Business

Canadian home prices have stabilized. Will incomes ever catch up?

Published

1 year ago

August 16, 2023

Canadians looking to buy a home continue to face hurdles as costs keep piling up.

While the housing market is showing signs of stability, rising mortgage rates and still-elevated home prices mean an increase in the income needed to purchase a home, according to a new report.

The analysis by Ratehub.ca published Tuesday shows the income needed to buy an average-priced home in 10 of Canada’s major cities increased from June to July of this year.

In some of the biggest cities like Toronto and Vancouver, the average price for a home ranges from $1.16 million in the former to $1.21 in the West Coast city. And to afford such a home, the report found households in Ontario’s capital would need to earn at least $235,250, while those in Vancouver would need at least $244,620 gross.

Even in cities that saw home prices drop, such as Ottawa where an average home is about $650,200, Canadians’ needed income still rose by about $3,600 with someone having to earn $138,260 a year to buy property, according to Ratehub.

The data was based on a mortgage with a 20 per cent down payment and a 25-year amortization, with $4,000 in property taxes and $150 for monthly heating.

“Home values are sort of going sideways, but interest rates continue to rise so much that qualifying for that average home, financing that average home is becoming increasingly difficult and it is the most difficult it’s ever been,” Ratehub.ca co-CEO James Laird told Global News.

One of the big factors that stood out in the report, he said, was the mortgage stress test, which now sits at around eight per cent or higher for most Canadians.

The stress test, introduced in 2018, requires borrowers to qualify for either the minimum qualifying rate of 5.25 per cent or the contract rate plus two percentage points, whichever is higher.

This, Laird says, means whether taking a variable or fixed interest rate when trying to qualify for a home, it’s going to be more difficult, and people will need more income if they want to qualify.

A new report shows the amount of income a Canadian needs to afford an average home price in Canada’s major cities has increased by anywhere from $2,000 to almost $9,000 in just one month.

RateHub.ca

The income needed to purchase a home has risen from just five months ago when Ratehub.ca released a similar report.

That report found Toronto homebuyers would need an annual income of $217,000 and $221,580 in Vancouver — meaning the income needed raised by nearly $20,000 in both cities.

The data was released just a day after Housing Minister Sean Fraser said the federal government should never have got out of the housing business, and on Wednesday told reporters there are “conversations” being had about getting the Canada Mortgage and Housing Corporation back into the affordable home-building game.

But Fraser has not provided additional detail on whether or not the feds will get involved or how they could do so going forward, though said people shouldn’t be paying more than 30 per cent of their income for a home.

“If you work in Canada, you should be able to afford a place to call home,” he said.

Laird said the best way to tackle the issue is one that has been referenced for some time as the housing crisis continues — build more homes.

“If we don’t build the homes, home values will rise even more,” he said.

He adds that while there may be concerns about people being able to afford those homes once they’re built given the income needed to do so, having more homes in supply could in turn lower the cost of some housing.

“If we overbuilt, you’d actually see our home prices come down, making them more affordable,” he said.

Aled ab Iorwerth, deputy chief economist with the CMHC, told Global News finding a solution is also going to depend on the place where people are trying to buy and as people wait in hope of eventually being able to buy, governments are going to need to build up the rental market as well.

“Buying a home for a middle-income household, even in Vancouver, in Toronto, is incredibly difficult,” he said. “That’s why we drastically need more rental market in these cities just so that people have a place to live.

“So it’s going to vary from city to city, but certainly we need a suite of policies and a lot of options to try and improve affordability.”

Some governments of different levels are exploring other options to try and help Canadians find housing, with Nova Scotia recently announcing an expansion of their agreement with home-sharing platform Happipad that matches renters with people who have empty rooms that could house a person looking for an affordable place to stay.

And though provincial Housing Minister John Lohr says it’s a small part of what they’re doing to address the housing crisis, Leah Cogan, a knowledge transfer specialist with the CMHC, said those solutions can still help in tackling issues in the housing market.

