Among frustrated prospective buyers is Mac Ross, an assistant professor at Western University’s School of Kinesiology in London, Ont. He tells Global News that he’s struggling to find a home big enough for his growing family, even on a professor’s salary.
The family of four has been renting a two-bedroom home for the past few years, but the addition of a new baby pushed Ross and his wife to put together a down payment in search of a three-bedroom home five months ago.
Though he says they’ve found a couple of bungalows listed for just under $500,000 that fit their budget and would accommodate the family, the properties were scooped up for more than $200,000 above asking.
“At that point, there’s nothing we can do. It just kind of boggles the mind that people were willing to pay that much,” he says.
The family has adopted a holding pattern in their house hunt now, and is waiting to see if the spring brings any calmer conditions. Rent is stable at their current home and Ross says they’ve been able to absorb the hit from rising prices and interest rates, though their buying budget is maxed out.
They can’t wait forever, though, as the baby is quickly growing to need a bedroom of her own, putting the pressure on to make their current space work or rent a more expensive home that will quickly burn through their downpayment savings.
“This was like our last chance, it was all we could possibly get. It’s just impossible,” Ross says. “We won’t be able to get a home, I don’t know, until the bubble goes or something.”
Canadian home prices soar to new heights, averaging $800K
Housing affordability eroding
The Ross family is not alone in their dim outlook on the Canadian housing market.
A recent report from Mortgage Professionals Canada (MPC) showed 29 per cent of respondents felt now was a good time to buy a home in their community — the lowest that figure has hit in the 12 years of the survey.
MPC’s survey captured impressions from more than 2,000 people, the vast majority of whom were already homeowners, however. The market outlook is even worse among the roughly one in five respondents who don’t own property: only three per cent said now was a good time to buy a home.
A slew of factors are coming together now to put homes out of reach.
Average home prices rose 20.6 per cent year over year in February, according to stats released this week from the Canadian Real Estate Association (CREA).
Inflation levels, meanwhile, are at a more than 30-year high, Statistics Canada said Wednesday, putting particular pressure on consumers at the gas pump and the grocery store.
Economists say inflation hit 5.7% in February, but hasn’t peaked yet
The Bank of Canada began increasing its key interest rate target at the start of this month, a move that looks to tamp down surging inflation and calm the housing market but simultaneously raises the cost of borrowing and reduces house hunters’ buying power.
Though wages are also generally growing in Canada’s tight labour market, Kyle Dahms, economist with National Bank of Canada, says home price growth is “outpacing” compensation for most Canadians.
National Bank’s Housing Affordability Monitor at the end of last year showed the ability for Canadians to pay down their mortgages in major cities across the country deteriorated every quarter of 2021.
Though the first quarter of 2022 has yet to wrap, Dahms says rising interest rates, alongside other factors hitting Canadian pocketbooks, will not help prospective buyers like Ross.
“That’s going to be somewhat biting for homebuyers,” Dahms says.
He adds that the spring market, typically a busy time in Canadian real estate, could see some relief with additional listings coming to market as owners look to “offload” properties to minimize mortgage payments or maximize returns.
A National Bank report from Tuesday showed new listings surged 23 per cent in February, though total inventory remains low at only 1.6 month’s supply.
It’s too soon to say whether the growing stock will become a sustained trend, Dahms says, but a surge of new listings could ease competition and provide an entry point into the market for prospective buyers.
“If it does that, (the market) could open up.”
House hunters changing tactics
Some real estate watchers are already seeing a change on the horizon of Canada’s real estate market in response to rising interest rates.
Toronto realtor Pritesh Parekh with Century 21 says he’s already seen the “psychological” shift tied to interest rates affecting his clients.
He says the initial 25-basis-point hike isn’t enough to grind the market to a halt.
Parekh pictures it more like the market was running at 150 km/h and the central bank’s announcement saw buyers ease off the accelerator to bring it to 120 km/h — still speeding, but to a lesser degree.
A few clients have come to him recently, however, and told him they’re putting their search on hold for the foreseeable future, so fed up are they by bidding wars and unattainable properties in Toronto.
