Thursday, September 26, 2013

Toronto seeks incentives to encourage purpose built rental buildings

A shortage of new rental apartments has Toronto considering giving builders a break on development charges if they’ll build rental buildings rather than condos.

Assuming city council gives final approval next month, the development charge on a 2-bedroom unit, whether condo or rental, will rise in phases, from $12,412 now to $21,203 by February 2016.

Development charges boost city coffers by an average of $100 million annually — $150 million last year. Under the changes endorsed Tuesday, the city’s take would rise to the range of $170 million to $250 million a year, depending on development activity.

Over the past decade, only a few hundred rental units have been built each year, in a city whose population is rising by almost 40,000 a year.

Purpose-built apartment buildings have been rare since the advent of rent controls. Rented condos have helped fill the gap, but don't offer the security to the tenant that rental buildings do.

To read the full article on purpose built rental buildings, please click here

Monday, September 23, 2013

Millennials Are Snubbing the Corporate World for Entrepreneurship

Unlike previous generations, for many millennials climbing the corporate ladders isn't a goal they are striving to attain. Indeed, 60 percent are turning their backs on the traditional career path and instead, consider themselves entrepreneurs, with ideas, capital and plans for startup endeavors, according to for-profit Rasmussen College.

Of those still at a "regular" job, 71 percent are pining to quit and work for themselves and 60 percent stated they will leave within the next two years.

While the motivations for branching out into the world of entrepreneurship run the gamut, the No. 1 reason is freedom, followed by ability to choose projects and unlimited income potential.

To learn more about Gen Y and their impact in investing in Ottawa real estate, please click here.

Saturday, September 21, 2013

Inflation slows to 1.1% in August: StatsCan

 Canada's annual inflation rate slowed to 1.1 per cent in August, with the main driver for consumer price increases coming from housing and transportation costs, Statistics Canada said Friday.

The August annual inflation rate was in line with economist estimates and compared with an increase of 1.3 per cent in July.

Statistics Canada said shelter costs were up 1.1 per cent from a year earlier as Canadians paid more for rent and natural gas, offset by lower mortgage interest costs compared with last year.

Rent prices were up 1.7 per cent year-over-year, while natural gas costs gained 9.5 per cent. Mortgage interest costs were down 3.6 per cent.

The price of gasoline was also higher, as was the cost of vehicles, however at a slower pace than in July.
Drivers paid 2.2 per cent more for gasoline while passenger vehicle prices were up 0.6 per cent for August. That compared with July's increases of 6.1 per cent and two per cent, respectively.

The Bank of Canada's core inflation index rose 1.3 per cent for August compared with 1.4 per cent in July.
The inflation rate remains at the low end of the central banks range, which is between one and three per cent with an ideal target of 2.0 per cent.

Overall, Statistics Canada said prices for seven of the eight components that are tracked were up from a year ago.

Food prices were up one per cent in August, compared with a 0.8 per cent increase in July, while the clothing and footwear index rose 2.3 per cent following a 1.5 per cent increase in the previous month.
The household operations, furnishings and equipment catergory was up 1.2 per cent in August, while the recreation, education and reading category gained 0.3 per cent. Alcohol and tobacco prices were up 1.9 per cent.

That compared with gains of 1.3, 0.5 per cent and 2.1 per cent respectively in July.

The health and personal care category was the only one to report lower prices compared with a year ago as the price of prescription medication fell 4.2 per cent. The group fell 1.1 per cent on a year-over-year basis compared with a 0.4 per cent drop in July.

Manitoba saw the largest increase in prices with a year-over-year gain of 2.7 per cent following a three per cent increase in July with higher prices for cigarettes and vehicle registration fees than a year ago.
British Columbia saw prices slip 0.1 per cent compared with a year ago after remaining unchanged in July.

For information about where to invest in the Canadian housing, please click here

For the full article on Canadian inflation rate, please click here

Friday, September 20, 2013

Ottawa light rail transit and it's effect on housing prices

Summary and highlights
 Ottawa transportation improvements will deliver a 10%–20% enhancement of real estate values in the
regions most affected. In the future, these areas will outperform the rest. If the market goes up
everywhere, these areas will increase by about 10%–20%
more. If home values in Ottawa drop, these will
drop by 10%–20% less.
 With the completion of Highway 417 and Highway
7 improvements, real estate prices in key
neighbourhoods will increase more quickly than in other regions of the city due to improved transportation
linkages. Improved accessibility drives real estate demand.
 Values in older and more established neighbourhoods ar
e impacted more significantly than in newer
 In studies of the effect of transportation improvements on real estate in other jurisdictions around the world,
it was found that real estate value increases occur
for properties located within 800 metres of stations on
the new transportation and 800 metres from ex
its on new major highway improvements.
 The areas that will be most significantly impacted
by transportation upgrades are divided in to the ‘Three
Tiers of Impact’.
First Tier:
These are areas that will experience the most
positive impact from the transportation
improvements. These neighbourhoods will feel the twin impa
ct of highway improvements and new rapit transit
access: Hampton Park, Wellington West, Hintonburg, Centretown, Downtown, Old Ottawa East, Sandy Hill,
Hurdman’s Bridge, Overbrook, Eastway Gardens, Cyrville, and Pineview. 
Second Tier:
Areas which will also feel a strong positive
impact with one of the major improvements
significantly increasing long term demand: Carlet
on Place, Arnprior, Champlain Park, Island Park,
Mechanicsville, LeBreton, Lowertown, Byward Market, D
ale Park, Riverview Park, McArthur, Cardinal Heights,
Qualicum, Bayshore, Redwood, Parkway Park, Whitehav
en, Queensway Terrace, Bel Air Park, Glabar Park,
Braemar Park, McKellar Heights, Carlington, Laurentian
View, West Centre Town, The Glebe, Robinson Field,
Beacon Hill South, Gloucester, Convent Glen, Orleans
, Sheffield Glen, Kanata, Stittsville, Huntley. 
There may be negative effects (nuisance, property crime, no
ise, increased traffic, etc.) on properties located in
the immediate vicinity of many stations

