United States

*    The Federal Reserve committed to keep rates on hold through the end of 2014 this week, while today’s Q4 GDP released underscored the fragility of the economic recovery. Unfortunately, further monetary easing isn’t what is going to provide the jolt the economy needs.

*    What’s holding the economy back right now isn’t the price of credit; it’s the lack of quality borrowers. The pool of potential borrowers willing and able to take advantage of lower interest rates is limited. And as long as aggregate demand remains depressed, businesses will continue to put off investing until the economic outlook improves.

*    What the economy needs right now is more effective fiscal policy solutions. However, fiscal policy so far has tended to undermine the recovery rather than aid it.

Canada

*    With the U.S. Federal Reserve on hold until 2014, we expect the Bank of Canada to leave its key overnight rate unchanged until mid-2013.  In addition to this delayed start, we now forecast that the return to the neutral interest rate will take place over a longer period of time.

*    The revised interest rate outlook led the loonie to break through parity versus the greenback for the first time since November.  Canadian bond yields also fell across the curve.

*    The lower-for-longer interest rate profile implies an upward risk to our near-term domestic economic outlook.  At the same time, households are already heavily indebted and the national real estate market is overvalued by roughly 10-15%.  If both measures continue to ramp up in the presence of low interest rates, they will become heightened downside risks to the medium-term economic outlook.

Webcasts:

Canada:  https://www.brainshark.com/tdeconomics/vu?pi=zIazmYiZsz1sQYz0

United States:  https://www.brainshark.com/tdeconomics/vu?pi=zGlz15w9G0z1sQYz0

 TD Financing Services and TD Broker Services sales teams have merged! Ask me about Prime OR Non prime deals!

 Lorie Martin I Regional Sales Manager BC I Broker Services I TD Canada Trust | 604 346 5976 or 1 877 273 7498 x 2501

How will the new MLS® Home Price Index help you help your clients?

The housing price index (HPI) has always been the best measure for home price trends and now it’s going to get even better.

In February, CREA and five of Canada’s largest real estate boards, including FVREB, will launch a national index replacing our regional FVREB/REBGV MLSLink® HPI that’s been in place since the mid-90s.

Like the old index, this new MLS® HPI is the best and purest way of gauging price trends in the housing market. It takes housing quality into account, such as housing category, location, number of rooms, living area, etc., in a way that no other method of price tracking does.

What’s changed? The new index:

• Is more accurate because it’s been updated to reflect more sub-areas and new housing types (the old index was last updated in 2005)
• Is national in scope with uniform housing types across the country to allow for “apples to apples” comparisons between markets across the country (the old index was only valid in the Lower Mainland)
• Shows price trends at all levels: areas, sub-areas, municipal, regional and national (the old index excluded or combined certain Fraser Valley neighbourhoods)
• Divides single family detached into one and two storey categories providing greater stability and accuracy

Thanks to the MLS®, REALTORS® across Canada and the industry are already recognized as a credible, reliable source of real estate data and now the new MLS® HPI will build on this reputation. It will keep REALTORS® at the forefront of public opinion in terms of housing market expertise.

The MLS® HPI is scheduled for launch during the first week of February, 2012. Click here to see a more detailed matrix comparing the old index with the new.

Finance Minister Jim Flaherty says he stands ready to intervene in the housing market again, just as a mortgage price war breaks out among Canada’s major banks.

Flaherty said Tuesday that he’s watching the market closely, although he has no plans to tighten the market again at this point.

His comments came on the same day that the Bank of Canada projected that the debt burden on households will continue to rise – a troubling sign that means stretched consumers are vulnerable to shocks in this climate of heightened economic uncertainty.

Flaherty said he’s in close contact with the big banks, most of whom are now offering 2.99% fixed-rate mortgages – the lowest ever.

Click here for the full Globe and Mail article

Bank of Montreal made headlines with the 2.99% five-year fixed-rate mortgage it unveiled last week.

Most of the other big banks have followed suit, but before signing on the dotted line you should read the fine print. These mortgages have restrictions that you won’t find on other products.

“It’s the lowest rate available but I would only recommend it to people who are very sure of their circumstances for the next five years,” said Kerri-Lynn McAllister of RateHub.ca, a website that compares mortgage rates. “You may want to look at a slightly higher rate that offers all the flexibility of a standard mortgage.”

BMO says this mortgage offers Canadians a way to be mortgage-free faster because it offers a great rate and a shorter amortization. But it differs from a typical mortgage in several ways.

Click here for the full article in The Star.

Canada’s key interest rate will begin 2012 exactly where it’s been since September 2010 – unchanged at 1.00%

This is the longest stretch on record (16 months) without a Bank of Canada rate change.

