An evening with Mr. Wonderful
https://www.dropbox.com/sc/5kmh2j4nxoxazuk/itCAuJIftj No introduction required, Mary and I were at a function withKevin O’Leary last week, infamous for his role in Dragons Den and Shark Tank. IronicallyKevin was supposed to be the premier speaker at our national mortgageconference in Vancouverlast November, when at the last minute the sponsor pulled the plug and Kevinwas replaced. The reason, Kevin has entered the Mortgage Broker market, and itappeared the sponsor got nervous about his presence and foray into our market,the same sponsor who has Don Cherry as their spokesperson, go figure. Salient points: I'm not a tough guy. I'm just delivering the truth and only the truth and if you can't deal with it, too bad. I'm not trying to make friends; I'm trying to make money. Money equals freedom, (this is what drives people and what people love to see on Dragons Den). Kevin only invests in products that pay a dividend. Never spend the principle just the interest. When I asked if Finance Minister Flaherty went too far with the Mortgage Rules changes, he agreed but indicated we should all be concerned about the possibility of a Canadian Housing Bubble! Great evening, he is everything that he appears to be,brutally honest, and bottom line driven. Love him or hate him, he tells thetruth!
Bank of Canada maintains overnight rate target at 1 ¾ percent
The Bank of Canada today maintained its target for the overnight rate at 1 percent. The Bank Rate is correspondingly 2 percent and the deposit rate is 1 percent.
The global economy is showing signs of stabilization, and some recent trade developments have been positive. However, there remains a high degree of uncertainty and geopolitical tensions have re-emerged, with tragic consequences. The Canadian economy has been resilient but indicators since the October Monetary Policy Report(MPR) have been mixed.
Data for Canada indicate that growth in the near term will be weaker, and the output gap wider, than the Bank projected in October. The Bank now estimates growth of 0.3 percent in the fourth quarter of 2019 and 1.3 percent in the first quarter of 2020. Exports fell in late 2019, and business investment appears to have weakened after a strong third quarter. Job creation has slowed and indicators of consumer confidence and spending have been unexpectedly soft. In contrast, residential investment was robust through most of 2019, moderating to a still-solid pace in the fourth quarter.
LISTINGS FALL AGAIN TO END 2019, PUSHING PRICES HIGHER
Canadian Real Estate Association data show that national-level home sales fell 0.9% (sa m/m) in December 2019 after rising in the previous nine months. Limited availability looks to be increasingly weighing on sales activity. The month saw another broad-based decline in new listings18 of the 31 centres for which we have data witnessed fallsthat lifted the national sales-to-new listings ratio to 66.9%. It was the highest ratio since 2004 and a third straight month of supply- demand conditions tilted in favour of sellers (after data revisions). Fourteen cities reported sellers market conditions; the rest were balanced. The aggregate MLS Home Price Index (HPI) rose 3.4% (nsa y/y), its best gain since March 2018.
Montreal remained Canadas tightest local market, with rising sales and falling listings leading to yet another record-high sales-to-new listings ratio and the citys steepest y/y MLS HPI gains since 2005. Ottawas ratio also reached a new high as new listings plunged by more than 20% (sa m/m), driving a record 12.5% (nsa y/y) MLS HPI increase. Toronto also crept into sellers market territory for the first time since March 2017as in Montreal, home purchases rose and new listings felland its 7.3% (nsa y/y) HPI rise was the sharpest since 2017.
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Source: Scotiabank Economics