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Oil to drive Alberta to top province for economic growth

2011-07-11T15:10:00.001-06:00

Oil to drive Alberta to top province for economic growth:3.8% forecast for next two years

CALGARY — Alberta will lead the country in economic growth this year and next year, according to a report released Wednesday by Scotia Economics.

The report says real GDP growth in the province will be 4.2 per cent this year, the highest in the nation, followed by 3.3 per cent growth in 2012, which will tie Saskatchewan as the highest in the country.

Scotia Economics is forecasting Canadian economic growth of 2.7 per cent this year and 2.5 per cent in 2012.

“Alberta will once again lead Western Canada’s outperformance, with growth averaging nearly 3.8 per cent in 2011-12,” says the report. “Heavy oil output is being ramped up, with further investment and construction activity underpinning a multi-year period of solid growth.

“The manufacturing and service sectors will experience a positive spillover as physical and human capital are added to support the expansion. However, rising construction and labour expenses will also weigh on business costs, and may pressure capacity towards the end of the forecast period.”

The report says the oil sector will continue to be Alberta’s growth engine with significant investment and output gains contributing to the increased momentum. Total crude oil output is projected to expand by nearly 30 per cent from current levels by 2012, bringing total production to 50 per cent above 1999 levels, it said.

“Alberta is expected to lead the country in job creation over the 2011-2012 period. The province lagged the national pickup in hiring earlier this year, but has been gaining momentum ever since. Alberta has one of the tightest labour markets in Canada, which is expected to put increasing pressure on wages,” says Scotia Economics.

Employment growth of 2.7 per cent this year and 1.8 per cent in 2012 is forecast for the province.

mtoneguzzi@calgaryherald.com

Calgary MLS sales soar in June

2011-07-11T15:07:00.000-06:00

Transactions up over 30% from a year ago

CALGARY — Calgary’s residential real estate market experienced a significant upswing in sales in June compared with a year ago.

Single-family MLS sales during the month were 1,398, up 32.01 per cent from June 2010’s 1,059 transactions, according to data released by the Calgary Real Estate Board on Monday.

And for the first time since April 2010, condo sales were up year-over-year, increasing by 30.56 per cent in June to 581 transactions. In June 2010, there were 445 condo sales.

The average sale price for a single-family home in June dropped by 0.33 per cent year-over-year falling to $479,580 from $481,960.

But the condo average rose by 0.79 per cent to $296,501 from $292,182 a year ago.

June’s condo average condo price was the highest since May 2010.

According to CREB, June’s year-over-year increase in single-family home sales was the highest since January 2010’s 38.50 per cent while for the condo market it was the highest since March 2010’s 36.26 per cent.

On a year-to-date basis, single-family home sales for the first six months of this year are up 5.64 per cent from a year ago to 7,231 transactions while condo sales are down 4.91 per cent to 2,965 units.

“Strong monthly increases does not imply a housing boom, as it is important to put into perspective that sales activity remains below long-term averages,” said CREB in a statement.

Sano Stante, president of the Calgary Real Estate Board, said the housing market in Calgary has gradually improved throughout the year as anticipated.

“We had a late spring market this year,” he said. “It’s all starting to come together in June. And last year we had an exuberant market early on and it died in June. So to draw comparisons year-to-year for that month shows an exaggeration of the trend.”

After the first half of the year, it appears the recovery in the housing market is starting to find its footing, he added.

“This gradual levelling has been fuelled by growth in employment, and in particular growth in full-time jobs. Improved job prospects, combined with an increase in the number of people moving to Calgary, will give lift to our housing market for the remainder of this year and into the next.”

Stante said homes that are value-priced are selling and they’re moving relatively quickly. Homes that are over-priced are sitting on the market, he added.

Dan Sumner, economist with ATB Financial in Calgary, said a year-over-year comparison may be a little misleading as to the strength of the Calgary housing market in June specifically. June is often one of the busiest months for sales volumes but sales last June were abnormally slow, he explained.

“Fuelling sales is a stronger economy specifically in Alberta, which feeds through into consumer confidence and that’s making Albertans more comfortable with home purchases again. Very accommodative interest rates are also helping as well,” added Sumner.

He said prices have been stable for quite some time now, despite a fairly strong economy over the past year. Because housing prices have risen so much over the past 10 years in Alberta, they are about as high as they can be, he said.

“However, with the economy fairly strong in Alberta and rates increasing affordability, for the time being at least, that is preventing prices from moving any lower. What you end up with is resistance for prices to move in either direction, and flatness ensues,” said Sumner.

The key economic contributors to the current housing market include a strong energy sector and resource prices as well as an improving labour market and strong wage growth. Also interprovincial migration to Alberta has picked up, said Sumner.

“With economic conditions in Alberta strong and looking up, sales during the second half of 2011 should be higher than last year,” he said.

Richard Cho, senior market analyst for Calgary for Canada Mortgage and Housing Corp., said that although demand for housing has been gradually improving, resale activity this time last year was also moderating.

mtoneguzzi@calgaryherald.com

Real estate fees not headed for basement despite new rules

2010-12-14T23:46:00.002-07:00

Canadians shouldn’t expect a sharp drop in real estate fees, with the country’s largest brokerages vowing to hold the line on the commissions despite rules that make it easier for discounters to muscle in on their businesses.

While a deal between the Competition Bureau and the Canadian Real Estate Association means agents will be able to break real estate services into small, individually priced chunks rather than charge a set commission for a complete sale, companies such as Royal LePage don’t plan to offer à la carte services.

39% 516 votes

Yes

61% 799 votes

That leaves the door open for a small group of discounters who have already set up shop across the country, offering those who want to sell their own homes to buy a listing on the real-estate funded Multiple Listing Service for as little as $109.

“That type of service may appeal to a certain segment of the market but I don’t think it appeals to those who would traditionally use a professional agent,” said Royal LePage president Phil Soper.

The national real estate association, which represents about 100,000 agents, was locked in a battle with the Competition Bureau over Commissioner Melanie Aitken’s charges that CREA made it impossible for individual agents to offer innovative services to consumers.

Instead, anyone who wanted an agent’s help to sell their home had to sign up for a full slate of services – including the posting of a Multiple Listing Service listing, the handling of negotiations and anything else involved with the sale. The average commission is 5 per cent in Canada, which meant the average national sale price of $324,928 in August would have landed agents a $16,246 commission.

CREA made changes earlier this year that were meant to appease the Competition Bureau, but they didn’t go far enough because there was some wiggle room that allowed it to keep members from offering low-cost services at any time. Thursday’s deal, which must still be ratified by CREA’s members, should end that battle.

“This battle has been about making sure a consumer isn’t forced to buy more service than they may need,” said Mr. Soper. “These changes may well have a profound effect on the lower end of the market, but I’m not sure this is the best time to be offering fewer services considering the market is cooling.”

But even without a settlement, this year has seen a slew of low-cost realty companies set up shop to help those who want to sell their houses on their own.

Joe William of Best Value Real Estate in Ottawa has been putting houses on the MLS for $109. Mayur Arora of OneFlatFee.ca will place a listing for $649. Other services can be purchased as needed – for example, he will negotiate a deal for an extra $500.

“We’re having our best year, business is up over 40 per cent,” said Mr. William. “It’s been a very popular service, we’re looking at going national”.

(Steve Ladurantaye Globe and Mail)

Things you think add value to your home - but really don't

2010-12-14T23:31:00.002-07:00

Every homeowner must pay for routine home maintenance, such as replacing worn-out plumbing components or staining the deck, but some choose to make improvements with the intention of increasing the home's value.

Certain projects, such as adding a well thought-out family room - or other functional space - can be a wise investment, as they do add to the value of the home. Other projects, however, allow little opportunity to recover the costs when it's time to sell.

Even though the current homeowner may greatly appreciate the improvement, a buyer could be unimpressed and unwilling to factor the upgrade into the purchase price. Homeowners, therefore, need to be careful with how they choose to spend their money if they are expecting the investment to pay off. Here are six things you think add value to your home, but really don't.

Swimming Pools

Swimming pools are one of those things that may be nice to enjoy at your friend's or neighbour's house, but that can be a hassle to have at your own home. Many potential homebuyers view swimming pools as dangerous, expensive to maintain and a lawsuit waiting to happen.

Families with young children in particular may turn down an otherwise perfect house because of the pool (and the fear of a child going in the pool unsupervised). In fact, a would-be buyer's offer may be contingent on the home seller dismantling an above-ground pool or filling in an in-ground pool.

An in-ground pool costs anywhere from $10,000 to more than $100,000, and additional yearly maintenance expenses need to be considered. That's a significant amount of money that might never be recouped if and when the house is sold.

Overbuilding for the Neighbourhood

Homeowners may, in an attempt to increase the value of a home, make improvements to the property that unintentionally make the home fall outside of the norm for the neighbourhood. While a large, expensive remodel, such as adding a second story with two bedrooms and a full bath, might make the home more appealing, it will not add significantly to the resale value if the house is in the midst of a neighbourhood of small, one-storey homes.

In general, homebuyers do not want to pay $250,000 for a house that sits in a neighbourhood with an average sales price of $150,000; the house will seem overpriced even if it is more desirable than the surrounding properties. The buyer will instead look to spend the $250,000 in a $250,000 neighbourhood. The house might be beautiful, but any money spent on overbuilding might be difficult to recover unless the other homes in the neighborhood follow suit.

Extensive Landscaping

Homebuyers may appreciate well-maintained or mature landscaping, but don't expect the home's value to increase because of it. A beautiful yard may encourage potential buyers to take a closer look at the property, but will probably not add to the selling price. If a buyer is unable or unwilling to put in the effort to maintain a garden, it will quickly become an eyesore, or the new homeowner might need to pay a qualified gardener to take charge. Either way, many buyers view elaborate landscaping as a burden (even though it might be attractive) and, as a result, are not likely to consider it when placing value on the home.

High-End Upgrades

Putting stainless steel appliances in your kitchen or imported tiles in your entryway may do little to increase the value of your home if the bathrooms are still vinyl-floored and the shag carpeting in the bedrooms is leftover from the '60s. Upgrades should be consistent to maintain a similar style and quality throughout the home.

A home that has a beautifully remodeled and modern kitchen can be viewed as a work in project if the bathrooms remain functionally obsolete. The remodel, therefore, might not fetch as high a return as if the rest of the home were brought up to the same level. High-quality upgrades generally increase the value of high-end homes, but not necessarily mid-range houses where the upgrade may be inconsistent with the rest of the home.

In addition, specific high-end features such as media rooms with specialized audio, visual or gaming equipment may be appealing to a few prospective buyers, but many potential homebuyers would not consider paying more for the home simply because of this additional feature. Chances are that the room would be re-tasked to a more generic living space.

Wall-to-Wall Carpeting

While real estate listings may still boast "new carpeting throughout" as a selling point, potential homebuyers today may cringe at the idea of having wall-to-wall carpeting. Carpeting is expensive to purchase and install. In addition, there is growing concern over the healthfulness of carpeting due to the amount of chemicals used in its processing and the potential for allergens (a serious concern for families with children). Add to that the probability that the carpet style and colour that you thought was absolutely perfect might not be what someone else had in mind.

Because of these hurdles, wall-to-wall carpet is something on which it's difficult to recoup the costs. Removing carpeting and restoring wood floors is usually a more profitable investment.

Invisible Improvements

Invisible improvements are those costly projects that you know make your house a better place to live in, but that nobody else would notice - or likely care about. A new plumbing system or HVAC unit (heating, venting and air conditioning) might be necessary, but don't expect it to recover these costs when it comes time to sell.

Many homebuyers simply expect these systems to be in good working order and will not pay extra just because you recently installed a new heater. It may be better to think of these improvements in terms of regular maintenance, and not an investment in your home's value.

The Bottom Line

It is difficult to imagine spending thousands of dollars on a home-improvement project that will not be reflected in the home's value when it comes time to sell. There is no simple equation for determining which projects will garner the highest return, or the most bang for your buck.

Some of this depends on the local market and even the age and style of the house. Homeowners frequently must choose between an improvement that they would really love to have (the in-ground swimming pool) and one that would prove to be a better investment. A bit of research, or the advice of a qualified real estate professional, can help homeowners avoid costly projects that don't really add value to a home.

(Jean Folger, Investopedia.com)

Canadian mortgage debt rises to over $1 trillion on high prices, low interest

2010-11-10T13:04:00.003-07:00

Low interest rates and a hot housing market helped push Canada’s total residential mortgage debt to a record $1 trillion this year, but a cooling real-estate market is expected to slow further accumulation, says the chief economist of Canada’s mortgage industry association.

The value of outstanding mortgages is now 7.6 per cent higher than it was last year, the Canadian Association of Accredited Mortgage Professionals said in its annual report released Monday.

“We’re still seeing a lot of movement into home ownership and that’s what’s driving the growth of debt,” said Will Dunning, CAAMP’s chief economist.

“The growth will gradually decelerate but we’re still looking at rates of six and a half per cent or so, so still fairly rapid,” Dunning said.

This year’s growth was higher than the average annual increase is around 7.1 per cent. However, it is still much lower than it was in the early 2000s, when debt growth hovered closer to 10 per cent year over year.

Higher home prices drove many Canadians to borrow heavily to finance-purchases, while a low interest rate environment encouraged others to refinance loans and consolidate debt, the CAAMP report said.

The low interest rate environment has enabled some consumers to take on bigger mortgages than they might otherwise have been able to carry, while it has encouraged others to borrow against their homes.

Recent housing market data points to a massive downshift in housing market activity.

Less activity in Canada’s resale home market and moderating housing starts will mean fewer people taking on new mortgages, Dunning said.

“That (slowdown) now and in the near future going to result in less mortgage takeout as those sales get closed,” he said.

Canada’s housing market has been on a tear for much of the past year after the Bank of Canada sent its trend-setting policy rate to an emergency low of 0.25 per cent to stimulate borrowing and consumer spending.

Buyers, spurred by easy access to relatively cheap borrowing, rushed into the market and competed aggressively for homes, which drove prices to record highs.

The market has been cooling in recent months as many sales were pushed ahead to the beginning of the year in advance of tighter mortgage qualification rules, a new tax regime in B.C. and Ontario and higher interest rates.

Meanwhile, the Bank of Canada’s policy rate has been hiked three times to one per cent, still historically low. The central bank is expected to take a pause on rate hikes until the middle of next year, giving mortgage holders more time to refinance at low rates.

Most Canadians have heeded warnings from economists — including the Bank of Canada — about growing debt levels and took advantage of low interest rates to refinance and pay off other debts, CAAMP said.

The report found 18 per cent of mortgage holders have taken equity out of their homes to free up extra cash. Almost half of mortgage holders who borrowed against their homes cited a need for “debt consolidation or repayment” and the average amount borrowed against home equity was $46,000.

The association said that most mortgage holders appear to be comfortable with their debt levels and that the vast majority — about 84 per cent — said they could afford at least a $300 or 30 per cent increase in their monthly mortgage payment, Dunning said.

The association asked approximately 2,000 Canadians surveyed how much of an interest rate hike they could withstand. The average Canadian monthly mortgage payment is about $1,025 and the average homeowner has room for $1,056 per month on top of current costs, the report found.

However, about 350,000 out of 5.65 million, or about six per cent of Canadian mortgage holders, would be challenged by rate rises of less than one per cent, CAAMP said.

“Most of the people who have low tolerances for increased payments have fixed-rate mortgages,” the reports said. (So) by the time their mortgages are due for renewal, their financial capacity will have expanded and their mortgage principal will have been reduced.”

Canadians continue to favour fixed-rate mortgages and a five-year fixed-rate mortgage remains the most popular option despite the fact that variable rates have become much less expensive than fixed rates, the report found.

Mortgage loophole helps first-timers

2010-04-06T22:39:00.000-06:00

There is a small loophole in the new federal mortgage rules that could make it easier for the banks to lend out money to first-time buyers.

The federal government announced last month new requirements for anyone borrowing money for a house and needing mortgage insurance. If you have less than a 20% down payment and are borrowing from a financial institution covered by the Bank Act, you have to take out mortgage default insurance, which ensures the banks are covered for any losses resulting from payment defaults.

For principal residences, the new rules force consumers to qualify for a loan based on being able to make payments on a five-year fixed-rate mortgage, which has a much higher interest rate than variable mortgages, now as low 1.85%.

Clearly, Ottawa’s view was toward rising rates. And this week, two of the major banks raised their posted rate on five-year fixed mortgages to 5.85%.

But one lingering question is how the five-year rate would be calculated in terms of qualifying a customer. In other words, it would obviously be a lot tougher to qualify for a mortgage under the new rules when using the posted rate of 5.85%. But if using the actual rate consumers get -- these days as low as 3.75% -- that’s a lot less income you’ll need to buy your first home.

Officials in Ottawa have been mum on what numbers should be used.

But an internal document distributed by Canada Mortgage and Housing Corp. to mortgage brokers, obtained by the Financial Post, shows consumers will be able to use their actual rate to qualify for a mortgage if they go for a term five years or longer.

If buyers want a variable-rate mortgage, they will have to qualify based on “the benchmark rate,” which is essentially the posted rate.

So, if you want to go short, you had better be able to make payments based on an interest rate as high as 5.85%, which is where the benchmark rate will likely sit by next week.

“Probably 10% of the overall mortgage population is going to be affected by this rule in the sense they are no longer going to be able to qualify for a variable-rate mortgage or a one- to four-year term,” says Robert McLister, editor of Canadian Mortgage Trends. “The qualifying rate is going to affect the debt ratios of those people.”

The end result may see more people forced to lock in their rate, which is hardly fair given variable-rate mortgages have been a better deal than fixed-rate rate mortgages about 88% of the time over the past 50 years, before the recent credit crisis.

“This will help people become accustomed to making payments based on where mortgage payments are likely to be going,” said Peter Vukanovich, chief executive of Genworth Financial Canada, the mortgage insurer.

He doesn’t think the changes are a major deal, given that most of the major banks have been qualifying consumers based on their four- and five-year rates. His company was already only insuring products based on rates as high as 4%.

“It’s a good rule change when you are situation right now where we are increasing interest rates,” says Jim Smith, vice-president of Scotia Mortgage Authority. “Most lenders, ourselves included, have qualified based on at least the three-year posted rate.”

The discrepancy is, the three-year posted rate at most banks is actually higher than the five-year discounted rate.

And that means it is actually going to get easier to get a mortgage -- as long as you do what the government tells you to do and lock in your rate.

(By Garry Marr, Financial Post)

Interest rate hike this summer?

2010-01-30T23:56:00.002-07:00

Don't count on it. For the Bank of Canada to raise rates before the middle part of 2011 would be totally inconsistent with its current forecast.

Canadian market watchers will get some good news this week. The predictions for a "blowout" reading on fourth-quarter GDP are already out there and it is likely to be an abnormally strong number. But for anyone who thinks a big number is likely to help lock in a rate hike this summer, I would suggest that is not going to happen. In fact, my view is that the Bank of Canada will not be raising rates until mid-2011 - at the earliest.

