Monday, December 30, 2013

New option for pre-construction condo with huge terraces

There is an interesting choice in the condo market right now. They have suites on the 3rd floor with huge terraces. Usually, large terraces are only accommodated on the penthouse levels. I have prepared a sheet with a comparison on a penthouse suite to the 3rd floor suites. I can also send links to floorplans.
My estimates put terraced suites at less than 5% of the condos available on the market. This makes them of significant value. The suites on the 4th floor are also on the spreadsheet, to show the difference between the 3rd floor (with the terraces) and the 4th floor without.
For instance, a 995 sqft condo with a 400 sqft terrace, sold for $440,000 ($442/sqft) in June 2013, the same unit without the terrace, in the same building sold, on the 9th floor for $427,000 (October 2012) which is $429/sqft.
This isn’t totally accurate, as the additional 5 floors should have a value. A fair estimate would be $3000 a floor, so the adjusted price, if both were on the 4th floor is $412,000 or $414/sqft. This suggests a difference of $26/sqft for a terrace over a comparable same floor unit.
Estimated rent at $2250 per month, currently standard two bedrooms rent at $2000 per month, so this estimate is likely too low, as this building is closing in 2016, 2.5 years away and rents historically rise each year.
Please let me know if you have any further questions/comments or if you are interested in moving forward.

Growth in condos 9 times faster than single families over last 30 years

Love them or hate them, condos are becoming a bigger piece of the housing make up of Canada. Drawing on statistics going back all the way to 1981, the CMHC released the latest edition of the Canadian Housing Observer with a special section on condos – who’s buying, how many there are nation-wide and where they’re primarily located.


So how many condo units are there in Canada? As of 2011, there were 1,615,000 occupied condos across the country. Since 1981, the amount of owner-occupied condos grew from 171,000 to 1,154,000 in 2011 (Tweet this). That increase grew more than nine times faster than the rate of growth for other owner-occupied homes.

Here are some other fascinating facts from the country’s condo boom:


Who’s buying
Seniors are gravitating towards the suite life, even more so than young folks: in 2011, 29 per cent of condo owners were 65 or older, while 19 per cent were 35 and younger (Tweet this).

About 45 per cent of owner-occupied units were households made of a one person, while 28 per cent were made up of couples without children.

Women are a huge part of the market; in 2011, they made up 65 per cent of owner-occupants who lived alone, including 76 per cent of owners who were 55 plus.

Women also made up 84 per cent of lone-parent owners.

In 2012, condos being rented out by investor-owners made up 23 per cent of the Toronto and 26 per cent of the Vancouver market.

Where the condos call home
The condo is truly king in Vancouver where they made up 35 per cent of owner-occupied housing stock in 2011, the highest amount of all the metros studied (Tweet this).

Together, Vancouver and Toronto made up 51 per cent of all condo starts in 2012 (Tweet this).

Think all condos are skyscrapers? In 2011, the highest amount (36 per cent) were low-rise apartments, followed by high-rises at 31 per cent and row houses at 23 per cent.

The landscape is different in Toronto, which is home to half of all high-rise condos in Canada (Tweet this); it’s the only city in which high-rises accounted for the majority of condo suites, with two-thirds of its condo stock located in towers.

CMHC: Women and seniors dominate the Canadian condo landscape


By: Monika Warzecha










Tuesday, December 24, 2013

Canadian economy missed expectations in 2013. Will 2014 perform better?

 Wait until next year.
It's a familiar refrain for sports teams, but the premise is getting old for Canadians awaiting the return of an economy that can be counted on for jobs, solid incomes and financial security.
As far back as 2010, the Bank of Canada held out the prospect of better times in the year ahead. But unexpected events – whether it was a tsunami in Japan, a debt crisis in Europe, or political shenanigans in Washington – always took the shine off the optimism.
"If you were looking for a theme song for the Canadian economy, it would either be 'With a Little Help from my Friends,' or, alternatively, Led Zeppelin's 'The Song Remains the Same,' " says Craig Alexander, TD Bank's chief economist.
He says we're still waiting for a hand-off from consumer-driven growth.
"We are going to eventually get this rotation toward exports and business investment and away from real estate and consumer spending. We said that would happen in 2013. It didn't happen. Now we're saying it is going to start next year," Mr. Alexander said.
He's not predicting eye-popping growth.
TD, like the Bank of Canada and a consensus of economists, is estimating growth will rebound to about 2.3 per cent in 2014. That would follow two years of sub-par growth at 1.7 per cent in 2012 and an estimated 1.7 per cent growth this year.
The improvement foreseen for 2014 is not much of a bump and won't lead to massive job creation and steep income growth. But the difference between 1.7 per cent and 2.3 per cent is important.
The Bank of Canada believes economy has the "potential" to grow about two per cent. At 1.7 per cent, the economy has underachieved its potential whereas, at 2.3 per cent, the economy can eliminate slack and head toward full recovery.
The central bank thinks 2015 will see the gap close further with 2.6 per cent growth, enabling the economy to return to health by the middle or the end of that year.
The other important distinction is the composition of growth.
According to the central bank and others, 2014 will be the year the economy finally enters the zone of what Bank of Canada governor Stephen Poloz calls self-generating, self-sustaining "natural growth."
That is critical because Canada, for the past three years, has experienced a kind of un-natural recovery.
Yes, it has recouped all it lost during the recession in terms of output and jobs, but a persistently low inflation reading and continuing slack in production capacity suggest something has not been quite right.
Growth was achieved primarily at first because federal and provincial governments pumped tens of billions of dollars into the economy – all of it borrowed.
The Bank of Canada – as well as its U.S. counterpart – has also kept interest rates at or near rock bottom, encouraging businesses and households to borrow money and spend.
Snatch away the stimulus measures and Canada, some say, would most likely still be in recession.
CIBC chief economist Avery Shenfeld there was nothing fundamentally amiss about Canada's domestic economy before 2008 when the world's financial system was dealt a severe blow by a meltdown in the U.S. real estate, which spread to banking and other industries.
While Canada's economy initially emerged from the 2008-9 global recession in relatively good shape, it has limped along more recently amid weakened demand for many of the country's major exports.
"Part of the reason Canada hasn't seen the lift in capital business spending is because the rest of the world has disappointed us," Mr. Shenfeld said.
"Interest rates have been low, financing has been available, but unless you are sure the product demand is going to be there, it's hard to trigger a boom in capital spending. So a brighter global economy could see a return in capital spending in the resource in sector, which is part of that rotation that's been missing."
That's where a little help from our friends, particularly the United States where 75 per cent of exports end up, will go along way to curing Canada's ills, say analysts.
Optimism for 2014 is tied to how quickly the U.S. recovers and how much that boosts Canadian exports. The Royal Bank is among the most optimistic, pencilling in a 2.6 per cent expansion next year, and 2.7 the year after that, which will more quickly close the output gap and get the Bank of Canada to raise interest rates in 2015.
Exporters will also benefit from a swooning loonie, analysts say, because, by comparison, the U.S. economy will outperform Canada's. The loonie has already lost about six per cent in value in the past year and now hovers around 94 cents US. By many estimates, it could be at least as low as 90 cents by the end of 2014.
With all these factors in Canada's favour, it's a wonder the economy won't do better. But the Bank of Canada has noted that exporters haven't kept pace, given the rebound in the United States, so they won't likely benefit as much in 2014 as they have historically.
Part of the reason, says Mr. Poloz, is that the country lost about 9,000 exporting companies in the aftermath of the 2008-09 recession.
Mr. Alexander, TD's chief economist, lists other factors: an increase in the number of right-to-work states in the U.S. that have brought down labour costs; a shale oil and gas revolution; and low gas prices that have decreased energy input costs for a lot of U.S. manufacturers.
"And we've had really strong productivity growth in the U.S.," Mr. Alexander added. "So U.S. manufacturing is far more competitive than it was before and that makes it much tougher for Canadian exporters."
The consensus view assumes that the modest pick up in exports, which will lead to companies investing in machinery and equipment in order to become more competitive exporters, won't be counterbalanced by a retrenchment in the household sector and in housing.
Taking the contrary view, as does David Madani, the chief analyst at Capital Economics, leads one to the conclusion that 2014 won't be any different from 2012 and 2013 in terms of aggregate economic growth – even if the composition is healthier.
With the housing market overbuilt and household debt at record levels – 164 per cent of annual aftertax income – Mr. Madani expects a bad year for the construction industry and a slowdown in consumer spending, which makes up the majority of the economy.
"So you have a situation where weakness in housing and slower household consumption growth is now offsetting the improvement in exports and perhaps business investment," Mr. Madani says.
Rather than improving, Mr. Madani thinks the economy will deteriorate further to 1.5 per cent growth, which may cause the Bank of Canada to cut interest rates further and even push Finance Minister Jim Flaherty off his austerity drive – although he admits that's a long shot.
Mr. Madani's advice. Wait till next year and, by next year, he means 2015 or even 2016. By then there will have been a correction in housing and global demand may be strong enough to make more of a difference to Canada.