Kingston, Ont. sees highest housing price increase in Canada in 2021
Even with some pausing the search, Parekh believes current pressures on Canadian’s pocketbooks are not lessening the demand for housing, but changing it.
“With all these factors, the rate increases, the price increases, the inflation … I’ve seen the demand change versus flooring,” he says.
While the past year of the pandemic has seen him work largely to find detached homes for his clients, he’s seeing some demand shift back towards Toronto’s more affordable downtown condo market.
He’s also increasingly doing deals outside the GTA for those who can’t afford the Toronto real estate market. He says he recently helped a client get a $600,000 side investment in Kingston to get an affordable stake in the housing market and passive income while continuing renting back in Toronto.
Parekh cites another example of a client who, forgoing plans of buying a detached home in the GTA, bought a condo in Burlington, Ont., and set out to renovate the bathrooms and other fixtures immediately in hopes of moving up to a townhome in the next few years.
“I’ve seen a shift from saving for your dream home to stepping up to your dream home,” he says.
Some buyers seeking cheaper pastures
Parekh says that in the past three months, three clients have told him that they no longer need his help to find a home.
It’s not because they’re giving up the hunt or found a property in Toronto — instead, they tell him they’re moving to Calgary.
Calgary is one of the major cities that remains a bit more affordable than surging markets such as Toronto or Vancouver.
The median price of a home in Calgary was just below $500,000 in the second week of March, according to the city’s real estate board. In National Bank’s most recent housing affordability report, the household income needed to afford the median home in the city was just over $106,000 — roughly half the same income needed to buy a home in Toronto.
Dahms adds Quebec City, Winnipeg and Edmonton as a few other standouts that have seen prices appreciate at a slower rate.
Indeed, Ross has found his frustrations amplified seeing three-bedroom homes going for half the price in other parts of the country as they do in London.
The Nova Scotia native says he’s seen east coast real estate remain an affordable option for Maritimers back home, and says that if the housing market in Canada doesn’t improve in the next two years, it’s inevitable that he might have to move his family to more welcoming harbours.
“It gets to the point where you have to consider if you can continue on,” he said.
“Even though this is my dream job … I’ll never, ever, have another opportunity, probably, to get hired at a school like Western. But if I can’t afford anything, it becomes a discussion you have to have.”
Lack of listings impacting real estate market in Manitoba
© 2022 Global News, a division of Corus Entertainment Inc.
Nike sues Lululemon for infringement of footwear patents – CBC.ca
Nike Inc. sued Lululemon Athletica Inc. on Monday, saying that at least four of the Canadian athletic apparel company’s footwear products infringe its patents.
In a complaint filed in the U.S. federal court in Manhattan, New York, Nike said it has suffered economic harm and irreparable injury from Lululemon’s sale of its Blissfeel, Chargefeel Low, Chargefeel Mid and Strongfeel footwear.
Nike, based in Beaverton, Ore., said the three patents at issue concern textile and other elements, including one addressing how the footwear will perform when force is applied.
Nike is seeking unspecified damages.
Lululemon, based in Vancouver, did not immediately respond to requests for comment.
This wasn’t the first time Nike has sued Lululemon for patent infringement — on Jan. 5, 2022, it accused the athleisure brand of making and selling the Mirror Home Gym and related mobile apps without authorization.
Nike accused its smaller rival of infringing six patents, including technology that enables users to target specific levels of exertion, compete with other users and record their own performance.
Nike has sought triple damages for Lululemon’s alleged willful infringement and a variety of other remedies regarding the Mirror Home Gym and related mobile apps.
Stock market news live updates: Stocks sell off to start blockbuster week – Yahoo Canada Finance
U.S. stocks tumbled Monday as investors await a blockbuster week that includes the latest Fed meeting, a flurry of heavyweight earnings reports, and jobs data.
The yield on the benchmark 10-year U.S. Treasury note ticked up to 3.546% on Monday morning. The dollar index ticked up 0.32% to $102.26.
Stocks closed a winning week Friday following data that pointed to stronger-than-expected U.S. economic growth. All the major market averages finished higher for the week, with the S&P 500 gaining 2.5%, the Dow Jones Industrial average ending up 1.8% and the Nasdaq climbing north of 4%.