This is critical to the outlook for Canadian money market and bond yields since futures have priced in nearly 100 per cent odds of a 25 basis point rate hike this June, and another 25 basis points by September. (A basis point is 1/100th of a percentage point.) The central bank has already told us that its base case is for 2.9 per cent real GDP growth this year and 3.5 per cent next year, with the starting point on the "output gap" being 3.7 per cent ("output gap" is the gap between the actual level of real GDP and where real GDP would be if the economy were at full capacity). Remember that an output gap that big in any given quarter classifies as a 1-in-20 event. Moreover, baselining these expected growth rates against the latest estimates of potential growth puts the output gap at a smaller level of 1.55 per cent this year, narrowing further to 0.25 per cent in 2011.

The history of the Bank of Canada is such that - outside of when it had to defend the Canadian dollar - it typically does not embark on its tightening phase until the output gap is close to closing. Even during the aggressive John Crow era, the bank's modus operandi was to time the first rate hike just as spare capacity was being eliminated, and not much before. On average, the first central bank rate hike following a recession takes place one quarter before the output gap closes (there is still a gap, but it is small at 20 basis points). If such a strategy is replicated this time around - and the cause for being on pause longer in the context of a historic deleveraging cycle is certainly quite strong - then the very earliest the bank will move is the second quarter of 2011.

Under this scenario, based on some back-of-the envelope calculations I just did, the unemployment rate at no time declines below 7.5 per cent through to the end of 2011. The peak in the jobless rate was 8.7 per cent in August, 2009. Going back to prior recessions, the central bank does not begin to tighten rates until the jobless rate is down an average of 150 basis points with a range of 130 basis points to 170 basis points.

Unless the bank wants to be pre-emptive - highly unlikely when it acknowledges in its economic outlook last week that "the recovery continues to depend on exceptional monetary and fiscal stimulus" and that "the overall risks to its inflation projection are tilted slightly to the downside" - then to raise rates before the middle part of 2011 would be totally inconsistent with its current forecast. More to the point, while bored Bay Street economists analyze every word to see if the bank is more or less "hawkish" than in its previous outlook, what is important for investors is to assess the bank forecast and decide what it means for the degree of excess capacity in the economy and what that implies for the future inflation rate.

The bottom line is that even with the fragile recovery, the bank sees more downside than upside risk to its inflation projection, and, to reiterate, for it to start tightening policy until the jobless rate falls below 7.5 per cent would be a break from past post-recession actions.

And whatever future "policy tightening" is needed could also come via the overextended loonie, limiting any need for an interest rate adjustment in the time horizon that the markets have discounted. This is a source of debate on Bay Street, but the bank is still sensitive to the growth-dampening impact of an exchange rate too firm for its own good. To wit: "The persistent strength of the Canadian dollar and the low absolute level of U.S. demand continue to act as significant drags on economic activity in Canada," the bank says.

In a nutshell, the Canadian market is already braced for 50 basis points of tightening from the Bank of Canada by September. With that in mind, it is difficult to believe that there is any significant rate risk here; if anything, the surprise will be that the bank is on hold for longer. If that proves to be true, then there is actually more downside than upside potential to Canadian bond yields, particularly at the front end of the coupon curve.

The reason the markets think the bank may pull the trigger is because of this one sentence that shows up in every press statement: "Conditional on the outlook for inflation, the target overnight rate can be expected to remain at its current level until the end of the second quarter of 2010 in order to achieve the inflation target."

So the central bank has really only given a pledge to keep rates where they are until mid-year. But June is only five months away and so one would have to think that at one of the next three meetings, the Bank is going to have to update this particular sentence or cut it entirely and leave the market without a de facto time commitment. Either way, the moment the bank changes this sentence is the moment the market will put on hold its expectations of a new rate-hiking cycle coming our way.

Until then, homeowners opting for variable rate mortgage financing will likely not have to face the interest rate music.

(By David Rosenberg, chief strategist for Gluskin Sheff & Associates Inc. and a guest columnist for Report on Business).

November sales, prices dwarf year-ago levels

2009-11-25T23:27:00.003-07:00

Calgary housing market surging

One year ago, the downturn in the Calgary residential real estate market was beginning to take hold on the heels of a global financial market meltdown.

But just two weeks into November, preliminary housing sale numbers indicate how dramatically the market has turned since then.

Sales in November of this year will eclipse those for November 2008. And at this pace, average sale prices will also be up from a year ago.

"It has a lot to do with the low mortgage rates," said Nikki Harrison, a realtor with Re-Max Realty Professionals, adding that has stimulated buyers to purchase homes. Last year at this time, the bad and uncertain economic news contributed to people sitting back and not moving, but now the overall outlook for consumers is more positive.

"We're definitely optimistic that things are starting to change," she said Friday at a home listed by realtor Ted Greenhough she is helping market for $1.2 million in the northwest Tuxedo neighbourhood.The numbers seem to back up Harrison's outlook for the Calgary real estate market.

According to the website of Mike Fotiou, of First Place Realty, so far this month until Nov. 18 there have been 662 single-family home sales for an average sale price of $470,774. For the entire month of November last year, there were 670 sales at an average price of $435,471.

Condo sales have already surpassed last-year levels. This month there have been 292 transactions at an average sale price of $300,118. November 2008 recorded 284 sales for an average of $285,820.

"It's very difficult to predict what's going to happen in this market because it's rather volatile as far as interest rates(and where they're) going. We're not really sure and we're just very optimistic that it will continue to get better," said Harrison.

The more positive trend in the local real estate market has been seen since May, beginning six consecutive months of year-over-year sales increases for both the single-family and condo markets.

"Obviously, sales activity continues to remain fairly steady," said Richard Cho, senior market analyst in Calgary for Canada Mortgage and Housing Corp. "The presence of lower mortgage rates continues to benefit the home buyers toward sales growth.

"The economy in general is also showing more signs of improvement. Employment levels on a seasonally adjusted basis have started to trend upwards and employment growth is also one of the primary drivers of housing demand."

The year-over-year gain in sales may appear a bit pronounced in November as sales activity began to slow at the end of 2008, added Cho.

Todd Hirsch, senior economist with ATB Financial in Calgary, concurred that low mortgage rates continue to have a dramatic impact on the residential real estate market. "There is a sense, a correct sense, that these mortgage rates aren't going to stay this low forever, so people are getting in, I guess, while the getting's good. They know that if they wait too much longer, like another year, those rates are going to start to go up," said Hirsch.

Another factor for the housing market, he said, is that the city and the province continue to have positive in-migration numbers. "That's helping when they move here," said Hirsch. "They're not stampeding in like they were in 2006, but they're still moving to Alberta and to Calgary and putting some upward pressure, especially at that entry-level home buyers--the condo market or the smaller single-detached home. That's adding some lift to the market there, too."

(By Mario Toneguzzi, Calgary Herald)

Homes sales hit record high; outlook upgraded

2009-11-19T08:30:00.001-07:00

November, 17, 2009.

OTTAWA -- Home sales hit a new record high in October, leading the Canadian Real Estate Association to boost its outlook for 2009 and 2010.

Resale home activity was up 41.5% in the month, reaching a total of 42,288 units. On a seasonally adjusted basis, homes sold on the Multiple Listing Service totalled 45,818 units in October.

"Low interest rates and upbeat consumer confidence continue to release the pent-up demand that built late last year and earlier this year," said CREA president Dale Ripplinger. "The release of that pent-up demand has boosted national sales activity to new heights and is drawing down inventories."

Further, said Millan Mulraine, economics strategist at TDSecurities, "we expect the recent strong gains in the housing market to remain largely intact, though we suspect that the back-to-back double-digit advance in sales seen earlier this year may not be repeated."

As a result of the sector's strong performance, CREA increased its forecast for sales in 2009 by 6.6% to 460,200 units. For 2010, the national industry group said sales would rise 7% to 492,300 units.

The average home price also reached new highs in October, climbing to $341,079, up 20.7% from a year ago.

A separate measure, which limits its focus to Canada's major markets, showed the average price rising 22.1% to $373,095.

At the same time, the sharp rise in housing demand has eaten into inventories. With 194,994 homes listed for sale in Canada at the end of October, the number of listings is 20.8% below the peak reached in October of last year.

It is the sixth month in a row in which inventories have fallen from year-ago levels, bringing supply to 4.1 months on a seasonally adjusted basis, the lowest level in more than two years.

CREA chief economist Gregory Klump said new listings are expected to rise in coming months in response to headline average price increases.

New monthly sales records were set in about one fifth of local markets in October, including Toronto, Montreal and Ottawa. On a provincial basis, new records were set in British Columbia, Ontario and Quebec, largely as a result of increased activity in those provinces' major markets.

(John Morrissy, Financial Post)

卡城各区房价走向？

2009-09-04T21:02:00.002-06:00

本贴描述了卡城各区2008-2009两年来

独居民房（single family house）平均价格的变化。

图的横坐标是月份，每年从1月到12月。

图的纵坐标是每个月的平均房价，以万元计。

基本趋势是2008年房价持续下减， 2009年房价缓步增加。

虽然每个区的房价不同，但房价变化的大方向是一致的。

From Home Price

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The Home Renovation Tax Credit

2009-09-01T21:05:00.004-06:00

Home renovations are smart investments in the long term value of a home and also create
economic activity by increasing the demand for labour, building materials and other goods. Renovations can also reduce energy consumption and the long term cost of owning a home.

To provide some $3 billion of much needed fiscal stimulus and encourage investments in Canada’s housing stock, Budget 2009 proposes to implement a temporary Home Renovation Tax Credit (HRTC).

Temporary, Timely and Targeted Stimulus

The HRTC will apply to eligible home renovation expenditures for work performed, or goods acquired, after January 27, 2009 and before February 1, 2010, pursuant to agreements entered into after January 27, 2009. The temporary nature of the credit will provide an immediate incentive for Canadians to undertake new renovations or accelerate planned projects.
The HRTC can be claimed for renovations and enduring alterations to a dwelling, or the land on which it sits.

How the HRTC Will Work

The 15 percent credit may be claimed on the portion of eligible expenditures exceeding $1,000, but not more than $10,000, meaning that the maximum tax credit that can be received is $1,350.

The credit can be claimed on eligible expenditures incurred on one or more of an individual’s eligible dwellings.

Properties eligible for the HRTC include houses, cottages and condominium units that are owned for personal use.

Renovation costs for projects such as finishing a basement or re-modelling a kitchen will be eligible for the credit, along with associated expenses such as building permits, professional services, equipment rentals and incidental expenses.

Routine repairs and maintenance will not qualify for the credit. Nor will the cost of purchasing furniture, appliances, audio visual electronics or construction equipment.

Who Can Claim the HRTC?

About 4.6 million families in Canada are expected to benefit from the credit. Taxpayers can claim the HRTC when filing their 2009 tax return. Eligibility for the HRTC will be family based. For the purpose of the credit, a family is generally considered to consist of an individual, and where applicable, the individual’s spouse or common law partner. Family members will be able to share the credit.

Examples of HRTC Eligible and Ineligible Expenditures

Eligible

• Renovating a kitchen, bathroom, or basement

• New carpet or hardwood floors

• Building an addition, deck, fence or retaining wall

• A new furnace or water heater

• Painting the interior or exterior of a house

• Resurfacing a driveway

• Laying new sod

Ineligible

• Furniture and appliances (refrigerator, stove, couch)

• Purchase of tools

• Carpet cleaning

• Maintenance contracts (furnace cleaning, snow removal, lawn care, pool cleaning, etc.)

Examples of the Benefits of the Home Renovation Tax Credit

The following examples illustrate how homeowners can benefit from the HRTC

• Sally and Ed are a couple who have recently purchased a house. In response to the temporary HRTC, they decide to replace their old windows and improve the insulation in their home in 2009, instead of waiting, incurring $10,000 in expenditures. After taking into account the $1,000 minimum threshold, a 15 percent credit will be available on $9,000 in eligible expenditures, providing tax relief of $1,350.

• William and Marie are a couple who are planning to purchase a more energy efficient furnace for their home, and build a deck at their cottage sometime later. To take full advantage of the temporary HRTC, they decide to do both projects in 2009 rather than waiting. They pay $5,000 for the furnace and $3,500 for the deck. They also decide to have the area around the deck landscaped for $2,500, bringing their total costs to $11,000 ($5,000 + $3,500 + $2,500).
Marie claims a credit of $1,350 on the maximum allowable amount of $9,000.

• Karen and Heather are sisters who share ownership of a condominium unit. They each incur $7,500 in expenditures renovating the kitchen in the condo. Karen and Heather each claim a $975 credit on eligible expenditures of $6,500 ($7,500 - $1,000).

How Can I Get More Information?

Additional information on the Home Renovation Tax Credit is be available on Canada Revenue Agency’s website at (www.cra.gc.ca).

Information is also available at www.fin.gc.ca

Canada home resales set July record, up 6th month

2009-08-25T07:35:00.002-06:00

Sales of existing homes in Canada posted their biggest year-over-year gain in two years and rose for a sixth straight month in July, as low interest rates and an improving economy tempted buyers back.

In a first look at third-quarter sales, the Canadian Real Estate Association said on Friday that 50,270 homes changed hands in July, up 18.2 percent from the same month last year.

It was the first time that sales topped 50,000 units in July, and the number was 3.9 percent above the previous record for the month, set in 2007, the industry group said.

On a seasonally-adjusted basis, home sales rose at a slower pace in July, up 2.5 percent. Sales rose nearly 9 percent in June.

"National resale housing market activity continued on its upward trend in July, but its pace slowed from fullout sprint in months prior down to that of a 5K run," said Pascal Gauthier of TD Economics.

The report is the latest evidence that consumers are venturing back into the home market after a slump triggered by the recession. Low mortgage rates and signs that the worst of the slump is over are stimulating the market.

The association said demand is rebounding sharply in some of Canada's most expensive markets and that distorted the national average price upward. The average July resale price rose 7.6 percent from a year earlier to C$326,832 ($299,846).

"The difference in the resale housing market now, compared to the beginning of the year, is night and day, and nowhere is this more evident than in the West," said CREA president Dale Ripplinger.

Resale activity in Vancouver, British Columbia, surged 90 percent in July from a year ago, while Alberta cities Edmonton and Calgary posted a jump in sales of 28 percent and 22 percent, respectively.

New listings nationwide continued to fall, down 13 percent to 73,444 units from a year ago. Eight provinces reported higher prices, as did 18 of the 25 largest cities.

(TORONTO, Reuters, by Ka Yan Ng; editing by Janet Guttsman)

Bernanke: near term growth prospects good

2009-08-25T07:31:00.001-06:00

U.S. Federal Reserve chief Ben Bernanke on Friday said prospects for a return to global economic growth looked good "in the near term," the clearest signal yet the world's most powerful central banker thinks a recovery is at hand.

"After contracting sharply over the past year, economic activity appears to be leveling out, both in the United States and abroad, and the prospects for a return to growth in the near term appear good," Bernanke told an annual Fed conference here in the shadows of the Grand Teton mountains.

"Although we have avoided the worst, difficult challenges still lie ahead," he said, cautioning that the "recovery is likely to be relatively slow at first, with unemployment declining only gradually from high levels."

His remarks were a bit more upbeat than a statement from Fed policy-makers last week, and nodded toward private forecasts for a solid upturn in the second half of 2009, while stressing headwinds still face the global economy.

Bernanke said "critical challenges remain" from financial markets still strained from a severe crisis that broke two years ago. The difficulties households and businesses face in getting loans is another source of stress, he said.

The crisis highlights the need to "urgently" address structural weaknesses in the financial system, particularly in the way governments set rules and supervise it, he said. Bernanke delivered the remarks at a conference sponsored by the Kansas City Federal Reserve Bank that draws top central bankers from around the world, along with a Who's Who of economists.

Germany, France and Japan have pulled out of recession and the U.S. economy appears to be stabilizing after a devastating financial crisis and painful economic downturn that eliminated almost seven million U.S. jobs.

The Fed chopped interest rates to near zero in December and has pumped around $1 trillion into financial markets to combat the crisis and spur economic growth.

Earlier this month, the central bank said it would phase out its purchases of long-term U.S. Treasuries, one of the extraordinary measures it has used to revive the economy.

Its emergency action has gained traction. Data out on Friday showing a powerful jump in U.S. existing home sales in July to an annualized pace of 5.24 million units, notching the fastest rate in two years.

U.S. stock indexes rallied after Bernanke's speech and the better-than-expected housing data, with the benchmark S&P 500 index rising to new 10-month highs while Treasury bonds fell.

While the U.S. economy appears to be gaining health, analysts worry a recovery could prove fleeting.

Expectations for solid growth in the second half of the year reflect the impact of a government program to spur car buying and an anticipated restocking of inventories. U.S. consumer demand is still weak and unemployment is rising.

The Fed chairman's talk to an audience of peers at the annual Fed retreat outlined how central banks reacted to the series of flashpoints in the crisis. Without speedy actions by the Fed - some of which were "unfortunately unavoidable" - the panic could have intensified, he said.

"As severe as the economic impact has been, however, the outcome could have been decidedly worse," Bernanke said.

He said the Fed's moves to pump funds into frozen financial markets have promoted stability. Declining use of some of those emergency facilities since the beginning of the year is a "clear signal" that financial markets are normalizing, he said.

(Mark Felsenthal and Kristina Cooke, Reuters , JACKSON HOLE, Wyo. )

Why economists are watching the paint dry

2009-07-16T08:12:00.001-06:00

Fortune tellers read tea leaves. Astrologers read stars. And economists searching for signs of the recession’s end are reading … white paint.

More specifically, they’re tracking the price of titanium dioxide, the substance that makes paint white. Titanium dioxide might not be a household name, and economists of course eye more widely watched indicators.

But white paint is seen by many as an economic barometer, given its widespread use in everything from house paints, cars and washing machines to railway cars, skyscrapers and airplanes.

If the price of titanium dioxide is doing well, the explanation goes, more white paint is selling, suggesting a pickup in economic activity.

So when the U.S. Department of Labor released monthly prices for TiO2 on Tuesday, many economists took note. The chemical’s price was actually down in June, but has fallen at a slower pace for three months in row.

“It’s in the top 10 of obscure indicators,” joked Richard Yamarone, an economist at Argus Research in New York. “But there’s a lot behind it. It’s not as silly as one may expect.”

Mr. Yamarone noted that white paint is used in such a cross-section of the economy, it’s important to watch. “I always knew it as the durable-good pigment,” he said.

Some major makers of titanium dioxide, such as Kronos Worldwide, Inc., are beginning to push through price increases, saying that demand has started to pick up.

The companies had been cutting back production and closing plants for months because of the recession.

Asked if titanium dioxide, which costs around $1.07 (U.S.) per pound, is a good indicator of economic activity, Mr. Yamarone replied: “Oh, sure, absolutely. You’ve got to remember, when you looking at any economic indicator, there is no perfect indicator. The best you can do is get maybe a top 10 list and observe all those at the same time.”

Mark Zandi, chief economist at Moody’s Economy.com, said he follows the price of titanium dioxide fairly closely: “It’s stretching a little bit, but I think it has historically been a good barometer of broader economic conditions.”

He noted that yesterday’s U.S. figures matched other signals about the economy making a slow recovery.

“It’s consistent with the idea that the economy is still soft. We are still in recession, but we’re headed in the right direction,” Mr. Zandi said.

Both Mr. Yamarone and Mr. Zandi said they follow even more obscure measurements than titanium dioxide prices.

