Economists predict more financial troubles for Canada in 2009, slow recovery

Canadians should brace themselves for another year of economic woe that could even top the misery that unfolded in the latter half of 2008, according to some of the country's leading bank economists.

The flood of dire financial challenges facing the United States is still working its way steadily across the border into Canada, TD Bank chief economist Don Drummond told a gathering at the Economic Club of Toronto Wednesday.

"We shouldn't really be thankful for the end of 2008 because I think (it) will have proven to be a better year than 2009," he said.

"We'll have a rough fourth quarter, but it'll really hit in Canada in the first quarter, and we'll start to see a lot more variables that look somewhat like the United States."

The dramatic economic decline will likely push Bank of Canada Governor Mark Carney to further slash interest rates, to as low as 0.5 per cent, in an effort to fend of deepening economic problems, suggested Avery Shenfeld of CIBC.

http://ca.news.finance.yahoo.com/s/07012009/2/biz-finance-economists-predict-financial-troubles-canada-2009-slow-recovery.html

Yes thats the one ... you can watch it on TV ... Also tune every Wednesday b/w 6 and 7 pm on 101.3 FM (Band Baaja) and their star realtor advertiser Harjinder Jolly (Jolly jaisa koi nahin ) shares some of his star listings every week ... incidentally today's Wednesday .

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Fido.

Here is life time opportunity to buy investment property or wait for sometime you will get same opportunity in Canada too.


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Radical cheap: $1,000 homes

http://finance.yahoo.com/news/Radical-cheap-1000-cnnm-14005833.html


There are 18 listings in Flint, Mich., for under $3,000, according to Realtor.com. There are 22 in Indianapolis, 46 in Cleveland and a whopping 709 in Detroit. All of these communities have been hit hard by foreclosures, and most of these homes are being sold by the lenders that repossessed them.

"Foreclosures have turned banks into property management companies," said Heather Fernandez, a spokeswoman for Trulia.com, the real estate Web site. "And it's often cheaper for them to give these homes away rather than try to get market value for them."

In Detroit for instance, Century 21 Villa owner Randy Eissa has a three-bedroom, one-bath bungalow of about 1,000 square feet listed at just $500. It's a nice place with lots of light, but it needs a total rehabilitation inside, which Eissa estimates will cost between $15,000 and $20,000. But that's not bad, considering that the home last sold for $72,000 in late 2007, according to Zillow.com.

Harper calls unemployment numbers 'troubling'

The first question Harper faced at a news conference in Montreal was whether he believes the rate could hit double digits.

"I am not going to speculate on future figures," Harper said. "Obviously, the figures today are troubling.

Harper said the situation is far worse in the United States and that the Canadian economy still has many things in its favour.

The U.S. unemployment rate surged to 7.2 per cent in December, its highest level in 16 years.

"What I think is more more troubling are the figures in the United States which really do indicate the period of difficulty we are entering in terms of the global economy," Harper said.

http://ca.news.finance.yahoo.com/s/09012009/2/biz-finance-harper-calls-unemployment-numbers-troubling-says-canada-emerge.html

Commenting on just-released statistics showing 34,400 jobs lost in December and the unemployment rate rising to 6.6 per cent, Flaherty acknowledged that "we're in for a very difficult year; we regrettably are going to have to expect continuing job losses in Canada."


As fears grow that even solid companies are being crushed by a lack of capital and consumer spending is faltering for want of loans, "we hope that the private sector will work well with us," Flaherty said.


http://ca.news.finance.yahoo.com/s/09012009/2/biz-finance-ottawa-working-help-unemployed-credit-remains-top-concern.html


Wonder how many houseless canadian will hold on to jobs under the current recession (which is turning fast turning into another depression)to encash the real estate bottom which is expected in 2010.

Keep well,

Peace and until next time,

Cheers!

