Connect with us


Pace of real estate slump quickens, with sales and average prices down from last year – CBC News



Canada’s housing market continued its slowdown last month, with the average selling price of a home touching $665,850 — a decline of almost 20 per cent since February.

The Canadian Real Estate Association (CREA), which represents more than 100,000 brokers, agents and salespeople across the country, said Friday that the volume of home sales fell by 5.6 per cent during the month, and is down by almost one-quarter compared to last year.

“Activity continues to slow in the face of rising interest rates and uncertainty,” CREA chair Jill Oudil said in a statement.

After rising at a rapid pace for much of the pandemic, higher interest rates slammed the brakes on Canada’s housing market this spring.

Average selling prices have declined each month since February 2022, and are down by 1.8 per cent compared to what they were a year ago.

“What goes up must come down, and the Canadian housing market continued to cool in June under the weight of higher interest rates,” TD Bank economist Ksenia Bushmeneva said.

Ontario led the way down, as selling prices in the province’s suburban markets that rose the most during the pandemic are now coming back to earth.

“Sales and prices are down disproportionately more in Ontario and B.C., which suffered severe affordability deteriorations during the pandemic,” Bushmeneva said. “We expect that home prices and sales will move even lower amid further pressure from borrowing costs.”

A man talks about buying a home.
Waleed Hamed has been waiting to buy a home for several years, and says he has been watching the current slowdown with great interest. (CBC)

She isn’t the only one thinking the market still has a way to go before bottoming. Waleed Hamed has been on the sidelines of Canada’s housing market for years, waiting for a chance to buy, but he said he could never justify making the leap.

The market in and around Courtice, Ont., where he’s living with his parents, has definitely turned in recent months, he said. Yet Hamed is still reluctant to buy, because he thinks further price declines are coming.

“I think we are going to see prices drop for a while,” he told CBC News in an interview this week. “I still feel like we are near the very top.”

Lower prices may favour buyers, but many like Hamed are discovering that homes are no more affordable because the cost to finance a mortgage has gone up by more than the drop in prices.

The Bank of Canada hiked its benchmark interest rate by a full percentage point this week, the largest one-time increase since 1998. It’s the fourth rate hike since the start of the year, and more are on the way in the face of record-high inflation.

That’s increasing the costs for anyone with a variable rate mortgage, and making it harder to qualify for one, too. Variable rate loans are currently hovering at around four per cent, up from under two per cent at the start of the year. 

But because of stress test rules implemented several years ago, borrowers have to qualify at rates even higher than the loan term itself. The stress test level for a variable rate loan is now at about six per cent, a bar that many borrowers may not be able to meet.

“Anyone upset that a rising overnight rate is hurting real estate values should keep in mind that the Bank of Canada’s role isn’t to look out for the housing market or individual homeowners,” Clay Jarvis with fintech company Nerdwallet. “That’s the job of the mortgage stress test — which we should be thankful for right about now.”

“Homebuyers are still stuck between a rock and a hard place,” Jarvis said. “The hard place (the market) is a little softer, but the rock (interest rates) is getting higher with every rate hike.”

Adblock test (Why?)

Source link

Continue Reading


TD faces public scrutiny, support, of First Horizon takeover in public meeting – Business News –



TD Bank Group’s proposed takeover of Memphis-based First Horizon Bank is the issue before a public meeting Thursday where community members are being given a forum to voice their opinions on the deal.

The virtual meeting is being convened jointly by the Federal Reserve Board and the U.S.Office of the Comptroller of the Currency, which are reviewing the proposed US$13.4 billion deal.

The meeting comes as TD has faced renewed criticism in recent months for allegedly aggressive sales tactics in the U.S., including from Senator Elizabeth Warren who has called for the merger to be blocked until the bank is “held responsible for its abusive practices.”

TD agreed to a US$122 million settlement with U.S. regulators in 2021 stemming from illegal overdraft practices, while an investigative report released in May alleged that problematic practices continue at the bank, something the bank had strenuously denied.

The federal agencies also held a public meeting in mid-July for BMO’s proposed US$16.3 billion takeover of Bank of the West, where numerous community groups urged the deal be blocked until a strong community benefits agreement can be reached.