Mr. Yamarone, for example, said one of the most important indicators he tracks is the sale of women’s dresses.

“The woman is traditionally the [chief financial officer] of a household. She sees when times get tough,” he explained. “When things get tough, she postpones a ‘self purchase.’ And there is no greater self purchase for a woman than a dress.”

Right now, his dress sale indicator “is still contracting.”

Mr. Zandi goes even further afield to read the economic barometer. He follows the number of people driving through tunnels and across bridges in New York and the number of airplanes taking off and landing in Orlando, Fla., because it’s a good snapshot of vacation and business travel.

He also tracks the variety of products on grocery store shelves, “in terms of everything from fruits and vegetables to the kind of olives they put on display,” he said. “In tough times you see much less variety, in good times much more variety.”

Mr. Zandi said the hard economic data familiar to most people – such as unemployment figures, gross domestic product measurements and international trade statistics – are still vital for economists. “But these smaller things make a difference and sort of colour my thinking.”

(Paul Waldie, The Globe and Mail)

Harper: 'The worst is behind us'

2009-06-20T17:51:00.002-06:00

Prime minister encouraged by new data that suggests economy is in recovery mode

Canadians have reason to breathe a little easier -- the economy fell sharply at the start of the year but talk about another depression appears to have been just talk.

Having been given the best economic news in months, Prime Minister Stephen Harper was quick to take advantage yesterday, saying the Liberals have no reason to push for a federal election.

"I think the worst is behind us, we will have better quarters going forward,'' Harper said in an interview with a Toronto radio station.

"I think that's one of the reasons (Liberal Leader Michael) Ignatieff seems to be pushing so hard with ideas to get the other parties to bring the government down. He would love the opportunity to get in there for a recovery. The country needs an election like a hole in the head,'' Harper added.

The output numbers for the first quarter of 2009 were nothing to boast about. The economy contracted by a massive 5.4 per cent at an annualized rate, the worst in 18 years when there was a 5.9 per cent decline in 1991.

But with the Bank of Canada having projected a 7.3 per cent collapse and some economists saying the decline could be as much as nine per cent, the Statistics Canada data has the feel of a death row reprieve.

And the improving data for the last two months of the quarter -- February and March -- suggests that as Harper noted, the worst is likely over and it happened during the November-January period.

"It is the worst recession since the Great Depression globally, but this is where some of Canada's positives have come back to save us a bit from something nastier,'' said Douglas Porter, deputy chief economist with BMO Capital Markets.

"Make no mistake, it's a very severe downturn. But we've been through these kinds of severe downturns before in the early '80s and early '90s.''

Combined with the revised 3.7 per cent drop in the fourth quarter of 2008, Liberal finance critic John McCallum said the slump still qualifies as among the worst since quarterly data began being kept in 1961.

But he too expressed relief that "there is less panic than there was a while ago . . . and more sense that, 'Yeah, we are going to get out of this."'

McCallum said his party will still press for improvements to unemployment insurance to ensure that more laid-off Canadians qualify for benefits, saying the economy will likely continue to shed jobs for months to come.

(Julian Beltrame, The Canadian Press OTTAWA, June 2, 2009)

Bond surge to spike rates?

2009-06-20T17:32:00.000-06:00

Soaring yields have investors wondering if banks will raise interest rates ahead of schedule

Jun 12, 2009 04:30 AM

Economists are dubbing it "the great rate debate."

Soaring interest rates in the bond market in recent weeks have investors wondering whether global central banks could begin raising their trendsetting interest rates ahead of schedule.

Rate hikes were unthinkable only a month or two ago. But a string of "less negative" consumer and employment data, combined with rising stock and commodity prices, serve as harbingers of an economy on the mend. Meanwhile, bond traders are fixating on the threat of inflation as governments issue massive amounts of debt to jump-start growth, while concerns swirl about the security of the United States' prized AAA credit rating.

The confluence of those factors has spurred a sharp run-up in longer-term bond yields in recent weeks, as the market wagers that central banks will be forced to hike interest rates in order to control inflation.

Rising rates would put more strain on consumers by driving up the cost of variable-rate mortgages, lines of credit and other loans, and some economists worry the trend could muck up an economic recovery before it takes root. Already, mortgage rates in Canada and the U.S. have jumped. Typical five-year fixed-rate loans are around 5.85 per cent in Canada, up about 60 basis points in about a week.

Some experts, however, argue that bond yields are due for a correction. The bond market enjoyed a rare strong session yesterday as investors attracted to the higher interest rates bid up bond prices and pushed yields downward. But it's too soon to tell whether the dip in yields marks the beginning of a meaningful pullback.

"The main reason why average Canadians should care about a rise in bond yields is that ultimately, it raises borrowing costs," said Craig Alexander, deputy chief economist at TD Bank Financial Group. "And higher borrowing costs during a period of economic weakness will act as a headwind in terms of how strong the economic recovery is."

Alexander doubts the recent rise in yields is sufficient enough to jeopardize the recovery, but he remains "concerned" because the trend has already resulted in higher longer-term mortgage rates in both Canada and the United States.

Bond market action suggests that various floating-rate loans could be on the rise in the near future. The prevailing sentiment sees the U.S. Federal Reserve increasing its key interest rate by the end of this year, putting more pressure on the Bank of Canada to follow suit.

For his part, governor Mark Carney reiterated plans yesterday to keep Canada's overnight rate at a record low of 0.25 per cent until mid 2010, provided inflation remains tame. Economists, meanwhile, argue the bond market is being too hasty.

"Expectations of a (Fed) rate hike in 2009 may be premature even though the economic outlook is brightening," wrote Benjamin Reitzes of BMO Capital Markets in a report. He noted the U.S. economy continues to shed jobs, while real gross domestic product has yet to bottom out. "With consumers accounting for 70 per cent of the economy, real GDP growth is likely to remain lacklustre through 2010, relative to previous recoveries."

Nonetheless, there were more indications the worst of the crisis may have passed. U.S. retail sales rose in May for the first time in three months, while a separate report showed claims for jobless benefits fell last week.

Economists warn that higher interest rates too soon would hurt consumer spending on both sides of the border, especially on big-ticket items that require financing, such as furniture, appliances, automobiles and homes.

"Markets don't travel in a straight line. So, at some point, I think, there is going to be a bit of a reappraisal," Alexander said. The timing, however, remains sketchy despite yesterday's rally.

U.S. Treasury prices rose yesterday, pulling benchmark yields back from eight-month highs above 4 per cent, as a solid auction of 30-year debt assuaged worries over America's rising budget deficit.

The $11 billion (U.S.) sale was the first reopening of a 30-year issue since the government announced in April that it was moving to monthly sales of long bonds.

The sale appeared to benefit from a steep sell-off in recent days that made bond prices more attractive.

This week has also been the first test of the government's long-term borrowing ability since investors began to question the United States' AAA credit rating last month.

A 10-year auction on Wednesday met with spotty reception and raised some concerns, but the 30-year sale followed up strongly, leaving some fixed income investors heartened.

(RITA TRICHUR, BUSINESS REPORTER)

Mortgage rates rise as bonds grow

2009-06-11T23:17:00.002-06:00

HOUSING: Governments boost bond rates to raise money for stimulus packages - and that influences mortgage rates

TORONTO, Mon, June 8, 2009 -- Improved investor confidence and increased government spending may be good for the overall economy, but it can be bad news for home buyers as bond yields rise and push up fixed mortgage rates.

All of Canada's big banks increased the interest rates for their five-year, fixed-rate mortgages by 0.2 percentage points to 5.45% last week.

These increases came as investors pushed up rates on government bonds that influence the the cost of mortgages.

Eric Lascelles, chief economist and rates strategist at TD Securities, said a number of economic factors have played a role in doubling Canadian government bond yields from a low of 1.25% in late 2008 to about 2.5%.

Government bond yields are inversely related to demand: as the economy soured late last year, investors flocked to the safe haven of government debt, pushing yields down. Now, as the economy begins to show signs of improvement, demand for government bonds is shrinking, pushing yields up -- and fixed mortgage rates along with them.

Lascelles added that governments around the world are issuing more and more bonds as they increase borrowing to support massive stimulus projects.

"There's the concern that at some point demand just isn't going to keep up with supply, and you're going to have so many bonds out there and nobody's going to want them," he said.

"If that happens . . . you've basically got to pay a higher return to lure people in to buy those government bonds."

Lascelles described the doubling of bond rates in roughly six months as an "astonishingly concerted push" and said no one should be surprised that fixed mortgage rates are rising, too.

"Historically there has been a pretty good link between government yields and mortgage rates," he said. "A 1.25 (percentage point) increase in the level of government yields suggests an inevitability to mortgage rates going up a little bit, and that's what we've seen."

There are two broad categories of mortgages: fixed-rate mortgages have locked-in rates for the length of their term and are linked to bond market yields, while variable-rate mortgages shift along with the Bank of Canada's overnight lending rate, which was left at its lowest-ever rate of 0.25% on Thursday.

Jim Murphy, president and chief executive of the Canadian Association of Accredited Mortgage Professionals, said mortgage rates have been at historical lows for two months and it isn't surprising to see fixed rates creeping upwards, but consumers shouldn't worry that rates will skyrocket.

"I don't think anybody's predicting that we'll go back to where we were in the early 1980s with double-digit rates in the high teens," he said. "But rates have been very low and as the economy improves and hopefully employment and other situations improve, you're likely to see increases in rates."

While variable-rate mortgages are much cheaper than fixed-rate ones right now -- the Bank of Montreal is offering five-year, variable-rate mortgages for 3.05% compared to 5.45% for a five-year, fixed-rate mortgage -- Murphy said consumers need to assess their risk aversion before they decide which to buy.

"Historically, research shows that you're always better with a variable rate, but most Canadians take fixed rates and the vast majority of those take five-year," he said. "Really, it's a question of your own financial situation and your own peace of mind."

(By KRISTINE OWRAM, THE CANADIAN PRESS)

U.S. housing market woes drag on global economy

2009-05-07T19:32:00.002-06:00

Recession will last twice as long as usual and run twice as deep.

The good news from money manager Michael Quigley is that we aren't in another Great Depression because we learned lessons about things such as having deposit insurance, and we'll avoid a painfully slow economic recovery like Japan's in the 1990s due to cultural differences.

On the other hand, Quigley, a senior vice-president with Natcan Investment Management, a portfolio management firm in Canada, told a gathering of National Bank and Altamira clients that worsening housing woes in the United States and a makeover of its financial industry mean a global economic recovery won't come quickly.

"Twenty-five per cent of Americans today have negative equity in their homes; my mortgage exceeds the value of my home," he says. "From the peak in late 2006, the national prices in real estate in the United States were down about 30 per cent. In San Diego, it was minus 54 per cent.

"We're now back to long-term averages, but unemployment is way up and financing is less available, so, at Natcan, we're of the view that the housing story isn't over yet in the U.S."

It also isn't finished yet in Eastern Europe, where half the mortgages were taken out in Swiss francs to get better interest rates.

Another major economic hurdle is the U.S. financial industry.

"When they're finished, their banking system is going to look an awful lot like ours," Quigley says. "Today, five banks in the U.S. control over 70 per cent of deposits."

The industry is sick but gets intravenous feeding from the U.S. dollar, which Quigley doesn't think will collapse, like many people do.

"The deficit in the U.S. and debt are at levels warranted by an emerging market. If the U.S. wasn't the U.S. and owner of the world reserve currency, people would have stopped lending to them a long time ago. But you can afford an awful lot when you're printing the world reserve currency."

That's also why the U.S. can bail out its auto industry, which Quigley thinks will "lose a player at least" as that business is restructured.

The Bank of Canada lowered its overnight lending rate to 0.25 per cent, where it is expected to stay for a year, yet Quigley says that after another 18 to 24 months "we're about to go back to the '70s in inflation."

In the interim, there will be a continuation of stock-market volatility "for several months."

Already, the S&P 500 index in the U.S., which rose or fell more than five per cent in a day only 31 times from 1950 through 2000, did so a whopping 34 times in 2008.

On average, a recession lasts eight months, but Quigley says that "when you have a recession that's accompanied by a banking crisis, it's twice as long and twice as deep."

He says this global recession won't last as long as Japan's did starting in the 1990s, because "in Japan the collective comes ahead of the individual, and the willingness to put up with economic difficulties is enormous. In the U.S., the individual comes over the collective, and the patience to put up with difficult times is much less."

For example, many administrators of pension plans that traditionally invest 40 per cent in bonds and 60 per cent in equities are now saying "that's too painful," and they're going to stay at the 50-50 mix they adopted back when the markets tanked.

Quigley refers to this as "the paradox of prudence," namely paying a high price to play defence.

He points out that 109 years of financial data show that "over the long, long, long run, after inflation, nothing beats equities" as the way to invest.

In 1900, in the U.S., a dollar invested in equities is now worth $582 net of inflation, in bonds is worth $9.90 and in T-bills, $2.80. In Canada, a dollar invested went to $503 in equities net of inflation, $9.70 in bonds and $5.90 in T-bills.

But in the great tradition of economists who are told not to give both a number and a date, Quigley suggests: "If you have money to put in the market, do it in stages, and don't ask us for timing."

Generally, he is more bullish on investing in Canada than the U.S., in the U.S. rather than the rest of the world and in large-cap stocks over small-cap stocks. On the bond front, he says there is a move toward provincial rather than federal or most corporate bonds.

He is very bearish on Japan, but, on the contrary, says "what's happening in China is really, really important, especially for Canada," which is a provider of commodities. The price of copper went up 19 per cent in March, as China doubled its demand for refined copper.

Quigley says a couple of things that could upset the apple cart and derail a recovery are social unrest in emerging Europe and "a return to the panic mode related to banking in the U.S."

Our fingers are crossed.

(By Ray Turchansky, For Canwest News Service;)

With interest rates at zero, Fed looks at going negative

2009-05-01T19:54:00.002-06:00

Can U.S. interest rates effectively fall below zero?

Economists and traders expect the Federal Reserve to signal just that today when it makes its first policy announcement since lowering its benchmark target to between zero and 0.25 per cent, a move that left it no room to cut interest rates the conventional way.

Now, there are signs the central bank is about to become much more aggressive in its unorthodox efforts to drive rates effectively below zero.

The Fed has already been intervening in the debt market - or at least promising to do so - as part of its effort to bring down long-term rates. But economists expect even more of the kinds of measures known as quantitative easing as the Fed works to get the lending wheels turning again in the U.S. economy.

The central bank's target rate cannot actually fall below zero. So its measures are aimed at bringing long-term rates to where they would be if short-term rates could go negative, given the traditional spread between the two.

The easing measures will be aimed at forcing market interest rates even lower, which would in turn result in lower rates on everything from mortgages to corporate bonds.

The Fed has hinted in a leaked study that negative rates, while almost unprecedented, may be necessary given the depths of the recession.

"I think they're going to announce another [bond] buying spree," said Rich Yamarone, chief economist at Argus Research in New York. He forecasts that the central bank may spend another $100-billion (U.S.) on Treasuries and $150-billion on other debt.

Economists and investors are also on the lookout for comforting words from the Fed that the central bank has not lost sight of the possibility that throwing around so much money could spark inflation.

"They're just trying to explain why what they're doing makes sense and is not inflationary," said veteran Wall Street economist Ed Yardeni, president of Yardeni Research in New York.

The Fed already has the go-ahead to buy $300-billion of government bonds, more than $1-trillion worth of mortgage-backed securities, and $200-billion of debt issued by the government-sponsored agencies Fannie Mae and Freddie Mac.

So far, it has moved slowly on this front, acquiring less than $70-billion of Treasuries; $60-billion of agency debt; and $381-billion of mortgage-backed securities.

"It seems as though they're trying to carry a big stick and not use it," Mr. Yardeni said.

But that may be about to change.

The Fed has the power to do a lot more. The internal study recently leaked to the media suggested the ideal target interest rate would be minus-5 per cent, based on the current levels of unemployment, inflation and output.

While many discredit that model, known as the Taylor Rule, after the economist who devised the formula, the fact the Fed is talking about it signals that the bank is looking to drive rates still lower.

"Usually where there's smoke there's fire, and they're chatting up the idea of negative interest rates," Mr. Yamarone said.

If the Taylor Rule says the key interest rate ought to be down to minus-5 per cent to revive the economy, "then the Fed's commitment to quantitative easing and expanding its balance sheet can be justified on that basis," Mr. Yardeni said.

"What amount of quantitative easing is equivalent to a minus-5-per-cent interest rate is the exercise they're playing here. It's kind of silly. Other than computer models, it doesn't really mean anything." he said.

The only weapon left in the Fed's arsenal is to ratchet up the purchase of debt securities to drive down yields.

According to internal Fed estimates, the $300-billion of Treasury purchases planned so far would reduce the yield on 10-year Treasury bonds by about 25 basis points.

That would ripple into lower rates on consumer and business loans such as mortgages, whose rates are based on those of long-term government bonds.

So just how much buying would it take to force rates down to a level consistent with what the economy needs? A whopping $3.3-trillion, some economists suggested.

The Bank of Canada will be watching carefully because it too is out of room to cut short-term rates.

The Canadian central bank last week said that it would deploy unconventional measures such as buying bonds if the economy worsens.

(BOYD ERMAN AND BRIAN MILNER, April 29, 2009)

利率解密！

2009-04-24T08:15:00.008-06:00

艳丽2010年一月24日更新：

用浮动利率，百分之88的机会赢！

（下面英文来自 First National 银行的内部资料）：

“ Research suggests adjustable-rate mortgages benefit consumers.

From 1950 – 2000 research found that homeowners with a $100,000 mortgage (15 year amortization) would have saved approximately $22,000 in interest costs by borrowing at the prime rate instead of the five-year rate.

Further, research found that choosing the adjustable rate benefited the homeowner during 88 per cent of the period studied. ”

~ ~ ~ ~ ~ ~ ~

很多顾客纷纷打电话来，想转贷款或重新贷款（mortgage transfer and refinance），
当然买房（purchase）的也渐渐多了。现在利率低的百年不见，
那么是选浮动（variable rate mortgage）利率好、
还是选固定利率（fixed rate mortgage）好？

要回答这个问题，我拿ING的浮动利率和固定利率举个例子。
在2008年10月以前，浮动利率一般是Prime 减0.6% 甚至是Prime 减0.9%,
但是2008年10月之后，浮动利率却是Prime 加0.7%甚至是Prime 加1.0%（见下图）。
现在（2010年1月24日），浮动利率又变成Prime 减0.3%

虽然都是浮动利率，但这一加一减叫人糊涂。

From ING_ARMFixed

办贷款和看天气有相似的地方。
我们去一个地方，首先要了解当地的气候（climate），
在地图上看一下当地的经度、纬度，
到了之后还要时不时地看一看天气（weather）。
对于贷款来说，气候就是过去多年利率的大概走向，
天气就是利率现在短时间的变化。

2008年初的时候ING 5年固定利率高达6.14%, 还不到一年半的时间，
现在5 年固定利率已降到3.89% （见下图）。
那么， 5 年固定在3.89%低不低哪？
说实话， ING连其它大小银行也算上， 5年固定利率还从来没这么低过。

过去10年来， 5年固定利率平均值是5.5% 左右。
这个5.5%就是气候， 3.89% 就是现在的天气。

对于有房屋贷款的朋友来说，现在的天气真是棒极了！
天还从来没有这么晴朗过！！

From ING_ARMFixed

希望以上的图表给需要房屋贷款的朋友提供一个客观、无偏见的的信息。

更多了解贷款冷暖及走向，敬请和艳丽联系。

Bank of Canada cuts rate to 0.25 per cent

2009-04-21T21:06:00.000-06:00

OTTAWA - The Bank of Canada has taken its influential target interest rate to the lowest practical level in an effort to combat what it says is deeper and more widespread global recession.

