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Robert W. May, Realtor/Mortgage Expert Lethbridge Mortgage & Real Estate Info

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Canadian Real Estate Back on Track

10-08-09
Robert W. May, Realtor/Mortgage Expert Lethbridge Mortgage & Real Estate Info

Canwest news posted the following article today. On the data and opinion of Royal Lepage executives, home prices are back on track. While our boom in Canada was later and not as large as the one experienced in other places, our bust was equally as late and small. As it draws to an end, the economic and real estate data from across Canada is once again solid and positive.

Rebound in house prices doesn't point to boom: Royal LePage.

OTTAWA - Canadian home prices are continuing to recover from the economic downturn, but that doesn't mean the market is heading for a boom, according to real estate group Royal LePage.

Although the economy is climbing out of recession, Royal LePage said the ``increase in sales activity and firming of house prices are the product of a normal market correction and not the beginning of another aggressive expansionary cycle.''

Phil Soper, president and chief executive of Royal LePage Real Estate Services, added that the "economic recession interrupted the flow of the real estate cycle but it is essentially back on track."

``There is the illusion of a boom in the market, but in fact what we are experiencing is the end of a normal, short-term correction,'' he said. ``Once housing supply returns to normal levels, we believe the economy will support low pricing growth into 2010."

© Copyright (c) Canwest News Service
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Time To Buy US Real Estate? Nope, Not Yet.

10-08-09
Robert W. May, Realtor/Mortgage Expert Lethbridge Mortgage & Real Estate Info

Another article in the National Post today pointing out that the $C is rising agains the $US and shows no sign of slowing down. For the past 6 months while the 'experts' were predicting a 90 cent loonie, I have been predicting a $1.25 loonie.

Granted todays rate is closer to their guess, but I still bank on the fact that I will be the one who wins this arguement. I keep having the feeling that a black day on the US financial markets is imminent, all it needs is and excuse to trigger it. It might be an act of war or terrorism, it could be a suprise financial announcement, or maybe even a natural disaster, but I believe the financial markets are on the edge and any sudden negative news will push them over.

Bad news for the US, great news for Canadians. If you are waiting and watching for your chance to jump on some premium US real estate for investment or retirement, now is the time to do your homework. Give me a call and lets talk about some of the options so that you are prepared to jump in when the opportunity presents itself.

The opportunity of a lifetime to snap up US real estate is coming. Will you be prepared to take advantage of it when it hits?

Robert May

TORONTO -- It is a good time to short the U.S. dollar versus the Canadian currency, given its ties to oil prices that have moved back toward the top of a recent trading range, Goldman Sachs said on Thursday.

"This U.S. dollar view could have been expressed against a number of currencies but the Canadian dollar looks particularly attractive given its strong exposure to oil," Goldman Sachs wrote in a note. "Combined with our underlying bullish oil view linked to supply fundamentals, the risks are likely skewed towards CAD outperformance."

The Canadian dollar’s performance is often influenced by the direction in oil prices and other commodities, given the nature of Canada’s exports.

Goldman also said that U.S. fundamentals will not improve sufficiently this year for foreign investors to consider any sizable foreign-exchange unhedged investments in the United States.

Thursday, the Canadian unit was at C$1.0886 to the U.S. dollar, or 91.86 U.S. cents. That is 20% above the four-year low of C$1.3066 to the U.S. dollar, or 76.53 U.S. cents, that it reached in early March.

Goldman also said it does not expect the Bank of Canada to take the highly unusual step of selling Canadian dollars in the market to brake the currency’s rise.

"We are aware that the BOC has recently warned about excessive CAD appreciation, but, at the same time, we doubt Canada as a G7 nation will actively intervene to directly influence the exchange rate near current levels."

© Thomson Reuters 2009

© Copyright (c) National Post
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Canadian Housing Market Strong as Ever

10-08-09
Robert W. May, Realtor/Mortgage Expert Lethbridge Mortgage & Real Estate Info

Housing sales have picked up, partly due to lower prices and partly due to historically low interest rates. This combination is making buyers jump in, hoping they have timed the bottom of the market correctly. Here is an article from today's Globe and Mail...



Housing sales eclipse precrisis level

Steve Ladurantaye

Wednesday, October 07, 2009

Existing home sales haven't just recovered this year, TD Bank says they are better than they were going into the economic crisis.

“No other Canadian economic indicator has rebounded as sharply as sales of existing homes over the last few months,” economist Pascal Gauthier wrote in his Resale Housing Market Outlook.

After declining by nearly a third in the second half of last year, the seasonally adjusted level of sales had climbed 61 per cent higher as of August.

“Not even the 50 per cent S&P/TSX rally since March can match such a robust recovery,” he said.

Much of the rebound can be attributed to pent up demand, he said, although home buyers' appetites will likely be sated by November. The number of listings should continue to rise, however, providing sellers modest price gains through 2010.

The market will change in 2011, he said, as “eroding affordability” begins to weaken demand.

“Meanwhile, supply will have turned the corner and should increase,” he said. “Both factors combined point to an easing in price growth [in 2011].

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Australia First of the G20 to Raise Interest Rates, BIG NEWS

10-08-09
Robert W. May, Realtor/Mortgage Expert Lethbridge Mortgage & Real Estate Info

While this news does not affect us directly in North America, it does send a global signal and should serve as a wake up call for some. Read this breaking news....



The recent history of interest rate hikes

RICHARD BLACKWELL

00:00 EDT Wednesday, October 07, 2009

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Australia's interest rate hike yesterday was said to be the first by a G20 country since the financial crisis began. When was the last rate jump, and by which country?

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The last rate hike among the Group of 20 was in Indonesia, where the key rate was boosted by 0.25 percentage points to 9.5 per cent in early October, 2008.

The Indonesian central bank was trying to take a bite out of rising inflation, even though almost everyone else in the world was cutting rates to try to stem the burgeoning financial crisis.

The previous G20 upward move was at the European Central Bank, which had pushed up interest rates by a quarter of a point in July, 2008, to 4.25 per cent.

When was the last time the Bank of Canada raised rates?

You have to go all the way back to July 10, 2007, when the Bank of Canada boosted the benchmark overnight rate by 0.25 points to 4.5 per cent.

The next change was a quarter-point cut to 4.25 per cent in early December of 2007, and it has been all downward since then. There have been nine more cuts, taking the overnight rate to its current level of 0.25 per cent.

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Where are Canadian Interest Rates Going?

10-08-09
Robert W. May, Realtor/Mortgage Expert Lethbridge Mortgage & Real Estate Info
An interesting article today about the possibility of an interest rate rebound. Not sure I agree entirely with some of the opinion in it, but I always try to be objective about this sort of thing.




House market bubble could bring quick end to low interest rates

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.

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