Home ownership costs continuing to climb despite slowing activity: RBC

Ottawa Citizen- The cost of owning a home in Canada rose for the fourth consecutive quarter despite the slowdown in the resale market, according to a housing report released Monday by RBC Economics Research.

"Higher mortgage rates in tandem with a further appreciation in home prices boosted the monthly costs associated with carrying a mortgage on a typical home," said RBC senior economist Robert Hogue. "This extended the deteriorating trend in affordability since the middle of last year."

But despite the downturn, he said affordability remained "within a safe range…”

Home ownership costs continuing to climb despite slowing activity: RBC

Housing market feels impact of HST introduction

Ottawa Citizen- The new harmonized sales tax introduced in British Columbia and Ontario last month had an immediate impact on the housing market, according to the Canadian Real Estate Association.

The Ottawa-based group, which represents 100 boards across the country, said July sales plunged 6.8% on a seasonally adjusted basis from a month ago, a decline “almost entirely the result of fewer sales in British Columbia and Ontario.”

The slowdown had been expected as consumers rushed to buy homes ahead of the July 1 implementation in those provinces. The HST only applies to services used in purchasing and selling an existing home, such as real estate commission, and not the actual sale price.

In British Columbia sales dropped 14.1% from a month ago on a seasonally adjusted basis and Ontario the decline was 8%. The two provinces accounted for 85% of the the change in national activity…

Housing market feels impact of HST introduction

Wealth effect is anything but

Ottawa Citizen- There is something about our stock portfolios and homes being worth more that makes us want to spend.

“It’s called the wealth effect. If you feel you have more, you are more willing to spend more,” says David Onyett-Jeffries, an economist with Royal Bank of Canada.

“When people see their house value increase, they are more willing to spend because there is less requirement to save. They view these assets as being marketable and gaining value.”

Statistics Canada said this week that household net worth increased by 1.3% in the first quarter to $6-trillion — a fourth consecutive quarter of improving wealth. Household net worth has recovered 96% of what was lost during the recession…

Wealth effect is anything but

Bay Street still betting on July rate hike

Ottawa Citizen- Bay Street economists are betting the Bank of Canada will raise interest rates again in July even though the central bank governor reinforced Wednesday that more hikes are no sure bet as aggressive budget-cutting measures in Europe threaten the pace of global growth.

In a speech in Charlottetown, Mark Carney said “considerable uncertainties” remain in the global economy, and that the paring back of debt among households, banks and countries had “barely begun, and will … temper the pace” of global growth.

The central bank raised its key interest rate by 25 basis points on June 1, based on stronger-than-anticipated domestic growth. Prior to Wednesday’s speech, the betting among economists and traders was for Mr. Carney to increase rates again on July 20.

Mr. Carney, however, appeared to dampen expectations Wednesday, arguing any further removal of stimulus from the strongest Group of Seven economy over the next two years had to be balanced against global developments…

Bay Street still betting on July rate hike

« Previous Page — Next Page »