The central bank sliced the overnight rate in half to 0.25 per cent - the lowest it says is practical - and signalled strongly it will have to keep it there until at least mid-2010.

In addition, the bank has extended the term of its purchase and resale agreements it uses to inject liquidity into money markets from one-and-three months to six-and-12 months, while setting minimum and maximum bids that correspond to the historically low target rate.

The bank said it will target a daily level of settlement balance in the financial system at $3 billion, a move it says will help drive the overnight rate to the bottom of the trading band.

The Bank of Montreal (TSX:BMO) was the first of Canada's major banks to announce that it would lower its own prime rate in step with the central bank, dropping the benchmark around which it calculates variable mortgages and other loans to 2.25 per cent.

Shortly after, Royal Bank (TSX:RY) said it too would lower its prime rate to 2.25 per cent, signalling that the other chartered banks would likely follow suit. The dramatic actions - and more are expected Thursday when bank governor Mark Carney unveils options for increasing the money supply - signal a new and darker view of the global and domestic recession than the Bank of Canada has previously admitted to.

"In an environment of continued high uncertainty, the global recession has intensified and become more synchronous since (January)," Carney wrote in an unusually lengthy note accompanying the interest rate decision.

"Deteriorating credit conditions have spread quickly through trade, financial and confidence channels. While more aggressive monetary and fiscal policy actions are underway across the G20 (countries), measures to stabilize the global financial system have taken longer than expected to enact."

As a result, Carney has basically thrown out the playbook for the Canadian economy that he outlined in January.

Then, the recession was supposed to be over by the summer and accompanying growth was to built in the third quarter on the way to a robust recovery in 2010, with output growth of 3.8 per cent. Total economy shrinkage this year would be limited to 1.2 per cent.

Now Carney says the economy won't stop falling until at least the fourth quarter and in total will contract three per cent this year. That is in line with the Organization for Economic Co-operation and Development projection and that of a growing number of private sector economists.

Carney remains a relative optimist on how strong the rebound will be, however, predicting a bounce-back of 2.5 per cent next year and 4.7 per cent in 2011. While lower than his previous prediction of 3.8 per cent growth in 2010, it is still far ahead of the OECD's 0.3 per cent flatline forecast for next year.

"Given significant restructuring in a number of sectors, potential growth has been revised down," he says.

"The recovery will be importantly supported by the bank's accommodative monetary stance."

The new pessimism, or realism as some economists would call it, has increased the odds that Carney will do more than outline options for so-called quantitative easing later this week - a technical way of saying printing more money to get credit markets functioning better - but that he will soon move into the uncharted territory.

The central bank sees no immediate danger of inflation for all the stimulus it is injecting into the dormant economy.

In fact, Carney said he expects inflation to be minus 0.8 per cent in the third quarter and not to return to the central bank's desired two-per-cent target until the third quarter of 2011.

Canada's housing market shows signs of life

2009-04-17T21:35:00.001-06:00

Rock-bottom interest rates combined with some relief from Ottawa to pull the housing market out of its tailspin, industry experts said Wednesday - temporarily, at least.

The cautious optimism stems from fresh figures released by the country's real estate board that show the second consecutive rise in monthly existing-home sales in March after months of decline.

The number of homes bought and sold last month rose by 7% to 31,135 units, seasonally adjusted, compared with February, which was already more than 10% better than January, the Canadian Real Estate Association said.

The pair of readings counter months of declining sales volumes across the country as the market crumbled in tandem with the rest of the economy.

Now, with a little help from the Bank of Canada and federal legislators, the market appears to be stabilizing.

"Interest rates and government stimulus are what's helping right now," said Ron Lawby, president of Century 21 Canada LP, one of the largest realtors in the country.

Lenders have dropped their rates in lockstep with the central bank, while recently introduced incentives from Ottawa are "causing people to say, ‘This is a time I can access the market,'" Mr. Lawby said.

Specifically, two measures introduced within the federal budget's stimulus plans are bringing buyers around; an increase in the allowable withdrawal from registered savings plans for first-time buyers to $25,000 from $20,000; and a tax credit of $5,000 home buyers may count against their incomes.

"Housing markets are starting to show signs of buyer interest," said Dale Ripplinger, president of CREA.

As the aim of the incentives from Ottawa would suggest, the greatest demand is occurring down market.

"It really is first-time buyers," Mr. Lawby said. "We're seeing some activity moving up, but the majority is in entry-level homes."

Other indicators released by CREA Wednesday suggested some stability is returning.

The average price for homes sold remained depressed yet the year-over-year decline is shrinking.

The average residential price across Canada was $288,641, or 7.7% lower last month than the average price recorded in March, 2008. Yet it was the narrowest year-over-year margin registered in the last six months, and the second month in a row in which the pace of decline eased.

"People are looking at the cost of borrowing money - with interest rates as low as 3% - combining that with the fact that there is cheaper product on the market and [they're] stepping in," said Michael Polzler, regional director for Re/Max Ontario-Atlantic Canada.

The flood of unsold listings is also drying up. CREA said Wednesday 208,755 existing homes were for sale last quarter, down 6.4% from the final quarter of 2008.

Still, most economists were reserved in declaring a firm bottom is at hand. Bank of Nova Scotia's Derek Holt said the two-month bounce in sales signals "sounder conditions" but cautioned that there remains plenty of new homes that need to be bought.

"Inventories are still high which speaks to downside risks to prices," he wrote in a note to clients.

The upturn is also benefiting from seasonality, Century 21's Mr. Lawby said, noting sales are usually strongest between the beginning of March and June.

Millan Mulraine, economics strategist at TD Securities said a worsening employment picture means the bank expects "overall housing market activity to remain soft in the coming months."

Meanwhile, new data from the United States Wednesday indicated its moribund real estate market is showing signs of life - or at least a small degree of optimism.

After the National Association of Home Builders/Wells Fargo index of builder confidence reached a record-low of 8 in January, it rose higher than expected to 14 last month. The index of current single-family home sales rose to 13, while the gauge of buyer traffic was also higher from February as sentiment among builders in all four regions in the U.S. improved.

The confidence survey asks builders to characterize current sales as "good," "fair" or "poor." A reading of below 50 is considered poor.

(Jamie Sturgeon, Financial Post, Wednesday, April 15, 2009)

Banks begin to decline federal aid in first sign of recovery

2009-03-18T22:05:00.002-06:00

Credit conditions easing, banks no longer struggling to raise funds to make loans

March 17, 2009 at 2:00 AM EDT

Canadian banks are turning down some of the funding that the government is making available to them, a sign that they are recuperating from the financial crisis.

The banks have stopped selling the government the full amount of mortgages they could under Ottawa's $125-billion mortgage purchase program, the centrepiece of the federal government's plan to help the industry.

“We actually don't need a lot of funding right now,” a senior banker at one of the big five banks said yesterday. “All of the Canadian banks are pretty flush right now with cash.”

That's not to suggest they aren't facing problems, with consumers increasingly losing their jobs and unable to pay off their debts. But the banks are no longer struggling to raise funds to make loans – at least for now.
Credit conditions for Canadian banks have improved since late last year, as Canadians jittery about the stock market have left more of their money in bank accounts, giving them a ready pot of cash to fuel lending. At the same time, global credit markets have eased slightly as central banks have pumped billions of dollars into the financial system.

Federal Finance Minister Jim Flaherty announced the creation of the mortgage purchase program in early October, when it was extremely difficult for banks around the world to fund their lending operations.

He originally said Ottawa would buy up to $25-billion of mortgages from the banks, through Canada Mortgage and Housing Corp., to free up capacity for them to make new loans.

The purchases take place in periodic auctions that actually turn a profit for the government. Ottawa tells the industry how much it is willing to buy – for instance, $5-billion worth of mortgages held by the banks on their balance sheets – and then the banks each say how much they would be willing to pay, in the form of interest, to sell mortgages to the government. CMHC accepts the most profitable bids.

Bankers have been griping that the program, which is projected to earn billions of dollars for Ottawa, is expensive. But until last month, that hadn't stopped them from selling all of the mortgages that they could into it, and pressing Mr. Flaherty to buy even more. Well into the new year, banks continued to have trouble raising medium-term funds.

Ottawa boosted the size of the program twice, most recently announcing in the federal budget that it would buy a total of up to $125-billion worth of mortgages. The program has been successful in leading to a reduction in mortgage rates for Canadians, with banks passing on their lower funding costs.

But in the last couple of auctions, the banks have not sold the full amount of mortgages Ottawa was willing to buy. The most recent one took place on March 11, when CMHC told the banks it would buy up to $4-billion worth. Banks sold it about half that, $2.1-billion.

That followed the Feb. 20 auction, when banks sold CMHC $2.3-billion worth after it said it would buy up to $7-billion from them.

There are a couple of reasons why the banks have lost some of their appetite for the government aid.

More Canadians are pulling their cash out of mutual funds and riskier investments and parking it in deposits, such as chequing accounts and GICs. Deposits are the largest source of funding for the banks. If stock markets recover, and customers shift their money back into mutual funds and equity investments, the banks could find themselves in need of funding help again, notes Toronto-Dominion Bank chief economist Don Drummond.

At the same time, the growth of banks' loan portfolios is slowing. The soft housing market led to very weak mortgage originations in January and February, Mr. Drummond said.

Still, the slackening demand for government help does suggest that credit conditions have eased. The lack of take-up on the mortgage auctions “seems to point to the fact that the Canadian banks are not in a big liquidity crunch themselves,” said Marlene Puffer, a managing director at Twist Financial Corp.

That means the banks' lending operations are not being held back by an inability to raise financing, she added: “Any constraints in terms of the banks lending are coming more from inside the banks than any constraints they're facing in terms of raising capital.”

The Canadian Bankers Association said in an e-mailed statement that the mortgage purchase program is still an effective tool, noting that it's already injected more than $53-billion worth of liquidity into the marketplace so far.

A spokeswoman for CMHC declined to comment yesterday, noting that the details of the auctions are confidential.

(TARA PERKINS, Globe and Mail)

Analysts advise choosing type of mortgage wisely

2009-03-10T20:45:00.001-06:00

Bargain basement borrowing costs are prompting many Canadians to opt for fixed mortgages even though variable products continue to be a money-winning option for the foreseeable future, industry observers say.

Canadian Imperial Bank of Commerce's chief economist says variable rate mortgages should produce the greater benefit for the next two to 2.5 years, but be a wash over five years.

"If you're really risk-averse, jump on those fixed-term rates because they're extremely cheap,'' Benjamin Tal said.

"Going variable probably will give you good performance for the next two years or so and beyond that, we might see interest rates rising.''

Inflation could ultimately lead to higher interest rates, but likely not before 2011, he said.

Variable rates remain attractive even though banks last fall eliminated discounts and began charging premiums for those who signed up for them after the Bank of Canada lowered its interest rate.

The central bank went even further last week, cutting its trend-setting overnight rate another a half percentage point to 0.5 per cent. Banks followed by lowering their prime rate to 2.5 per cent.

Homeowners with variable rates, especially those with discounts reaching 90 basis points, should ignore temptations to lock in now, says Vince Gaetano, vice-president of Monstermortgage.ca.

The self-professed fan of variable mortgages said they give customers control, which is important in the current climate.

Gaetano said homeowners should use this window of low rates to pay down their mortgages.

Owners of rental properties, however, should stick to fixed-rate mortgages to balance steady income with stable interest expenses, he added.

Mortgage expert Moshe Milevsky of York University suspects many Canadians will opt for the security of fixed mortgages considering how low rates have dropped.

But he said the decision about what kind of mortgage to take should never be made in isolation of individual circumstances such as the amount of equity, value of the house, debts and risk aversion.

And in markets where real estate prices are falling, seeking a long-term rate may be more important than the type of rate.

"The last thing you want to do is have to renew your mortgage in a year from now and have the bank say: 'Let's assess what that house is really worth,"' he said in an interview.

Studies conducted by Milevsky have shown that variable rates have historically produced greater savings 88 per cent of the time.

"But in today's environment, you'd be hard-pressed to make a case to continue floating,'' he said, advocating a blend between fixed and floating rates.

(Ross Marowits The Canadian Press, Mar 09, 2009, MONTREAL)

Why it’s time to buy a house

2009-03-10T20:42:00.001-06:00

Experts say right now may be the best time in years to buy a home Friday, March 6, 2009 Julian Beltrame Canadian Press

OTTAWA - Jim Rawson says it's a great time to buy a house.

The regional manager of Invis mortgage brokerage firm in Toronto has been in the business since 1978 and has never seen interest rates, both variable and fixed, so low. Pair that with falling housing prices and it's a no-brainer.

"People have to have somewhere to live and whether you are paying for a mortgage or paying rent, you still have to be paying to live somewhere," Rawson explains.

But something is missing in the equation. As prices for most consumer goods, cars and homes decline - in some cases plunge - and the cost of borrowing falls, Canadians have been hesitant to buy.

The Bank of Canada did its part this week to lure consumers and businesses out of their fox hole, dropping the overnight rate down to an unheard of half per cent - virtually zero.

Canada's chartered banks lowered their prime rate to 2.5 per cent on Tuesday, shortly after the central bank moved, and by the end of the week were lowering other lending rates.

TD Canada Trust, for one, is reducing several of its posted fixed-term mortgage rates on Saturday. TD's biggest decrease was with its two-year mortgage, which falls to 5.0 per cent from 5.75 per cent.

Scotiabank went even further, lopping nearly two full percentage points off the advertised price for its 10-year mortgage, which fell to 5.25 per cent from 7.15 per cent, effective Friday.

By almost every measure, Canadians have slowed down borrowing and spending, most visibly in the auto sector, which saw sales volume crash by 28 per cent in February.

The Canadian housing market, for years a source of boundless growth, has come crashing to earth with sales, prices, and construction of new homes all down, in many cases by double-digits.

Consumers have also stopped discretionary purchases, as the 5.4 per cent contraction in retail sales in December - the largest in 15 years - shows.

"I think they're scared out there," says Bruce Cran of the Consumers' Association of Canada. "Consumers are tapped out and frightened of over-spending. They are going back to being savers."

Bank of Canada deputy governor Pierre Duguay may have a point in saying there is a danger of "irrational fear" taking hold, but there are also very real reasons to be concerned.

Canada lost 129,000 jobs in January, the third straight month of decline, and announcements of future layoffs are being posted almost daily. Everyone is predicting the Canadian economy has much further to fall after contracting 3.4 per cent in December.

There is also fact that the days of easy money are over. Chartered banks are being more choosy who they lend to and interest rates - low as they are - are higher than they might be given the central bank rate and non-existent inflation.

Variable rate mortgages, for example, formerly could be had below the banks' prime rate. The prime rates have fallen, along with the Bank of Canada's moves, but now banks' variable mortgage rates are well above prime.

Individuals have also cut back on borrowing, hence spending. TD Bank chief executive Ed Clark said this week that overall demand for loans is coming down.

Under normal times, economists would say that is a good thing. Rampant buying, particularly in the United States, was a major contributor to the financial sector meltdown that brought the world low.

Americans have now pulled back big time making matters worse, even though the Federal Reserve rate at 0.25 per cent is lower than the Bank of Canada's. The U.S. once lamentable savings rate has shot from just above one per cent to five per cent in a matter of months.

The amount of debt Canadians held as a ratio of their income increased last year to 136 per cent from 130 per cent. What kept them solvent is that low interest rates made the cost of servicing that mounting debt at affordable levels.

That is as long as jobs, incomes and the economy were advancing. In a recent CIBC World Markets report, economist Benjamin Tal showed the squeeze was underway.

Canadians assets fell by $160 billion in the third quarter, he noted, adding that with house and equity values falling, Canadians would likely be another $180 billion poorer in the fourth quarter. Values haven't gotten better since.

As well, debt is rising and consumer bankruptcies are jumping - 13.5 per cent last year with expectations they could hit 30 per cent growth this year. Mortgage arrears are also on an upward path, rising from a record low of 0.24 per cent to the current 0.33 per cent, the highest in six years.

But the big number, says Tal, is the number of Canadians who have lost their job and the much bigger number that are for the first time in many years afraid of losing their job.

"The issue is confidence," he said. "People talk about the unemployment rate going to eight and nine per cent, but the focus should be on the 91 per cent of people who are employed and are concerned about their jobs."

Tal and most economists believe that Canadians will start spending again because they no longer can put off purchases. But he doesn't believe they will spend with the reckless abandon of the recent past.

"After the crisis is over, consumer spending will be stronger but not like it used to be because it was artificially strong before, using borrowed money," Tal said.

Rawson believes that time is coming soon, at least in the housing market.

Applications for mortgages in his Toronto office have doubled since December, Rawson says, with many in the pre-approved market. That usually involves first-time prospective buyers making sure all their ducks are lined up before taking the plunge.

"These are people who haven't bought yet but they will buy in the future," he says.

Canada envy, amid a global meltdown

2009-03-09T22:09:00.002-06:00

(March 9, 2009)
Canada's banks are finally getting some respect.

Derided for years as meek and mild while banks around the world expanded wildly, suddenly the reputation of Canada's big lenders as prudent and sometimes downright boring has become an asset instead of a liability.

U.S. President Barack Obama has heaped praise on the management of this country's financial system. Ireland is considering overhauling its system to look more like Canada's. Financial papers around the world are running headlines such as “Canada banks prove envy of the world.”

Whether measured by market value, balance sheet strength or profitability, Canada's banks are rising to the top. Since the credit crunch began in the summer of 2007, the Big Five banks have booked a total of $18.9-billion in profits.

In roughly the same period, the five biggest U.S. banks have lost more than $37-billion (U.S.). One, Wachovia Corp., was forced to sell out to avoid failing. Another, Citigroup Inc., long the world's largest bank, may have to be nationalized and this week became a penny stock. The picture is similar in Britain.

The U.S. has spent most of the $700-billion the government earmarked for bank bailouts, and there are estimates that the final tally could be more in the trillions of dollars. The head of the Bank of England said last month that it's “impossible” to know how much money it will take to fix his country's banks.

Canada, by contrast, has not had to inject capital directly into banks, other than starting a program to buy from banks $125-billion (Canadian) of insured mortgages – any losses from which the government was already on the hook for anyway.

The reason comes down to a fundamental conservatism. From lending practices to bets on trading to financial reserves and takeovers, the Big Five banks have long tended to be more careful than their global peers. And when they did want to get aggressive, government and regulators held them in check.

“The Canadian banks were under a significant amount of pressure from both the analysts and the marketplace in general to be more aggressive in expanding into international markets, particularly the United States, and I think to some degree resisted partially because of a more conservative approach,” says RBC chief executive officer Gordon Nixon.

Still, the industry has had stumbles, most notably Canadian Imperial Bank of Commerce's misadventure in derivatives, which led to a $2.1-billion loss for 2008.