The Canadian Press ~ OBJ

Ottawa’s “frontier of development” The South Urban area is the fastest growing part of our City. Part 1 of a four-part series

OTTAWA — The fastest growing part of Ottawa, the south urban area, is like a jigsaw puzzle. There are sections where the picture is nearly complete, others still being assembled, and there are some missing pieces.
Established neighborhoods give onto fields stripped of soil and trees in preparation for development. Bungalows built on country lots forty years ago are now surrounded by new town houses laid out on small lots with reduced street widths. Occasional fragments of rural heritage survive: barns, sheds, stands of trees.
On the same street, there can be houses which are finished and occupied, while next door pink insulation covers house frames still waiting for windows. Furnished and curtained living rooms look onto digging equipment still excavating for foundations.
“When you’re on the frontier of development you have to accept that you live in a community that’s being built around you,” says Steve Desroches, deputy-mayor of the City of Ottawa and councillor for Gloucester-South Nepean.
Together, Desroches and Barrhaven councillor Jan Harder represent the south urban community, among the most booming in Canada. Covering almost 15,000 acres, it lies south of the Greenbelt and straddles the Rideau River in the former cities of Nepean and Gloucester.
According to the City of Ottawa, the area accounted for more than 50 per cent of Ottawa’s population growth over the last five years, reaching about 95,000 residents in 2012. That’s roughly 10 per cent of the total city population.
In the next 20 years, the number of people is expected to almost double to 180,000.
“The city is now growing primarily to the south,” says Carleton University architecture professor Ben Gianni. “It’s the equivalent of what Kanata and Orleans were a few decades ago.”
Yet the expansion is “out of sight, out of mind,” says Gianni. “Unless you live out there, you are not aware of how much construction is going on. “
The Gloucester-South Nepean ward experienced the city’s largest recent increase in population. According to the 2011 census, it grew almost 55 per cent from 26,895 in 2006 to 41,620 in 2011.
The ward includes Riverside South and Leitrim as well as a portion of Barrhaven. It is bounded by Strandherd Road and Leitrim Road to the north; Rideau Road and Earl Armstrong Road to the south; Woodroffe Avenue, Greenbank Road and Jockvale Road to the west and Bank Street to the east.
During the same period, the population of Barrhaven ward grew from 36,815 in 2006 to 46,475 in 2011 — an increase of more than 26 per cent.
Barrhaven’s boundaries follow Fallowfield Road to the north; Cambrian Road and Strandherd Road to the south; Highway 416 to the west; Woodroffe Avenue and Jockvale Road to the east.
“There are still people that have never been to Barrhaven,” says Harder. “They call it Far-haven. We are no longer a bedroom community. We have evolved and grown.”
In the 1970s, the former regional municipality of Ottawa Carleton designated Kanata, Orleans and the “south urban community” as places for Ottawa to grow. They called them satellite cities.
Development in Kanata, Orleans and Barrhaven began in the1960s. The south end, however, lagged behind the west and east, because it lacked infrastructure such as roads, sewers and water mains.
The first houses in Riverside South were completed in 1996. In Barrhaven, housing activity accelerated in 2001, after the local economy recovered from the slowdown of the 1990s.
In Leitrim, services had to be extended down Bank Street before urban development could start. The first houses in the subdivision of Findlay Creek Village were completed in 2003.
“Development south of the city was both predictable and inevitable,” says Gianni, noting the area is close to employment centres such the RCMP headquarters (located in the former JDS Uniphase complex in Barrhaven), Carleton University, Algonquin College, Confederation Heights, the old Nortel Campus and Kanata.
It is also near the Ottawa International Airport. “Most cities spawn edge cities adjacent to the airport,” he says.
David Wise, the City of Ottawa’s program manager, development review, notes that about 20,000 people a year move to the region. Some are new immigrants, others migrate from other parts of Canada.
“Ottawa is an attractive place to live, work and retire,” says Wise. “They have to be accommodated.”
Desroches often hears people say they don’t see themselves living in the suburbs. “But when get married and want to raise a family they just can’t afford to live in the core and they quickly find themselves looking in the suburbs.
“That’s part of the Canadian dream, to own your own home,” he says. “One of the things that stands out is the youthfulness of the communities. You have a lot of young families, many just starting out.”
The built landscape is starting to reflect Barrhaven’s growing diversity. The South Nepean Muslim Community (SNMC) is building a $4.5-million community and prayer centre topped with domes on Woodroffe Avenue, between Longfields and Claridge Drives.
The SNMC estimates there are about 10,000 Muslims in the south end, up from about 1,000 in the year 2000.
“There’s this perception that it’s uncontrolled sprawl; that suburbs are contributing to the environmental demise of our city,” says Desroches.
“This is growth that we have planned,” he says. “We are working to build sustainable communities with employment, with retail and residential. We are not building the traditional sprawling bedroom community.”
A 165,000-square foot recreation complex opens next fall in Barrhaven South. The city recently approved a new 100-hectare business park in Barrhaven at Highway 416. The owners hope to start building an auto mall and retail plaza in 2015. The South Merivale Business Park is expected to grow, and employment lands have been set aside south of the Jock River.
The city’s official plan projects 70,000 jobs by the year 2021 in the area.
