Real Talk!

Warren Lovely, an economist at CIBC World Markets Inc., recently interviewed for a Globe & Mail article, said Ontario's is one of the provincial economies downshifting from a better-than-expected 2010 to a more tepid growth pace for 2011. Mr. Lovely says the housing market has been propping up Ontario's economy, but the same sector will likely act as a drag next year. A slowdown in the construction sector, combined with a slumping U.S. economy, will weigh on real estate and the overall economy. He estimates that real estate prices in Ontario are over-valued by about 11.6 per cent.

Nesbitt Burns has a similar perspective. A recent online article (TorontoLife.com) discussed a study: "In our view, comparing house prices with personal income, rather than rent, provides a superior methodology… the historical trend for this ratio has a zero slope, meaning prices tend to rise alongside incomes over time. This makes sense, since a family’s income largely determines how much it can pay for a house…

Comparing the current ratio with the long-term trend suggests Canadian house prices hit a peak overvaluation of 18% in late 2009. This raises some concern because it suggests the market is only slightly less overpriced than in the late 1980s, or compared with the U.S. in 2006. However, a 3% decline in (seasonally-adjusted) prices so far this year, coupled with continued moderate income growth, has reduced the estimated degree of overvaluation to a less worrisome 11% in 2010 Q3."

It never fails to amaze me that the Toronto/Ottawa real estate markets can be so different. Recently, a capital Conference Board economist said that October stats showed Ottawa in the middle of expected price increases nationally at about three per cent. Robin Wiebe said that government employment has always helped the market stay steady, but the early 2000s tech-boom pushed residential real-estate into a better growth phase that still reverberates today. "We are looking at a period of stability out here," Mr. Wiebe added.

Canada’s residential property sector appears to be stabilizing based on separate reports released in mid-November. National resale housing activity picked up for the third straight month in October, according to data from the Canadian Real Estate Association. The association also predicts that residential property prices in Canada are set to fall 1.3% in 2011 after a rise of 3.1% this year.

“High employment levels and low mortgage rates will continue to support demand for new homes in 2011. Nevertheless,housing starts will decrease to levels that are more in-line with long-term demographic fundamentals next year,” said CMHC chief economist Bob Dugan. CREA president Georges Pahud. ‘Interest rates are expected to resume their return to more
normal levels next year, but will still be at levels that are friendly to the housing market,’ he said.

Meantime, Statistics Canada said Tuesday that the gross domestic product rose by only 0.3 per cent in the third quarter,down from a 0.6 per cent gain in the previous quarter. The agency said lower exports and lower investment in housing restrained GDP growth.

Douglas Porter, the Bank of Montreal's deputy chief economist, said it means the Bank of Canada will be in no rush to raise interest rates when it makes its next scheduled announcement. The central bank increased borrowing costs three times between June and September, but has since held rates steady at 1 per cent. It is set to make its next decision on Dec. 7.

UPDATE:

This just in:

Royal Bank of Canada says the cost of home ownership was more affordable in the third quarter, thanks to lower mortgage rates and softer house prices.

RBC says all provinces had improvements in housing affordability during the third quarter, especially British Columbia.

The RBC report says housing affordability improved at the national level by between 1.4 and 2.5 percentage points, depending on the type of property.

Yesterday morning, I was distracted from my mundane routine... and spent some wonderful time, watching an otter play in the water, near the beach. Maybe she/he was fishing. I got to thinking about the simplicity of it all... and about what his/her visit might mean.

According to native medicine, otter teaches independence and self-reliance for our needs. Otter reminds those to whom the otter spirit splashes to laugh and enjoy life to its fullest... to always look at situations, events and people from different angles; to always be open to new challenges...to swim through problems and emotional upheavals of life with ease. Otter medicine emphasizes nurturing energies. If otter swims into your life the message may be to rid yourself of fret, worry and pain.

This otter was almost as interested in me, as I was in him/her!

The otter is a feminine totem. It's fur and pelts have been used from time immemorial by medicine people the world over to hold their medicine tools.

Otter is the symbol of grace and empathy. Otter medicine takes great pleasure in the success and happiness of others, and will work untiringly to help others achieve that. There is no selfishness in otter. They could never be mean, or self-centered, or self-driven. You will not find an otter that gossips, or who "flames" others, or who is unnecessarily critical in a vengeful way for the purpose of otter is to support and enhance OTHERS, not themselves.

THIS MORNING... my buddy came back... and brought some friends:

Otter is also a signal that you need to take more time for yourself to just play and be silly. Lighten up! You must feed otter's playful side so that she can continue to help balance your great concern for the welfare of others. We lose sight, sometimes, of our own spirit's need to be light-hearted and to laugh and be childlike- which is a very important element in walking in balance.

Well, they certainly made some interesting sounds... and Piper was busy barking at them to move on... it truly is a delightful way to start the day!