The bank also faced criticism for the proportionately low number of mortgages granted to Black and Latino borrowers, while numerous community groups that have received funding from BMO voiced their support of the deal.

Adblock test (Why?)

Source link

Continue Reading


Judge sides with Enbridge Inc. in Michigan’s latest effort to halt Line 5 pipeline



WASHINGTON — The international dispute over Line 5 belongs in federal court, a Michigan judge declared Thursday, dealing a critical blow to Gov. Gretchen Whitmer’s bid to shut down the controversial cross-border pipeline.

It’s the second time in nine months that District Court Judge Janet Neff ruled in favour of pipeline owner Enbridge Inc., which wanted the dispute elevated to the federal level.

That first decision prompted Michigan Attorney General Dana Nessel — believing her only path to victory to be in state court — to abandon the original case, turning instead to a separate, dormant, nearly identical circuit court case to try again.

Neff’s disdain for that tactic was palpable throughout Thursday’s ruling.

“The court concludes that (the) plaintiff’s motion must fail, based on …(the) plaintiff’s attempt to gain an unfair advantage through the improper use of judicial machinery,” Neff wrote.

“The court’s decision … is undergirded by (the) plaintiff’s desire to engage in procedural fencing and forum manipulation.”

A spokesperson for Nessel did not immediately respond to media inquiries.

Whitmer is a Democrat and close ally of President Joe Biden whose political fortunes depending on the support of environmental groups in the state. She ordered the shutdown of Line 5 in November 2020.

She cited the risk of an ecological disaster in the Straits of Mackinac, the environmentally sensitive passage between Lake Michigan and Lake Huron where the pipeline runs underwater between the state’s upper and lower peninsulas.

They went to circuit court, where Enbridge pushed back hard, arguing that Whitmer and Nessel had overstepped their jurisdiction and that the case needed to be heard in federal court.

Late last year, Neff sided with Enbridge, prompting Whitmer and Nessel to abandon the complaint and try again, this time with a similar circuit court case that had been dormant since 2019.

Nessel had hoped to head off Enbridge’s jurisdictional argument on a technicality: that under federal law, cases can only be removed to federal jurisdiction within 30 days of a complaint being filed.

But Neff wasn’t buying it, citing the precedent she herself established in 2021 when she ruled for Enbridge the first time.

“It would be an absurd result for the court to remand the present case and sanction a forum battle,” Neff wrote.

“The 30-day rule in the removal statute is intended to assist in the equitable administration of justice and prevent gamesmanship over federal jurisdiction, but here, it is clear to the court that (the) plaintiff is the one engaging in gamesmanship.”

The Line 5 pipeline ferries upwards of 540,000 barrels per day of crude oil and natural gas liquids across the Canada-U. S. border and the Great Lakes by way of a twin line that runs along the lake bed.

Critics want the line shut down, arguing it’s only a matter of time before an anchor strike or technical failure triggers a catastrophe in one of the area’s most important watersheds.

Proponents of Line 5 call it a vital and indispensable source of energy, especially propane, for several Midwestern states, including Michigan, Ohio and Pennsylvania. It is also a key source of feedstock for refineries in Canada, including those that supply jet fuel to some of Canada’s busiest airports.

In a statement, Enbridge described Thursday’s decision as “consistent with the court’s November 2021 ruling that the state’s prior suit against Line 5 belonged in federal court.”

That, the company said, is the correct forum for “important federal questions” about interstate commerce, pipeline safety, energy security and foreign relations.

The statement goes on to say that shutting down Line 5 would “defy an international treaty with Canada that has been in place since 1977.”

Line 5 talks between the two countries under that treaty, which deals specifically with the question of cross-border pipelines, have been ongoing since late last year.

“Enbridge looks forward to a prompt resolution of this case in federal court.”

This report by The Canadian Press was first published Aug. 18, 2022.


James McCarten, The Canadian Press

Continue Reading


Bed Bath & Beyond shares fall after investor Ryan Cohen files intent to sell stake – CNBC Television



Adblock test (Why?)

Source link

Continue Reading