Infrastructure is still the biggest issue. North-south routes such as Greenbank Road, Woodroffe Avenue, Limebank Road and Prince of Wales Drive are bumper-to-bumper during rush hour. Buses are jammed. Park and rides are full. Schools sprout portables as soon as they’re built.
Two councils ago, then-Mayor Bob Chiarelli both anticipated and attempted to plan for the development boom south of the city with his proposal to push rail-based transit south into the area.
It would have served both Riverside South and Barrhaven. When the north-south light rail project was cancelled in 2006, bus rapid transit was extended to Barrhaven instead.
“Unfortunately, it does not serve Riverside South, nor does it serve the RCMP employment center along Prince of Wales,” points out Gianni.
“For better or worse, the development is happening without the benefit of efficient transit,” he says.
“While the lack of rail-based transit has not affected the desirability of the area, it has certainly affected its form and density. By extension, it has affected how people commute to and from the area.”
Since 2008, millions have been spent on roads and transit, including the Strandherd-Armstrong Bridge, which opens next year, the extension of the Southwest Transitway and three new park and rides. Segments of Limebank and Earl Armstrong Roads have been widened and a new Strandherd Drive built between Woodroffe Avenue and Prince of Wales.
Other road projects are scheduled. Wise says development charges pay for anywhere from 20 to 95 per cent of new infrastructure.
Driving along the new roads, one sees a surprising number of townhouses, stacked townhouses and semi-detached houses. Lot sizes tend to be smaller than in subdivisions developed even 10 years earlier. A grid street-pattern occasionally replaces the more familiar curving and winding pattern of suburban streets.
The thrust of the city’s official plan is for greater density in suburbs as well as the core. For example, the new Half Moon Bay subdivision in Barrhaven is developed at 34 units per hectare, compared to the 20 to 22 units per hectare of older parts of Barrhaven.
“That’s part of affordability and to to avoid expanding out into countryside further, ” says Dana Collings, program manager, community planning and urban design at the City of Ottawa.
The official plan seeks to place walkable cores linked to transit in the midst of new development.
“For urban planning we have concentrated the retail and business districts into town centres and we’ve avoided creating a Merivale Road which is just a long strip of stores,” explains Desroches.
The large shopping centres that exist do little for local identity. In contrast, lovely parks and recreation areas along the banks of the Rideau River make sense of names like Riverside South and Chapman Mills.
Natural attributes such as parks, paths, wetlands and storm-water ponds, give the neighbourhoods their character, says Desroches.
The city’s 2013 development report highlighted the continuing trend of people moving to “urban areas” outside the greenbelt. An estimated 33.5 per cent of the city’s 935,255 population, at the end of 2012, lived in these developing communities and a further 9.9 per cent in rural areas. This contrasts with 56.6 per cent living within the Greenbelt.
“I jokingly tell the people who moved there in 2001 that they’re pioneers,” says Desroches. “They lived there when there was virtually nothing.”

Global Property Markets Display Increasing Strength: Scotiabank

SOURCE: Scotiabank
Scotiabank
December 20, 2013 07:00 ET


TORONTO, ON--(Marketwired - December 20, 2013) - Housing conditions globally are displaying increasing strength, underpinned by improving growth prospects and highly stimulative monetary policy, according to the Scotiabank Global Real Estate Trends Report released today.
"While a number of national markets in Europe remain weak, most major advanced nations are showing more positive signs," said Adrienne Warren, Senior Economist, Scotiabank. "Property markets in the majority of emerging nations in Asia and Latin America remain relatively buoyant, with China in particular reporting accelerating price gains."
Highlights of the report include:
  • The United States maintains its position at the top rung among advanced nations in Scotiabank's latest survey of international house prices, with average inflation-adjusted home prices up 8% year-over-year (y/y) in the July to September period.
  • Canadian home price appreciation also remains near the top of the pack, with a 7% y/y real house price gain in Q3.
  • The U.K. housing recovery is gaining traction, supported by the government's 'Help to Buy' home purchase program for low-deposit borrowers.
Read the full Scotiabank Global Real Estate Trends Report at http://www.scotiabank.com/ca/en/0,,3112,00.html.

Thursday, December 19, 2013

Women the new ‘wildcard’ in the condo market

Megan Vickell is a new brand of condominium owner that people predicting a market crash may have forgotten to factor in.
She’s young, single and ready to buy her first home. And, more importantly, she’s female — part of a growing demographic that just might be creating a new paradigm in the housing sector.
A report from Canada Mortgage and Housing Corp. shows women are a growing powerhouse in the Canadian condominium market. Among people who live alone, women made up 65% of owner occupants in 2011.

Condo owners: By the numbers

19% Percentage of condominium owners under the age of 35; 29% were seniors 65 or older.
65% Percentage of women among condo owner-occupants who live alone.
2.5 Average number of people in a household size in 2011, down from 3.5 people in 1971.
12.6% Percentage of Canadian homeowners who lived in a condo in 2011.
42% Percentage of condo owners that are one-person households
35.1% Percentage of Vancouver homeowners who live in a condo, the highest in the country.
71% Among Canadians with a mortgage, the percentage of people with more than 25% equity.
7% Percentage of people with less than 10% down.
31% The percentage of Canadians with a mortgage in arrears, as of June, 2013.

