Category Archives: Canada

Business is ready for a rate hike

Lots of key indicators are telling the Bank of Canada that it’s time for an interest rate hike.

After the survey’s release, the chance of a July rate hike rose to 84 per cent from about 70 per cent, according to Bloomberg. Nine of 16 economists polled by Bloomberg now expect the central bank to raise rates to 0.75 per cent in July from the current 0.5 per cent.

The survey is one of the key pieces of information that Mr. Poloz and his central bank colleagues use to set monetary policy.

It was conducted between early May and early June, just before Mr. Poloz and his deputies started publicly saying the economy has turned the corner from the devastating oil price collapse that began in 2014.

Read the full article here.

Canada has 2x more vacant homes than the US before the crash

southseacompany posted this link claiming we’ve now reached double the number of vacant homes the US had before their housing bubble burst:

Home vacancies are often a sign of overbuilding, and speculation. At the height of the US housing crisis in 2008, a massive 2.9% of all homes were sitting vacant. This made it hard for home prices to retain their value during the downturn, since the vacant units began flooding the market on the way down. But that was the US, and this is Canada – we don’t have that number of units sitting vacant, right? Actually, Canada has more than twice that number.

Read the full article here.

Canadian dollar rises on rate hike expectation

Poloz is hinting that rate hikes are coming and thats pushing the Canadian dollar up a bit:

The Canadian dollar climbed to a four-month high of 76.44 cents US after Poloz’s comments, which fed speculation about a rate increase as early as its next scheduled announcement in two weeks. The boost lifted the loonie from an average price of 75.83 cents US on Tuesday.

If the central bank increases its key rate, the big Canadian banks are expected to raise their prime rates, driving up the cost of variable rate mortgages, other loans and lines of credit tied to the benchmark rate.

Poloz credited the two rate cuts introduced by the bank in 2015 for helping the economy counteract the effects of the oil-price slump, which began in late 2014. The reductions also helped increase the speed of the adjustment, Poloz added.

“It does look as though those cuts have done their job,” said Poloz, who was in Portugal on Wednesday to participate in a forum hosted by the European Central Bank.

“But we’re just approaching a new interest rate decision so I don’t want to prejudge. But certainly we need to be at least considering that whole situation now that the capacity, excess capacity, is being used up steadily.”

Read the full article over at the Financial Post.

Canada to crack down on real estate transaction tax cheats

Looking to cheat on your real estate transaction taxes? Bad news, the CRA has decided it doesn’t want you to and is coming after real estate tax cheats.

From April 2015 to March 2017, the CRA audits of real estate transactions resulted in more than $329.4 million in assessed income that had not been reported. During this time, the CRA applied over $17 million in penalties, primarily associated with Canada’s two major real estate markets in Toronto and Vancouver.

Canadians work hard for their money and the Government of Canada recognizes that many families count their principal residence as both their home and most valued asset.‎ The CRA will continue to strengthen relationships with key partners such as provinces, territories, and municipalities to further expand, obtain, and exchange information on real estate transactions, thereby enhancing the CRA’s ability to combat tax evasion and avoidance.

17 million in penalties? That’s almost enough to buy a fixer-upper on the north shore!

Secrets of the Real Estate industry

These may not actually count as ‘secrets’, but over at the Tyee they have a list of 9 things the real estate industry doesn’t want you to know:

You’ve heard it a million times. The reason so few of us can afford Vancouver is because there aren’t enough new homes being built. This is the version of reality that real estate industry leaders and their political allies want us to believe.

But an investigation of the industry by The Tyee has revealed reality to be much more complex. Over the past six months I spoke at length with financial analysts, economists, industry consultants, realtors and many others to learn the true causes of Vancouver’s housing crisis and who is profiting from it. They were in broad agreement that real estate is at the centre of a massive realignment between our society’s rich and poor — and one that few leaders in the industry seem willing to publicly acknowledge.

About half of the items on their list have to do with the class divide and the disappearing middle class.

Read the full article here.