Economists didn’t expect the BOC to move rates at this meeting. Instead, they were looking for any change of language in the Bank’s official statement. As usual, there were a handful of conspicuous statements in that release.

Click here for BOC highlights from CanadianMortgageTrends.com

Lawyers spearheading twin class-action suits against CIBC over “vague prepayment terms” have fielded interest from hundreds of the bank’s mortgage clients – that as a case management judge in BC gets assigned to the legal action

“There have been hundreds of inquiries about these cases to our office and that of our co-counsel in Ontario,” Kieran Bridge, a Vancouver lawyer with the Construction Law Group, told MortgageBrokerNews.ca, pointing to borrowers who paid out CIBC mortgages from April 2005 onward.

FirstLine clients are among those concerned that they may have been adversely affected by the lender’s prepayment policy.

A Case Management Judge has also been assigned, what Bridge calls a key, mandatory step in moving class actions forward in British Columbia. “We applied in November for a judge to be appointed, in order to move the case ahead, and are pleased this has happened,” he said.

The twin lawsuits were filed in BC and Ontario last October, alleging some CIBC mortgage borrowers have been unfairly penalized by unclear prepayment terms giving rise to two substantive complaints.

Click here to read more from MortgageBrokerNews.ca.

We had a recession back in 2008-09, but you might not have known it by the way people kept spending and borrowing.

Now, the economy is growing modestly, and yet a recent national poll has suggested that 70% of Canadians believe the country is in recession.

This is progress. You’re much more likely to have your financial priorities straight if you’re worried right now about the future.

Click here for 10 money rules to prepare you for any tough times ahead from the Globe and Mail.

Canadians rank relatively low on The Economist magazine’s Misery Index released this week, which is a good thing.

Canada stands at number 70, out of 92 countries measured on a combination of unemployment and inflation.

The jobless rate in Canada is now at 7.5%, high but nowhere near as high as other countries, while inflation is running at 2.9%.

Macedonia, whose unemployment rate tops 30%, and Venezuela, where inflation is rampant, top the list.

Click here to read more from the Globe and Mail.

2011 REAL ESTATE MARKET SHOWCASES REGIONAL VARIATION

(Surrey, BC) – Overall, Fraser Valley’s real estate market in 2011 was below the 10-year average in property sales and above average in the number of new listings received, however, according to the president of the Fraser Valley Real Estate Board, results varied widely depending on the community and property type.

Sukh Sidhu observes, “I can’t remember a year that illustrates better how local real estate is and the importance of talking to your REALTOR® before making a decision to buy or sell. For example, in my community of Abbotsford, sales of single family homes dropped by almost 7 per cent compared to 2010, pushing prices down slightly, while in South Surrey/White Rock sales increased year over year by 45 per cent resulting in double-digit price increases.”

The Board’s Multiple Listing Service® processed 15,529 sales in 2011 compared to 14,891 the previous year, an increase of 4 per cent, while the number of new listings remained about the same – 31,592 in 2011 compared to 31,437 in 2010. Over the year, the number of active listings for buyers to choose from dropped by 9 per cent going from 8,139 properties in December 2010 to 7,399 in December 2011.

Although 2011 ranks the third slowest year for sales in Fraser Valley since 2002, it was only 10 per cent less than the 10-year average of 17,210 sales. The volume of new listings received in 2011 was 6 per cent more than the 10-year average of 29,867 new listings, placing last year third in ranking since 2002.

Sidhu adds, “One trend from 2011 that is clear was the preference for single family homes. For the most part in our region, both sales and prices of townhomes and condos either stayed on par with 2010 or decreased.”

In December, the benchmark price of a detached home in the Fraser Valley was $522,998, an increase of 3.3 per cent compared to $506,145 in December 2010 and a decrease of 1.7 per cent compared to November.

For townhouses, the benchmark price in December was $315,330, a decrease of 2.1 per cent compared to the same month last year when it was $322,054 and down 3.8 per cent compared to November. The benchmark price of apartments in December was $237,285, a decrease of 1.2 per cent compared to December 2010 and a decrease of 0.5 per cent compared to November.

Average prices year over year show detached homes up 9.1 per cent – $610,269 in 2011 compared to $559,456 in 2010. The average price of townhomes increased by 2.6 per cent, going from $336,484 in 2010 to $345,138 in 2011 and the average price of apartments increased by 0.9 per cent going from $223,910 in 2010 to $225,976 in 2011.

The Fraser Valley Real Estate Board is an association of 2,893 real estate professionals who live and work in the BC communities of North Delta, Surrey, White Rock, Langley, Abbotsford, and Mission. The FVREB marked its 90-year anniversary in 2011.