The female factor is even more prevalent among older women with 76% of those 55 and older living alone women. Among lone-parents, women make up 84% of condominium owners.
It’s not just one thing about condos that is pushing Ms. Vickell to look at a high-rise. The public relations manager of eBay Canada says she’s close to putting in an offer this week on a 650 square foot unit.
“When I was looking I was grumbling because a lot of the maintenance fees were so high but then I was walking down the street after a big snowfall, and all these people were snowed in,  I thought ‘for a single female, I’m willing to pay those fees’,” she says. “I don’t even know where to start with half that stuff around the house.”
There are other perks of condominium living that attracts her to the market, including the 24-hour seven-day a week concierge service. “It’s everything you need in one place. There is someone to take my packages when I’m not there, I’ve got a gym. It’s really just all about convenient living,” says Ms. Vickell.
She sees the condominium as a stepping stone to a house. “I think of it as a five-year plan,” she says.
The condominium market shows few signs of slowing down. CMHC said this month November new construction reached 194,014 on a seasonally adjusted annualized basis, well above the number we need based on demographics. Multiples, which includes high-rise condominium units, made up 111,036 of the figure.
Growth in owner-occupied condominiums has exploded over the last three decades, according to the CMHC report. In 1981, there were 171,000 owner-occupied condo units but that figure grew to 1,154,000 by 2011.
Benjamin Tal, deputy chief economist with CIBC World Markets, agrees that women may be the unknown wildcard in determining whether the condominium market can continue its explosive growth.
“One point we’ve made when we’ve said this market is crazy is people need to look at demographics in a different way,” says Mr. Tal. “People buy a house now and don’t marry. Sure there’s the divorce rate being high but many young people in their 30s are not married but busy with careers and buying a home because they have the means. This is a new wave of demand that hasn’t been there before.”
What hasn’t really taken hold, based on the survey, is families considering condominiums. The largest chunk of condo owners are one person households at 42%, followed by couples without children at 28%.
Mr. Tal’s prediction is that in time we will see more families moving into condominiums, it’s just too early to see it any statistics.
“This will be the thing of the future. We are maybe five, six or 10 years from that,” he says.
The condo phenomenon remains mostly a story for Canada’s two most expensive markets with 51% of all new condo starts in 2012 happening in Toronto and Vancouver. Investors continue to drive both markets with 23% of condo apartment units in Toronto rented in 2012 and 26% in Vancouver.
Overall, there seems to be little question that the condominium is going to become a major part of the housing stock in Canada. CMHC noted that in 1981 only 3.3% of homeowners lived in a condo. That percentage grew to 12.6% in 2011.

Investors own less than a quarter of Toronto condominiums: CMHC

Investors are a “strong presence” in both Toronto’s and Vancouver’s condominium markets, but exactly how strong still remains unclear, even in the wake of a new report by the Canada Mortgage and Housing Corporation.
About 23 per cent of Toronto’s condo stock was being rented out by investor-owners in 2012, the federal housing agency says in its annual Canadian Housing Observer review, released Wednesday, which places a special focus on the national condo market this year, revealing some interesting details.
But the review only looks at condos rented via the MLS system and doesn’t include investor-owned units just sitting empty or rented via free websites like Craigslist or word-of-mouth.
“We think the number is closer to 50 per cent,” says veteran Toronto development consultant Barry Lyon. “The data they (CMHC) are using has some shortcomings. It’s only part of the story.”
Mathieu Labarge, CMHC’s deputy chief economist, acknowledged that “to complete the picture there’s a need for data,” and it simply doesn’t exist.
Nobody seems to know exactly where buyers, or their money, is coming from, why they are buying and how they intend to use the condo.
“What we have in terms of hard facts is what we released. We have round tables with the (condo development) industry on a regular basis and what we get is that investment activity remains limited.”
Local housing experts, economists and realtors also lack hard numbers, but anecdotal evidence suggests at least 40 per cent of Toronto’s condo market is investor owned and that the number is even higher — as much as 90 per cent — in some downtown skyscrapers close to transit lines.
It’s widely known that investors have helped drive record condo sales across the GTA the last few years and Laberge says those units have been critical to providing rental housing in a growing region where almost no new purpose-built rental apartments have been constructed in decades.
According the CMHC annual review, about 26 per cent of Vancouver’s condos were tenanted, rather than lived in by owners, as of last year, a number that has been growing right across Canada since 2007.
That figure is also being questioned, given concerns that have abounded in that market around foreign buyers looking to park money in Canada, but leave their units empty.
As the CMHC report notes, condo construction and ownership has exploded over the last three decades, from just 171,000 units in 1981 to 1.6 million in 2011, a rate of growth more than nine times faster than single-family homes.
Some 461,000 of those condos were being rented out in 2011, according to the report.
Condos accounted for almost half — 40 per cent — of all housing starts in Canada’s major cities in 2012.
Skyscraping condos dominate Toronto’s skyline far more than any other urban landscape in Canada — accounting for about 70 per cent of the total stock of condominium housing. But, across the rest of the country, highrises account for just 31 per cent of all condo types, followed by lowrise condo apartment buildings at 36 per cent and townhomes and row houses at 23 per cent.
While condos now attract a broad spectrum of buyers, they remain most popular with seniors and young adults: As of 2011, 19 per cent of condo owners were under the age of 35 and 29 per cent were 65 or older.
Just 16 per cent were couples with children, says CMHC. Some 42 per cent of condo owners live alone. Twenty-eight per cent are couples with no children.
And women dominate sales centres: They made up 65 per cent of all owner-occupied condominiums in 2011, and accounted for 76 per cent of owners aged 55 or older.
Condo construction in Toronto and Vancouver accounted for more than half of the country’s condo starts in 2012, says the comprehensive report, which looks at everything from affordable housing to the growth of factory-built housing in over 160 municipalities from coast to coast.

Canada's housing market in good shape: federal housing agency


By Andrea Hopkins and Leah Schnurr

(Reuters) - Canadian condominium construction has surged but population growth has kept oversupply in check, the federal housing agency said in a report on Wednesday that also showed declining mortgage arrears and high home-equity levels.

In its annual report on the housing market, the Canada Mortgage and Housing Corp pointed to steady levels of mortgage debt and an increasing number of households as evidence that residential real estate is in good shape, despite warnings from observers that the market is overheated.

Canada's housing market avoided the crash experienced in the United States five years ago due in part to more conservative lending standards and a stronger economy. While economists have long predicted an eventual correction in Canada, they are divided over whether prices will drop sharply or simply stagnate in a so-called soft landing scenario.

"The main argument here is just that the Canadian housing market still looks fairly normal," said Eric Lascelles, chief economist at RBC Global Asset Management in Toronto.

