By Julian Beltrame (CP) – 11 hours ago

OTTAWA — The Bank of Canada's efforts to spark a rebound in the domestic housing market may be working too well.

A new TD Bank report shows house sales and prices have defied gravity during the severe economic recession and are poised to end 2009 at higher levels than they were before the downturn hit Canada last fall.

Economists credit the central bank's policy of slashing interest rates the past year with reviving a dormant housing market - perhaps too much, too fast - leading to speculation that bank governor Mark Carney may have to reverse course and raise rates earlier than expected.

"We're not calling what we see presently a housing asset bubble," says TD economist Grant Bishop,

"We think it will moderate, but should it fail to moderate, it will no doubt be concerning to the bank."

Talk about exit strategies as the global economy improves has been building for months, particularly since most governments have ramped up spending beyond comfort levels and central banks have cut rates to the bone. Low interest rates, along with a loosening of controls, is largely blamed for the U.S. housing bubble earlier this decade that eventually triggering the global financial crisis.

U.S. Fed officials have recently begun to speculate about the proper time to raise the policy rate from zero, and European Central Bank policy-makers have also sounded more hawkish on interest rates.

On Tuesday, Australia went beyond talk by increasing the policy rate by a quarter point to 3.25 per cent, citing rising home prices in that country as a key concern.

Australia benefits from a resources-based economy that ships many of its products to China, Japan and other Asian countries.

The Bank of Canada has issued what it calls a conditional commitment not to raise its policy rate of 0.25 per cent - the lowest practical level - until at least July, but last week Carney went out his way to stress the pledge had plenty of conditions.

Devoting three paragraphs on the subject in a speech in Victoria, Carney concluded the section by stressing: "In short, it is an expectation, not a promise. If circumstances affecting the outlook for inflation change materially, the conditional commitment would change."

In Europe, the two leading central banks are expected to keep interest rates unchanged Thursday and damp down any talk that borrowing costs will soon rise in the wake of the move by Australia's central bank to lift rates.

Analysts say the European Central Bank, which controls monetary policy for the 16 countries that use the euro, and Britain's Bank of England will keep benchmark interest rates unchanged at historic lows of one per cent and half a per cent.

Unlike Australia, the eurozone and British economies remain in recession, though upcoming figures may show a modest pickup in growth over the final months of 2009.

'We continue to believe the ECB remains very comfortable with notions of keeping the policy rate at a low level for a prolonged period of time," said Royal Bank of Scotland economist Silvio Peruzzo.

'However, the rhetoric is likely to turn gradually more hawkish in recognition of the macroeconomic outlook, which is evolving more positively than the ECB expected," he added.

Copyright © 2009 The Canadian Press. All rights reserved.

If anyone has an Inman subscription I would love to have the full text of the article emailed to me pls.

Here is the link to Inman News, but you do need a membership to view the entire thing:

Inman News

Here is a snippet of the article

Gaming the real estate market

Online Monopoly goes hyperlocal, uses Google Maps

By Erik Pisor, Tuesday, September 22, 2009.

Inman News

Negotiating purchase prices, selling assets, and collecting rent isn't just a part of real-world real estate -- these are key features of Hasbro's Monopoly CityStreets, a new online version of the classic Monopoly board game that incorporates Google Maps as its game board.

"It's definitely a way to learn about real estate cash flow and investment," said Nick Roman, a Realtor with Melbourne, Fla.-based Tropical Realty of Suntree.

On Sept. 9, the day the game launched, about 1.7 million people worldwide attempted to log on and play, which led to server delays and the eventual restarting of the game on Sept. 17, said Donetta Allen, Monopoly spokesperson.

Of those who logged on, a portion included real estate agents like Roman.

"If anything, I thought (the game) would generate a little real estate publicity," said Robert May, a Realtor with Lethbridge Mortgage and Real Estate Info in Alberta, Canada. "I'm surprised they didn't work in real estate advertising and do some geo-targeted marketing," May said.

Both Roman and May began playing on Sept. 9 and quickly exhausted their initial $3 million in Monopoly money to acquire streets within the cities they currently reside, as any street in the world can be purchased and built up with various properties.

While using Google maps as the Monopoly board brings a realistic aspect to the game, the price paid for a street is not.

According to Allen, the value of a street is determined by its length, as the longer a street is the more building potential it has.

For instance, Downing Street in the U.K., home to the prime minister, initially cost $231,000, while Pennsylvania Avenue, which joins the White House and the U.S. Capitol, cost $2 million.

"They're not differentiating between residential and commercial zones," May said, adding the value of a street is also determined by how many lanes it has.

"There are better Web sites they could have used (to determine street values), like a postal or ZIP code system," he continued. ...

Thats all I can read of the article without a subscription, so if anyone has one to Inman news, feel free to post the rest or forward me a copy please.

Just read this great article regarding Canadian credit cards and the rule changes that are coming into effect soon. While I agree that they do not go far enough, it is at least a step in the right direction. This great article was posted on the blog section of yourmoney.ca and was authored by Kerry Taylor. I am going to go back to the site and check out more of their stuff, but for now here is the original article and a link to it as well.

http://blog.yourmoney.ca/2009/10/new-credit-card-rules.html

Do the new credit card rules go far enough?

