Bank of Canada Cuts Overnight Rate

(Tuesday April 22, 2008) - The Bank of Canada cut the overnight rate by 50 basis points this morning, bringing the target rate to 3.00%. The overnight rate is the rate at which major participants in the money markets borrow and lend one-day funds to each other. This is the second 50 bps rate cut in a row, and marks the first time since the 2001 US recession that the Bank has cut rates by a full percentage point in just six weeks time.

In their communiqué, the Bank notes that “buoyant growth in domestic demand…has been substantially offset by the fall in net exports.” Due to a “deeper and more protracted slowdown in the U.S. economy,” this drag from trade is expected to remain. And, in spite of financial conditions…

Interest Rates Will Continue to Drop

(February 05, 2008) Since August 2007 the Fed cut rates by no less than 225 basis points. This is the most aggressive easing since the early 1980s when the Fed was targeting money supply growth and not inflation. But the market is expecting more. Note that the bond market is already pricing in a recession. And in every recession the inflation-adjusted fed funds rate was negative.

Today at 3%, the fed funds rate is about one percentage point above inflation. So it’s hardly a surprise that the market is now pricing in another 100 basis points rate cut by the Fed. At the minimum, the market will get 50 basis points. And if we are indeed in a recession, the Fed will cut by additional 50 basis points.

Libor Rate Down

The…

Calgary Real Estate Stats

Calgary’s MLS® Sales and Listings for the month of January 2008, show a steady and more stabilized market, according to figures released by the Calgary Real Estate Board (CREB®).

Calgary SF Homes Stats

Single family Calgary metro new listings added for the month of January totaled, 3,023, an increase of 30.02 per cent over the 2,325 new listings added in January 2007. Single family Calgary metro properties changing hands in January 2008 were 1,083, a decrease of 27.66 per cent from the 1,497 recorded in January 2007 and an increase of 28.01 per cent over the 846 sales recorded in December.

The median price of a single family Calgary metro home in January 2008 was $410,000 showing an 7.89 per cent increase over January 2007,…

CREB Predicts 5% Gain in Market

 The average sale price of a single-family home in the city will flirt with the half-million-dollar mark this year, according to the Calgary Real Estate Board. Two thousand and eight will be a good year and a year of opportunity for serious buyers and sellers,” said Jensen. “Seeing a solid Alberta economy, strong employment, predictions of movements to past levels of net migration, I see the Calgary market moving closer to normal market conditions - as normal as Calgary can be. 

According to the real estate board, single-family homes in the city averaged $472,230 in 2007, up 17.94 per cent from $400,398 in 2006. The average sale price of a condo was $316,370, an increase of 19.98 per cent from $263,684 in 2006.…

Bloodbath on Bay Street

(Monday  January 21, 2008) After losing nearly 1,000 points last week, most analysts expected the Canadian market to take a breather today, with markets south of the border closed for Martin Luther King Day. Instead, Canadian stocks on the TSX plummeted more than 600 points on Monday, following steep declines on both the Asian & European markets.

All sectors of the market were hit today, including resource, financial, consumer and tech stocks. For those currently invested in the market, the short-term outlook is grim: Tuesday morning when the US markets re-open, there will likely be another huge sell-off.

At market close, the S&P/TSX Composite index was down 605 points at 12,132, a drop of nearly 5% and a level not seen since…

Shortly after taking office, Alberta Premier Ed Stelmach had Dr. Lyle Oberg, Minister of Finance, put together a panel who were tasked with examining the province’s energy royalty and tax regime. The six member panel was chaired by Bill Hunter, and included experts in resource taxation and the royalty system. Members of the panel included Evan Chrapko, Judith Dwarkin, Kenneth McKenzie, Andre Plourde and Sam Spanglet.

Throughout the process, the panel hosted a series of public meetings and accepted submissions from Alberta residents, municipal leaders, and stakeholders in the oil and gas industry. On September 18, 2007, the panel released their 104 page report entitled Our Fair Share (see link to report below). Stelmach's government promised to study the…

(May 30/07)  While the Bank of Canada DID NOT increase the prime interest rate at yesterday's meeting, they issued a strongly worded press release suggesting that an increase in the overnight rate was to be expected at their next meeting - July 10th.

In response, all of the major Canadian banks increased their mortgage rates this morning, with 5 yr fixed rates increasing by as much as 0.30% to 7.14% *note - the wholesale or preferred rate for a 5 yr fixed will likely be around 5.74%*.

To read the complete article visit Rates Heading Up?

Calgary Real Estate 

May 17, 2007: Residential MLS sales in the Calgary housing market soared to $5.4-billion in the first four months of 2007 according to a report released yesterday by CREA. In dollar volume, that's a 38% increase from the same period last year. Calgary ranked third in the country behind Toronto ($11-billion) and Greater Vancouver ($6.5-billion).

While experts had predicted 2007 would see a drop in the number of Calgary homes & condos sold (vs last year's all-time record), unit sales are currently 8.7% higher than they were at the same time last year. To the end of April 13,423 homes & condos had been sold on the Calgary MLS.

Calgary Market Forecast

The huge demand for Calgary housing has forced CMHC to revise their Calgary forecast.…