The agency's report showed that as of June 2013, 0.31 percent of residential mortgages were three or more months in arrears, compared with 0.33 percent 12 months earlier, CMHC said. Arrears averaged 0.41 percent in the decades 1990-2010.

About 31 percent of recent buyers made lump-sum payments or increased their regular payments in 2012 to pay off their mortgage sooner, and 44 percent had set their payments above the minimum, the report showed.

The average amount of equity for homeowners with mortgages was 47 percent, and 71 percent had at least 25 percent equity in their homes. Only 7 percent had less than 10 percent equity as of April 2013, suggesting only about 7 percent of homeowners would be "under water" if prices dropped more than 10 percent.

Some 41 percent of homeowners had no mortgage, while the rest typically had solid equity levels, accelerated mortgage payments or declining arrears.

 

CONDOS DOMINATE HOMEBUILDING

 

With the once-booming but cooling condominium market widely perceived to be the weak spot in Canada's urban housing market, the CMHC said condo construction was far outpacing construction of detached homes. Even so, there were no signs of oversupply yet because of an increase in the number of people living alone as well as population growth resulting from a strong influx of immigrants.

While single-detached dwelling starts rose just 1.5 percent to 83,657 in 2012, multiple-dwelling starts - typically condos - rose 17.6 percent to 131,170 units. Condos comprised 61 percent of all construction in 2012, continuing a trend that began in 2002.

The surge was most notable in Canada's biggest cities, where cranes dot the skylines and tens of thousands of new units come on line every year. The share of condominium starts out of total starts was highest in Vancouver at 64 percent, followed by Toronto at 59 percent and Montréal at 58 percent.

While the number of starts suggests a huge supply in the pipeline that will come to the market in the next year or two, the building boom has begun to slow and CMHC said inventories so far are not above historical levels.

Still, economists remain concerned about the level of condo construction already underway in some major cities.

"There's still a huge supply of condos, particularly in Toronto, coming on the market in 2014, 2015," said Diana Petramala, economist at TD Bank in Toronto.

Housing starts began moderating in the last half of 2012 and the first quarter of 2013, with multiple-dwelling starts declining for three straight quarters before rising modestly in the second quarter of 2013.

In 2012, urban inventories averaged 4.7 units per 10,000 people, CHMC said, only slightly above the long-term average of 4.6 from 1992 to 2012. By the second quarter of 2013, however, inventories were at 5.1 units per 10,000 people.

CHMC said population growth and a shift in the way people are living suggests the demand for smaller housing, including condos, will grow.

Condo ownership rates rose in every age group between 1996 and 2011, but condos were particularly popular with seniors and young adults. In 2011, 19 percent of condo owners were under the age of 35, while 29 percent were 65 and older.

"It does show that some of the demand is being driven by demographic fundamentals, particularly for condos," Petramala said.

"Some of the over-building may not be as excessive as some people might be warning." (Reporting by Andrea Hopkins and Leah Schnurr; Editing by Leslie Adler and Peter Galloway)

To understand the Ottawa housing market or for questions on Ottawa real estate, please click here.

Sunday, December 15, 2013

Should you help buy your kids a house? - Financial Post

One of the interesting factors supporting real estate growth is the role of financial support of parents and grandparents on some home purchases. The rationale for this growing practice is simple. Parents want their children to be able to get into the real estate market – and live remotely close to the type of neighbourhood they grew up in.


With the average price of a detached house at $635,000 in greater Toronto, and $925,000 in greater Vancouver, it is easy to see a challenge for both first and second-time homebuyers.

If you want to help your child with a home purchase, there are a couple of factors to look at. The first is the parenting philosophy of an individual. The second would be the financial strength of the parent. The third might be the financial strength of the child. The fourth might be the strength of a child’s marriage.

Philosophy of the parent

In the past, it was much more likely that parents would say ‘I never had any help buying my first house, so my kid can do it themselves’. Today, with the daunting house prices facing those first and second time home buyers, it leads many parents to a different opinion.

Many parents have personally seen the financial benefits of home ownership. They also see the financial struggle and limited housing options facing many of their children, and have decided to do something to help.

In some cases, helping means a loan with normal interest rates. In some cases it is a loan with lower or no interest. In some cases it is effectively a gift.

Today, we are seeing a general philosophy of parents wanting to help their children with real estate – assuming they have the financial strength.

Do you look at a child with a good job and a decent savings discipline, and help them get a leg up? Or do you let that child fend for themselves because they will likely be OK, but only help out the child that will never be able to afford a home on their own? Do you make sure that all children receive equal benefits? Our general recommendation is to assume you are helping all children equally, regardless of their personal financial strength. After all, as the Smother’s Brothers used to say “Mom always liked you best.” Kids never outgrow that issue and concern. This means that if you think you can help your children with $300,000, and you have 3 children, you better not overextend to the oldest child and then run out for child two and three.



Financial strength of the parent

It is very difficult for a 60-year-old couple to know how generous they can afford to be, without having some form of detailed financial projection that will show the impact of a financial gift or loan. You want to know what would happen if you gift $200,000 to a child? Will that put you in financial trouble in 20 years? What if you make a loan to a child, and they never pay you back? Can you afford that? Unfortunately, family debts are among the most likely to become impaired debts. Regardless of the financial planning and projections, a loan with a modest interest rate is the least likely to be of risk to the parent. Remember, once the gift is made, it is very difficult to unmake it. The financial and emotional stress of a poorly thought out gift can be very difficult for the whole family for years to come.

Financial strength of the child

There are some children (I know it is rare), who don’t want their parent’s help. They want to be able to do it on their own. There are also children who have good jobs and are a good loan risk. This means that if the parents want to lend them money at a standard or low interest rate, it likely doesn’t represent much of a risk for the parent’s financial picture.

If the child’s situation is not in as strong, one of the questions is whether, even with help, the child should be buying real estate? If they get a loan from their parents, will they be able to pay it back? Will it cause family stress? If they receive a financial gift, will they still struggle with paying the mortgage at the bank? Sometimes the best help a parent can give is to advise the child to keep renting (or living at home) rather than buying real estate that they can’t afford.

The strength of a child’s marriage

This is important, as a financial gift will become your child and their spouse’s family property as soon as it is received. We have seen cases, where a parent gifted $400,000 to help buy a house, and six months later the child’s marriage broke up. In this case, the parents just handed their soon to be ex-daughter or son-in-law a $200,000 gift.

