Housing starts increase in July
There was a modest increase in the number of housing starts in July compared the June according to the latest stats. The figures from the Canada Mortgage and Housing Corporation show that construction began on 189,784 units in July, up from 185,952 a month before. “The trend in construction has increased modestly in recent months due in large part to multiple starts, which have strong variability from month-to-month,” said Bob Dugan, CMHC’s Chief Economist. “Nevertheless, CMHC continues to expect a soft landing for the new home construction market in Canada.” Multiple urban starts in July decreased to 115,870 units while the single-detached urban starts segment increased to 67,062 units. In July, the seasonally adjusted annual rate of urban starts increased in Atlantic Canada and Ontario, and decreased in the Prairies. Modest decreases were also observed in British Columbia and Quebec.
Consumer confidence drops to 7 week low
Householders are paring back their expectations for increases in real estate prices and the wider economy. The Bloomberg Nanos index dropped below its 12 month average at the end of last week and is at a 7 week low. Only last month the index hit a four year high and the forecasts for the housing market were the most positive for six years. So what’s changed? Policymakers expectations of lower growth, geopolitical unrest increasing in the middle east, lower employment growth and more analysis suggesting a slowdown in real estate! While not all of this has happened suddenly in the last month, the raft of cautious notes was bound to affect consumer confidence. Read the full story.
The trio of contenders for title of ‘Canada’s wealthiest city’
While Vancouver maintains its position as Canada’s wealthiest city for now, Toronto and Calgary are not far behind. The latest analysis by Environics Analytics shows that the net household wealth in Vancouver is $710,095 with Toronto on $693,652 and Calgary at $680,377. The game changer could be the rate of wealth growth; Vancouver is up 6.5 per cent year-over-year, Toronto 8.8 per cent and Calgary at 10.8 per cent. Although if these numbers held it would still take many years for Calgary to top the list it shows the narrowing gap in affluence in the three cities. Real estate is even more interesting with values up 2.8 per cent in Vancouver, 6.6 per cent in Toronto and 9.1 per cent in Calgary in 2013. Read the full story.
New homes made affordable – thanks to mom and dad
Those who are hoping to get their first step on the property ladder may have a family discussion about how their parents may be able to help. One option that could be considered is mom and dad selling their house to the adult child, but at a below market price but does this make good financial sense? Accountant Graham Williams says no. As selling a principle residence is tax free, he says parents would be wasting an opportunity to maximise that benefit and suggests an alternative. Parents sell the house on the open market, downsize and use the left over cash to help the kids out. The gift would be tax free or the down-payment could be marked as a mortgage free loan to be repaid on the sale of the house; this loan would not have to be repaid in practice. Mr Williams suggests consulting with an accountant or lawyer to get advice on individual circumstances. Read the full story.