Daily Market Update

Home ownership now more affordable says RBC
Owning a home in Canada was more affordable in the third quarter of this year according to new stats from RBC Economics. While property prices have continued to rise in many areas there has also been a rise in income. At the same time utility bills have been cut and interest rates have stayed low. The bank’s report also shows that resales continued to increase in October with Calgary, Toronto and Vancouver driving the rise; elsewhere resales have been flat or slightly lower. In the mortgage market RBC says there was a reduction in fixed rates earlier in the year which has added to confidence. The report does come with a warning that next year is likely to see a reversal of affordability as interest rates inevitably rise. Read the full story.
 
IMF says housing market is in for a soft landing
The International Monetary Fund is again warning about Canada’s housing market. It acknowledges that we are likely to see a soft-landing; that’s consistent with the Bank of Canada and federal government’s forecast; however it believes that a sharper crash could still occur without further tightening of lending rules. The IMF estimates that the market is overvalued by between 5 and 20 per cent. The higher end of the market is particularly vulnerable to correction the IMF says. It cautious view of the market includes factors such as a weaker global economy and the low oil price. The IMF is also repeating its view that banks should be taking more risk on residential mortgages with the CMHC reducing its exposure. Read the full story.
 
Baby boomers would be happier not downsizing says expert
A retired academic actuary says that retirees would be happier staying in their houses rather than downsizing to a condo or renting. Rob Brown, formerly of the University of Waterloo says that his advice for retirement is to have as much control over your finances as possible and he believes that the family home, once the mortgage is repaid, offers fairly predictable costs compared with rent volatility or condo maintenance fees. Read the full story.
 
Alberta budget will not be broken by oil price
Alberta’s finance minister says that the province will deliver its core aims and a budget surplus despite the fall in the oil price. While the budget surplus has been revised down to $933 million due to the forecast being made when oil was $92 a barrel, increased population and employment in Alberta is expected to deliver more revenue than last year, totalling up to $17 billion. Robin Campbell says that overall spending for the province will be $44 billion. 

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