The best way to avoid this is to not make a gift at all. Whether it is a standard loan with standard interest rates, or a 0% interest rate, or even a demand loan that isn’t meant to be paid back, the key is to make the financial ‘gift’ in the form of a loan.

If the goal is to make it a gift, we generally tell clients to write up a demand loan note. This says that you are ‘loaning’ $200,000 with no repayment plan. However, you have the right to call the loan at any time. The reason this is important is that technically the child and their spouse owe this money. It is not part of their family property. In the event of a marriage breakup, the parent would demand the loan, and this loan amount would be reduced from the family property.

One way to look at this is that in a best case financial scenario, you will likely be leaving a sizable estate to your children when you pass away. It is usually preferable to not wait until you are gone (and your children might be in their 50s or 60s), if some gifting could have happened earlier. Why not help at a time when your children can use it, and you can see the benefits. Unless your child is single, I would recommend structuring any financial support as a loan.

In a scenario where you may be financially in a position to help, but it isn’t so clear, it is better to be safe and only look at a loan scenario with a clear expectation of repayment. If repayment isn’t so likely, then it is better not to help.

One last thing to keep in mind is that while owning personal real estate is a positive from a tax perspective, and is generally positive from a ‘pride of ownership’ perspective, it may not be the obvious choice in 2013 that it was 40 years ago. In many cases, renting provides greater peace of mind and a higher standard of living, given how large many mortgages are today.

In the end, part of being a parent is knowing when to help and when to stand back.

Ted Rechtshaffen is president and wealth advisor at TriDelta Financial, a boutique wealth management and planning firm.

Syndicated Mortgage Investments

My wife and I were looking for a consistent rate of solid return ( but “not to good to be true”) while at the same time diversifying our portfolio. The Fortress Syndicated Mortgage Investments filled the bill very nicely. It offered a degree of security that made us feel comfortable in that, as an investor, one was registered on title at the land registry with the full invested amount as a lien on the property providing collateral and security.

We were offered a choice to participate in a number of ongoing property developments in different regions in Canada. Critically, the process was thoroughly explained both by representatives of Fortress and by an independent legal counsel. The paper work was straightforward and taken care of by Fortress. The bottom line was that our first project was actually completed ahead of schedule and we received a monthly check that represented an 8% annual interest rate plus a deferred lender fee of 12% which, in total, yielded an overall rate of over 11% annually

The experience of this project with Fortress makes us confident enough to reinvest with them and to recommend to others to consider the Fortress Product as part of their portfolio.



Many thanks

Peter and Sabina

Friday, December 13, 2013

Canada to benefit from a strengthening U.S. economy in 2014: RBC Economics



After another year of mediocre growth, Canada's economy is expected to perk up in 2014, supported by a pick-up in exports and strengthening business investment, according to the latest Economic and Financial Market Outlook issued today by RBC Economics. RBC is forecasting real GDP growth of 1.7 per cent in 2013, 2.6 per cent in 2014 and 2.7 per cent in 2015.
"The U.S.'s slow and subpar recovery has no doubt played a part in the underperformance of Canadian exports through 2013," said Craig Wright, senior vice-president and chief economist, RBC. "Looking ahead to 2014, we anticipate that stronger growth south of the border will translate to increased demand for Canadian exports, especially as the expansion fans out and business investment accelerates. This expected uptick in both exports and business investment is a critical component of our outlook for Canada's economy."
The report indicates that strong exports relative to imports in 2014 will result in trade contributing more than it has in a decade to Canada's annual growth rate. RBC anticipates that this will cause a rebound in investment activity particularly in the manufacturing and mining and oil and gas sectors.
Extra support to external trade will come from a weakening Canadian dollar over the course of next year, says RBC. The softer currency reflects a leveling off in commodity prices alongside a generally firmer tone for the U.S. dollar.
RBC also assumes that neither the Bank of Canada nor the Fed is likely to adjust the overnight policy rate in 2014, meaning short-term interest rate spreads will hold steady. Longer-term yields on government bonds, however, are likely to rise in line with the gradual, upward shift in U.S. treasury yields; RBC indicates that the pace of increase will be gradual enough to ensure that the economy doesn't falter and that the Canadian housing market stabilizes.
Canada's labour market has been resilient with 148,000 jobs created so far in 2013 and the unemployment rate falling to a cycle low of 6.9 per cent, RBC says. This increase in employment has driven up wages by close to 2.0 per cent on average so far this year while inflation has only increased at an average 0.9 per cent pace. As labour markets tighten further, wage pressures are expected to have a greater upward impact on inflation through the forecast moving it closer to the Bank of Canada's 2.0 per cent target rate. RBC notes that real wage gains will continue to fuel consumer spending going forward.
"Rising incomes and improving household balance sheets will be the key factors supporting consumer spending which we expect to grow by 2.5 per cent in 2014, up from 2.2 per cent this year," added Wright.
On the provincial front, RBC says that an improvement in underperforming provincial economies will be reflected in Canada's real GDP growth rising in 2014. The country will continue to see the West out-performing the East with the dividing line shifting slightly east to the Ontario-Quebec border.

 Ottawa Real Estate market insight please click here.

Craig Wright, RBC's chief economist, discusses Canada's outlook, click here for complete article 

Privatizing CMHC would weaken banks, leave economy vulnerable: TD’s Ed Clark



Any move by Ottawa to privatize or even tinker with the Canada Mortgage and Housing Corporation would weaken the Canadian banking system and put the economy at risk, the chief executive of Toronto-Dominion Bank said in an interview Thursday.
The Canadian banks sailed through the financial crisis, emerging mostly unscathed because their massive holdings of residential mortgages stayed liquid, unaffected by the freeze-up that afflicted fixed income assets around the world because they were guaranteed by the CMHC.
CMHC insurance “provided us with stability in both earnings and liquidity that differentiated us [from banks in the rest of the world],” Ed Clark said in an interview.
So any government effort to reform the Crown corporation — as Jim Flaherty, the Finance Minister, has mused several times — risks “taking away the very things that made Canadian banks [so resilient]“, he said.
Mr. Clark said one of the lessons of the crisis that began in 2008 was how crucial a stable banking system is to the health of the economy.
“So if you take that away, [how do] you explain to people that the unemployment rate in the next downturn will be a lot higher because you decided to dismantle what made Canadian banks different,” he said.
Despite a spate of warnings about the precarious state of Canadian real estate — most recently Deutsche Bank released a report saying that Canadian housing market is the most overvalued in the world — Mr. Clark said he doesn’t believe things have gotten out of control.
“For the moment, I don’t think we are in a bubble,” he said, adding that at the same time prices can’t keep going up for ever.
The challenge for bankers and policymakers such as Mr. Flaherty is to figure out the difference between “rapidly expanding prices” and a bubble. For the time being, he said, both groups need to keep close watch on the market.
For the moment, I don’t think we are in a bubble
“If a year from now housing prices start to take off again, then I’ll be advocating to say we’ll tighten [the rules around mortgage lending] again.”
Since 2008 Mr. Flaherty has moved to tighten mortgage rules several times. He’s also put the CMHC under tighter regulatory oversight — it’s now directly overseen by Canada’s financial regulator, the Office of the Superintendent of Financial Institutions.
Still, even after all those steps housing prices continue to rise along with household debt, which has been escalating in tandem with real estate prices and now sits at record levels. Recent statistics suggest that while the rate of growth has slowed down over the last year, average consumer debt continues to rise — a worrisome trend that has left this country vulnerable a potential economic shock like a sharp rise in interest rates.
Mr. Clark acknowledged that if a meltdown were to take place, the banks would be protected thanks to the government mortgage insurance. But he noted that it would be difficult for TD to thrive if the Canadian economy ends up on its back. Trying to differentiate between a strong real estate market with rapidly rising prices and a bubble is a very tough thing to do, “so I err on the side of let’s slow this thing down and I think we have slowed it down. Because if you get it wrong, it’s really bad”.