Please click here for full details

For more information on INVESTING IN OTTAWA REAL ESTATE, please click here

Pop Go the Home Sales...For Now

By: Douglas Porter, BMO Chief Economist
TORONTO 2013-09-16

Canadian existing home sales rose a seasonally-adjusted 2.8 per cent in August, and are now up a meaty 11.1 per cent from year-ago levels. Sales were a snick below our expectations due to weakness in Quebec and some Atlantic cities, but the lead story here of course is the double-digit gain in sales and the impressive price increase. There are two important factors that help explain the showy year-on-year sales gain: 1) it’s an easy comparison, as year-ago sales were at a low ebb following the new mortgage insurance rules, and 2) summer sales were no doubt juiced by potential buyers jumping in with pre-approved mortgages before rates went higher. Still, suffice it to say that next to no one predicted a big mid-year bounce in home sales at the start of 2013, when calls for Canadian housing market calamity were all the rage. Contrary to the Greek chorus of woe, sales are now above their 10-year average in seasonally adjusted terms.

And, the year-ago comparisons will remain quite easy for the next 8 months, so settle in for a spell of potentially solid yr/yr figures even if sales do simmer down notably in coming months. While the sales figures have been up and down like a yo-yo over the past year, prices just keep quietly churning ahead. The national average transaction price was up 8.1 per cent y/y, though this measure has been skewed higher by the unusual fact that the five most expensive markets in the country just happened to see the five biggest yr/yr sales increases last month. (In order of price: Vancouver, Toronto, Fraser Valley, Victoria, and Calgary.) Note that the 26-city median city price was up 4.1 per cent y/y, and the more representative MLS HPI was up 2.9 per cent y/y, to a record high. Of the 26 largest cities, 23 reported a single-digit rise over the past year.
The big event has been the snap-back in sales activity in Vancouver, a market that was all but written off by the housing bears. Sales are now up a massive 53.1 per cent y/y and closing in on the 10-year average. But even with that nifty recovery, Canada-wide sales for all of 2013 look on track to dip slightly from last year’s level. Only 6 of the 26 cities reported sales increases for the first 8 months of the year (including Vancouver), led by a 10.5 per cent rise in Calgary.

BMO Economics report:
  • Sales are now above their 10-year average in seasonally adjusted terms
  • The national average transaction price was up 8.1 per cent year over year, though this measure has been skewed higher by the unusual fact that the five most expensive markets in the country experienced the five biggest year-over-year sales increases last month
  • Regionally, the big event has been the snap-back in sales activity in Vancouver – sales are now up a massive 53.1 per cent year over year. 
  • “Even with that nifty recovery, Canada-wide sales for all of 2013 look on track to dip slightly from last year’s level,” stated Doug Porter, Chief Economist, BMO Capital Markets.  “Only six of the 26 cities reported sales increases for the first 8 months of the year – including Vancouver – led by a 10.5 per cent rise in Calgary.”
BMO Housing survey:
  • 68 per cent of Canadian home owners say they are aware of their home’s market value within a few thousand dollars, four-in-ten (38 per cent) feel their home is worth more
  • First Time Buyers: Report shows first-time buyers more likely to enter a bidding war than the average buyer

Thursday, September 19, 2013

Tommy Smythe does Ottawa: Effervescent HGTV designer headlines Home & Design Show

OTTAWA — You may have to eat noodles for a couple of weeks, says Tommy Smythe, but if saving money on food means you can afford a top-end sofa, then tighten your belt and go for it. Your stomach won’t thank you, but your home will for years to come.

Smythe, best known as the effervescent designer and co-host of HGTV’s popular home-improvement shows Sarah 101 and Sarah`s House, is the celebrity designer and one of several experts presenting seminars at this year’s Ottawa Home & Design Show Sept. 27 to 29.

The fifth annual show at the Ernst & Young Centre in Ottawa’s south end features over 150 exhibitors offering home-improvement products, services and design ideas.

The bow tie-loving Smythe points to his own homes — he seems to move almost as often as most of us brush our teeth — as an example of buying high-quality furnishings for the long run.

“Examine old photos, and you’ll see I use the same pieces of furniture again and again. Authenticity and quality are really important.”

In his Ottawa seminars (he presents twice on Saturday and once on Sunday), Toronto-based Smythe will speak about when to splurge and when to be frugal in decorating your home, as well as how to create layered, personalized spaces by mixing decor.

As an example of the latter, he suggests blending classic and contemporary: “Art deco can really dovetail well into a very contemporary environment, a minimalist environment.”

For drama, put a black velvet or emerald green couch against a contrasting white wall hung with dark artwork.

The key is to ensure your home tells your own story, he says. Don’t be shy about using furnishings and accessories that are precious to you, items that “are about your life, your travels, your interests.” Adding a sprinkling of new, contemporary accessories helps freshen up those older, personal items.

Encouragingly, Smythe says everyone has a sense of style: It just needs to be given the freedom to stretch and explore.

While he’s big on the democratization of style, the chatty designer is less enthusiastic about many of the condos being built.

He says that while touted as “minimalist,” the units actually have little architectural pizzazz and may be built with lesser-quality materials.

His solution is to first strip out builder-supplied backsplashes and light fixtures, replacing the latter, for example, with vintage or high-quality contemporary items.

“Then you start to have an envelope that will support really great furniture and really beautiful artwork.”

Speaking of condos, other seminars at this year’s show include tips on buying and decorating them from 
Ottawa’s condo queen, realtor Marnie Bennett.

Candice Batista of television’s The Marilyn Denis Show will offer room-by-room strategies for living green.
Homeowners with basements that aren’t living up to their potential should catch the seminar by Norm Lecuyer, lead designer & owner of Ottawa’s Just Basements. His firm has created intriguing spaces in this often difficult-to-design space.

