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Housing prices in Canada could fall 15 per cent by Dec. 2023 after Bank of Canada rate hikes: report

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As the Bank of Canada continues to hike rates in order to curb inflation, housing prices in Canada could fall 15 per cent from its peak by the end of next year, a new report says.

The average price of a home in Canada peaked at just over $790,000 in February 2022, marking a 50 per cent increase over two years. But the report, published on Wednesday by Desjardins, says by December 2023, the average national home price could fall to around $675,000.

Since the Bank of Canada began to raise interest rates in order to combat inflation, home prices has steadily declined. Desjardins says that average price of a home in Canada fell 2.6 per cent month-to-month in March and 3.8 per cent in April.

But despite the expected drop, Desjardins notes that $675,000 is still nearly 30 per cent above what it was in December 2019, when the average price of a home was $530,000 in Canada. Jimmy Jean, chief economist and strategist for Desjardins, says he expects the decline in home prices to be “fairly manageable” before stabilizing, citing increasing levels in immigration and a continuous shortage of housing supply amid strong demand.

“Our expectation is for the housing market to cool to moderate, but we’re not expecting any collapse by any measure,” Jean told CTV News on Thursday.

For most homeowners who intend to keep living in their homes for decades to come, including those who jumped into the market near the peak, Jean says this housing correction will only be a small “blip.”

“Housing is an investment normally you make for the long-term,” Jean said. “Ultimately, you’re buying a product to raise a family, to live into. So, over the long term, things will stabilize and pick up again. So, it’s not a major concern from that perspective.”

But it’s a different story for real estate investors who were expecting huge gains from rising housing prices.

“If you rent out a property, sometimes, if you don’t collect enough in terms of rent to make up for the mortgage costs or the utility costs, those decisions were still justified by the idea that prices would keep appreciating,” he said. “Now it’s another story.”

The Bank of Canada is expected to raise rates again by another 50 basis points in July, and bank governor Tiff Macklem has indicated that interest rates may have to spike to 3.0 per cent.

But Desjardins economists believe Macklem won’t have to go all the way to 3.0 per cent and say 2.25 per cent will be enough to slow inflation.

“The Canadian economy is highly rate sensitive,” Jean said. “We think this moderation will be significant and will cause economic growth, and therefore inflation, to slow, and that will remove the necessity for Tiff Macklem and the Bank of Canada to hike all the way to three per cent.”

HOUSING CORRECTION TO BE MOST SEVERE IN MARITIMES

While a 15 per cent drop is what Desjardins forecasts nationally, some regions may experience even bigger corrections, particularly in parts of Canada that saw that steepest pandemic-era home price increases.

After years of population declines, the Maritime provinces saw an explosion in population growth from 2020 and onwards, as the advent of remote work enabled more Canadians from big cities to flock to the east coast, seeking larger and more affordable living spaces.

In turn, P.E.I., Nova Scotia and New Brunswick saw the highest housing price increases in the country. Compared to December 2019 levels, the average price of a home in these provinces rose 62 to 70 per cent in February 2022.

These provinces are also expected to see the largest corrections; Dejardins says housing prices could drop between 18 to 20 per cent.

The Prairies and Newfoundland and Labrador saw the smallest pandemic-era spikes in housing prices. These provinces rely heavily on oil, and crude prices took a nosedive in the early months of the pandemic. Home prices in these regions are only expected to fall between two to 10 per cent by December 2023, the Desjardins report says.

B.C.’s home prices are also expected to fall 15 per cent, closely mirroring the national average, while prices in Quebec will fall 12 per cent thanks to its “much greater housing affordability and less overvalued market,” the report states.

Ontario’s home prices are expected to decline 18 per cent, but these drops will vastly differ across regions. Much like the Maritimes, the communities within a few hours drive from Toronto saw home prices jump 70 per cent between December 2019 and February 2022 as many Canadians began to work from home. Desjardins says outside of the Greater Toronto Area, home prices could fall 20 per cent, with the biggest declines expected in Bancroft, Chatham Kent and Windsor-Essex.

With files from CTV National News Parliament Hill Correspondent Kevin Gallagher.

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STD epidemic slows as new syphilis and gonorrhea cases fall in US

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NEW YORK (AP) — The U.S. syphilis epidemic slowed dramatically last year, gonorrhea cases fell and chlamydia cases remained below prepandemic levels, according to federal data released Tuesday.

The numbers represented some good news about sexually transmitted diseases, which experienced some alarming increases in past years due to declining condom use, inadequate sex education, and reduced testing and treatment when the COVID-19 pandemic hit.

Last year, cases of the most infectious stages of syphilis fell 10% from the year before — the first substantial decline in more than two decades. Gonorrhea cases dropped 7%, marking a second straight year of decline and bringing the number below what it was in 2019.

“I’m encouraged, and it’s been a long time since I felt that way” about the nation’s epidemic of sexually transmitted infections, said the CDC’s Dr. Jonathan Mermin. “Something is working.”

More than 2.4 million cases of syphilis, gonorrhea and chlamydia were diagnosed and reported last year — 1.6 million cases of chlamydia, 600,000 of gonorrhea, and more than 209,000 of syphilis.