To understand the Ottawa real estate market, please click here.  

Please click here for the whole article.

Thursday, December 12, 2013

10 Ways to Turn Off a Would-Be Homebuyer

1. Dirt

Hands down, our panel agrees: Nothing turns off a buyer quicker than a dirty house.

"The No. 1 biggest mistake is not getting the home in the best possible condition. That's huge," says Goldwasser. "I won't even represent sellers at this point unless they are fully aware of how important it is to get their home in the absolute best condition that they've ever had it in."

Goldwasser recommends that sellers go the extra mile, from steam-cleaning tile and grout to replacing carpets.

"If the carpets are old and smelly, you should put in new," he says. "If they're relatively new, you should at least have them shampooed."

Cannon agrees that grime can derail any showing.

"The home should be neat and clean and free of all debris," Cannon says. "If it reeks of cats or the kitchen sinks and counters are so filthy that it almost looks like the food is moving, I won't even want to come in."

2. Odors

Buyers, it's said, buy with their noses. Make sure your home smells fresh and inviting.

"Odors are a big one, especially kitchen odors," says Dana. "I advise my clients not to cook fried food, fish or greasy food while the house is on the market."

Some pet owners mistakenly believe pet smells to which they've become accustomed help make their abode homey. Nothing could be further from the truth.

"If you're a dog person, you tend to think everyone else is a dog person," says Goldwasser. "But the truth is, 50 percent of the population hates dogs and doesn't want to be near them. "Pets in the home? You have to deal with that."

Dana advises her clients to eliminate all traces of pets, not just pet odors. It's important to get rid of pet paraphernalia and have a "pet plan" to make sure the animals are not around when the house is shown.
"Pets in the home? You have to deal with that."

"A lot of times, people will leave pet items out -- dog dishes, cat litter boxes, etc.," Dana says. "That immediately turns off a buyer because they wonder, 'What has that animal done in the house?' Also, some people really don't like dogs. The minute they walk in and see this big, old dog bowl, they immediately won't like the house."

The same rules hold true for smokers: Remove all ashtrays, clean all curtains and upholstery, and consider smoking outdoors while your home is on the market.

"Interestingly, next to the kitchen, the smelliest room in the house is actually the living room," Dana says. "That's typically the room that has the most fabric, so that is where odors get absorbed."

3. Old fixtures

Want buyers to roll their eyes? Leave old fixtures on your doors and cabinets.

"You need to change out old fixtures in your house," Goldwasser says. "New cabinet hardware and doorknobs will probably cost all of $400 or $500, but it makes a huge difference."

The same holds true for dated ceiling fans, light fixtures and kitchen appliances.

"Homes that have old fans, lights, ovens, microwaves, ranges and dishwashers can really turn a buyer off," says Goldwasser. "Sellers will say, 'Oh, the buyers can take care of that.' Well, yes they can, but it's going to impede you from getting the highest price possible for your home."

4. Wallpaper

Your grandmother may have had it in every bedroom. Your mom may have loved it as a room accent. But today's buyer wants no part of wallpaper.

"Wallpaper is a definite no-no," Dana says.

Wallpaper is a pain to remove and simply adds another chore to a buyer's to-do list, Dana says.

"Wallpaper is extremely personalized. You've spent hours looking over books to pick out the wallpaper you want," she says. "What are the odds that the person walking in the door will also like that wallpaper that you picked out?"

5. Popcorn acoustic ceilings

Times change, and with them home decor styles. Acoustic popcorn ceilings, once the must-have for fashionable homes in the '60s and '70s, now badly date your space.

If you can't stomach the cost or the mess to remove the overhead popcorn, be prepared to credit a buyer in certain markets in order to close a sale.

"The popcorn acoustic ceiling is a major, major turnoff to buyers these days," says Goldwasser.

6. Too many personal items

Psychologically, when buyers tour a home, they're trying it on to see how it fits, just as they would a skirt or a pair of pants. If your house is cluttered with too many personal items, it's like the buyer is trying on those clothes with you still in them. A fit is unlikely.

"Anything that makes your house scream 'you' is what you don't want," Dana says. "I tell all my clients that how we decorate to live and how we decorate to sell are different, and right now, we're decorating to sell."

Sellers should try to eliminate personal items, including family photos, personal effects and even unique colors, she says.

"As soon as you have family photos, buyers get very distracted. 'Oh, did I go to school with him? What do their children look like?'" she says. "Suddenly, you're selling your family, and you're not selling the home."

If you really want to hook a buyer, Dana offers a tip: "I try to place a mirror strategically so that people can actually see themselves in the home, so they can actually picture themselves living there."

7. Snoopy sellers
Realtors and buyers alike generally bristle when the seller greets them at the door for a showing.

"It's so annoying," Goldwasser says. "They will want to walk around with the potential buyer and put in theirand two cents' worth. It's not good. Normally, there are one out of 10 sellers where it's OK to have them there, and that's because they know what is up with the property and how everything works."
"I tell all my clients that how we decorate to live and how we decorate to sell are different."

Goldwasser makes a point to shoo his sellers away from showings when he's the listing agent.

"They like to think they know what they're doing, and that's fine," he says. "But when you've sold thousands of homes and you have a system, you know how to get people the maximum value for their home. That's why they hire you, right?"