Weekly Sales Report for Homes and Condos in Toronto and the GTA from TREB Market Watch. This report is updated once TREB releases the data.
January 7, 200

Av. Price $330,056

http://www.gtamoves.com/Weekly_Sales/page_2168750.html

Compare:
December 2008 - $361,415
January 2008 - $370 000
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Just replace the oil with RE,

http://www.cbsnews.com/stories/2009/01/08/60minutes/main4707770.shtml

Did China and India suddenly have gigantic needs for new oil products in a single day? No. Everybody agrees supply-demand could not drive the price up $25.


“Approximately 60 to 70 percent of the oil contracts in the futures markets are now held by speculative entities. Not by companies that need oil, not by the airlines, not by the oil companies. But by investors that are looking to make money from their speculative positions,” Gilligan explained.

Gilligan said these investors don’t actually take delivery of the oil. “All they do is buy the paper, and hope that they can sell it for more than they paid for it. Before they have to take delivery.”

Latest statergy by the realtors to potential clients...

"No new construction coming up for a long time.... So only the existing homes will be available for sale... Inventory will keep going down and finally price will rise again... So buy before you lose good homes."

My take: Those who are contemplating buying in this environment at ridiculously inflated prices will have severe cases of post purchase dissonance for many years. U.S. had their ARM mortgage renewals starting this year and will spread like wildfire in 2010, this will be bigger then the subprime...so what happens to their biggest trading partner (Canada) when nobody is buying anything from us.



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Canada won't avoid recession, Conference Board says

http://business.theglobeandmail.com/servlet/story/RTGAM.20090114.wconfboard0114/BNStory/Business/home

A deep economic downturn will boost the unemployment rate and cause house prices to decline by a further 10 per cent in 2009, according to the Conference Board of Canada's 2009 winter outlook.

Federal fiscal stimulus, including tax rebates and infrastructure spending, won't be enough to avoid a recession, the report said.


http://www.greaterfool.ca/

Canadian telecom giant Nortel Networks (TSX:NT) files for bankruptcy protection in U.S. court, shares halted.

January home sales plunge 50%

Average GTA property price falls $35,000 from last year; analysts predict tough year ahead for market

The Toronto Real Estate Board yesterday reported a meagre 888 sales in the first half of January, compared with 1,776 sales during the same period a year ago.

The average price of a home is also down, 9.5 per cent to $332,495, compared with last year's $367,574 – a $35,000 plunge.

"The economic situation in Canada has changed noticeably over the past year ... Toronto is not immune to this," TREB president Maureen O'Neill said.

"The GTA housing market has been impacted."

Realtors say a flurry of buying last January to escape Toronto's new land transfer tax that came into effect in February 2008 may have exaggerated the year-over-year drop.

Sales in the city of Toronto are off 54 per cent in the first 15 days of 2009, while prices are down more than $40,000 for the average home. Homes in the 905 suburbs were not hit as hard, with sales down 47 per cent and prices off $26,000.

There is no question this will be a difficult year for the housing market as well as the commercial real estate market.

Job losses for the GTA could mount to 125,000 over the next 12 to 18 months, according to a report by housing analyst Will Dunning.

"We are probably at the edge of a rapid drop in employment," Dunning said. "That added negative factor will accelerate, deepen and prolong the recession."

Dunning said he remains convinced the condo market is the most vulnerable to a downturn, with 36,700 units currently under construction in the GTA. In central Toronto, resale listings, as well as rental condo listings, are up 75 per cent from a year ago, he said.

"I've been saying for a long time that there is excess investment in the condo apartment market and the reckoning has been deferred due to delayed completions," Dunning said. "This has allowed the supply pipeline to get very fat. The reckoning has now begun."

Meanwhile, in the commercial market, there was just under 12 million square feet leased in 2008, compared with 13 million in 2007, resulting in an 8 per cent drop in activity according to a report on commercial and industrial activity released by TREB yesterday.

"This result demonstrates the commercial market has not escaped the downward economic pressures of the last several quarters," said TREB commercial council chair Garry Lander.

Despite the fall, 2008 leasing figures are still up by 3 per cent over 2006 figures.

But analysts say it will be tougher for commercial real estate as layoffs start to sink in, while more than three million square feet of new space is set to be completed at the end of 2009.

http://www.thestar.com/business/article/573826

Keep well,

Cheeers!