Other presentations cover everything from hiring a contractor to green roofs and solar energy.
Also on tap: rooms, each with a different design perspective, created by celebrity designers Glen Peloso, Joe Ruggiero and Yanic Simard. The threesome won’t be on-site, but there will be videos by each explaining their design processes.

As always, there’s a wealth of exhibitors. They range from kitchen and bathroom specialists to renovators, solarium and sunroom suppliers (something to consider as winter edges closer), and roofing companies.
New exhibitors this year include Cornwall-based Neo Vintage Furniture. The retailer specializes in the chic industrial look including bright red and yellow dining room chairs and wood-and-metal side tables. Its website ( also features hip decorative items such as mounted industrial gears starting at $19.99.

The recently established Urban Shed Company ( is also on hand. The Glebe-based business sells outdoor storage units such as bench lockers to house recycling boxes, garden planters and custom hutches and sheds.

Designed with a particular eye to the space limitations of urban homeowners, the products are made of western red cedar and other woods. Colours like brick red and blue-greys match those found in the Glebe and other heritage areas.

The Ottawa branch of Luxe Interiors is also exhibiting for the first time at this year’s show. The store on Carling Avenue carries stylish home furnishings, rugs and accessories including elegant Stanley furniture. The business also has an in-house design team.

Home & Design Show
When: Sept. 27 to 29
Where: Ernst & Young Centre, 4899 Uplands Dr.
Hours: Friday, noon to 9 p.m.; Saturday, 10 a.m. to 6 p.m.; Sunday 10 a.m. to 5 p.m.
Admission: $12 (children under 12 free); parking $7.

Great advice from Don Campbell of REIN

Last week I sent you a link to an interesting letter I wrote, hope you spent 5 minutes reading it...if not, Read it HERE now.

You know, I'm asked all the time why I invest in real estate...why am I 'biased' towards this asset class.

Truth: I have money in the stock market, I lend money at ridiculous interest rates privately, I have a few hobby farms, some new warehouses, a bit of commercial/light industrial...but I still LOVE my residential properties; they're my bread & butter and they've made me a lot of money (and still do).

So stick with me for 5 minutes, you'll like this.

Let's go through some super simple math you might have missed from my letter above...and the reason why residential real estate is so cool.

Let's say you go out and buy a single property TODAY for $300,000 (call it a suited house) and based on your conservative numbers, this property does nothing more than break even every month (and we're buying in a stable, well-performing market based on the fundamentals).

No cash flow, just break even.

Then we're going to assume that the market will stay flat forever. We both know the market will go up, it will go down, but assume that over the next 20 years those ups and downs equate to a FLAT's still worth $300,000 in 2033.

Still with me?


Now over that 20 years the property just breaks even, nothing more, nothing less. Sure we've been up some months, but we've had some repairs & maintenance, some, over those 20 years we just break even.

Some would call this a boring piece of real estate...even a 'non-performing' piece of real estate.

Call me crazy, but guess what, I call that a $900 a month savings plan that someone else (called my tenants) paid for .

That's right, after 20 years of holding this 'non-performing' piece of real estate I'm left with the equivalent of someone giving me $900 every single month for 20 years...I call that one heck of a savings plan.

Tell me, do you put $900 away every month right now? Maybe...but that's still YOUR money, money you had to work hard for!

I'm talking about $900/month that someone gave me for the last 20 years, and it's mine...all from an unexciting, 'non-performing', piece of residential real estate.

Want the math?

OK. So I bought for $300,000, I put 20% down plus closing costs, so roughly $65,000.

In 2033, 20 years from now, I sell it for the exact same price...$300,000.

I get my $65,000 investment back.

I pay the Realtor and closing costs and I'm left with roughly $215,000.

That's no cash flow, that's no appreciation, that's simply my tenants paying down my mortgage (both principle and interest) for the last 20 years and leaving me with a free and clear property.

So $215,000 divided by 20 years = $10,750 per year

Divide that by 12 months = $896/month...that someone else gave me.

Sure we can calculate opportunity cost for your $65,000 investment, but tell me, would you be even mildly happy if someone, some stranger, was contributing even $500 a month into a savings plan for YOU & YOUR FAMILY for the next 20 years????

That's like someone else contributing to your RSP fund every month. You OK with that??

Of course!

Go ahead, poke holes in it if you want...

"Don, no one gets a 20 year mortgage!" OK, you're crazy if you think my investment properties aren't paid off in 20 years...and no, I don't kick in more money from my wallet to do so!

"Don, what about a the roof, the furnace, etc???"

You're absolutely right.

But let's be serious, over the next 20 years do you think my rent is going to go up or down? Do you think my property will be worth more or less in 20 years buying in a fundamentally strong area?

Heck, even WHEN interest rates go up, guess what? So will my rent!

Folks, this is a no-brainer.

You can spend the next hour tearing this apart, telling people this Campbell guy is full of #$%...

OR maybe...just maybe, this makes sense.

Bottom line - real estate is's just not easy!

And we're not talking get rich quick, we're not talking some 'sexy' investment strategy that 0.1% of investors ever pull off, just a simple old piece of real estate that you rent out and maintain for 20 years that YOU have 100% control over!

IT'S SIMPLE - I invest $65,000 to make $215,000 (before tax)...I'll take that all day long, and that's ONE PROPERTY.

Now imagine if you bought 10 properties just like that over the next few years (which isn't rocket surgery). 

More truth...every single property I have like the example above, cash flows. Maybe not crazy cash in the first few years, but they cash flow (not break even).

And ALL the properties that I've sold were worth more when I sold than when I bought them.

It's the power of leverage, the power of having control of your investment, and the power of being in the business of putting a roof over someone's head (a business that ain't going anywhere any time soon!!!)