The Commerce Department said Friday the personal consumption expenditures price index, excluding energy and food, showed prices rose 4.4% from a year earlier. Friday’s report came in a day after the government reported a better-than-expected 2.9% gain in gross domestic product for the fourth quarter, boosting hopes that the Federal Reserve may head toward the elusive “soft landing” scenario.
Fed officials will be meeting in Washington, D.C., Tuesday and Wednesday. The meeting will wrap up with Fed Chair Jerome Powell holding a press conference Wednesday afternoon as he offers signs of the central bank’s path forward on rate hikes.
“The FOMC’s work is not yet done, even if the recent declines in inflation and wage growth give it more time to assess the effects of past policy actions. A key challenge for the FOMC will be to execute its transition to smaller rate hikes without furthering expectations that an end to its hiking cycle is imminent,” the team at Barclays wrote.
At the end of week, investors will get another clue of the Fed’s path as the government’s January jobs report is set to be released Friday morning. Economists surveyed by Bloomberg expect 185,000 jobs were added to the economy last month, a slowdown from the gain of 223,000 jobs in December.
Meanwhile, it’s the biggest week of the fourth-quarter earnings season, with Big Tech results taking the spotlight amid thousands of layoffs in the industry. Despite the already announced job cuts, the tech companies’ are in part to blame for the disaster, Yahoo Finance’s Dan Howley writes.
Elsewhere in markets, shares of Lucid (LCID) sank nearly 9%. On Friday, the electric-vehicle maker surged more than 88% following speculation that a Saudi Arabia Public Investment Fund (PIF) is considering buying its remaining stake in the company.
Alibaba (BABA) shares fell 6% Monday after reports that the Chinese e-commerce site is moving its headquarters out of the country, suggesting the new campus could be in Singapore, according to reports.
SoFi Technologies (SOFI) shares rose 12.5% Monday after the digital financial services company posted an upbeat earnings guidance for the year ahead.
In the cryptocurrency market, Bitcoin (BTC-USD) has fallen over 1% to $23,168 over the last 24 hours, according to CoinMarketCap. However, the largest token is on its way for its best January since 2013, per Bloomberg, on bets that monetary tightening and the sector’s crisis are both receding.
Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
J&J Can’t Use Bankruptcy to End Cancer Suits Over Baby Powder, Court Says – Yahoo Finance
(Bloomberg) — Johnson & Johnson can’t use bankruptcy to resolve more than 40,000 US cancer lawsuits over its now-withdrawn baby powder, a federal appeals court ruled.
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The three-judge panel in Philadelphia sided with cancer victims, who argued J&J wrongly put its specially created unit, LTL Management, under court protection to block juries around the country from hearing the lawsuits and handing out damage awards.
The ruling means J&J will most likely need to defend itself against claims that tainted talc in its baby powder causes cancer. The company has lost a number of such cases — including one that was appealed all the way to the US Supreme Court, before J&J was forced to pay more than $2 billion to one group of victims.
Shares of J&J dropped as much as 7.2% in New York on Monday before closing down 3.7%. J&J removed its iconic talc-based baby powder from the US market in 2020 and is slated to have it off markets across the globe by the end of this year.
The judges found only companies directly threatened with financial troubles can use bankruptcy. Since J&J itself never claimed to be in immediate danger, it can’t benefit from Chapter 11 of the bankruptcy code by putting a unit under court protection, the judges found.
“Good intentions — such as to protect the J&J brand or comprehensively resolve litigation — do not suffice alone,” to file for bankruptcy, Judge Thomas Ambro wrote. “What counts to access the Bankruptcy Code’s safe harbor is to meet its intended purposes. Only a putative debtor in financial distress can do so. LTL was not. Thus we dismiss its petition.”
The ruling may drive a settlement, according to Holly Froum, a litigation analyst for Bloomberg Intelligence. A settlement of the more-than 40,000 suits could total $5 billion, according to Froum, who in a note Monday pegged the chances of a deal at 70%.
J&J plans to challenge the ruling. The bankruptcy was filed in good faith to “equitably resolve” talc claims, it said in a statement. If the company’s appeals aren’t successful, plaintiffs’ lawyers predicted Monday J&J could face a wave of talc trials starting this summer.