Syphilis is a particular concern. For centuries, it was a common but feared infection that could deform the body and end in death. New cases plummeted in the U.S. starting in the 1940s when infection-fighting antibiotics became widely available, and they trended down for a half century after that. By 2002, however, cases began rising again, with men who have sex with other men being disproportionately affected.

The new report found cases of syphilis in their early, most infectious stages dropped 13% among gay and bisexual men. It was the first such drop since the agency began reporting data for that group in the mid-2000s.

However, there was a 12% increase in the rate of cases of unknown- or later-stage syphilis — a reflection of people infected years ago.

Cases of syphilis in newborns, passed on from infected mothers, also rose. There were nearly 4,000 cases, including 279 stillbirths and infant deaths.

“This means pregnant women are not being tested often enough,” said Dr. Jeffrey Klausner, a professor of medicine at the University of Southern California.

What caused some of the STD trends to improve? Several experts say one contributor is the growing use of an antibiotic as a “morning-after pill.” Studies have shown that taking doxycycline within 72 hours of unprotected sex cuts the risk of developing syphilis, gonorrhea and chlamydia.

In June, the CDC started recommending doxycycline as a morning-after pill, specifically for gay and bisexual men and transgender women who recently had an STD diagnosis. But health departments and organizations in some cities had been giving the pills to people for a couple years.

Some experts believe that the 2022 mpox outbreak — which mainly hit gay and bisexual men — may have had a lingering effect on sexual behavior in 2023, or at least on people’s willingness to get tested when strange sores appeared.

Another factor may have been an increase in the number of health workers testing people for infections, doing contact tracing and connecting people to treatment. Congress gave $1.2 billion to expand the workforce over five years, including $600 million to states, cities and territories that get STD prevention funding from CDC.

Last year had the “most activity with that funding throughout the U.S.,” said David Harvey, executive director of the National Coalition of STD Directors.

However, Congress ended the funds early as a part of last year’s debt ceiling deal, cutting off $400 million. Some people already have lost their jobs, said a spokeswoman for Harvey’s organization.

Still, Harvey said he had reasons for optimism, including the growing use of doxycycline and a push for at-home STD test kits.

Also, there are reasons to think the next presidential administration could get behind STD prevention. In 2019, then-President Donald Trump announced a campaign to “eliminate” the U.S. HIV epidemic by 2030. (Federal health officials later clarified that the actual goal was a huge reduction in new infections — fewer than 3,000 a year.)

There were nearly 32,000 new HIV infections in 2022, the CDC estimates. But a boost in public health funding for HIV could also also help bring down other sexually transmitted infections, experts said.

“When the government puts in resources, puts in money, we see declines in STDs,” Klausner said.

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The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Science and Educational Media Group. The AP is solely responsible for all content.



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Japan’s SoftBank returns to profit after gains at Vision Fund and other investments

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TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.

Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.

Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).

SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.

The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.

WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.

SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.

SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.

SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.

The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.

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Yuri Kageyama is on X:

The Canadian Press. All rights reserved.



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World’s largest active volcano Mauna Loa showed telltale warning signs before erupting in 2022

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WASHINGTON (AP) — Scientists can’t know precisely when a volcano is about to erupt, but they can sometimes pick up telltale signs.

That happened two years ago with the world’s largest active volcano. About two months before Mauna Loa spewed rivers of glowing orange molten lava, geologists detected small earthquakes nearby and other signs, and they warned residents on Hawaii’s Big Island.

Now a study of the volcano’s lava confirms their timeline for when the molten rock below was on the move.

“Volcanoes are tricky because we don’t get to watch directly what’s happening inside – we have to look for other signs,” said Erik Klemetti Gonzalez, a volcano expert at Denison University, who was not involved in the study.

Upswelling ground and increased earthquake activity near the volcano resulted from magma rising from lower levels of Earth’s crust to fill chambers beneath the volcano, said Kendra Lynn, a research geologist at the Hawaiian Volcano Observatory and co-author of a new study in Nature Communications.

When pressure was high enough, the magma broke through brittle surface rock and became lava – and the eruption began in late November 2022. Later, researchers collected samples of volcanic rock for analysis.

The chemical makeup of certain crystals within the lava indicated that around 70 days before the eruption, large quantities of molten rock had moved from around 1.9 miles (3 kilometers) to 3 miles (5 kilometers) under the summit to a mile (2 kilometers) or less beneath, the study found. This matched the timeline the geologists had observed with other signs.

The last time Mauna Loa erupted was in 1984. Most of the U.S. volcanoes that scientists consider to be active are found in Hawaii, Alaska and the West Coast.

Worldwide, around 585 volcanoes are considered active.

Scientists can’t predict eruptions, but they can make a “forecast,” said Ben Andrews, who heads the global volcano program at the Smithsonian Institution and who was not involved in the study.

Andrews compared volcano forecasts to weather forecasts – informed “probabilities” that an event will occur. And better data about the past behavior of specific volcanos can help researchers finetune forecasts of future activity, experts say.

(asterisk)We can look for similar patterns in the future and expect that there’s a higher probability of conditions for an eruption happening,” said Klemetti Gonzalez.

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The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Science and Educational Media Group. The AP is solely responsible for all content.

The Canadian Press. All rights reserved.



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