Think about it, read this note a few times, this stuff works.

Next week I'm going to share some of my favorite personal strategies for taking properties like the 'non-performing' one above and making them kick out cash every month.

To Your Success,

Don's signature
Don R. Campbell
REIN™ Senior Analyst

Learn about real estate in Ottawa, please click here

Lamphier: Hot air can’t bust a housing bubble that doesn’t exist ... why ... Simple demographics

EDMONTON - If I’ve read one story about a possible U.S.-style housing bust in Canada, I’ve read a hundred.

Indeed, the Toronto-centric national media, whose world view apparently extends from the Don Valley Parkway to Highway 427, seem absolutely obsessed by the topic. Barely a week goes by without another breathless warning from some Toronto economist, columnist or TV news anchor about a looming price collapse.

It’s complete nonsense, in my opinion. For starters, there is no national housing market. Prices vary wildly from place to place, and always will. So while Toronto or Vancouver look pricey, many other cities — including Edmonton— simply don’t.

Of course, I’m just a newspaper scribbler. But when one of the world’s top economic forecasters says the gloom and doom crowd is out to lunch, well, that’s not as easy to dismiss.

Stefane Marion, chief economist and strategist at Montreal-based National Bank, was recently ranked among the top 20 forecasters in the world by U.S.-based Bloomberg Markets magazine. He’s the only Canadian to make that prestigious list.

In Marion’s view, those who insist that Canada’s house prices are “bubbly” — as Britian’s Economist magazine recently argued, and as The Globe and Mail dutifully reported — simply don’t understand what drives housing in the first place.

It’s simple demographics, he says. Canada’s population grew by 1.2 per cent in 2012, versus just 0.8 per cent in the U.S., and 0.2 per cent in the eurozone. Japan’s population, on the other hand, has shrunk for six straight years.

The big reason? Immigration. Newcomers accounted for fully 60 per cent of Canada’s population growth last year, he says, far more than the U.S. or Europe.

What’s more, 55 per cent of those newcomers are between the ages of 20 and 44, when many are launching careers, getting married, starting families, and yes, buying new homes.

Japan is at the opposite end of the spectrum. Its aging population, low birth rate and aversion to immigration curbs demand for housing. Yet the same Economist article that slammed Canada’s housing market as bubbly argues that Japan’s house prices are “undeservedly flat,” Marion says.

“If you don’t have household formation where are your home prices going to go? That’s the key right there. That’s where Canada really, really is different from other countries,” he says, notably in high-growth provinces like Alberta.

“It does explain why the new housing market or home resale market in Alberta seems to be so tight all the time. This is key. Household formation is just surging,” he says. “So it fascinates me that we have economists coming out and taking a shot at Canada and not taking that into account.”

That was one of several key insights Marion offered to local bank clients and advisers at a packed luncheon that was organized by Angus Watt, managing director, individual investor services at National Bank Financial.

Marion’s generally upbeat outlook for the Canadian and Alberta economies jives with the positive tone of Bank of Canada governor Stephen Poloz’s latest comments.

“We are now close to the tipping point from improving confidence into expanding capacity,” Poloz told a Vancouver Board of Trade audience on Wednesday.

Looking ahead, Marion says he expects those demographic trends to continue over the next five years. In the key 20-to-44-year age cohort, he expects India to lead all nations in population growth, at seven percent, followed by Canada, at four per cent. On the flip side, countries like Germany, France, Italy, Russia, China and Japan will show marked declines.

“Alberta would be just behind India, at six per cent. So that shows you how potent this growth is for Alberta. Alberta actually has the dynamics or properties you’d normally see in emerging economies.”

Turning to the oil markets, Marion says despite declining U.S. consumption, falling imports and soaring production — up an astounding 47 per cent in the U.S. since 2006 — Canada’s exports south of the border remain strong.

The biggest loser? OPEC, whose share of U.S. imports has declined from 55 per cent in 2008 to just 46 per cent last year, he says.

“By next year the U.S. will produce as much crude as it did in the 1980s, so we have to cope with this energy revolution in the U.S. . . . but Canada is shipping as much oil and petroleum products to the U.S. as all of OPEC put together. I never thought this would happen anytime soon, so that’s a big, big deal.”

As for TransCanada’s proposed $12 billion Energy East oil pipeline, which would carry Alberta bitumen to refineries in Quebec and New Brunswick, Marion says the potential economic upside for Canada is big, since it would displace higher-priced Brent crude imports from unstable countries like Algeria, Kazakhstan and Angola.

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Is this the Animal Instinct trigger we are looking for ....

Ford gets investment boost from Ontario, Ottawa

The federal and Ontario governments will contribute about $135 million to an investment Ford Motor Co (F-N 17.66 0.04 0.2%) will make in its Oakville, Ont., operations that will secure the future of the company's only Canadian assembly plant and 3,000 jobs into the next decade.

Ford will spend between $675 million and $725 million to retool the Oakville plant, which will assemble mid-sized crossover utility vehicles for North American and global markets, said sources familiar with an announcement scheduled to be made on Thursday by Ford executives and senior government officials.

The auto maker has been negotiating with the two governments for more than two years on the future of the Oakville factory, which occupies a prominent location in Ontario's industrial heartland.

The contributions by the two governments underline the importance of the auto industry and its high-paying jobs and what appears to be a commitment by Ottawa and Ontario to try to retain existing assembly plants, where every job generates an estimated 10 more spin off jobs throughout the broader economy. The government contributions to the Ford plant represent about 20 percent of the total investment.

The auto industry is a particularly crucial part of the Ontario economy, which is home to all of the vehicle assembly plants in Canada and most of the 150,000 jobs in assembly and parts manufacturing. Vehicle manufacturing and auto parts represent about 2.4 percent of the province's gross domestic product directly and as much as 10 percent when the contribution of other industries such as steel making, transportation and warehousing is included, according to Bank of Montreal estimates.