And shareholders in Canadian banks have been battered. As a group, the banks' shares are down almost 50 per cent since Aug. 1, 2007, with most of the decline in the past six months as the economy worsened.

The concern weighing on these bank shares, for starters, is that profit growth in general is a thing of the past until the economy picks up. Most analysts say the banks' profits will shrink in coming quarters as more loans go sour and margins on lending tighten up. There's also nagging doubts that dividend payments are unsustainable and that something bad is still lurking on balance sheets.

More write downs are likely in store for banks such as Toronto-Dominion Bank and Royal Bank of Canada, both of which made big acquisitions in recent years that now look overpriced.

Still, bank bosses such as Rick Waugh, CEO of Bank of Nova Scotia, say the banks are insulated from lingering problems because they have profits rolling in from many sources.

“We have made mistakes,” he says, “but we made sure that we were well diversified.”

That's a result of a conservatism not just among executives. That same approach extends to consumers, helping the banks sail along on the strength of their domestic lending businesses.

“You've got a more balanced cultural approach towards consumption and savings than we do in this country,” says Charles Dallara, head of the Washington-based Institute of International Finance, and a former managing director at JPMorgan Chase & Co.

Much of that stems from the pain of the last recession. While the downturn of the early 1990s was short and sharp in the U.S., it was drawn out in Canada, leading to more of a social evolution, says CIBC chief executive officer Gerry McCaughey.

Former central bank governor David Dodge agrees. Canadian bank executives keenly remember that period, “and there was therefore perhaps a degree of prudence, a lack of aggressiveness, in comparison with major banks around the world,” he said.

And he gives top marks to the Office of the Superintendent of Financial Institutions, Canada's banking regulator, for being more conservative than those in the U.S. or Britain. “I think that, from a regulatory point of view, you can say that the Canadian banks were more appropriately regulated.”

The final key is the structure of the mortgage market.

While U.S. banks sold a large proportion of their mortgages, Canadian banks held the bulk of theirs on their balance sheets, giving them an incentive to make sure they were good loans. Riskier ones are backed by government insurance. And the law here makes it tough for consumers to walk away from a mortgage because banks can go after other assets.

Still, the banks are wary of getting cocky when a careful approach has worked well.

“It's a good thing for us to recognize the things we do very well, but maybe do it in what is appropriately a Canadian way – with modesty,” said Bank of Montreal CEO Bill Downe.

______

Royal Bank of Canada

First quarter profit: $1.05-billion, down from $1.25-billion.

What's working: The bank's securities arm makes big bucks, and its huge retail bank in Canada generates steady earnings. RBC benefits from strong loan growth and expense control, notes UBS analyst Peter Rozenberg.

What's worrying: A foray into the U.S. leaves it exposed to the sagging American economy. Investors never like to see too much of a bank's earnings come from capital markets, because it's a volatile business. And while the securities division is doing well, it's also booking big write downs. “RBC's Achilles heel, in Moody's view, is its U.S. operation,” the rating agency says.

What the CEO says: “As a Canadian bank with global operations, RBC does have a competitive advantage relative to many of our global peers. The fundamentals of our domestic economy, while stressed, appear stronger than in Europe and the United States, having benefited from a public policy agenda that for many years valued prudent fiscal management.”

Total assets: $713-billion

Tier 1 capital ratio (Jan. 31): 10.6 per cent

Provision for credit losses: $747-million, up from $293-million

______

Toronto-Dominion Bank

First-quarter profit: $712-million, down from $970-million.

What's working: Retail arm TD Canada Trust is a dominant force across the country. “The bank's sizable capital cushion, combined with the recurring earnings from its Canadian franchise, leave it well positioned to manage through a period of economic headwinds,” says Moody's Investors Service.

What's worrying: TD expanded in the U.S. just as things were getting really bad. Now, the bank has the biggest U.S. retail banking presence of any Canadian bank – half of all the bank's branches are in the U.S. Plus, TD owns a big U.S. wealth management operation that may suffer as markets plunge. The consensus among analysts is that the bank's securities and trading side isn't big enough to make up for declining performance in other areas of the bank.

What the CEO says: “We are living in unprecedented times. So what we consider solid performance in the current environment is certainly not what we would be happy with in the long term. … We are going to take some bruises if the situation gets worse, but we're still going to be able to deliver solid earnings.”

Total assets: $585-billion

Tier 1 capital ratio (Jan. 31): 10.1 per cent

Provision for credit losses: $537-million, up from $255-million

______

Bank of Nova Scotia

First-quarter profit: $842-million, up from $835-million.

What's working: The bank's international business – the largest of the Canadian banks – posted a record quarter, and Scotiabank's reputation for risk management remains intact. The bank's securities and trading arm, Scotia Capital, had a near-record quarter.

What's worrying: Investors are leery of exposure to car loans and the auto industry. They are also keeping an eye on the bank's corporate loan book, the biggest of any Canadian bank. The bank's large international division, with a big presence in Latin America, was much more profitable than anticipated in the latest quarter, but the macro environment in Latin America has deteriorated in recent months, notes RBC Dominion Securities analyst André-Philippe Hardy.

What the CEO says: “The banking sector in Canada is still in good shape. Some say the best in the world. As a group, we are all very well capitalized by global standards. And Scotiabank clearly demonstrated this by the fact that we were able to raise more capital this quarter, all of it from the market, from private sources.”

Total assets : $510-billion

Tier 1 capital ratio at Jan. 31: 9.5 per cent

Provision for credit losses: $281-million, up from $111-million

______

Canadian Imperial Bank of Commerce

First-quarter profit: $147-million, up from a loss of $1.46-billion.

What's working: Most of the big problems relating to exposure to subprime-linked investments are behind the bank, and its balance sheet is rock solid after raising another $1.6-billion of capital this week. Analysts and investors like the fact that its Canadian-focused business means bad U.S. loans aren't a big issue.

What's worrying: The bank is getting out of or cutting back in so many business lines to avoid problems that it's unclear where growth will come from. Investors worry that the bank is becoming so risk-averse that it won't be able to compete.

Its core consumer lending segment saw earnings decline 14 per cent in the latest quarter, due in large part to rising provisions for bad credit card, manufacturing and real estate loans, notes Blackmont Capital analyst Brad Smith.

What the CEO says: “Market conditions worldwide for banks remain difficult. Yet arguably one of the better places to be right now is in Canada. At CIBC, the majority of our revenue is derived from retail markets, where we enjoy strong market positions in a broad range of products and services.”

Total assets: $354-billion

Tier 1 capital ratio at Jan. 31: 9.8 per cent (it's now a whopping 11.5 per cent)

Provision for credit losses: $284-million, up from $172-million

______

Bank of Montreal

First-quarter profit: $225-million, down from $255-million.

What's working: The bank's trading operations are buoying profit, and its retail operations are rebounding after lagging for years. A switch toward more profitable products, such as lines of credit, is helping the core operations churn out strong earnings.

What's worrying: Investors are concerned that trading profits can disappear fast, and the bank has a U.S. loan portfolio by virtue of its presence in the U.S. Midwest. There's also a nagging worry that the bank will cut its dividend that won't go away no matter how many times CEO Bill Downe says the payout is safe.

Credit Suisse analyst James Bantis is watching for rising credit losses in the $42-billion (U.S.) U.S. loan portfolio. He sees a large drop-off in the quality of the U.S. portfolio, which accounts for 27 per cent of BMO's loan book, compared to the Canadian portfolio.

What the CEO says: “Financial institutions everywhere continue to face headwinds in credit markets and the capital markets environment. BMO is well positioned to meet these challenges, having accessed markets to bolster our capital position and having further strengthened our strong liquidity in the period, albeit at a higher cost.”

Tier 1 capital ratio at Jan. 31: 10.21 per cent

Total assets: $443-billion

(TARA PERKINS AND BOYD ERMAN, Globe and Mail)

Bank of Canada lowers overnight rate target by 1/2 percentage point to 1/2 per cent

2009-03-03T19:59:00.002-07:00

(March 03, 2009)

As you have likely heard, the Bank of Canada decreased their target overnight lending rate by 50 bps to a meager 0.5% this morning.

As a result the Prime rate is decreasing 50 bps to 2.50% effective midnight tonight.

This move was widely expected by the markets and economists.

The Bank of Canada commented that they are now exploring a program of “credit and quantitative easing” as they have clearly run out of room on the interest rate front.

What is quantitative easing?

“Quantitative easing is designed to leave banks with so much free cash that they stop hoarding and expand lending. It can involve a central bank buying securities and creating money to pay for them. A central bank can also try buying up securities to drive down longer-term market interest rates, extending efforts to keep short-term rates low with their benchmark rates.”

This is good news in the sense that the BOC is signaling they are willing to pull out all stops, but it’s also a little concerning as we’ve never implemented such programs in Canada before and such programs in other countries have had a history of fueling inflation. They plan to lay out the framework for their quantitative easing program on April 23rd.

See below for the full commentary from the Bank of Canada

----------------------------------

OTTAWA – The Bank of Canada today announced that it is lowering its target for the overnight rate by one-half of a percentage point to 1/2 per cent. The operating band for the overnight rate is correspondingly lowered, and the Bank Rate is now 3/4 per cent.

The outlook for the global economy has continued to deteriorate since the Bank's January Monetary Policy Report Update, with weaker-than-expected activity in major economies. The nature of the U.S. recession, with very weak auto and housing sectors, is particularly challenging for Canada.

Stabilization of the global financial system remains a precondition for the global and Canadian economic recoveries. The timely implementation of ambitious plans in some major countries to address toxic assets and recapitalize financial institutions will be critical in this regard.

National accounts data for the fourth quarter of 2008 and other indicators of aggregate demand point to a sharper decline in Canadian economic activity and a larger output gap through the first half of 2009 than projected in January. Potential delays in stabilizing the global financial system, along with larger-than-anticipated confidence and wealth effects on domestic demand, could mean that the output gap will not begin to close until early 2010. These factors imply a slightly lower profile for core inflation than was projected in the January MPRU.

The effects of the recent aggressive monetary and fiscal policy actions in Canada and other major economies will begin to be felt in the second half of this year and will build through 2010. Once the global financial system stabilizes and global growth recovers, the underlying strength of the Canadian economy and financial sector should ensure a more rapid recovery in Canada than in most other industrialized economies.

The Bank's decision to lower its policy rate by 50 basis points today brings the cumulative monetary policy easing to 400 basis points since December 2007. Consistent with returning total CPI inflation to 2 per cent, the target for the overnight rate can be expected to remain at this level or lower at least until there are clear signs that excess supply in the economy is being taken up.

Given the low level of the target for the overnight rate, the Bank is refining the approach it would take to provide additional monetary stimulus, if required, through credit and quantitative easing. In its April Monetary Policy Report, the Bank will outline a framework for the possible use of such measures.

The Bank will continue to monitor carefully economic and financial developments in judging to what extent further monetary stimulus will be required to achieve its 2 per cent inflation target over the medium term.

Information note:

The next scheduled date for announcing the overnight rate target is 21 April 2009. A full update of the Bank's outlook for the economy and inflation, including risks to the projection, will be published in the Monetary Policy Report on 23 April 2009.
---------------------------

Home prices to fall by 8% this year

2009-02-09T20:36:00.002-07:00

(Globe and Mail Update, February 9, 2009 at 12:17 PM EST)

Sales and prices of existing homes will continue widespread declines that took hold in the middle of last year, and no province is expected to buck the trend, said a forecast from the Canadian Real Estate Association (CREA) released Monday.

Existing home sales are expected to fall by 17 per cent year-over-year in 2009 to their lowest level since 2000, the report said.

The sharpest drops in sales activity will be in Alberta, British Columbia and Ontario, where 19 per cent fewer housing units are expected to be sold this year.

Declines are expected to be most moderate in Prince Edward Island (-4.5 per cent), Manitoba (-6.5 per cent), and Newfoundland (-7.3 per cent).

Resale housing units totalling 360,900 are expected to change hands in 2009, compared with 434,477 in 2008.

Job losses and flagging consumer confidence are hurting the resale market, said CREA president Calvin Lindberg in a statement.

The average existing home price is expected to fall by 8 per cent in 2009 from the year before, and then stabilize in 2010.

In 2008, home sales in Canada fell by 17 per cent, and prices slid by under one per cent.

CREA's estimate calls for home sales levels to bounce back by 10 per cent year-over-year in 2010, and for prices to edge up slightly.

Listings should start to drop as buyers who can't get their asking prices pull their homes from the market, said CREA chief economist Gregory Klump. In time, this should put a floor under prices, he added.

The forecast was released the same day as data for the new homes market, which showed building activity has continued to decline across the country.

Housing starts fell by 11 per cent in January to 153,000 on a seasonally-adjusted annual rate basis, the Canada Mortgage and Housing Corp. said Monday.

Total urban starts are now down more than 40 per cent from a year ago.

The decline was led by erosion in Western Canada as the prairies and British Columbia suffered the most.

“It is clear from these data that the Canadian housing market is under a great deal of pressure,” said Charmaine Buskas, senior economics strategist at TD Securities.

“The combination of an increasingly weak labour market and lingering concern about the state of the economy has left consumers unwilling to take the plunge into the housing market,” Ms. Buskas wrote in a research note. “The correction in Canada's housing market continues to unfold and it appears the pace is a bit quicker than we had originally anticipated. In the face of continued economic weakness, housing may not see a rebound until early 2010.”

In urban areas, construction starts fell 15.6 per cent. Multiple starts fell 12.2 per cent while single starts 20.2 per cent, Canada Mortgage and Housing Corp. said Monday.

“To a certain extent, the decline in housing starts coincides with recent developments in the existing home market,” Bob Dugan, CMHC's chief economist, said in a statement. “Reduced sales and increased listings in the existing home market have led to reduced spillover demand in the new home market.”

CMHC said the decline swept across all regions but was led by a 30.3 per cent fall in the prairies and 29.1 per cent erosion in British Columbia.

More Canadians refinancing mortgages to pay off other debts

2009-02-04T18:23:00.002-07:00

Record low interest rates are spurring more Canadians to refinance mortgages to consolidate debt, a trend that is expected to grow as Ottawa moves to loosen lending conditions and encourage spending on housing.

While refinancing your mortgage at a lower interest rate can save you money even after paying a penalty, experts warn there are dangers to taking out bigger mortgages with home values dropping and unemployment rates rising.

Laurie Campbell, executive director of Credit Canada, a non-profit credit counselling organization, said while it makes sense to pay off a credit card with a 19-per-cent interest rate with money from a higher mortgage at a rate of just four or five per cent, there can be "a false sense of security."

She said people who already have a problem paying off credit cards are usually the first to repeat the mistake of getting more heavily into debt.

OVER AND OVER

"We have seen it over and over again in our office," said Campbell.

"People have great intentions and get a line of credit or a home equity loan or refinance their mortgage to get out of a scathing debt situation, only to turn around and rack up their credit cards again."

She also said people who refinance their mortgages to consolidate debt are often taking out a bigger mortgage.

A recent survey by the Canadian Association of Accredited Mortgage Professionals, which represents Canada's $900 billion mortgage industry, shows about one in five borrowers took out an increased amount of cash from their mortgages when refinancing.

The November survey showed the average draw rose 20 per cent to $41,000 compared with a year earlier.

Of those surveyed who took out larger mortgages, 56 per cent said they used the money -- which totals $18.5 billion nationally -- for debt consolidation and repayment. About 30 per cent of these funds went towards home repair and renovation.

Meantime, statistics kept by the Canadian Bankers Association show the number of mortgages in arrears has grown to 0.31 per cent in November, or 12,048 mortgages, from a total of 3.9 million mortgages nationwide.

That's a 22 per cent increase in the number of arrears compared with 0.26 per cent or 9,862 in November, 2007, when there were about 3.81 million mortgages in Canada.

The rise in mortgage levels and arrears comes as Ottawa announced plans in its federal budget extending the Insured Mortgage Purchase Program by an extra $50 billion to $125 billion.

The move is meant to encourage banks to increase mortgage lending, especially after Finance Minister Jim Flaherty and Bank of Canada Gov. Mark Carney began urging the banks to increase money available for loans to consumers and companies.

Ottawa also offered a temporary home renovation tax credit of up to $1,350 toward a wide variety of home improvements, increased the RRSP withdrawal limit for qualified home buyers to $25,000 from $20,000, and introduced up to $750 in tax relief for closing costs for new first time home buyers.

Jim Murphy, president and CEO of the mortgage group also known as CAAMP, said Ottawa's moves are needed during these uncertain economic times. For example, consumer confidence is at its lowest level in more than a quarter century, unemployment is rising and house prices are falling in many Canadian markets, recent reports show.

"These are all measures aimed at trying to instill confidence in the housing market, " said Murphy.

"I think the key message is the need for consumer confidence, and governments have an important role to play in that."

But Campbell said she is concerned about the already "unstable" debt levels out there today.

"I understand the logic of spending your way out of a recession," she said, but added that Canadians "due to high debt levels are in no position to do that."

(By BRENDA BOUW, THE CANADIAN PRESS, February 4, 2009.)

Outlook dims as rates fall to record low

2009-01-21T21:12:00.002-07:00

OTTAWA -- The Bank of Canada has cut its key interest rate to a record low, warning of a deepening recession that is hitting the country on many fronts - a bleak picture of the Canadian economy that serves to underline the need for effective federal stimulus in Finance Minister Jim Flaherty's budget next week.

Citing the intensifying financial crisis that is "spilling over into real economic activity" around the world, the central bank drastically slashed its growth expectations for Canada this year, forecasting a contraction of 1.2 per cent, compared with an earlier forecast of a modest 0.6 per cent expansion.

The country's income is contracting, house prices are falling, wealth is crumbling and exports are on a sharp decline, the bank noted. It cut its target for the overnight lending rate by half a percentage point to 1 per cent - lower than in 1958, when the most-watched policy rate was 1.12 per cent.

The major banks matched the Bank of Canada cut, passing the full amount on to consumers by slicing their prime lending rates half a percentage point to 3 per cent. In December, when the central bank slashed its overnight rate by three-quarters of a percentage point, the banks decided to cut prime by just half a point.

Mortgage rates also tumbled.

Rates on variable mortgages, which move hand in hand with the prime rate, fell. Lenders also cut fixed mortgage rates, which had been expected to fall along with bond yields.

Rate cuts alone won't be enough to push the economy into recovery, according to economists. The bank is forecasting that by 2010, financial markets will have stabilized and a combination of steep interest rate cuts and fiscal stimulus around the world will have taken effect, enabling Canada's economy to grow at 3.8 per cent.

That forecast is beyond the wildest dreams of most economists, who are projecting a more gradual recovery starting late 2009, and reflects in part a mathematical exercise that allows the bank to satisfy its goal of bringing the economy back into balance within two years. But the odds of achieving even a more modest Canadian recovery rest heavily on the budget to be delivered in Ottawa next week.

"You've got to put on the jumper cables and give everyone a big shock," said Glen Hodgson, chief economist at the Conference Board of Canada. "The next step is a big fiscal shock. The government gets that, loud and clear."

While Mr. Flaherty has said he'll present a large stimulus plan in his budget next Tuesday, it remains to be seen how big the package will be, how quickly the money will flow into people's pockets, and how well it will be received by a dour public that is skeptical of the government's moves and is disheartened under the weight of a major global recession.