FRASER VALLEY REALTORS® DONATE $20,000 TO LOCAL FOOD BANKS

SURREY, BC – The Fraser Valley Real Estate Board has made its largest donation ever to area food banks – $20,000 – to assist them in their fight against hunger. Sukh Sidhu is Board president. “As REALTORS®, we understand the challenges many families face to pay rent, utilities as well as put food on the table.

“We were fortunate this year to be able to help thousands of families achieve their dream of home ownership. Not every year is prosperous however, whenever possible, we feel it’s important to do what we can to improve the quality of life in our communities. With this gift to Fraser Valley food banks we’re hoping to assist some of those who can’t afford a home by stocking their pantries.”

The $20,000 donation was divided proportionately based on the number of REALTORS® represented in each community with $9,000 going to the Surrey Food Bank; $3,600 going to both the Langley Food Bank and Sources White Rock South Surrey Food Bank; $3,200 to the Abbotsford Food Bank; and $600 to St. Joseph’s Food Bank in Mission.

Marilyn Herrmann, Executive Director of the Surrey Food Bank, received FVREB’s cheque on behalf of the communities of North Delta and Surrey. “REALTORS® are amongst our most generous supporters, not just in dollars but in volunteer time.

“Sukh asked how many bags of rice nine thousand dollars could provide and I was very happy to tell him: 225 forty-pound bags. Or it will provide formula to 230 babies for almost two months. This is a very special gift and on behalf of all Fraser Valley food banks, we are very grateful.”

The Fraser Valley Real Estate Board is the professional association of over 2,800 REALTORS® who live and work in the communities of North Delta, Surrey, White Rock, Langley, Abbotsford and Mission. Because REALTORS® live where they work and work where they live, they care deeply about the quality of life in their communities. The profession embraces a philosophy called Quality of Life, which provides a framework for government relations work; member volunteer work and community support. For more information, go to www.fvreb.bc.ca.

PHOTO: Now that’s a lot of rice! Marilyn Herrmann, Surrey Food Bank’s Executive Director tells president Sukh Sidhu that FVREB’s $9,000 donation could buy 225 forty-pound bags of rice.

 —30 —

BLANKET DRIVE CONTINUES TO SPREAD WARMTH TO THOSE WHO NEED IT MOST

VANCOUVER, BC – Nearly 19,000 working poor and homeless people across the Lower Mainland received donations of blankets, clothing, and other necessities this year from the region’s longest running Blanket Drive. Over the years, the Drive has grown to become the largest collection of its kind in our region.

Since 1994, the real estate community has partnered with local charities to distribute items collected in the region, in that time helping more than 185,000 people.

During this year’s REALTORS Care® Blanket Drive, Nov. 28 – Dec. 5, people from across the Lower Mainland benefited from the many contributions distributed through local charities.

“Many people in our community who are struggling financially will be blessed and warm this winter because of the Blanket Drive,” said Lorraine Pilling, clothing co-op manager at Higher Ground Ministry, a charitable organization in Port Coquitlam.

The largest recipient charity in Surrey, NightShift Street Ministries, is an organization that offers outreach services to the homeless including food, clothing and counselling.

“We anticipate the hundreds of bags of coats and blankets we received this year will provide a change of clothes and a fresh blanket to every client who needs it until April 2012,” said MaryAnne Connor, founder/president of Nightshift Street Ministries.“This donation program is an integral part of our mission to assist those in need.”

Across the Lower Mainland, people generously support the Blanket Drive. Individual people, corporations, retailers, community groups and schools all partner with local REALTORS® to collect quality items.

Donations collected by Chilliwack and district volunteers were distributed to Ruth and Naomi’s Mission, Chilliwack; the Joshua Project, Hope; and Agassiz-Harrison Community Services, Agassiz.

This year, for the first time, a video blog was created to tell the stories behind the Blanket Drive. Learn how it started, how volunteers collect and sort donations, and how charities distribute the items by visiting:

www.blanketdrive.ca
www.facebook.com/blanketdrive
www.twitter.com/FVREB  and www.twitter.com/REBGV  (#RCBD)

STEADY DEMAND FOR HOMES HEADING INTO THE HOLIDAYS

(Surrey, BC) – The November property sales in the Fraser Valley are up slightly compared to last year and didn’t experience the usual month-over-month seasonal decline.

The Fraser Valley Real Estate Board processed 1,120 sales in November on its Multiple Listing Service® (MLS®), an increase of 3 per cent compared to the 1,084 sales during the same month last year and a decrease of 2 per cent compared to 1,139 sales in October. In the last decade, sales decreased on average 9 per cent from October to November.

Board president, Sukh Sidhu says, “Given the time of year, Fraser Valley is experiencing steady buying activity with notable month-over-month increases in the sale of homes with an attractive price point.

“For example, townhome sales in central Surrey increased by 20 per cent in one month and in Langley by 43 per cent.” Sidhu adds, “Fraser Valley offers buyers the key value of affordability. Currently, over half of our townhomes and condos are listed for $289,000 or less.”