Although the two governments contributed more than $13-billion to the bailouts that saved Chrysler Group LLC and General Motors Co (GM-N 37.23 -0.35 -0.93%) from liquidation during the 2008-2009 recession, Ontario has been watching enviously since then as billions of dollars of investment by Ford, its Detroit rivals and other global auto makers flooded into the United States and Mexico.

The U.S. and Mexico investments, some of which involve the construction of new plants in Mexico, were also aided by government subsidies.

The plan to redevelop Oakville represents one of the largest single investments Ford has made since the end of the recession, which the company weathered without going into Chapter 11 bankruptcy protection and without bailouts by Washington, Ottawa and Ontario.

A study done on Ford's Michigan Assembly Plant in Wayne, Mich. by the Center for Automotive Research, an industry think-tank in Ann Arbor, Mich., shows that Ford invested $8.9-billion US at its U.S. and Canadian operations between 2010 and May 2012. Since then, it has also spent $555 million to add production of Fusions at an assembly plant in Flat Rock, Mich.

The investment in Oakville will enable the company to assemble the Ford Edge and Lincoln MKX crossovers on a global platform that also serves as the base for the mid-sized Ford Fusion and Lincoln MKZ sedans and is expected to be extended to other new vehicles.

Production of the current versions of the Edge and MKX will end late next year and assembly on the new platform will begin early in 2015, according to industry consulting firm AutomotiveCompass LLC of West Chester, Penn.

Assembly of the current versions of the larger Ford Flex and Lincoln MKT crossovers will continue on their current platform through 2018 and production of Edge and MKX will rise as the two larger vehicles are phased out.

From Greg Keenan, Globe and Mail


Wednesday, September 18, 2013

Stephen Poloz: Canada close to ‘tipping point’ for business investment

 Interesting read below, Stephen Poloz has some great quips, like his reference to the economy and spagetti sauce and boats.

Basically, Mr Poloz, thinks the Canadian economy is primed to move forward, it needs a catalyst, to move forward.  In economic terms, the term is "animal spirits".  Animal spirits is the term John Maynard Keynes used in his 1936 book The General Theory of Employment, Interest and Money to describe the instincts, proclivities and emotions that ostensibly influence and guide human behavior, and which can be measured in terms of, for example, consumer confidence. It has since been argued that trust is also included in or produced by "animal spirits".

That catalyst is likely to be Canadian businesses increasing their confidence in the US economy, increasing hiring and buying new equipment to service the massive US marketplace.

OTTAWA — Stephen Poloz is confident the Canadian economy will soon return to “natural growth,” and on Wednesday, he set out the course — in his colourful manner, including a reference to a boat on spaghetti sauce — that the country needs to follow to get there.

“I anticipate that the Canadian economy will normalize and growth will become natural, in contrast to the economic activity of the past six years, which has been fuelled by policy, including record-low interest rates,” the Bank of Canada governor said in the text of a speech being delivered in Vancouver.

“Natural growth will be self-generating and self-sustaining, and the economy will be growing at its potential, as its productive capacity expands,” Mr. Poloz told the Vancouver Board of Trade.

“New ideas, new products and new ways of producing them are often the seeds of new companies,” he said. “New companies create new jobs, which create new incomes, which get spent creating a virtuous circle of self-sustaining growth. That’s what makes it natural.”

Improved trade and investment with the U.S. is most critical for Canadian business operators, who have been cautiously looking south of the border and waiting for things to pick up and stay up before spending additional money on new equipment and additional staff.

That’s a situation that Mr. Poloz has addressed in the past and he did so again on Wednesday.

“Understandably, Canadian firms have been reluctant to add new capacity until the U.S. economic recovery gains traction and is more certain,” he said in his Vancouver speech.

“However, once there is a shift in sentiment, research shows that business decision-makers tend to react and move forward very quickly with their investment plans. Economists call this ‘animal spirits’ because it is very hard to predict.

“Evidence suggest we are now close to the tipping point from improving confidence into expanding capacity.”
The newly minted Bank of Canada governor has quickly gained a reputation for using colourful descriptions for often boring and complicated economic trends.

And Wednesday was no exception.
“… It’s important to make the distinction between policy tightening and a slowing of the rate at which additional stimulus is being provided,” he said.
“I sometimes use a spaghetti-sauce model to help explain this. When the bubble burst in 2008, we were left with a crater, which is where we now find ourselves. If you look carefully at a pot of simmering spaghetti sauce, under every bubble there is a crater that’s equal in size,” he explained.

“So, a seven-year bubble, a seven-year crater. Central banks have been filling that crater with liquidity, so we can row our boats across it. We need to make sure we’re getting to shore and not just hitting a rock.”
Mr. Poloz spent more than a dozen years at the Bank of Canada before going into the private sector. Most recently he was the president of Export Development Canada, the Ottawa-based arms-length government credit agency for business investment.

Mr. Poloz now has two speeches under his belt since taking over from Mark Carney in June.

He is scheduled to hold a news conference at 12:20 pm ET in Vancouver, the second time he has faced reporters’ questions during a tenure that has been marked by cautious public steps as he attempts to set his own monetary tone.

But in just over three months, the governor has treaded softly as Canada struggles to find a firm economic footing after an impressive initial rebound from the 2008-09 recession. The country’s efforts to regain traction have been compromised by events outside Canada — mostly in the European Union and the United States, our two biggest trading partners, where signs of sustainable growth are only now beginning to take root.

Mr. Poloz’s Vancouver address will inevitably be overshadowed later on Wednesday by events taking place in that same economic elephant to the south.

U.S. Federal Reserve chairman Ben Bernanke is expected to announce the globally anticipated tapering of the central bank’s $85-billion-a-month bond-buying policy, referred to as quantitative easing.
The Fed’s benchmark interest rate is near zero and Mr. Bernanke has pledge to keep it there until the U.S. jobless rate — now at 7.3% — drops to 6.5%, a though he may announce Wednesday that he is cutting that target to 6%.