This lack of confidence is seriously harming the Canadian economy, and is "undermining business and household confidence worldwide and further eroding domestic demand," the bank said.

Fiscal stimulus needs to come swiftly and decisively, in a way that can reverse this destructive, spiralling loss of confidence that is slamming the global and Canadian economies, added Dale Orr, chief economist at IHS Global Insight Canada.

"Fears of recession cause recession," he noted. "If [Finance Minister Jim Flaherty] believes the bank, then that really puts the pressure on him to get the stimulus package working quickly."

Separately, and as if to underline the central bank's sentiments, Statistics Canada said manufacturing shipments plunged 6.4 per cent in November, the fourth consecutive month of declines.

The bank also warned that slack is building up in the economy - meaning job losses ahead. And inflation will drop to below zero for much of 2009 because of falling energy prices. Even core inflation - which excludes energy and other volatile prices - will drop to 1.1 per cent, far below the central bank's 2 per cent target.

The bank's aggressive interest rate cuts will definitely help rejuvenate growth, economists said.

But in order to change the psyche of consumers who won't spend, of businesses that resist investing and of banks reluctant to lend, the federal budget needs to back up the rate cuts with bold measures that will reassure Canadians of recovery, Mr. Hodgson said.

The budget should not only contain ways to encourage consumer and business spending, but will also likely contain measures that encourage lending and banking activity, said Avery Shenfeld, senior economist at CIBC World Markets.

"The obvious implication of being at 1 per cent is that any further reduction in borrowing costs will come from [the federal government] helping the banking system and through mortgage purchases," he said.
(by HEATHER SCOFFIELD, ECONOMICS REPORTER, January 21, 2009)

Correction, not crash for Canadian real estate market in 2009

2009-01-07T09:05:00.003-07:00

Average house prices forecast to fall 3.0 per cent

- Historically low interest rates, stable local economies and increasing

 affordability should support Canada's residential real estate market

          during transitioning period -

  TORONTO, Jan. 6 /CNW/ - After experiencing a significant reset in 2008 -

a reaction to continuous dire news surrounding the health of the global

economy combined with a cooling from the previous years' fervid activity

levels - Canada's resale real estate market should see only modest price and

unit sales corrections take place across the country during 2009. Both

national average house prices and the number of homes sold is expected to

decline this year, according to the Royal LePage 2009 Market Survey Forecast

released today.

            Nationally, average house prices are forecast to dip by 3.0 per cent from

last year to $295,000, while transactions are projected to fall to 416,000

(-3.5 %) unit sales in 2009. In spite of this cooling trend on a national

level, price and activity gains are anticipated in some provinces.

            Emotional reaction to recent economic and political instability did much

to dampen consumer confidence during the latter part of 2008, causing a marked

slowdown in house sales activity. However, as a more rational understanding of

the issues gains ground, together with a wide range of announced corrective

measures, consumer confidence is anticipated to recover, prompting real estate

activity to pick up once again in the latter half of 2009. Further, Canada in

2009 enjoys a stronger economic foundation than most countries and that should

temper the housing market correction. The combination of low inflation,

reasonable employment levels and improving housing affordability, driven in

part by low mortgage rates, are anticipated to stimulate demand in the coming

months.

            "While Canada's housing market is anticipated to continue to move through

a period of adjustment over the next six months, we should expect modestly

lower home prices, not a U.S.-style collapse, which was brought on by a

structural failure of the entire American credit system," said Phil Soper,

president and chief executive of Royal LePage Real Estate Services. "Most

consumers are not aware that nationally, Canadian housing market activity

peaked in 2007 and has been adjusting lower since. We are well into this

inevitable cyclical correction."

            Added Soper: "While a grey cloud hangs over some markets, the sky is not

falling. In recent years, Canada has been a difficult place to be a purchaser

of real estate, particularly for first-time buyers. When real estate markets

correct, inventory levels rise, providing buyers choices instead of

frustrating bidding wars. In 2009, appropriately-priced homes will still sell

for fair value."

            The housing market is expected to perform quite differently from region

to region across the country. In many mid-sized cities where home prices

remain below the national average, such as Regina and Winnipeg, prices are

expected to increase moderately through 2009, as home ownership remains

particularly affordable. The most significant price decreases are forecast for

Canada's most expensive city, Vancouver, which has experienced above average

price increases for most of the decade. The correction is a natural cyclical

reaction to an extended period of high price appreciation. Vancouver's

fundamentals, including growing population figures and the positive economic

spinoffs expected from the 2010 Olympics, remain very positive.

            Observed Soper: "For several years, Vancouver experienced aggressive

price run-ups in response to overwhelming levels of demand - conditions, which

eventually reached a tipping point. While buyers will be acquiring properties

for less in 2009, it is important to note that prices are coming down from

all-time record levels."

            Secondary Ontario markets heavily populated by people working in the

manufacturing sectors are also anticipated to experience greater than average

declines in house prices and activity levels in 2009. In contrast, real estate

in Montreal and Ottawa is poised to remain stable, with average house prices

relatively flat through 2009.

            After moving through a period of correction that started in 2007, well

before other regions in the country, both Calgary and Edmonton's housing

markets are anticipated to return to a growth state later in 2009,

characterized by stable average house prices and increased unit sales. Despite

slowdowns and delay with some major energy projects, Alberta's economy remains

one of the strongest in Canada.

            Looking east, Halifax's real estate market is expected to experience very

modest price appreciation through 2009. After experiencing strong price

increases over the last year and a half, the market has hit its capacity for

absorbing rising prices and activity levels. The city's diversified array of

industries is expected to bolster the economy and continue to create solid

employment opportunities, stabilizing home values.

            Canadians have been confused and justifiably skeptical of the efforts of

the worlds' central banks and governments to combat the global economic

crisis. There is broad belief, however, that Canada's financial house is in

better shape than many peer countries, particularly the U.S. While the federal

and most provincial governments have been slow to implement economic stimulus

packages, they enjoy broad public support in principle. Together with the

actions taken by the Bank of Canada, the positive impact on consumer

confidence stemming from infrastructure spending announcements and other

stimulus programs is expected to be significant.

            Concluded Soper: "We believe that the Canadian economy will struggle

early in 2009, but that conditions will progress continually throughout the

year. Improving credit markets, the stimulative impact from a weaker Canadian

dollar, together with the implementation of large fiscal stimulus initiatives,

set the stage for a return to growth in the second half of 2009."

                           Economic Factors Impacting 2009 Forecast

            Global Economic Woes:

            No country is impervious to the current economic woes being felt around

the world. The poor performance of the equity markets and the constant stream

of pessimistic economic news had a very negative impact on housing activity in

Canada in 2008. Consumer confidence is expected to slowly recover during 2009

as the impact of the many corrective actions introduced and announced takes

root.

            Tempered, but continued growth in emerging economies, particularly China,

India and Brazil, should mitigate the downside risk to Canadian commodity

exporters.

            Foreclosure Figures in Canada:

            Foreclosure rates in Canada are expected to increase, but remain very

limited, especially when compared to the U.S. experience, where a broad

structural failure of the credit system occurred. Canada's relatively

insignificant subprime market, and in turn, the low number of Canadians

contractually committed to very risky mortgages, should result in a

foreclosure rate of insufficient volume to impact house prices or transaction

activity.

            Employment Rates:

            Across the country, employment rates are expected to erode somewhat in

2009, but remain at long-term healthy levels. Some areas in Ontario, and to a

lesser extent Quebec, that have high levels of manufacturing jobs, may

experience greater than national average unemployment. Areas in Alberta tied

to the energy sector may see short-term employment declines, but the

province's tight overall labour market is expected to mitigate the downside.

            Interest Rates:

            The Bank of Canada's overnight target-lending rate, already at very low

levels, is expected to be reduced again early in 2009. This should bode well

for home buyers in 2009 as loosening credit spreads allow banks to offer more

aggressively priced mortgages.

                     2009 Market Survey Forecast - Average House Prices

            -------------------------------------------------------------------------

                                2009        2008

            Market    09/08%   Forecast   Projected   2008/2007    2007       2006

            -------------------------------------------------------------------------

            Halifax     1.0%   $234,300    $232,000      7.2%    $216,339   $203,178

            -------------------------------------------------------------------------

            Montreal   -1.0%   $254,400    $257,000      4.3%    $246,500   $215,659

            -------------------------------------------------------------------------

            Ottawa      0.0%   $291,000    $291,000      6.6%    $273,058   $257,481

            -------------------------------------------------------------------------

            Toronto    -4.0%   $364,800    $380,000      0.8%    $377,029   $352,388

            -------------------------------------------------------------------------

            Winnipeg    4.0%   $204,900    $197,000     20.5%    $163,500   $151,983

            -------------------------------------------------------------------------

            Regina      6.0%   $243,300    $229,500     38.6%    $165,613   $131,851

            -------------------------------------------------------------------------

            Calgary    -1.0%   $402,000    $406,000     -1.9%    $414,066   $346,675

            -------------------------------------------------------------------------

            Edmonton    0.0%   $333,000    $333,000     -1.7%    $338,636   $250,915

            -------------------------------------------------------------------------

            Vancouver  -9.0%   $540,100    $593,500      4.0%    $570,795   $509,876

            -------------------------------------------------------------------------

            Canada     -3.0%   $295,000    $304,000     -1.1%    $307,265   $276,974

            -------------------------------------------------------------------------

Big banks keep slice of deep rate cut

2008-12-11T21:58:00.002-07:00

Half-hearted' response may stymie effort to aid economy, critics charge

(Dec 10, 2008 04:30 AM, Ann Perry, Rita Trichur , Business Reporters)

The Bank of Canada slashed its key interest rate yesterday by three-quarters of a percentage point to the lowest level in half a century and confirmed Canada's economy is "entering a recession" because of the deepening global economic slump.

But chartered banks refused to match the deeper-than-expected cut, dropping their prime rates by only half a percentage point, the second time in the past few months some have balked at passing on the full savings to consumers and businesses.

Canada's benchmark overnight rate now stands at 1.5 per cent, the lowest since 1958, as the Bank of Canada tries to revive the flagging economy and restore confidence by making it cheaper to borrow money.

The rate reduction was the single-biggest cut since the aftermath of the 2001 terrorist attacks in the United States.

"The outlook for the world economy has deteriorated significantly and the global recession will be broader and deeper than previously anticipated," the central bank stated, adding that global financial markets "remain severely strained."

It also hinted more rate cuts may be in the offering and some economists now expect the overnight rate to fall to 1 per cent early in 2009.

"Clearly the bank is signalling that they want to address the downturn in the economy much more aggressively and much more quickly," said Douglas Porter, deputy chief economist at BMO Capital Markets.

But the "half-hearted" response of the chartered banks raised concerns they may be undercutting the Bank of Canada's efforts to stimulate the economy at a time when worries are growing that some central banks are running out of room to cut.

Toronto Dominion Bank, Canadian Imperial Bank of Commerce, Royal Bank of Canada, Bank of Nova Scotia, Bank of Montreal and the National Bank of Canada all lowered their prime lending rates – the rates they charge their most creditworthy customers – from 4 per cent to 3.5 per cent.

In early October, the TD Bank and CIBC declined to fully match a half-point rate cut by the Bank of Canada, citing soaring funding costs. Both lenders later moved to fully match their rivals when another quarter-point cut was delivered two weeks later.

Erin Weir, an economist with the United Steelworkers union, said the issue goes beyond "consumer outrage." He argued the chartered banks' latest rebellion poses a serious "existential threat" to monetary policy.

"If the chartered banks don't respond to the Bank of Canada's rate, then monetary policy is completely ineffective."

If banks require more capital, Weir argues the federal government should look at buying equity stakes in those lenders as other governments have done.

Tsur Somerville, a professor at the Sauder School of Business at the University of British Columbia, noted that spreads have been increasing between conventional five-year mortgage rates and corresponding government bond rates. But he noted this is "not inconsistent" with the major recessions of the early 1980s and mid-1970s.

"It does limit the immediate effect of monetary policy, but the flip side of that is when people are extremely paranoid, even if interest rates are low, they're not borrowing," Somerville said. "If I'm being laid off my job, the fact that mortgage rates have come down 50 basis points – you know what, I'm probably still not going to go out and buy a house."

Last week, Canada's six biggest banks wrapped up their latest earnings season. Their combined annual profits tumbled to slightly more than $12 billion from a record $19.5 billion last year, largely because of debt-related writedowns. More flexible accounting rules, however, helped them avoid even bigger losses.

Still, their latest prime rate decision outraged some Members of Parliament.

Liberal consumer affairs critic Dan McTeague said the move amounts to poor optics given all the support Ottawa has provided to shore up lending. The federal government has tripled the size of its mortgage purchase program to $75 billion and has agreed to backstop more than $200 billion in interbank lending.

"This is not about bank bashing. This is about recognizing the pivotal role they play in terms of securing our strong economy in very difficult times," McTeague said.

NDP finance critic Thomas Mulcair said he informed the Canadian Bankers Association that he would call for an investigation under federal competition laws, as he questioned why all six banks dropped their prime rates by exactly 50 basis points.

"Canada's banks are governed by the laws of Canada," the CBA said in a statement. "Canada's banks take compliance with those laws very seriously. Decisions about prime rates are proprietary in nature and are made following individual bank internal procedures."

Don't balk, a case can be made for variable-rate mortgages

2008-11-06T21:05:00.002-07:00

by ROB CARRICK (Globe and Mail November 4, 2008)

Once the darling of savvy homeowners, the variable-rate mortgage has become a nasty piece of business lately.

Rates for these mortgages are vastly more expensive than they used to be, and some lenders are charging a fair bit more than others. It's probably best to avoid variable-rate mortgages altogether for the time being, right?

Not so fast. There's a case to be made for variable-rate mortgages right now, even if homeowners are shunning them.

Before the global financial crisis gummed up bank lending, you could get a variable-rate mortgage at the prime lending rate at major financial institutions minus a discount of up to 0.9 of a point or so. Today, variable-rate mortgages are going for prime plus a full percentage point in many cases.

The net effect is that variable-rate mortgages as of yesterday ranged from 4.75 per cent or less at some mortgage brokers to 5.5 per cent. In a normal financial environment, we would see variable-rate mortgages starting at 4 per cent and ending up as low as 3.1 per cent after aggressive discounting. Why go with one of these mortgages when the pricing is so out of whack?

"Right now, the math for variable-rate mortgages is still better," said Kim Arnold, a mortgage consultant with Dreyer Group Mortgages in Vancouver.

Ms. Arnold's firm yesterday posted a rate on its website of 5.29 per cent for a five-year fixed rate mortgage, which is what most people go with if they want the certainty of a steady interest rate. A good deal for variable-rate mortgages is 5 per cent or less.

Variable-rate mortgages are pegged to the major banks' prime rate, which is in turn influenced by the Bank of Canada. If the central bank lowers rates to help shore up the economy, then variable-rate mortgages will go lower, too, so long as the big banks pass on the savings by lowering their prime rates. Ms. Arnold notes that five-year mortgage rates could also fall in the months ahead.

Like variable-rate mortgage, fixed-term loans are being doled out with extra-high interest rates right now. If bank lending loosens up in the months ahead and five-year rates fall, you could convert your variable-rate mortgage into a five-year fixed rate loan at no cost.

"I'd pick variable because of the option to lock in, and then keep a close eye on the [five-year] fixed-rate mortgage," Ms. Arnold said. "I think we might see some changes there."

Another way to give yourself some flexibility to benefit from a mortgage rate easing is to take out a one-year mortgage. In an unusual twist, maybe the best deal around is being offered by a big bank, Bank of Nova Scotia, which is promoting a one-year rate of 4.35 per cent on its website (good through Nov. 15).

Vince Gaetano, senior mortgage consultant at Monster Mortgage in Toronto, said the rationale for taking a one-year mortgage right now is that it allows time for financial markets to calm down and for rates to move lower. Ideally, both variable-rate mortgage and five-year mortgages would both be cheaper.

"With a one-year mortgage, you can wait until everything blows over and you have a little more control," Mr. Gaetano said. "That's what we're recommending right now."

Mr. Gaetano said he's seen forecasts that variable-rate mortgages will come back down to prime or maybe prime plus a bit in the next year or so. He said he's not comfortable recommending clients take a variable-rate mortgage today, when the pricing is so inflated.

Still, a variable-rate mortgage is a cheaper option than a five-year mortgage right now, and it could get cheaper still if the economy weakens and interest rates are cut even further.

If you decide to go variable with the intention of locking into a five-year mortgage at a future date, then be sure to negotiate the rate discount you would get in such a situation. "I make sure that every variable-rate mortgage I put a client into is one where the discount is predetermined," Ms. Arnold said.

Ideally, you would have a discount spelled out in your mortgage contract, as in the posted rate minus 1.5 percentage points. Don't settle for the promise of simply "a discount."

计算利息总额的数学公式？

2008-10-26T23:12:00.006-06:00

最近一个顾客打来电话，想知道有没有现成的公式来计算一下
她在贷款合同期限内、总共付了多少利息？

我很喜欢并且欣赏这样爱思考的朋友。

本贴有3个附图，给出了计算的公式并且举了2个例子。

关于房屋贷款更多的信息，敬请和艳丽联系.

(如需放大效果，请点击图片)

From TotalInterestPaid

Bank of Canada Cuts Rate to 2.25%, Signals More Moves

2008-10-21T18:48:00.001-06:00

Oct. 21 (Bloomberg) (By Greg Quinn and Theophilos Argitis) -- The Bank of Canada reduced its main interest rate by a quarter of a point, less than economists predicted, saying it will probably need to act again to fend off the effects of a credit crisis and global recession.

Governor Mark Carney and his five deputies trimmed the target rate for overnight loans between commercial banks to 2.25 percent, the lowest since October 2004. Canada's six biggest banks passed the relief on to customers by lowering their prime rates to 4 percent. Canada's dollar fell to the lowest in more than three years as traders bet on more reductions in the central bank's benchmark.

``Surprisingly they didn't cut by more, but the statement itself is awfully gloomy, leading me to believe there is an awful lot more to come,'' said Eric Lascelles, chief economics and rates strategist at TD Securities Inc. in Toronto.

The credit squeeze spurred by the subprime mortgage meltdown is sapping demand for Canadian shipments of automobiles and lumber to the U.S., Canada's main export market. The global financial crisis also may crimp the domestic spending that's propped up Canada's economy, policy makers said. Today marked the first scheduled decision by a central bank within the Group of Seven major economies since a coordinated rate cut on Oct. 8.

Seven of 24 economists surveyed by Bloomberg predicted today's move, with 13 calling for a cut twice as deep and four expecting no change. The central bank may have been reluctant to ease by half a point after already doing so this month, Lascelles said.

`Timely' Support

``These actions provide timely and significant support to the Canadian economy,'' policy makers said in a statement from Ottawa, referring to their own rate cuts and the joint move. ``Some further monetary stimulus will likely be required.''

The Canadian dollar weakened by as much as 2.5 percent to C$1.2208 per U.S. dollar, the lowest since August 2005, from C$1.1910 yesterday. It traded at C$1.2140 at 5 p.m. in Toronto. The drop from a record 90.58 Canadian cents per U.S. dollar set last Nov. 7 will help exporters, the bank said.