8. Misrepresenting your home

Misrepresenting your house online in the multiple listing service is a sure way to really upset buyers and their Realtors.

One of Cannon's buyers loved a home she saw online. When he drove by to take a look, he was surprised to find acres of ramshackle mobile homes across the street.

"Sellers are going to paint the best picture they can," he says. "Some listings I've looked at and wondered how in the world they got that gorgeous photo without showing all the junk that's around it. When you get there, you wonder why didn't they just be upfront?"

9. Poor curb appeal

Much is made of curb appeal, and for good reason: It's your home's handshake, the critical first impression that lasts with most buyers.

"You have to totally trim and edge your yard to get it into the most immaculate condition you can," Goldwasser says. "It's a big mistake to not freshly mulch the beds and trim the trees. Every little detail counts.

"To not power-wash the exterior or leave mud dauber and wasp and bird's nests in your eaves and above your doors? You've got to be a fool to do that."

10. Clutter

Whether inside or out, less is more when it comes to clutter.

"I usually start in the closets," Dana says. "Your closets should be half-full with nothing on the floor. Why? Because most people looking for a house have outgrown their previous house. Showing them that you've still got room to grow gives them a reason to buy."

Kitchens and built-in bookshelves should showcase spaciousness by following the rule of three. For kitchens, there should be no more than three countertop appliances. Meanwhile, bookshelves should be divided into thirds: one-third books, one-third vases and pictures, and one-third empty.

The home office should be very generic so any type of professional can imagine living there, Dana says.

"Otherwise, it can be a distraction: 'What does he do for a living? How much money does he make?'" she says.

Dana's tip for toddler parents is to pack away extraneous "kiddie litter" and keep a laundry basket handy.

"When you get that phone call one hour before a showing, toss everything in that basket and take it to the car with you and your kids, and you're all set," she says.

For advice on how to sell your Ottawa Home, please click on Ottawa real estate.

by Jay MacDonald, click here for whole article

Most Americans don't trust real estate agents, poll finds


Trust of realty agents falls short


Some 67.5% of Americans polled do not trust real estate agents, according to an online Google Consumer Surveys poll last month.
We’re not sure why Choice Home Warranty would conduct and publish such a poll, since you’d think real estate agents are among their biggest clients. Nevertheless, the survey of 1,147 adults showed more wariness among rural folks –  70.7% distrusted realty agents – than city dwellers. By age, 18- to 24-year-olds were the most distrustful.
Midwesterners were the most trustful at 38.1%. Men and women scored about the same on the trust-o-meter.
[Updated, 2:05 p.m. PST Nov. 13: Compared to a Gallup poll on honesty and ethics from a year ago, the Choice Home Warranty findings put trust of real estate agents on about par with bankers and chiropractors.
Real estate agents, however, aren't as disregarded as journalists. Only 24% of Gallup respondents ranked journalists’ honesty and ethics as very high.]

To read the complete article, please click here

Wednesday, December 11, 2013

Do you find the messages in the media confusing?

Do you find it confusing to predict the housing market in Ottawa?  Check out the google automatic search to the left, seems everyone is having this difficulty! 



Conservative downsizing of public service a “bark worse than its bite”: report

OTTAWA — The Conservative government’s promised austerity came with a “bark worse than its bite” as it downsized Canada’s public service by 19,200 jobs and left the size of government bigger than it was during 13 years of Liberals rule.
Ian Lee, a professor at Carleton University’s Sprott School of Business, said the job cuts since Prime Minister Stephen Harper came to power in 2006 amount to little more than “alleged downsizing.” In a newly released paper, he concluded the Conservatives grew the public service more than any government in 20 years, adding more jobs than they will cut by 2015.
“Increasingly Stephen Harper is revealed to be the 21st-century Conservative equivalent of Mackenzie King, the master incrementalist, who famously said ‘lean to the left, lean to the right but straddle the centre,” he wrote.
In his paper, published in the latest edition of How Ottawa Spends, Lee compared the reduction strategies of the Mulroney, Chrétien and Harper governments.
Former prime minister Brian Mulroney vowed to balance the books when he came to power but failed to slay the mounting deficit after privatizing Crown corporations, signing NAFTA and bringing in the goods and services tax. He also promised to get rid of public servants “with pink slips and running shoes” but ended up giving them nearly ironclad job security.
The Chrétien government introduced a program review that paved the way for the biggest downsizing in history — cutting $17 billion in spending and 55,000 jobs in the public service military and RCMP.
The size of the public service bottomed out at about 288,500 employees by the end of the Liberals’ downsizing. Departments began hiring again in the 2000s and grew steadily, adding more jobs than were lost during 1990s.
A big surge came with the election of the Conservatives in 2006 and peaked in 2010-2011 at 375,500 employees — including 283,400 in the core public service and agencies and another 92,100 in the military and RCMP.
But Lee said the Conservative government came to power with much hype, fear and expectations of a “hidden agenda” to shrink the size of government.
He said his analysis shows the massive cuts expected never materialized, disappointing the government’s hard-core conservative supporters. Meanwhile the opposition and unions call them “excessive and ruinous” to the public service and to Canadians who rely on federal programs and services. The unions are still united in their campaign against further cuts to the public service.
Lee argues the “empirical record” simply doesn’t support the Conservatives’ claims that they made major reductions in the public service, nor their opponents’ claims that the government has been “savage in imposing draconian, unprecedented cuts.”
“Both are appealing to their base, which in turn supports fundraising for the party, or in the case of the PS unions, greater support — which has been wavering — for the PS union leadership. In short, the federal public service is now larger than when they came to power in 2006 — notwithstanding the claims by the Harper Conservatives and the public sector unions.”
The Conservative government began taking aim at spending in 2006 with a $1-billion target reduction by 2007-2008. It then launched a series of departmental spending reviews, including the one-time strategic and operating review across government to find $5.2 billion in savings. Lee noted the Parliamentary Budget Office estimated cuts in the 2010 and 2011 budgets eliminated 4,000 jobs.
The downsizing began in earnest with the 2012 budget calling for the elimination of 19,200 jobs over three years — an eight-per-cent reduction from the employment peak in 2010-2011. By November 2012, Treasury Board announced it had already eliminated nearly 11,000 jobs and was halfway to its target. Most of those reductions were handled by attrition and retirements and the rest with the buyout, early retirement or education packages offered under the Workforce Adjustment Agreement negotiated with unions to manage layoffs.

Jobs have a huge impact on real estate markets, to learn how this effects the Ottawa Housing Market, please click Ottawa Real Estate.

For the full article, please click here