Signs of an improving U.S. economy have pointed to a reduction in QE anywhere from $10-billion to $15-billion.
In Canadian, policymakers have kept their key lending rate at 1% since September 2010. Most economists don’t expect that to change before late 2014.

Mr. Poloz “has continued an interest in speaking on big days for Federal Reserve policy decisions that his predecessor started,” said one analyst.

“One might assume it’s a scheduling fluke . . . but it naturally invites a discussion on the limits of central bank independence.”

Financial Post -  |

Monday, September 16, 2013

How to keep your home's purchase price a secret

Clients often ask whether I can keep the price they are paying for their home off the title record. The main reason is for privacy. They don’t think it is anybody’s business but theirs.

You can do it if you pay the land transfer tax in advance. The tax is usually paid by your lawyer, but you can do it yourself. If that’s the case, you must include these documents with your request:
  • A cover letter from the lawyer;
  • A copy of the original agreement of purchase and sale;
  • The draft deed to be registered on closing;
  • A copy of the statement of adjustments;
  • Three signed land transfer tax affidavits; and
  • A certified cheque payable to the Ministry of Finance for the amount of land transfer tax owing.

  • The Ministry will then provide your lawyer with a special code to be entered on closing, to confirm that the land transfer tax has already been paid. The Ministry suggests that all material be sent three weeks in advance of closing to make sure it is completed in time. I’ve found that if you go in person to the Ministry office, you should be able to obtain the code that same day. The GTA location is the Ministry of Finance offices, Land Taxes department, 33 King St. West in Oshawa L1H 8H9.

    If the house is in Toronto, you will also have to pay the municipal Land Transfer Tax. In order to pre-pay this tax, there is a similar process that must be followed but you have to send the material to a different location. In Toronto, take the same material noted above, together with the City of Toronto land transfer tax affidavits and send to the City of Toronto Revenue Services, Municipal Land Transfer Tax, North York Civic Centre, 5100 Yonge St., Lower Level, Toronto M2N 5V7.

    The cheque is payable to the Treasurer, City of Toronto. A similar code will be given to enter on closing confirming that the tax has been paid in advance. If you are in a hurry, go in person with the documents and the certified cheque and you should be able to get the code that day.

    If you are a first-time buyer, you are still eligible for the land transfer tax rebates and can deduct them from the amount payable for the tax. So for example, if this is your first home and it costs $300,000, the Ontario Land transfer Tax would be $2,975, but the rebate is a maximum of $2,000, so you would only pay $975.

    If the property happens to be in Toronto, the Municipal Land Transfer Tax is $2,725, but since the maximum rebate is $3,725 in Toronto, no tax would be payable in the above example.
    In all cases, what will show on your title after closing is either zero or $2 for the price paid. If you do want to take advantage of this, make sure that you speak to your lawyer in advance of closing so that the proper material can be prepared.

    Mark Weisleder is a Toronto real estate lawyer. Please click here for the full article

    Andrew Coyne: Canadians aren’t getting the whole story on the economy

    Excellent read here about the true story of the Canadian household debt and net worth.  Interesting stuff indeed!


    I have not, I see many more head lines like, "CANADIAN HOUSEHOLD DEBT-TO-INCOME RATIO HITS RECORD HIGH".

    Another interesting tidbit to take away ....
    Of course, even if your assets exceed your debts, you still have to make the payments. But here again, debt-to-income doesn’t tell the whole story. You also need to know what interest rate you’re paying on the debt: it’s the combination of the two that dictates how much you pay every month. These figures, too, are readily available: the Bank of Canada calculates a “housing affordability index,” measuring mortgage payments, principal and interest combined, against disposable income. What does it show? At a ratio of less than 26% (as of the first quarter of this year) it is lower than it has been at virtually any time over the last 30 years — half what it was in the early 1990s, a third of its level in the early 1980s. But no, you haven’t read that anywhere, either, have you?

    Is youth unemployment the issue we are facing?
    Elsewhere I’ve pointed out that, contrary to everything you’ve read lately, poverty is declining in Canada, median incomes are rising, while inequality is steady or even falling. Again: these figures are easily available. But the same applies to a range of other data. How many stories have you read about youth unemployment (“Canada’s Youth Face Job Crunch” ), now at 14%? How many told you that that is in fact rather lower than it’s been at most times in the last 40 years?

    Fascinating stuff and a good read to boot - Please click here to read Andrew Coyne's complete article

    Canadian Housing and Mortgage Corporation speaks on housing starts in Ottawa

    “Seasonally adjusted housing starts firmed once again in August following strong July building activity.  Single-detached construction regained somewhat the ground lost since 2012 while row starts revitalized. On the other hand, apartment construction retreated but remained at a healthy level. This resulted in a more even split in construction shares between single, row and apartment construction.”

    said Sandra Perez Torres, CMHC Senior Market Analyst for Eastern and Northern Ontario.

    Wednesday, September 11, 2013

    Investing in Farms, worth it ....

     Buy land. They ain't making any more of the stuff. - Will Rogers

    The price of a plot in and around North Gower, Ont., south of Ottawa, has more than tripled since the height of the Great Recession.

    Farm prices nationally have risen an average of 12 per cent a year since 2008, according to Farm Credit Canada (FCC), a federal Crown Corporation and the largest lender to Canadian farmers. That’s more than twice the average of the five years from 2003 through 2007, and several times faster than the corresponding rise in home prices over the same period.
    In Southwestern Ontario, prices have jumped 30 to 50 per cent a year in some counties, according to a recent report by real estate appraiser Valco of London, Ont. The average annual increase since 2010 is 25 per cent across a region where the long-term average is just 3 to 5 per cent.

