DURHAM REGION, July 6, 2012 – The Durham Region Association of REALTORS® reported 1,122 sales for the month of June, a 10% decrease from 1248 in May. The month’s sales bring the year-to-date total to 6,065 sales for the first half of 2012. Average selling prices in the region increased … click for more
People who live, work in Durham can have their say
These Durham-specific results will allow the university to prepare locally-based research reports, and offer insight that could benefit community partners and businesses.
“We want to be able to expand this every year so we can see how Durham is doing,” says Dr. Scott.
She hopes the number of survey participants will double this time around.
“The more people who respond, the more likely they are to get the best results that will help our community,” she says.
Last year Dr. Scott was glad to see participation from Oshawa residents, but found areas such as Ajax and Pickering, and especially rural spots such as Brock and Scugog, were underrepresented. Since Durham is unique with both urban and rural dwelling, participation from all over the region would garner the best results.
“Rural folks have different issues than city folks,” she says.
Those without access to the Internet can go to their local library, an Internet cafe or a friend’s place, suggests Dr. Scott.
The survey takes about 20 minutes and is available until Aug. 17 to all people who live and/or work in Durham. Results from last year’s study can be found online too.
Tara Perkins – Financial Services
Globe and Mail
Standard & Poor’s has revised its outlook downwards on seven Canadian
financial institutions, citing high housing prices and consumer debt.
the ratings for Bank of Nova Scotia, Central 1 Credit Union, Home Capital Group
Inc., Laurentian Bank of Canada, National Bank of Canada, Royal Bank of Canada
and Toronto-Dominion Bank, but in each case it cut its outlook from stable to
run-up in housing prices and consumer indebtedness in Canada is in our view
contributing to growing imbalances and Canada’s vulnerability to the generally
weak global economy, applying negative pressure on economic risk for banks,”
the rating agency stated in its decision. “Growing pressure on banks’ risk
appetites and profitability arising from competition for loan and deposit
market share could also lead to a deterioration in our view of industry risk.”
prospects for the global economy added further impetus for the change, because
Canada could see unemployment rise, further constraining income growth. That,
in turn, could make it harder for Canadians to pay off their debts and amplify
the country’s vulnerability to a housing market correction at some point in the
future, the agency said.
outlook recognizes that Canadian banks could see their financial performance
and capital levels hurt by these factors, and could also suffer from stiffer
competition among one another for loans as consumers try to tackle their debt
have roughly doubled over the past decade while, relative to GDP, consumer debt
has risen from about 70 per cent to more than 90 per cent, S&P pointed out.
And it suggested that Ottawa’s actions have not done enough to stem what could
be a significant problem for the economy. “Successive government efforts since
2008 to counteract the stimulative effect of low interest rates on consumer
borrowing and home prices have done less than we expected to counteract the
growing level of consumer leverage and housing market risk in Canada,” S&P
said. The agency is now watching to see if the most recent moves that the
government has made will have better results.
Anil Giga, Special to Financial Post Jul 26, 2012 – 1:17 PM ET | Last Updated: Jul 26, 2012 2:22 PM ET
Bank of Canada governor Mark Carney has been warning about the high level of consumer debt in Canada since 2011, and this advice has been largely ignored.
Canadian consumers’ debt levels today are by any measure higher than they have ever been. The irony is that we are on the cusp of the second phase of the financial crisis that began in 2008 and, this time, Canadians are more vulnerable than Americans or even the Europeans.
We knew the cause of this financial crisis when it arrived in 2008. The previous 20 years, consumers in the Western world had embarked on a spending binge financed by debt.
Consumers piled on unprecedented levels of debt to purchase their homes, investment properties, cars and anything else the banks and credit card companies would finance. Economic reality arrived in 2008, initially in the U.S., and the rest is history.
We do not need to be financial experts to understand that if we keep eating tomorrow’s lunch today, then when tomorrow arrives, there is no lunch. Consumers faced that moment in 2008. The world’s financial system almost went off the cliff. We know how we pulled back from the brink: The U.S. and other economies bailed out the banks and stimulated their economies with trillions of dollars of freshly created debt.
Of course, we never really solve a debt problem by creating more debt, although this is a good Band-Aid that kicks the can down the road. However, now, as we see in Europe (and soon in the U.S.), the governments have too much debt and are finding it difficult to borrow more without paying very high interest rates.
The question that needs to be asked is, who bails out the governments? After 19 economic summits in two years, Europe is still trying to figure this out.
