning, an important indicator of U.S. private sector job creation in September, the ADP report, posted a 200,000 gain, a positive portent for Fed action. The closely watched nonfarm payroll report for September will be released this Friday.

Clearly, the divergence in monetary policy between Canada and the U.S. bodes poorly for the Canadian dollar.

The TSX and the loonie jumped immediately following the GDP report. The third quarter, which ends today, has been very tough on investors as stock markets around the world have posted significant losses. 

Dr. Sherry Cooper
Chief Economist, Dominion Lending Centres

11 Sep

Market Commentary


Posted by: Cory Kline

As we head into the busy, autumn, real estate season Canada’s housing market is showing itself to be largely balanced and stable.

Of course Vancouver and Toronto continue to exert undue influence on the national averages. In Toronto the average price of a detached, single-family home topped one million dollars again.

In Vancouver, August sales surpassed year-ago numbers by more than 21% with 3,362 deals done. The MLS benchmark price is up 12% from 2014. The average for a detached property is now $1.16 million, up 17.5%.

The other market showing big swings is Calgary. August sales were off 27% compared to 2014, but prices remain relatively robust. The average and the benchmark are down 0.09% and 2% respectively year-over-year. But on a year-to-date basis the benchmark is actually up 2.4%.

Montreal remains the most active market in Quebec with 2,408 residential sales in August, up 8% from a year ago. The median price for a single-family home rose 2% to $290,000.

Low interest rates will likely continue to prop up home sales. All of the current economic indicators suggest the Bank of Canada will remain on the sidelines when it announces its latest rate setting on Wednesday.

Thank you First National for your insight.

2 Sep

Rent To Own – 6 Reasons You Need To Read This


Posted by: Cory Kline

Rent to Own, Lease to Own, R2O. They may seem like good options, but watch out for these pitfalls. They are a good program as long as you have a mortgage planner ensuring you are following a plan to succeed.

Rent to Own…what you NEED to know. My guess is you might check this option out if you:
1. Have NO credit.
2. Have credit challenges such as a bankruptcy or debt repayment plan.
3. You’re self-employed or on disability with little income to “declare”.
All valid reasons and you’re not alone. There are lots of people each year that contact me with these exact issues.

Rent-to-own or Lease-to-own is a great program for SOME people! The program allows you to buy a home today without having to meet the typical qualifications required by your banks. There is nothing cheap about these programs either.

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