    Farm prices nationally have risen an average of 12 per cent a year since 2008, according to Farm Credit Canada (FCC), a federal Crown Corporation and the largest lender to Canadian farmers. That’s more than twice the average of the five years from 2003 through 2007, and several times faster than the corresponding rise in home prices over the same period.

    Please click here to read the complete article

    Canada's economy - Stable and Predictable

    The Economist Intelligence Unit considers Canada the best country in the G-7 in which to do business over the next five years.

    “ We’ve been committed to Canada and investing here for 100 years and our goal is to continue expanding this strong presence for the next 100 years. ”
    Robert Hardt, President and CEO, Siemens Canada
    Canada boasts a diversified economy, a broad resource base and a stable banking and tax environment. Between 2008 and 2011, the country led the G-7 with an average real GDP growth rate of 1.0 percent and is now expected to be among the top G-7 performers through 2016.
    • Canada has the world’s tenth-largest economy and second-largest proven reserves of oil, and is the third-largest producer of natural gas.
    • Moody’s ranks Canada’s banking system number one in the world for financial strength . For the sixth consecutive year, the World Economic Forum rates Canada’s banking system as the world’s soundest. During the global financial crisis, no Canadian bank or insurance company failed or required bailouts.
    • More than 100 projects valued at $1 billion or more each, in oil-and-gas, mining and primary metals, have been announced for the 2012–2020 period.
    • Canada shares a border and one of the world’s largest and most stable commercial relationships with the United States .
    • Sailing times from Canada’s Atlantic and Pacific deepwater ports are up to two days shorter than from other North American ports.
    • Canada’s economy was the first among G-7 nations to recoup the employment losses recorded during the global recession.

    Please click here for the release from Department of Foreign Affairs

    Sunday, September 8, 2013

    Best renovations for return on investment

    According to a new report from and BMO, the top home renovation tips for sellers are:
    Renovation Hit list:
    Painting: When done well and with taste, applying a fresh coat of paint to the interior or exterior of a home is a simple way to realize gains on your renovation investment.
    Return: As much as 300 per cent.
    Kitchen remodeling: A kitchen renovation can be one of the most costly home improvement projects. However, careful planning, budgeting and shopping will help minimize expenses. Consider aspects such as whether or not the project is in line with the style and quality of the rest of the house and neighbourhood.
    Return: 68-120 per cent.
    Bathroom addition/remodeling: A bathroom addition should be a top priority for those looking to add value to a home with only one bathroom. This is particularly true if neighbouring homes feature multiple bathrooms. Additionally, upgrading an outdated bathroom will also bring significant value to a home. Return: 80-130 per cent; 65-120 per cent respectively.
    Window/door replacement: Replacing inefficient windows or doors can be an excellent use of your home improvement dollars, as they refresh the esthetic and also help to keep energy costs down. Stick to standard styles; odd shapes and highly customized arrangements do little for resale value.
    Return: 50-90 per cent.
    Deck addition/improvement/expansion: Decks are one of the few exterior improvements with any significant return, apart from painting.
    Return: 65-90 per cent.

    Bank of Canada should hike rates if worried about housing: Scotiabank

    Bank of Nova Scotia’s chief executive officer Rick Waugh said the Bank of Canada should raise its rates if the central lender is concerned that housing prices are rising too quickly.
    Mr. Waugh stressed that higher rates would be the most effective way to tame housing prices now that regulators have reined in mortgage amortization periods and taken other steps to prevent a property market bubble. Scotiabank’s leader added that he doesn’t see a hard landing for real estate.
    I think the problem with this, is raising rates would increase foreign investment in Canada and would cause the dollar to rise.  A rising dollar would hurt the manufacturing sectors and the gross exports.  This is a fine line  the Bank of Canada has to walk and their attempts at changing ammortorization lengths and such things are to slow the housing markets, but leave the interest rates alone.

    Jobs report – North and South of the Border

    Employment gains were experienced in Canada in the month of August.  Employment increased by 59,000 in August, mainly in part-time work, and the unemployment rate declined 0.1 percentage points to 7.1%.

    The US job report was mostly average with 169,000 jobs created and unemployment dropping to 7.3% but jobs were in lower income sectors and participation in the work force dropped.

    Thursday, September 5, 2013

    Overcoming obstacles to a successful completion

    Dear Greg, Sandra, Sue, Jeysa and Brent,

    A big Thank You from Jack and I for all your efforts and professionalism in securing our new investment property.  Obstacles were encountered throughout the way, but because of your diligence and expertise - this transaction had a successful conclusion!

    We look forward to working with you all again,
    Best Regards,

    Ottawa resale market on the up and up

    Members of the Ottawa Real Estate Board sold 1,219 residential properties in August through the Board's Multiple Listing Service® system, compared with 1,145 in August 2012, an increase of 6.5 per cent. The five-year average for August sales is 1,202.

    "It has been one year since the Canadian Government introduced the new mortgage rules, and although the Ottawa market has been slow-moving since the beginning of the year, this month's numbers are quite the opposite," says Tim Lee, President of the Ottawa Real Estate Board. "With both residential and condo units sold up a respectable amount since last year, it breaks the downward cycle. In addition, average sale prices evened out in August, creating a welcomed lull in inflating property prices."

    August's sales included 272 in the condominium property class, and 947 in the residential property class. The condominium property class includes any property, regardless of style (i.e. detached, semi-detached, apartment, townhouse, etc.), which is registered as a condominium, as well as properties which are co-operatives, life leases and timeshares. The residential property class includes all other residential properties.

    The average sale price of residential properties, including condominiums, sold in August in the Ottawa area was $348,519, a slight increase of 0.4 per cent over August 2012. The average sale price for a condominium-class property was $257,494, a decrease of 5.4 per cent over August 2012. The average sale price of a residential-class property was $374,663, an increase of 1.8 per cent over August 2012. The Board cautions that average sale price information can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The average sale price is calculated based on the total dollar volume of all properties sold.