Paying off your credit card bill just got a little bit easier. Maybe.

On January 1, 2010 a series of new rules will take effect that force banks to clarify payment details on your credit card statement and provide a standard grace period to pay off your plastic.

Under these rules, credit card companies must also give you advance notice of interest rate increases, stop credit limit increases without your consent, and limit debt collection practices.

But you'll have to wait until next September before the biggest change kicks in, when banks must give you a mandatory minimum 21-day interest-free grace period on all new credit card purchases when the outstanding balance is paid in full.

Interest rates and fees still high

Critics of the credit card regulations say the changes do little to help consumers.

"Skyrocketing high interest rates and the growing number of superfluous fees are the biggest hindrances for consumers," said New Democrat MP and consumer protection critic Glenn Thibeault in a statement. "If the government wants to protect Canadian credit card users, it must go all the way and implement substantial regulations that would put a cap on interest rates and eliminate many of the excessive fees that consumers are being charged."

Thibeault proposes that capping credit card rates at five per cent above prime would help "Canadians who are stuck paying interest rates as high as 25%" and would provide better protection from gouging, giving real relief.

Your new statement

Expect your credit card statement to look different in the new year when lenders must add a summary box that describes all fees and shows you how long it would take to fully repay the balance if you only make a minimum payment every month.

For example, under the new rules a summary box may show that a $5,000 credit card balance at an 18% interest rate would take 11 years and two months to pay off if you only make minimum payments. The total interest paid is about $2,873 and the total tab is $7,873.

But you don't have to wait for these new changes to see how interest rates and minimum payments bust your budget. Check out this Credit Card Calculator to get the facts today and see how many years it will take to payoff your balance. Results may shock you.

For more information on the changes coming to your credit card, see the regulations in the Canada Gazette.

There's more to a mortgage than a low rate

by Talbot Boggs
Monday, September 28, 2009provided by

(Special) - Homeowners and buyers are in a rather enviable position these days. Interest rates are at historic lows and the cost of borrowing for a home is about as low as it can get.

That's great news. But it's not the only thing homeowners and purchasers need to think about their mortgage.

There are a number of other features to consider before signing up for a mortgage and what is probably the largest debt that most Canadians will ever take on in their lives.

"When it comes to choosing a mortgage, getting a good rate is just the tip of the iceberg," says Mary Gronkowski, regional sales director with Mortgage Intelligence Inc., a national mortgage brokerage company. "You have to be aware of all the other features that may lie below the surface. All features of a mortgage should fit a homebuyer's personal goals, both now and down the road."

One type of mortgage to consider is an assumable mortgage.

An assumable mortgage means it can be transferred to another borrower. It allows a purchaser to take on your mortgage's terms and payments as part of the sale of your home. With extremely low interest rates today, that could be a big selling feature to a potential buyer in the future.

Given the low rates today, many homeowners are thinking about refinancing their mortgage.

Whether you should refinance your mortgage in a period of low interest rates depends on how much it will cost you to break your existing mortgage compared to how much you will save in interest payments.

If you break an existing mortgage you will have to pay the greater of three month's interest or the interest rate differential (IRD).

An IRD is a penalty for early prepayment of all or part of a mortgage outside of its normal prepayment terms. Usually this is calculated as the difference between the existing rate and the rate for the term remaining, multiplied by the principal outstanding and the balance of the term.

For example, if you had a $100,000 mortgage at nine per cent interest rate with 24 months remaining and wanted to renegotiate your mortgage at 6.5 per cent for 24 months, your IRD would be $5,000 ($100,000 x 2.5% $2,500 x 2 years $5,000).

It may only make sense to refinance your mortgage if the interest rate savings over the remaining life of your mortgage exceed the value of the IRD.

Another strategy is to take a variable rate mortgage. If interest rates go down and you keep your mortgage payments the same, you will be paying off more of your principal with each payment and will pay down your mortgage faster.

Many borrowers are taking advantage of low interest rates by accelerating payments on their mortgages. Many lenders will allow you to double up payments periodically or make lump sum payments of up to 20 per cent of the principal once a year.

You should make sure you understand the size and frequency of payments your lender will allow before you sign up.

Some mortgage lenders will have an option to skip a payment without penalty, which may come in handy in today's economy.

Another option that many mortgages have is portability.

This allows you to transfer your existing mortgage over to a new property, another big advantage if you have a mortgage at current low rates.

Not all portability features are the same, however. Some lenders allow up to 120 days to transfer the mortgage while others allow for only a few days or a week.

"Choosing the right mortgage involves considering where you are now and where you may be three to five years from now," says Gronkowski. "Working with a professional can help you make sense of the many options available to you."

Total New Housing Starts (Seasonable adjusted and annualized)

Source: CMHC Housing Now - September 2009 and September 2008.
This seasonally adjusted data goes through stages of revision at different times of the year.