The problem Canadians still face, however, is as it may be difficult to see a jump in household income to the levels currently needed in most major cities studied, Laird says, adding that it leaves people’s budgets being pinched and putting the goal of home ownership further away.

“What it really means is that many people who are maybe planning on purchasing their first home this summer or this fall, they’re probably going to pause or they’re going to have to earn more income or they’re going to have to wait until they find a partner to purchase with,” he said.

— With files from the Canadian Press

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Business

What Difference Will You Make to an Employer?

Published

12 hours ago

October 21, 2024

Nick Kossovan

It’s common knowledge that companies don’t hire the most qualified candidates. Employers hire the person they believe will deliver the best value in exchange for their payroll cost.

Since most job seekers know the above, I’m surprised that so few mention their Employee Value Proposition (EVP). Most job seekers list their education, skills, and experience without substantiating them and expect employers to determine whether they can benefit their company; hence, most resumes and LinkedIn profiles are just a list of opinions—borderline platitudes—that are meaningless and, therefore, have no value. Job seekers need to better explain, along with providing evidence, how they’ll contribute to an employer’s success.

Employers don’t hire opinions (read: talk is cheap); they hire results.

You’re not offering anything tangible when you claim:

I’m a great communicator.
I’m detail oriented.
I’m a team player.

Tangible:

“At Global Dynamics, I held quarterly town hall meetings with my 22 sales reps, highlighting our accomplishments, identifying opportunity areas, and recognizing outstanding performers.”
“For eight years, I managed Vandelay Industries IT department, overseeing a staff of 18 and a 12-million-dollar budget while coordinating cross-specialty projects. My strong attention to detail is why I never exceeded budget.”
“While working at Cyberdyne Systems, I was part of the customer service team, consisting of nine of us, striving to improve our response time. Through collaboration and sharing of best practices, we reduced our average response time from 48 to 12 business hours, resulting in a 35% improvement in customer feedback ratings.”

These examples of tangible answers provide employers with what they most want to hear from candidates but rarely do; what value the candidate will bring to the company. Typically, job seekers present their skills, experience, and unsubstantiated opinions and expect recruiters and employers to figure out their value, which is a lazy practice.

Getting hired isn’t based on “I have an MBA in Marketing and Sales,” “I’ve been a web designer for over 15 years,” “I’m young, beautiful and energetic,” blah, blah, blah. Likewise, being rejected isn’t based on “I’m overqualified,” “I’m too old,” “I don’t have enough education,” blah, blah, blah. Getting hired depends entirely on showing employers that you can add value and substance to their company; that you’ll serve a purpose.

When you articulate a solid value offer, the “blah, blah, blah” doesn’t matter. Job seekers focus too much on the “blah, blah, blah,” and when not hired, they say, “It’s not me, it’s…” The biggest mistake I see job seekers make is focusing on the “blah, blah, blah”—their experience and education—believing this is what interests employers. Hiring managers are more interested in whether you can solve the problems the position exists to solve than in your education and experience.

Not impressive: Education

Impressive: A track record of achieving tangible results.

You aren’t who you say you are; you are what you do.

If you want to be somebody who works hard, you have to actually work hard. If you want to be somebody who goes to the gym, you actually have to go to the gym. If you want to be a good friend, spouse, or colleague, you have to actually be a good friend, spouse, or colleague. Actions build reputations, not words.

The biggest challenge job seekers face today is differentiating themselves. To stand out and be memorable, don’t be like most job seekers, someone who’s all talk and no action. Any recruiter or hiring manager will tell you that the job market is heavily populated with job seekers who talk themselves up, talk a “good game” about everything they can “supposedly” do, drop names, etc., but have nothing to show for it.

More than ever, employers want to hear candidates offer a value proposition summarizing what value they bring. If you’re looking for a low-hanging fruit method to differentiate yourself, do what job seekers hardly ever do and make a hard-to-ignore value proposition.