    "Inventory on hand has decreased since last month, and is starting to return to more normal levels," says Lee. "Ottawa continues to be a healthy, balanced market, and as always, a great city to live in. With a strengthening economy and historically low interest rates, Ottawa consumers remain in a very enviable position."

    Canada’s housing market may well be enjoying a Goldilocks moment: Not too hot, not too cold.

    Interesting article, quoting BMO Bank of Montreal on the direction in the future of the Canadian housing market

    Please click here for the complete article on the Canadian Housing Market
    Recently, Allstate Insurance Company of Canada and Abacus Data released some research that shows many condo owners are lacking critical knowledge about their insurance coverage, which could lead to costly mistakes.
    Here are some of the major findings:
    • 61 per cent of Canadian condominium (“Condo”) owners don’t know or incorrectly assume their building’s insurance will cover damage to another unit from water or fire that originated in their unit
    • 74 per cent of Canadians looking to purchase a condo in the next few years don’t know what their personal insurance cover versus what the condo corporation’s insurance should cover.
    • Only 39 per cent of condo owners and 26 per cent of condo buyers know that the belongings of a roommate or boarder are not covered under their personal condo insurance policies.
    • 21 per cent of condo owners are not aware that the condo corporation’s insurance is responsible for incidents like falling concrete and shattering glass from condominiums.
    As a condo owner, there are things you can do to make sure you are protected:
    • Ask your condo board or management company to explain what the building’s insurance policy does or does not cover.
    • Talk to your insurance agent about your policy. Being properly covered can prevent your getting stuck with the bill if your condominium’s policy falls short.
    • Remember that damage done to your car in a garage or belongings in a storage locker are covered under your personal policy and not the building’s policy so you should ensure your coverage properly protects your car and any items you have stored in your locker.
    Right now, we’re partnering with Allstate Canada to help educate Canadians about their condo insurance. We’re running a contest to find a GTA Condo Hero – a concierge, security guard or property manager who makes a big difference to the lives of condo owners. You can find out more about this contest here:

    Courtesy of

    Auto sales hit record pace in August

    Canadian auto sales hit a record pace last month as they jumped 6.5 per cent compared with last year, according to data compiled by DesRosiers Automotive Consultants.
    "Building on strong sales over the year's first seven months, Canadian consumers drove the light vehicle market to its best August result ever," DesRosiers said in a report.
    For the complete article please click here

    Auto sales are often seen as a predictor of future spending by household and an indication of consumer confidence in the marketplace.  People will usually not spend money on a big ticket item like car sales if they are not feeling confident in future economic prospects

    Auto sales hit record pace in August,

    Canadian auto sales hit a record pace last month as they jumped 6.5 per cent compared with last year, according to data compiled by DesRosiers Automotive Consultants.
    "Building on strong sales over the year's first seven months, Canadian consumers drove the light vehicle market to its best August result ever," DesRosiers said in a report.
    For the complete article please click here

    Auto sales are often seen as a predictor of future spending by household and an indication of consumer confidence in the marketplace.  People will usually not spend money on a big ticket item like car sales if they are not feeling confident in future economic prospects

    Toronto, Calgary and Vancouver markets have strong August

    Markets around Canada heated up in August - please click here for article

    Why real estate doomsayers continue to be wrong

    Here is an interesting article about the Canadian real estate market and quotes both the positive and negative pundits. 

    It highlights the public statements in 2008 predicting a US style housing crash in Canada and has interesting quotes from university professors on the future outlook of Canadian housing

    Please click here for the complete article

    Toronto real estate prices jump with condos helping rise in sales

    It’s been a surprisingly hot summer for real estate across the GTA, with sales up 21 per cent in August over a year earlier, according to figures released by the Toronto Real Estate Board Thursday.

    Sales of detached homes were up 24.2 per cent in August, year over year, across the GTA, according to TREB. The average sale price hit $783,708 in the City of Toronto and $590,583 in the 905 regions.

    Condo sales rebounded by 21.4 per cent in the City of Toronto and 16.9 per cent in the 905 regions. Prices were up 3.7 per cent overall, with the biggest increases in the 905 regions (up 7.1 per cent to an average of $293,825) compared to a 2.3 per cent increase in the City of Toronto where prices in August averaged $357,572.

    Semi-detached sales were up 7.4 per cent in the city and 16.5 per cent in the suburbs, with sales prices averaging $576,022 (up 8.7 per cent) and $409,322 (up 5.1 per cent) respectively.

    Townhouses saw sales climb by 17.6 per cent across the GTA, 12.6 per cent in the city and 19.2 per cent in the 905 regions. Prices were down just under one per cent in the City of Toronto, to an average of $416,463, while they were up 6.7 per cent in the 905 regions to an average of $374,494.

    To read the complete article, please click here

    Monday, September 2, 2013

    Otto and the Hunt for Mal Goue - my first novel

    Exciting news, Otto and the Hunt for Mal Goue, has been selected for a 33% off coupon. 

    To get this exciting opportunity, please click the here for the link and see the coupon code below

    Promotional price: $2.00
    Coupon Code: RU97G
    Expires: October 2, 2013 

    Neat idea to get rent on time

    Rather than focus on the negative reinforcement when rent is not paid (N4), what about trying a new approach, an incentive to pay on time.  Check out the below advertisement....

    DISCOUNT RENT AVAILABLE:  The prevailing rental rate in this area for a similar three bedroom home is $1550-1600, and the stated rent for this home will be $1550.  However, we are offering a DISCOUNT of $50 off your monthly rent, and all we ask is that you pay your rent on time.  In other words, if we receive your rent by mail only no later than 5:00 PM on the first day of each month, we will discount your rent by $50.

    Will it work - I am not sure, but it is an interesting approach to encourage the rent to be paid in a timely fashion.  Sometimes, it is easier to "catch a fly with a bit of honey, rather than vinegar."