Policy makers cut their forecast for economic growth this year to 0.6 percent from a July prediction of 1 percent. Next year's gross domestic product will also grow 0.6 percent, compared with a July forecast of 2.3 percent.

Canadian exporters will be hobbled by a U.S. recession, a world economy that ``appears to be heading into a mild recession,'' and lower prices for the country's exported commodities, the Bank of Canada said. Domestic spending will also be curbed by tougher lending conditions, the bank said.

`Not Done'

Policy makers didn't say Canada's economy is headed for a recession, unlike assessments by BMO Capital Markets, Bank of Nova Scotia, Credit Suisse Holdings Inc. and UBS AG.

``They firmly signaled they are not done,'' said Derek Holt, an economist at Scotia Capital in Toronto, adding the rate will be lowered to 1.75 percent at the next meeting. ``You could have taken that statement today and easily changed the headline to have a 50- or 75-basis point cut.''

Canada's key rate hasn't been below 2 percent since 1960, and its record low was 1.12 percent in 1958, a time when it was based on treasury yields rather than actions by policy makers.

Canadian banks, rated the soundest in the world this month by the World Economic Forum, are still reluctant to lend after the worst financial malaise since the Great Depression toppled institutions such as Lehman Brothers Holdings Inc. in the U.S. and Fortis in Europe.

Prime Rates

The biggest commercial banks hesitated in cutting their prime rates after the Oct. 8 move, the first time that's happened since 1997, with four matching the full 50-basis point reduction only after the government created a program to purchase up to C$25 billion of their mortgages.

Prime Minister Stephen Harper, who won re-election on Oct. 14 by arguing he was a better economic manager than his rivals, has said he'll meet with provincial leaders in the coming months to discuss the economy. Harper last week also backed French President Nicolas Sarkozy's call for international meetings on restoring confidence in financial markets.

``We're looking at a much longer downturn in the American economy than anyone was thinking a year ago,'' British Columbia Premier Gordon Campbell said after a meeting of provincial leaders in Montreal yesterday on the economy. British Columbia is Canada's top lumber-exporting province.

`Challenging' Conditions

Canfor Paper Corp., Canada's second-largest lumber producer by market value, said Oct. 8 it will close a plywood plant in Fort Nelson, British Columbia. The 290-worker factory was shut because of ``unprecedented and challenging market conditions,'' Chief Executive Officer Jim Shepard said in a statement.

Carney, 43, has room to cut rates further because the economic slowdown is pushing commodity prices down from record highs set earlier this year. Those higher prices drove inflation above the central bank's 2 percent target and boosted business profits and consumer incomes in provinces such as British Columbia and Alberta, which is home to the world's second-largest crude oil deposits.

Inflation peaked in the third quarter of this year and will fall below 1 percent in the middle of next year, the central bank said today. In July, policy makers said prices would accelerate to 4.1 percent between October and December.

The bank will provide a new detailed economic forecast paper in two days, and its next scheduled decision is Dec. 9.

To contact the reporter on this story: Greg Quinn in Ottawa at gquinn1@bloomberg.net; Theophilos Argitis in Ottawa at targitis@bloomberg.net.
Last Updated: October 21, 2008 17:07 EDT

Prime 利率一年变动几次？

2008-10-16T18:20:00.004-06:00

加拿大中央银行 (Bank of Canada) 一般每年召开8次会议研究利率情况，决定利率的调整，
或升或降或保持不变。

一般中央银行的利率变了，各家银行和信贷公司的Prime利率马上会相应地跟着变。
全加拿大各家银行的Prime 利率一般都一样。

现在的Prime 利率是2.25%.

以下是今年会议的时间：
Tuesday, 20 January 2009
Tuesday, 3 March 2009
Tuesday, 21 April 2009
Thursday, 4 June 2009
Tuesday, 21 July 2009
Thursday, 10 September 2009
Tuesday, 20 October 2009
Tuesday, 8 December 2009

Big banks lower prime lending rate, but less than central bank's move

2008-10-08T19:34:00.003-06:00

The Canadian Press.
Oct. 8, 2008.

TORONTO — Canada's big banks have declined to pass on to consumers the full half percentage point cut in interest rates announced by central banks around the world Wednesday, citing turmoil in raising money in turbulent financial markets.

One of Canada's largest mortgage lenders, TD Canada Trust, was first off the mark, saying it will make a smaller quarter point cut to its prime lending rate, which serves as a benchmark for consumer loans, lines of credit and some mortgages.

CIBC, Royal Bank of Canada, Scotiabank and Bank of Montreal soon followed, saying they would cut their prime by a quarter point as well to 4.5 per cent from 4.75 per cent, effective Thursday.

Earlier Wednesday, the Bank of Canada and other central banks cut interest rates by half a percentage point in a co-ordinated effort to stimulate lending and economic growth.

The central banks had hoped the full half point cut would be passed down to consumers, reducing borrowing costs on home equity and other floating rate loans tied to the prime rate set by the banks, thereby stimulating spending and a boost in economic growth.

In the United States, Bank of America, Wells Fargo and other U.S. banks cut their prime rate by half a point, matching the central bank rate cut

But rocky credit markets appear to have stalled such a move in Canada. Around the world, commercial banks are finding it more difficult to borrow money from other banks and the bond market and are being forced to pay higher interest rates to attract funds and lower the risk for lenders.

The retail arm of TD Bank said the troubles in the global credit markets makes it more expensive for the bank to raise money so it can't pass along the full Bank of Canada rate cut.

"Continuing market turmoil has steadily driven up the cost of borrowing for financial institutions," said Tim Hockey, president and CEO of TD Canada Trust.

"This makes it challenging to match the Bank of Canada rate cut at this time. We recognize the efforts the Bank of Canada is making and, despite the fact that our cost of funds remains high, we have decided to reduce our rate by (a quarter point). We see this as a balanced move in managing our funds and passing along the intended benefits to our customers."

For several years, Canada's big banks have moved their prime rates up or down in lock step with the Bank of Canada's key short-term interest rates. However, a few months ago, they began delaying the prime cuts, citing troubles in financial markets.

Wednesday's cut by the banks appears to decouple many of the rates that affect ordinary consumers borrowing to buy houses, cars or big-ticket items in the broader economy.

And with the banks not matching the central bank cut, it also diminishes the Bank of Canada's policy levers it can use to lower borrowing costs in the economy.

Earlier Wednesday, Finance Minister Jim Flaherty said he wouldn't advise Canada's banking system to decide whether to fully pass Wednesday's interest rate cut onto consumers.

"I don't give the banks guidance on what they should do or shouldn't do," he said.

"They respond to the steps taken by the Bank of Canada as they see fit. We have a competitive banking system."

In a separate commentary, TD Bank economists welcomed the rate cuts by the world's central banks and predicted more rate cuts are on the way.

"Since the start of the year, the forecasts of the various monetary authorities all predicted significant economic improvement in late 2008 and 2009, which we felt was highly unlikely," the bank said in an economic report.

"Moreover, further rate cuts are in the pipeline. We look for the Fed and the Bank of Canada to cut by a further (half percentage point) at their upcoming rate annouincements."

2008爱城各类民用房价格走向

2008-10-04T14:42:00.003-06:00

本贴描述了2008爱城各类民用房平均价格走向（见附图）。可以看出，Duplex 和 Condo 的价格已趋稳定，甚至还有上升趋势。Single Family Dwelling 的价格仍然继续下跌，但权威人士指出，这并不意味着房价真的下跌，很大原因是市场上出售的Single Family house的档次和质量不是最好。

和去年9月相比，今年9月民用房销售数量增加近70%.

如需放大效果，请点击附图。

From Home Price

Canada may face housing bust: Shiller

2008-10-01T20:27:00.001-06:00

Jacqueline Thorpe, Financial Post Published: Wednesday, October 01, 2008

The Canadian housing market could face a similar housing bust to the United States, particularly in more bubbly markets as Vancouver and Calgary, said Robert Shiller, the Yale University professor who predicted both the 1990s stock market boom and bust and the US housing slump.

Mr. Shiller, co-founder of the S&P Case/Shiller Home Price Index, said psychology is the primary driver of bubbles and it appears that Canada has been caught up with home buying fever just as the United States and other countries around the world.

Asked whether that meant Canada could face a similar bust Mr. Shiller said: "Yes, especially in places that went up a lot like Vancouver and Calgary. I don't think Toronto has been quite as extreme."

Mr. Shiller said there was a natural connection between the United States and Canada.

"I would be surprised that the bubble that appeared in the United States and elsewhere didn't appear in Canada," he said in an interview with the Financial Post. "It's psychology, I think that drives it.

Mr. Shiller, whose book Irrational Exuberance came out in March 2000 just as the tech bubble peaked, said it was essential for the U.S. government to pass a financial bailout, though he believes the United States is facing a "severe recession," regardless.

"I'm concerned problems are deeper than can be handled by the bailout but that doesn't mean the bailout doesn't do some good," he said.

He said a bailout might help restore some confidence to the stressed financial system.

"What creates a crisis is a lack of confidence," he said.

He said the housing crisis was primarily a policy failure by U.S. authorities.

The U.S. government was "totally blind" to it, regulators failed to monitor the mortgage industry properly and the U.S. Federal Reserve had very low interest rates at a time of the greatest housing bubble of all time.

While homeowners should take some personal responsibility for the debacle, they were being goaded into the fevour by an establishment that endlessly pushed an ownership society.

"They were doing what was considered right at the time," Mr. Shiller said.

Mr. Shiller said human nature seems to predispose people to spectacular excess, fanned by a voracious news media.

"Until we had newsapers and other media we had no bublbles, he said.

While ups and downs in the market can lead to creative destruction the current housing crisis has morphed into a system problem.

"The problem is that perfectly good firms are in trouble," he told the Financial Post in an interview at the Ontario Economic Summit.

A bailout may not be palatable, government assistance is required when the system fails.

The trick is to reduce conditions that fan bubbles.

In his current book, "The Subprime Solution," Mr. Shiller proposes several measures to reduce bubble conditions in the housing market including better information for prospective buyers and broader markets that trade risk better, such as the housing futures he has developed on the Chicago Mercantile Exchange.

There should also be new retail products such as "continuous workout mortgages," that go up and down with the value of the home equity and mortgage equity insurance.

Mr. Shiller, who would not give a precise forecast on the outlook for U.S. home prices, nevertheless said futures markets are predicting more price declines of 10% or more. His Case/Shiller index earlier this week showed home prices down 16.3% year-over-year this summer.

He expects things to get worse for the U.S. economy in the short-term.

"We're going to have a severe recession, most likely," he said. How quickly the economy recovers depends on policy.

"Unfortunately the bailout has hit a snag," he said. "There is resentment of rich Wall Street people. I am worried that the sense of trust, in confidence of each other is being damaged."

Mr. Shiller said he does not have another bubble in his sights as the U.S. economy will be "damaged for years."

"The housing bubble was of record proportions," he said. "Maybe the next big bubble will be your children's or grandchildrens...The excitement we had in the 1990s and in 2000 in the housing market is a fragile thing and it won't come back for some time."

卡尔加里房价应降，爱德蒙德房价应涨！

2008-09-24T23:09:00.004-06:00

（9月24日）UBC教授认为：
（1）现在多伦多房价合理；
（2）Halifax, Montreal, Ottawa, Regina and Winnipeg 房价最少应降20%；
（3）卡尔加里和温哥华房价应降7-11%；
（4）爱德蒙德房价不但不高，还有涨8%的潜力。加拿大这样的城市不多。

以下是英文全文。
Housing Prices in Most Canadian Markets are Overpriced and Likely to Decline: UBC Study

Homeowners in the majority of Canada's urban centres should be prepared for the possibility of housing market price declines, according to researchers at the Sauder School of Business at the University of British Columbia.

Their study shows that with the exception of Toronto and Edmonton, houses in Canada's major cities are overvalued, priced up to 25 per cent higher than they should be to balance with rents -- given interest rates, holding costs and historical rates of price appreciation.

"The decade long boom in Canadian markets is over," says Tsur Somerville, the study's lead author and Sauder's Real Estate Foundation of B.C. Professor in Real Estate Finance.
Titled Are Canadian Housing Markets Overpriced?, the study observes that housing affordability is a severe problem in some Canadian cities, limiting the ability of markets to continue to rise.

"House prices can correct through rapid declines, through longer and slower declines, or by staying essentially flat for a long period," says Somerville.

Canada's more conservative lending practices have prevented the speculative excess and severe downturn experienced in U.S. markets. However, the study warns that the potential for price declines is greatest in cities that have a large supply of unsold inventory or a mismatch between the number of units and the number of households ready to occupy them. Recent data suggests that Vancouver is the most at risk in this regard.

To analyze whether housing prices are overvalued, the researchers looked at current house prices in nine major Canadian cities. They compared these prices to their equilibrium or balanced market levels, which is derived from the relationship between house prices and rents in a market when compared with cost of investing in housing. The study finds:

* Only in Toronto are prices in balance with rents
* In Halifax, Montreal, Ottawa, Regina and Winnipeg prices would need to drop by at least 20 per cent to be in balance
* Equilibrium in Calgary and Vancouver requires a 7 to 11 per cent drop in prices
* In Edmonton prices are actually below equilibrium, by 8 per cent

Economists warn of deflation threat

2008-09-19T20:58:00.001-06:00

HEATHER SCOFFIELD Globe and Mail Update (Sept 19, 2008)

OTTAWA — The global financial crisis is hampering growth and constraining credit to such an extent that it will drive down inflation
in Canada and prompt the Bank of Canada to start cutting rates soon, some economists say.

“The deepening of the global financial crisis and associated pressures on global growth and commodity prices are unambiguously
deflationary for Canada,” said David Wolf, chief economist at Merrill Lynch Canada. “As a result, we are accelerating our
expectations for Bank of Canada easing ahead.”

He expects central bank Governor Mark Carney will cut the bank's key interest rate by at least a quarter of a percentage point on Oct. 21,
the bank's next rate setting date.

And the central bank will follow up with more rate cuts, driving down the key interest rate to below 2 per cent by mid-2009, Mr. Wolf projects.

The key rate is now 3 per cent, and the bank has kept it at that level since April, following a series of aggressive rate cuts.

The financial crisis has prompted inter-bank lending to freeze, and credit to households and businesses to dwindle in many countries,
Mr. Wolf said. Without credit, economies can't grow, and that will hurt Canada's prospects.

“The availability of credit, especially in the U.S., but also in Canada and elsewhere, is shrinking,” he said.

“While the situation remains fluid and the ultimate fallout cannot be predicted with confidence, it seems clear that the de-leveraging process
already underway is accelerating, further squeezing the credit lifeblood of the economy from a trickle to a drip.”

Canadian banks have escaped the worst of the credit crisis, and money markets are not as gummed up here as they are elsewhere in the world.
But Canadian financial institutions still need to conduct financing on global markets. And spreads in short-term money markets are far wider
than normal – although not as wide as in the United States.

“Without action, the price of credit to Canadian households and businesses will rise; credit availability may be pressured as well,” Mr. Wolf warned.

The Bank of Canada has said it stands ready to inject liquidity into money markets if needed, but has not seen much need,
except for a $2.3-billion injection into overnight money markets on Monday. On Thursday morning, the Bank of Canada said
it was backing a $180-billion (U.S.) globally coordinated effort to swamp money markets with U.S. dollars,
but would not actually use its $10-billion facility for now.

Economists at Bank of Nova Scotia also warned Thursday about the deflationary effects of the credit crisis.

“If falling prices really get anchored in expectations, the economic consequences could well be very dire,” they said,
urging more action from policy makers than just liquidity injections.

Some economists argued that central banks are essentially printing money by injecting so much of it into the money supply recently – a move usually
considered inflationary.

“The economic risks of this operation arise only if the credit lines extended by the world's banking system – the newly printed money –
are not withdrawn promptly after the financial markets recover,” said Carl Weinberg, chief economist at High Frequency Economics.
“In that case, a surge of liquidity may well lead to an explosion of demand for financial assets.”

But he doubts that will happen, and besides, he argues that the $180-billion announcement on Thursday “is by far the best and the most important
measure the central banks could have taken.”

Similarly, Mr. Wolf said that the central banks' liquidity creation measures are meant to counter a broad deflationary force in the form of
contracting credit. And the liquidity measures are only partly offsetting the credit contraction. So the injections, in this case,
are not inflationary at all.

卡城各区2008房价走向？

2008-09-06T23:58:00.004-06:00

本贴描述了卡城各区2008年独居民房（single family house）平均房价的季节性变化。

图的横坐标是月份，从1月到12月。

图的纵坐标是房价（万加币）。因为各区的房价差异很大，所以每个小图的纵坐标的起始价格不同。

卡城各区8月房价和同年前几个月相比，均有所下降。但各区下降的幅度各有不同。

下降的绝对数量就差异更大了。

卡城房价是否降到底了？

也许,我们每个人都有权利拥有自己的见解。

（如需要，可放心点击图片，获取放大效果。）

From Home Price

埃德蒙顿房价有季节性吗？

2008-09-05T23:31:00.001-06:00

很多朋友想知道秋季是买房的好季节吗？埃德蒙顿房价季节性强吗？

我想最好用数据来回答这个问题。我把埃德蒙顿市过去10年（1999-2008）民用房平均价格画了图，供大家参考。图的横坐标是季节，从1月到12月。纵坐标是不同年份的民用房平均价格。

一般来讲，房价在秋季会稍稍有所增加。当然，不同年份变化的程度不同。

今年的房价是否降到底了？
也许，我们每个人都有自己的判断。

点击图片，获取放大效果。

From Home Price

Feds take housing market precautions

2008-09-05T20:18:00.003-06:00

40-year mortgages off the table

The federal government has launched initiatives aimed at preventing Canada's housing market from becoming a United States-style bubble in which reckless mortgage financing practices led to a collapse of that country's inflated housing market.

Canada Mortgage and Housing Corp. (CMHC) and the Department of Finance recently announced they are taking action to increase the availability of mortgage funds and to make qualification criteria more restrictive than what it has been in the past couple of years.

The new initiative is an expanded Canada Mortgage Bond (CMB) program, administered by CMHC, with a 10-year maturity to attract new individual and corporate investors who are seeking assets beyond the current five-year term.

"In the past year, when mortgage lending institutions across many countries have faced liquidity and funding challenges, Canada's CMB program has provided cost-effective funding to Canadian mortgage lenders and a high-quality investment for investors," CMHC president Karen Kinsley said in a news release.

"Through this enhancement, the CMB program will continue to provide Canadians with access to affordable mortgage financing."

The CMB expansion announcement is in addition to the record $12.5-billion CMB issue that occurred in June 2008, which provided funding for 25 financial institutions and some 64,000 Canadian mortgages..

CMHC, which fully guarantees CMBs, introduced the program in 2001 to benefit homebuyers and the housing industry by improving access to lower-cost mortgages and enhancing the availability of readily accessible cash in Canada's mortgage market.

The Finance Department recently announced new rules for government-guaranteed mortgages that are aimed at protecting and strengthening the country's housing market.

These measures include:

* Reducing the maximum amortization period for new government- backed mortgages to 35 years from 40 years. The government introduced the 40-year period in 2006 as a "financial innovation" to encourage more home buying.