J&J can now ask that all judges on the Philadelphia appeals court hear their appeal of the three-judge panel’s decision. If that’s denied, the company has the right to ask the US Supreme Court to hear its arguments that the Chapter 11 case should be allowed to proceed.
“The doors to the courthouse, which had been slammed shut by J&J’s cynical legal strategy, are once again open,” said Leigh O’Dell, a lawyer representing thousands of talc users whose claims have been consolidated in New Jersey for pre-trial information exchanges. Plaintiff lawyers will be scrambling to get talc suits back on trial dockets across the US in the wake of the appeals court’s ruling, O’Dell said.
A J&J lawyer Monday indicated the company was preparing for more talc litigation in a trial against consumer-products maker Colgate-Palmolive Co. Allison Brown, one of Colgate’s attorneys who has represented J&J in past talc cases, asked a California judge to put on hold Francis Coit’s case against multiple defendants over injuries allegedly tied to talc-based powders.
“Given plaintiff’s allegations in the complaint about Johnson’s Baby Powder, and that if they are permitted to do so, they will seek to bring J&J into the complaint, Colgate would request a continuance, Your Honor, to see what happens with the J&J bankruptcy and if J&J truly will need to come into this case to defend itself against the allegations” against its baby powder, Brown told Judge Richard Sebolt, according to a copy of a court transcript.
The bankruptcy case had put all talc litigation on hold while the appellate court decided whether the so-called Texas-Two Step technique J&J relied on for its talc bankruptcy was flawed.
After several talc litigation losses, J&J turned to the maneuver, which is designed to block the cases from trial and force claimants to negotiate in the Chapter 11 case of LTL.
In 2021, the health-care giant sought to funnel the suits into what it acknowledged was a “shell company” without any operations. That unit, LTL, immediately filed for bankruptcy to block the litigation while trying to negotiate settlements.
J&J has long argued that there is no good scientific evidence linking its baby powder to cancer. The company argued LTL’s case was the only way of managing talc litigation costs and ensuring victims get a fair payment.
US Bankruptcy Judge Michael Kaplan, who is based in Trenton, New Jersey — not far from J&J’s headquarters in New Brunswick — ruled last year that LTL’s bankruptcy was legitimate and a better solution than continuing to have juries weigh claims nationwide. Cancer claimants appealed Kaplan’s decision.
A handful of companies, including Koch Industries’ Georgia-Pacific unit, used the strategy before J&J. Those cases remain in bankruptcy court in North Carolina. The Philadelphia court’s decision will not have any direct impact on the North Carolina cases.
Last year, a bankruptcy judge in Indianapolis refused to halt about 230,000 lawsuits against 3M Co. even though its subsidiary, Aearo Technologies, had filed a legitimate Chapter 11 case. 3M has appealed that decision.
LTL’s bankruptcy was the first Texas Two-Step to reach an appeals court. After victim groups challenged Kaplan’s ruling, the appeals court in Philadelphia agreed to expedite the case.
J&J’s strategy has been condemned by some legal scholars and members of Congress because the company received a major benefit of Chapter 11 rules — a halt to lawsuits — without filing for bankruptcy, where it would be subject to court oversight of its spending and other practices.
The handful of the companies that have used the strategy since it emerged in 2017 have faced suits targeting their use of asbestos, a toxic industrial material. The cases take advantage of special rules set up by Congress for companies threatened with insolvency by such litigation.
There have been ongoing talks aimed at settling the talc cases filed in both state and federal courts. Prior to J&J putting its unit into bankruptcy in 2021, the company offered to resolve the suits as much as $5 billion, according to Monday’s decision.
In Chapter 11 filings, J&J’s lawyers acknowledged the LTL subsidiary had a value of more than $61 billion and those funds could be tapped to satisfy talc liabilities, if necessary. Analysts, however, aren’t predicting the company will pay out anything near that figure to settle the cases.
The J&J bankruptcy case is LTL Management LLC, 21-30589, U.S. Bankruptcy Court, District of New Jersey (Trenton).
(Updates with $5 billion settlement offer in 24th paragraph)
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