Archive for December, 2009
Carney: Don’t be seduced by low interest rates
The governor of the Bank of Canada warned Wednesday that consumers and banks should not be lulled into a false sense of security because of low interest rates.
In a speech in Toronto, Mark Carney, said both parties have a responsibility not to take risks that could derail the recovery.
Consumers are helping Canada’s economic recovery outpace that of its G7 partners, Carney said, but that the recovery remains vulnerable to over-indulgence.
“When risks are still manageable is precisely the best time to act,” Carney told a business audience. “We must be vigilant, and all parties must fulfill their responsibilities.”
The Bank of Canada’s extraordinary low-interest rate policies are making it possible for Canadians to take on more debt, he said, but rates will increase and loans affordable today could prove unaffordable in the future.
Banks should be particularly vigilant against risky loans, Carney said, pointing out that even good loans became a problem during the U.S. subprime mortgage fiasco.
Still, while cautioning against unrestrained borrowing, Carney also said Canada’s recovery may be more dependent on domestic spending because of lagging U.S. demand for Canadian exports, which could mean the rebound will be slower than usual.
The central bank has said it expects to keep its benchmark rate at a record low of 0.25 per cent at least until June. The rate has been that low since April, leading to a rise in the housing market that some economists have warned could become a bubble.
Last week the bank described growing household debt as now the biggest risk to the country’s financial system, even though was still “relatively low” and not likely to become so great that it could undermine the stability of commercial banks.
With files from The Canadian Press
Jim Rohn on personal development
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Jim Rohn Passed away in December 5th. I never had a chance to meet him in person, however this short video will reveal insights that will change your way of thinking and perhaps your life.
Real Estate Training and Google AdWords
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Value of Building Permits Up By 18%
Statistics Canada attributed the spike to construction intentions for single-family dwellings and non-residential permits.
The value of building permits for single-family dwellings increased for an eighth consecutive month, up 10.1 per cent to $2.4 billion in October. Every province except Nova Scotia and Prince Edward Island contributed to the advance in single-family construction intentions.
The value of building permits for multi-family dwellings fell 8.2 per cent to $1 billion after increasing 34.3 per cent in September.
Municipalities issued permits worth $2.7 billion, up 42.4 per cent following a 9.2 per cent decline in September. Municipalities have issued building permits worth $48.3 billion between January and October, 20.8 per cent less than in the same period in 2008.
In the industrial component, the value of building permits doubled to $709 million. This was the third consecutive monthly increase, fueled by higher construction intentions in Alberta, Ontario and Quebec.
After four monthly consecutive declines, the value of institutional building permits increased 50.9 per cent to $904 million. The gain was largely attributable to educational institution projects in Alberta, Saskatchewan, Quebec and British Columbia. Ontario had an increase in the value of permits for medical buildings.
Regional strength
In total, the value of building permits was up in six provinces and 20 of Canada’s 34 largest metropolitan areas.
The largest increases were in Alberta, Ontario, Saskatchewan and Quebec. All four provinces saw growth in the value of building permits for single-family dwellings and in the non-residential sector.
After substantial gains in September, New Brunswick and Nova Scotia posted the largest declines in October.