Increase sales: “Based on my experience managing Regina and Saskatoon for PharmaKorp, I’m confident that I can increase BioGen’s sales by no less than 25% in Winnipeg and the surrounding area by the end of 2025.”
Reduce cost: “During my 12 years as Taco Town’s head of purchasing, I renegotiated contracts with key suppliers, resulting in 15% cost savings, saving the company over $450,000 annually. I know I can do the same for The Pasta House.”
Increase customer satisfaction:“During my time at Globex Corporation, I established a systematic feedback mechanism that enabled customers to share their experiences. This led to targeted improvements, increasing our Net Promoter Score by 15 points. I can increase Dunder Mifflin’s net promoter score.”
Save time: “As Zap Delivery’s dispatcher, I implemented advanced routing software that analyzed traffic patterns, reducing average delivery times by 20%. My implementation of this software at Froggy’s Delivery can reduce your delivery times by at least 20%, if not more.”

If you want to achieve job search success as soon as possible, structure your job search with a single thread that’s evident and consistent throughout your résumé, LinkedIn profile, cover letters and especially during interviews; clearly convey what difference you’ll make to the employer.

_____________________________________________________________________

Nick Kossovan, a well-seasoned veteran of the corporate landscape, offers “unsweetened” job search advice. You can send Nick your questions to artoffindingwork@gmail.com.

Business

Netflix’s subscriber growth slows as gains from password-sharing crackdown subside

Published

4 days ago

October 17, 2024

Anne Joseph

Netflix on Thursday reported that its subscriber growth slowed dramatically during the summer, a sign the huge gains from the video-streaming service’s crackdown on freeloading viewers is tapering off.

The 5.1 million subscribers that Netflix added during the July-September period represented a 42% decline from the total gained during the same time last year. Even so, the company’s revenue and profit rose at a faster pace than analysts had projected, according to FactSet Research.

Netflix ended September with 282.7 million worldwide subscribers — far more than any other streaming service.

The Los Gatos, California, company earned $2.36 billion, or $5.40 per share, a 41% increase from the same time last year. Revenue climbed 15% from a year ago to $9.82 billion. Netflix management predicted the company’s revenue will rise at the same 15% year-over-year pace during the October-December period, slightly than better than analysts have been expecting.

The strong financial performance in the past quarter coupled with the upbeat forecast eclipsed any worries about slowing subscriber growth. Netflix’s stock price surged nearly 4% in extended trading after the numbers came out, building upon a more than 40% increase in the company’s shares so far this year.

The past quarter’s subscriber gains were the lowest posted in any three-month period since the beginning of last year. That drop-off indicates Netflix is shifting to a new phase after reaping the benefits from a ban on the once-rampant practice of sharing account passwords that enabled an estimated 100 million people watch its popular service without paying for it.

The crackdown, triggered by a rare loss of subscribers coming out of the pandemic in 2022, helped Netflix add 57 million subscribers from June 2022 through this June — an average of more than 7 million per quarter, while many of its industry rivals have been struggling as households curbed their discretionary spending.

Netflix’s gains also were propelled by a low-priced version of its service that included commercials for the first time in its history. The company still is only getting a small fraction of its revenue from the 2-year-old advertising push, but Netflix is intensifying its focus on that segment of its business to help boost its profits.

In a letter to shareholder, Netflix reiterated previous cautionary notes about its expansion into advertising, though the low-priced option including commercials has become its fastest growing segment.

“We have much more work to do improving our offering for advertisers, which will be a priority over the next few years,” Netflix management wrote in the letter.

As part of its evolution, Netflix has been increasingly supplementing its lineup of scripted TV series and movies with live programming, such as a Labor Day spectacle featuring renowned glutton Joey Chestnut setting a world record for gorging on hot dogs in a showdown with his longtime nemesis Takeru Kobayashi.

Netflix will be trying to attract more viewer during the current quarter with a Nov. 15 fight pitting former heavyweight champion Mike Tyson against Jake Paul, a YouTube sensation turned boxer, and two National Football League games on Christmas Day.

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Business

All Magic Spells (TM) : Top Converting Magic Spell eCommerce Store

Published

4 days ago

October 17, 2024

Sven Eggers

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