While sales remained stable, MLS® inventory decreased from October to November, typical for the time of year. The board posted 1,926 new properties in November, an increase of 9 per cent compared to November of last year and a decrease of 23 per cent compared to October. November finished with 9,471 active listings in the Fraser Valley, 5 per cent more than the same month last year and 5 per cent less than October’s 10,005 listings.

Sidhu says, “Even with fewer listings coming on stream, buyers can still take advantage of almost nine months of inventory, which is putting downward pressure on prices in certain areas and property types.” Prices for a typical Fraser Valley apartment are down year-over-year and month-over-month, while both single family detached and townhomes are still showing positive price gains compared to November last year and remain stable compared to October.

In November, the benchmark price of a detached home in the Fraser Valley was $532,086, an increase of 5.4 per cent compared to $504,848 in November 2010 and an increase of 0.3 per cent compared to October.

For townhouses, the benchmark price in November was $327,764, an increase of 2.5 per cent compared to the same month last year when it was $319,623 and up 0.7 per cent compared to October. The benchmark price of apartments in November was $238,461, a decrease of 1.6 per cent compared to November 2010 and a decrease of 2.2 per cent compared to October.

The Fraser Valley Real Estate Board is an association of 2,897 real estate professionals who live and work in the BC communities of North Delta, Surrey, White Rock, Langley, Abbotsford, and Mission. The FVREB marks its 90-year anniversary this year.

News Release: November 2, 2011

ADVANTAGE BUYERS… IN FRASER VALLEY’S HOUSING MARKET

(Surrey, BC) – Below average home sales combined with a regular influx of new listings continue to give buyers the upper hand in communities south of the Fraser River, including Mission. However, according to the president of the Fraser Valley Real Estate Board, Sukh Sidhu, “There is action when the property is competitively priced.

“It is not a quiet market. Priced-right properties are selling thanks to the continuation of low interest rates.” Sidhu adds, “What’s happening is that there is a large amount of inventory available in the Fraser Valley, in particular with condos and townhomes, and that’s what’s holding prices in check.”

The Fraser Valley Real Estate Board processed 1,139 sales in October on its Multiple Listing Service® (MLS®), an increase of 12 per cent compared to the 1,014 sales during the same month last year and a decrease of 2 per cent compared to 1,165 sales in September.

In terms of listings, the board posted 2,511 new properties in October, an increase of 18 per cent compared to October of last year and a decrease of 5 per cent compared to September. The number of active listings in the Fraser Valley dipped in October, going from 10,096 in September to 10,005.

Sidhu says, “The good news for sellers is that although inventory is high, it’s not near record highs and sales remain steady. This is why the overall benchmark price for residential properties has remained unchanged for six months.”

The benchmark price (the price of homes with characteristics typical to that area) of a single family detached home in the Fraser Valley in October was $530,335, an increase of 4.9 per cent compared to $505,759 in October 2010 and on par with the price in September.

For townhouses, the benchmark price in October was $325,482, an increase of 2 per cent compared to the same month last year when it was $319,058 and down 0.6 per cent compared to September. The benchmark price of apartments in October was $243,725, an increase of 1.3 per cent compared to October 2010 and on par with the price in September.

The average number of days to sell a Fraser Valley home varies depending on the property type. Sidhu says the average of 45 days to sell a single family detached home has been constant for three months. In October, townhomes took on average 55 days to sell and apartments 75 days.

The Fraser Valley Real Estate Board is an association of 2,903 real estate professionals who live and work in the BC communities of North Delta, Surrey, White Rock, Langley, Abbotsford, and Mission. The FVREB marks its 90-year anniversary this year.

Full package:
http://www.fvreb.bc.ca/statistics/Package%20201110.pdf

By The Canadian Press

OTTAWA – The Bank of Canada is expected to continue setting the conditions for economic recovery today by passing again on interest rate hikes.

Most economists and markets agree that governor Mark Carney will leave the rate at one per cent until the end of the year and likely well into 2012 or longer.

And, any thought Carney might have had of cutting the rate likely went out the window last week when Statistics Canada reported inflation rose to 3.2 per cent in September, above the bank’s one-to-three per cent acceptable range.

TD Bank chief economist Craig Alexander says with uncertainty over Europe’s debt issues high, and the U.S. economy still stumbling, the Canadian central bank is in wait and see mode for some time.

He says of greater interest today is what Carney will say about future prospects for the Canadian economy.

A few weeks ago, the bank was expected to dramatically downgrade its official growth projections of 2.8 and 2.6 per cent for this year and next. But with economic data coming in better-than-expected in recent weeks, including last month’s surprising 61,000 jobs gain, the bank may not be as glum about prospects going forward.