‘It was debt that caused the crisis to begin with and, in Canada, we are happy to ignore the lessons’
And what of the Canadian consumer — what has he been doing while the euro Titanic struggles to stay afloat? China’s response during the economic crisis was to undertake a huge spending binge, building new cities, malls, office towers and condos. This lifted the commodity prices that had crashed and cushioned Canada’s downturn.
We should remember that oil prices had sunk to $40, and the other resources responded in a similar fashion. In a way, this has given Canadians a false sense of security. While house prices have been crashing in the U.S. and Europe, Canadians have gone on a borrowing binge, bidding up house prices to frothy levels completely oblivious of the reality.
Canadians look at the news that emerges daily from places such as Greece, Portugal and Spain as if these events are taking place in a far distant galaxy. Huge austerity measures and 25% unemployment rates in some of these countries have done little to temper the Canadian consumer’s appetite for debt.
It was debt that caused the crisis to begin with and, in Canada, we are happy to ignore the lessons. That is, of course, until the same movie arrives in Canada.
Canadian consumers should be aware that “GREECE R US” will probably arrive by 2014. This is not a prophecy, just economics.
Europe represents almost 25% of the world’s trade, and Europe is in a recession that is getting worse by the day. The U.K. is also in a recession, while the powerhouse economies of China, Brazil and India are decelerating so fast that we can see the skid marks.
Finally, look at the U.S. economy. We see it muddling through with the risks of a recession rising by the day. The International Monetary Fund has once again reduced its growth forecasts and issued the following statement: “Growth in most major economies has showed signs of slowing in recent months, partly due to Europe’s chronic debt crisis and economic malaise.”
This is stating the obvious. So what we have taking place right in front of our eyes is a synchronized global economic slowdown.
The fact this is happening at a time when interest rates are almost at zero in the U.S. and Europe, and that the Western governments are already burdened with too much debt, which limits what they can do, should be a warning sign to everyone, especially the Canadian consumer.
‘Canadians will be going into a very slow economic period, and maybe even a global recession, with unsustainable debt levels’
Here it is in plain English: Every economy we trade with is slowing down, and this will impact us more than most. Why? Because Canadians will be going into a very slow economic period, and maybe even a global recession, with unsustainable debt levels.
The high debt levels will have a magnified effect as unemployment increases during the slowdown, and house prices start to drop from their overinflated valuations.
Our federal government obviously doesn’t get it. In fact, besides tinkering with the mortgage amortization, it has done little to prepare Canadians. So Canadians would be wise to take proactive steps to anticipate and prepare for a crisis that is heading to Canada.
The best thing Canadians can do is go back to the basics of prudence and financial management. Recessions come and go; it is the weak hands that get into trouble.
Here is a checklist:
– Build up a safety nest of at least six month’s expenses.
– Don’t live within your means, live below your means. The bigger the margin, the more you save.
– Get rid of debt. If you have investment properties, consider selling them as soon as possible, as this winter may be too late.
– If you have a mortgage on your home with a floating rate, consider locking in the rate for between three to five years. Similarly, with lines of credit that you cannot pay off. Interest rates may jump without warning.
– Pay off your higher interest rate debt, such as credit cards, first.
– Look for a secondary source of income to increase your safety net, such as a part-time job or by renting out an eligible basement.
– Expect a lot of volatility in the stock markets. If you have money invested in the markets that you may need soon, you shouldn’t be in the market.
– We are entering an age of frugality, so be frugal, but not cheap.
– It would be wise to put off big-ticket purchases and make do with what you have.
– If you are considering selling your home to buy another, make sure yours is sold first or you risk being stuck with two homes and extra debt in an uncertain economy.
– Think twice about quitting your job.
– Reconsider whether you need all the cars you have. Each car has hidden costs.
TORONTO – New mortgage rules go into effect today in Canada but a recent survey suggests many people are unfamiliar with the changes.
Starting today, lenders can only issue home equity loans up to a maximum of 80 per cent of a property’s value — down from 85 per cent.
The maximum amortization period also drops to 25 years from 30 years — giving borrowers less time to repay the debt in full.
A poll conducted by Pollara for Bank of Montreal found only about half of those surveyed were familiar with the changes brought in by the federal government.
And only 45 per cent of those surveyed June 29 to July 4 were aware that the maximum amortization period has been shortened by five years.
Finance Minister Jim Flaherty announced the new rules on June 21.