* Requiring a minimum down payment of five per cent for new government-backed mortgages.

The government previously had allowed loan-to-value ratio loans of up to 100 per cent as another "innovation."

* Establishing a consistent credit score requirement. "Canadian lenders have not originated many government-backed mortgages for borrowers with low credit scores," a Finance Department background paper says.

"To ensure this practice continues, the new framework will establish a credit score floor of 620. There will also be a limited "basket" to provide for exceptions to this rule, recognizing that there are some borrowers with credit scores below 620 that otherwise represent low credit risk."

* Introducing new loan documentation standards to ensure that there is evidence of reasonableness of the property value and of the borrower's sources and level of income.

The mortgage guarantee framework is to take effect on Oct. 15, 2008. This will allow existing mortgage pre-approvals with the common 90-day duration to be used or expire.

The move marks a "reasonable and measured approach" by the government to ensure Canada's housing market remains strong, the department said.

Later, in a speech, federal Finance Minister Jim Flaherty noted the fragility of the U.S. housing market and his government's desire to prevent Canada's real estate market from going down that road.

"The government has concerns about 40-year amortizations and very small down payments in residential housing," Flaherty told the Calgary Chamber of Commerce. "We, of course, want to avoid anything like (what) the Americans went through in their housing sector."

Flaherty said the adjustments to the loan-qualifying criteria are "a measured and responsible" approach to residential housing financing in Canada.

"They are modest changes but we do want to encourage Canadians to build up equity in their homes."

John Hrynkow of Edmonton, president of the Canadian Home Builders' Association, applauded the federal initiatives. He said the paring back of overly liberal financing terms - 40-year amortizations and less-than-thorough documentation - will enhance the market's financial soundness.

"You shouldn't be monkeying around with the actual free flow of the market," Hrynkow told Business Edge. "You're creating a false economy. That's exactly what transpired in the U.S."

Hrynkow said the expanded CMB program will also enhance the market's underlying stability. "That assures an availability of funds," he said. "It creates competition in the marketplace for interest rates."

Canada's government and financial leaders do Canadians a service by avoiding the excesses of the U.S.'s latter-day financial system, in which the traditional business cycle appears to have been replaced by a bubble cycle.

In a February 2008 cover story, Harper's Magazine noted that the U.S. economy seems to need to create a new bubble each time it must extricate itself from the consequences of the previous one, which begs the question: What's next?

Last month, the Washington, D.C.-based International Monetary Fund (IMF) said expected losses from U.S. sub-prime mortgages remain high and loan deterioration is becoming more widespread.

More ominously, the Pasadena, Calif.-based IndyMac Federal Bank collapsed recently under the weight of its deteriorating mortgage assets, becoming the third-largest bank failure in U.S. history.

And now the country's housing government-sponsored enterprises (GSEs) - Fannie Mae and Freddie Mac - are developing huge fault lines.

This is not good news, because out of the $5 trillion in debt- and mortgage-backed securities guarantees issued by these GSEs, more than $3 trillion is held by domestic financial institutions, including commercial banks, savings and loans, and credit unions. More than $1.5 trillion is held by institutions and central banks overseas.

In a July 28 Global Market Update, the IMF wrote: "At the moment, a bottom for the U.S. housing market is not visible."

In Canada, the market's prospects are rosier. In its Housing Market Outlook for the first quarter of 2008, CMHC says Multiple Listing Service average prices are expected to increase by 5.2 per cent nationally this year and a further 3.8 per cent in 2009.

New housing starts, meanwhile, are expected to decline by 7.3 per cent to 211,700 units this year, the report says. "Despite this fall-off, housing starts will have been above the 200,000 level seven straight years," it adds.

In a February 2008 assessment of Canada's financial system, the IMF says Canada has maintained prudent lending practices and kept the volume of sub-prime loans at a level of less than three per cent of outstanding mortgages.

"The Canadian financial sector is among the world's most highly developed," the IMF says. "The five large banking groups that form the core of the system are conservatively managed and highly profitable."

(By Brock Ketcham - For Business Edge, Published: 09/05/2008 - Vol. 8, No. 18. Brock Ketcham is an Edmonton-based writer who specializes in consumer and public policy issues.)

埃德蒙顿市民房平均价格何在？

2008-08-26T21:52:00.010-06:00

我们做事情、定决策都要有一个参考的标准。也许，最好的标准就是历史。以史为鉴嘛！

本贴描述了埃德蒙顿市民房48年来平均价格的变化。

同时，我又把2007年一月以来的房价画了一个小图，重点强调了一下。

您可看到房价在1981年后受通货膨胀的影响而递减，也可看到房价在2005年后的火箭式上升。

现在的房价和2007年初的时候很相似。

今后房价如何，也许仁者见仁，智者见智吧！

（请点击图片，获取放大效果。）

From Home Price

什么是“20+20”付款方式?

2008-08-24T17:24:00.006-06:00

让我给您举一个例子：

假设您的贷款总额 (mortgage amount) 为：$300,000；

年利息 (annual interest rate) 为：4.0%；

付清年限 (amortization) 为：25 年；

贷款合同期限 (term) 为：5年；

您的月付款额(monthly payment) 应为：$1578.07；

第一个20是说您在每年中，可增加月付款额20%。在本例中，您可增加$315.61 ($1578.07 X 20% = $315.61)，这样新付款额为：$1893.68。

第二个20是说您在每年中，可多付您原贷款额的20%。在本例中，您可多付$60,000 ($300,000 X 20% = $60,000); 因为是原贷款额，您在这5年合同期限中，每年均有权多付$60,000。但是，如果今年您没多付，今年可多付的数目不可转移到下一年。也就是，在本例中，每年最多付$60,000，不管上一年付没付。

您可一次付上这$60,000，或分成多次付上。一般唯一的条件是，每次付款额必须超过$100。当然，不同贷款机构的要求会稍稍有所不同。

以上两种预付方式没有任何违约金 (if you increase your monthly payment by 20% per year and/or prepay 20% of your original mortgage amount per year, there is no prepayment penalty)。当然，有的银行允许25+25，有的允许15+15。一般加拿大的贷款机构，都允许类似性质的预付计划。您可利用这种性质的预付计划，尽快多还上一些贷款，摆脱债务，获得解放。

很有趣的是，一般80%的顾客刚刚贷款的时候，都雄心勃勃，打算多付。而他们当中只有30%的人才真正去做，而这些人中，一般连10+10多付的标准都达不到。

Canada Mortgage and Housing Corporation: High Home Starts Begin Second Half of 2008

2008-08-18T17:34:00.003-06:00

Aug 11, 2008 08:15 ET

Canada Mortgage and Housing Corporation: High Home Starts Begin Second Half of 2008

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 11, 2008) - Preliminary results from Canada Mortgage and Housing Corporation's (CMHC) monthly starts and completions survey indicate another month of high housing starts. The number of homes started in July was a quarter over the figure recorded for the same month last year. For the first seven months of 2008, housing starts are up eleven per cent from 2007 figures on the strength of new multiple family construction.

"Despite more homes being available on the resale market throughout the year, developers have moved forward and begun construction on projects that have been in the planning stage," said Richard Sam, market analyst with CMHC. "With a number of multiple family projects still in the pending stage, expect housing starts to be at high levels for the rest of the year."

Housing starts began the second half of 2008 on a down note in the Abbotsford CMA. A drop in multiple family construction had home starts at less than half the total of July 2007. Overall, housing starts are still up in the Abbotsford CMA based on a number of higher density projects started during the first six months of the year.

Canada Mortgage and Housing Corporation (CMHC) has been Canada's national housing agency for more than 60 years. CMHC is committed to helping Canadians access a wide choice of quality, affordable homes, while making vibrant, healthy communities and cities a reality across the country. For more information, visit www.cmhc.ca or call 1-800-668-2642.

(Ce document existe egalement en francais)

To view the graph, map and tables accompanying this press release please click on the following link: http://media3.marketwire.com/docs/0811cmhc.pdf.

为什么选择艳丽贷款？

2008-08-16T16:35:00.008-06:00

何必东奔西跑, 艳丽贷款最好！

选择艳丽的6大理由：

1．自己买过房，贷过款，装修过房，对房屋贷款有扎实的第一手亲身的经验。

2．艳丽大学毕业后，当过7年数学教师，对贷款背后的数学逻辑，了如指掌。

3．艳丽是一个贤惠的妻子，善良的母亲，为人一贯以诚实和善良作指南。

4．艳丽是加拿大最好的贷款网络公司VERICO的会员，会从30多个房屋贷款公司中给您找到最好的批发价利息，适合您的优质的贷款。

5．艳丽不但知道今天的利息，还知道昨天的利息，所以会给您的贷款一个更全面、更周到的分析。

6．艳丽有14个合作伙伴，强强联手，办贷款及时，不拖延，干净利落，没泥没水。

Hello, my name is Yanli Song. I am a loving wife and mother of three little children. After receiving my BSc, I worked as a mathematics teacher for 7 years at a technical school in Shandong province, China. I immigrated to Canada in 2000. I have lived in three Canadian provinces (Ontario, BC and Alberta) as I accompanied my husband for his MSc, PhD and postdoctoral studies.

I became very interested in mortgage after my husband and I purchased a bi-level house from a builder. I shopped around for a mortgage, and got the information a borrower usually gets: interest rate, monthly payment, and the total amounts of interest and principle paid over the term of the loan. However, my requests were deeper: (1) should I take a variable rate or a fixed rate mortgage, and where can I get the historical rates of these two mortgages and compare their behavior in a historical context? (2) When Bank of Canada changes its prime rate, what is the average lag time in the rate changes of the above-mentioned two mortgages? (3) How fast would I pay off my mortgage if I chose bi-weekly accelerated payments? I wanted to know the interest and principle proportions of each payment.

I am a deep thinker. Contact me today and I will unlock the mystery of mortgage for you. You demand no less the best of your home, and you should not be kept in darkness.

I feel fortunate to be part of VERICO, the leading Canada-wide mortgage brokers network, by joining the excellent team at VERICO Canada First Mortgage. Choose me today as your mortgage expert and I will give you the best rate, best product, and of course the best service you deserve!

贷款术语解释

2008-08-16T09:07:00.002-06:00

Open vs. closed mortgage:
Open mortgage means you can pay out your mortgage without penalty, while if you pay out your closed mortgage, the lender usually charges 3 months' interest as penalty. The rate for open mortgage is higher than its corresponding closed mortgage, but if you are going to move during the term of the mortgage, this might be an option.

Variable vs. fixed rate:
Variable rate changes whenever Prime rate changes. The Prime rate, which in a sense is determined by Bank of Canada, currently is at 4.75%. For residential first mortgages, borrowers usually can get a Prime minus a discount rate. How much the Prime rate can be discounted depends on your credit score, employment stability, etc.

Term vs. Amortization:
Term determines the contractual obligation between you and the lender. For example, if you get a 5 year fixed rate at 5.24%， then the lender will commit this rate to you for 5 years, at the end of the term you have to renegotiate the mortgage with the original lender OR have the complete freedom to go to a different lender.
Amortization means how long it takes you to pay off your mortgage. Lenders need this piece of information to calculate your monthly payment. All conditions being equal, the longer the amortization, the larger mortgage loan you can get.
Amortization of 40 years does not necessarily mean you have to pay out the loan over 40 years. Most lenders in Canada allow borrower, at least , to prepay 15% of their original loan amount each year. Of course, you can pay out the mortgage entirely at the end of the term if you have already accumulated enough capital.

贷款申请

2008-08-16T09:02:00.013-06:00

欢迎电话咨询今日最新利息！！！

艳丽欢迎您网上直接申请：

http://www.verisite.ca/yanli/apply_now.php

更多了解房屋贷款，敬请和艳丽联系：

Telephone：
403-456-6325

FAX：
1-888-814-4911

E-mail：

yanli@canadafirstmortgage.com

Canadian Housing Agency Lifts 2008 New Home Starts Forecast

2008-08-16T08:08:00.002-06:00

Canadian Housing Agency Lifts 2008 New Home Starts Forecast

By Theophilos Argitis

Aug. 15 (Bloomberg) -- Canada Mortgage and Housing Corp., a government housing company, said new home construction will decline less this year than had been earlier forecast as the country benefits from strong job growth and higher incomes.

About 215,475 homes will be built this year, up from a May forecast of 214,650 units, the Ottawa-based CMHC said today. New home construction will drop from last year's 228,343 units.

``Strong economic fundamentals such as continuing high employment levels, rising incomes and low mortgage rates will provide a solid foundation for healthy housing markets this year,'' Bob Dugan, CHMC's chief economist, wrote in the report.

To contact the reporter on this story: Theophilos Argitis in Ottawa at targitis@bloomberg.net.
Last Updated: August 15, 2008 09:04 EDT

Prime Rate 10 年变化历史

2008-08-10T14:45:00.017-06:00

很多朋友想知道现在房屋贷款的利息怎么样？
要回答这个问题，我们必须看一下利息的历史性变化，尤其是Prime Rate 的变化。

本贴描述了Prime Rate 10年的变化曲线。

加拿大Prime Rate 10年历史记录：

Prime Rate 最低值：2.50%；
最高值：7.50%；
10年平均值：5.43%；
当今值(2009年4月21日起)：2.25%；

（如需要，请点击图片，获取放大效果。）

From Prime Rate

计算房屋贷款每月付款额的数学公式

2008-08-02T23:03:00.008-06:00

前几天一个朋友打电话给我，询问房屋贷款每月的付款额是如何计算出来的。他知道银行是不会算错的，但他还是想知道计算的公式，否则心里不亮堂。

以下是计算的公式及例子。

请放心地点击以下两个小图片。

3种付款方式利息的比较

2008-07-27T18:45:00.004-06:00

让我举一个例子来说明加速双周付款的好处。

将设：
贷款总额： $300,000；
年利息： 5.5%；
付清年限： 25年；
贷款合同期限： 5年；

请用我的房屋贷款付款明细表，找出5年期间所付的利息总合。

注意：对于月付款，5年共有60次付款；对于双周付款，5年有130次付款。
一年有26个双周（365/14）。

5年下来，采用月付款、（常规）双周付款、和加速双周付款分别付出利息（总合）为： $77432.97、 $77299.23 和 $75928.17。相对于月付款而言，（常规）双周付款少付 $133.74 利息，加速双周付款少付 $1504.80 利息。

当然，具体选择哪一种付款方式，是您的自由和选择。

Let us use the following example to illustrate how much interest you can save by using accelerated biweekly payment.

Loan Amount: $300,000;
Annual Interest: 5.5%;
Amortization: 25 years;
Term: 5 years;

At the end of the term (5 years), total interests paid using monthly, (regular) biweekly, and accelerated biweekly payments are $77432.97, $77299.23 and $75928.17, respectively. Relative to the monthly payment, (regular) biweekly payment saves $133.74 in interest during the 5 years while accelerated biweekly payment saves $1504.80.

如何自动生成双周常规分期付款表格？

2008-07-27T18:01:00.019-06:00

如果您想知道您付款的详细情况，例如，在每一个双周(常规)付款中，有多少用来付本金，有多少用来付利息，3年或5年后，您还有多少剩余贷款，请用以下表格。

请将贷款总额，年利息，和分期付款年限变换成您贷款的实际情况，您就可得到您贷款的分期付款细节表格。（双周（常规）付款数目自动算出，不必输入）。

注意：本表为您方便而建，适合于加拿大房屋贷款，但本作者不负任何负面责任。

The linked spreadsheet below is designed to help you calculate the (regular) biweekly payment, and its corresponding amortization table.

After inputting the mortgage amount, annual interest rate, and amortization in years, you will be able to get a detailed (regular) biweekly amortization table of your mortgage.

To the best knowledge of the author, this table is accurate and mathematically correct. But it is only a reference and the author is not liable for any negative consequences.

注意，表格绿色部分会自动生成，请不要填写。您仅需输入3个变量。

请放心点击下面网站链接，您就可使用本表。
(Please click the link below to access the amortization table).

http://sheet.zoho.com/public/yanli.song2/biweeklyamortizationtable

如何自动生成双周加速分期付款表格？

2008-07-27T14:16:00.014-06:00

如果您想知道您付款的详细情况，例如，在每个双周加速付款中，有多少用来付本金，有多少用来付利息，3年或5年后，您还有多少剩余贷款，请用以下表格。

请将贷款总额，年利息，和分期付款年限变换成您贷款的实际情况，您就可得到您贷款的分期付款细节表格。（双周加速付款数目自动算出，不必输入）。

注意：本表为您方便而建，适合于加拿大房屋贷款，但本作者不负任何负面责任。

The linked spreadsheet below is designed to help you calculate the accelerated biweekly payment, and its corresponding amortization table.

After inputting the mortgage amount, annual interest rate, and amortization in years, you will be able to get a detailed (accelerated biweekly) amortization table of your mortgage.

To the best knowledge of the author, this table is accurate and mathematically correct. But it is only a reference and the author is not liable for any negative consequences.

注意，表格绿色部分会自动生成，请不要填写。您仅需输入3个变量。

请放心点击下面网站链接，您就可使用本表。
(Please click the link below to access the amortization table).

http://sheet.zoho.com/public/yanli.song2/acceleratedbiweeklyamortizationtable

如何自动生成月分期付款表格？

2008-07-13T16:58:00.018-06:00

如果您想知道您付款的详细情况，例如，在每个月的付款中，有多少用来付本金，有多少用来付利息，3年或5年后，您还有多少剩余贷款，请用以下表格。

请将贷款总额，年利息，和分期付款年限变换成您贷款的实际情况，您就可得到您贷款的分期付款细节表格。（每月付款数目自动算出，不必输入）。

注意：本表为您方便而建，适合于加拿大房屋贷款，但本作者不负任何负面责任。

The linked spreadsheet below is designed to help you calculate the monthly payment, and its corresponding amortization table.

After inputting the mortgage amount, annual interest rate, and amortization in years, you will be able to get a detailed amortization table of your mortgage.

To the best knowledge of the author, this table is accurate and mathematically correct. But it is only a reference and the author is not liable for any negative consequences.

注意，表格绿色部分会自动生成，请不要填写。您仅需输入3个变量。

请放心点击下面网站链接，您就可使用本表。
(Please click the link below to access the amortization table).

http://public.sheet.zoho.com/public/yanli.song2/monthlyamortizationtable-2

如何自动计算每月付款额？

2008-07-12T23:28:00.010-06:00

如何计算每月付款数目？
(How to calculate monthly mortgage payment?)

假设:
您的房屋贷款数目为 (mortgage amount)：$300,000 加币；
贷款利息为 (annual interest)：5.5%；
分期偿还期限 (amortization): 25 年;

您每月的付款数目应为 (monthly payment): $1831.18

请变动表格中的房屋贷款数目, 贷款利息和分期偿还期限为您的实际情况, 您就能计算出您每月的付款数目.
Please change the mortgage amount, annual interest rate, and amortization in the linked spreadsheet below to the actual values of your mortgage, and you will be given your monthly payment.

注意，表格绿色部分会自动生成，请不要填写。您仅需输入3个变量。

请放心点击下面网站链接，您就可使用本表。
(Please click the link below to access the amortization table).

http://sheet.zoho.com/public/yanli.song2/monthlypayment