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House prices to rise, RBC says But for British Columbia, Canadian house prices will rise next year, Royal Bank of Canada says in a new study.
Senior economist Robert Hogue says home sales will rise in Alberta, Saskatchewan, Manitoba and Quebec in 2012, but decline in B.C., Ontario and the east, where they'll dip 3.3 per cent, 0.1 per cent and 0.4 per cent, respectively. The average price of a detached bungalow is forecast to rise in all regions, expect B.C. alone, where prices are projected to slip by 1.7 per cent.
"Developments in global financial markets since July have somewhat altered the economic landscape but, perhaps surprisingly, not the bottom line for Canada’s housing market," Mr. Hogue said.
He forecast sales would climb by 2.1 per cent in B.C. this year before falling in 2012. Sales in Alberta are forecast to rise 7.8 per cent in 2011 and 6.7 per cent in 2012, in Saskatchewan by 7.3 per cent and 1.7 per cent, and in Manitoba by 3.8 per cent and 0.7 per cent.
Ontario will see a gain of 1.5 per cent in 2011, before 2012's dip, Quebec will mark a decline of 4.5 per cent this year before a slight gain in 2012, and the eastern provinces will gain 0.4 per cent this year and a slight decline in 2012.
Where prices are concerned, Mr. Hogue projected an increase of 8.9 per cent in B.C. before next year's decline. Prices in Alberta will rise 0.5 per cent this year and 3.5 per cent in 2012, in Saskatchewan by 3.3 per cent in each year, in Manitoba by 5.6 per cent and 2.3 per cent, in Ontario by 4.9 per cent and 0.5 per cent, in Quebec by 4 per cent and 0.7 per cent, and in the eastern provinces by 6.2 per cent and 1.5 per cent.
Mr. Hogue's report came on the same day that the Canadian Real Estate Association reported prices in Canada climbed 5.5 per cent in October from a year earlier, below the 6.5 per cent in September and the slowest pace since January.
"The decelerating pace of increase in home valuation is a positive development," said Benjamin Tal of CIBC World Markets. "At this rate house prices will stop rising by the 2nd quarter of next year and that’s exactly what we need to see in order to achieve an orderly return to equilibrium."
Keystone wins backing Some influential critics of the proposed $7-billion (U.S.) Keystone XL pipeline are backing the TransCanada Corp. project now that the company has agreed to reroute it in Nebraska, The Globe and Mail's Shawn McCarthy and Carrie Tait report.
Two federal U.S. senators from the state, Democrat Ben Nelson and Republican Mike Johanns, issued statements Tuesday endorsing the deal reached between the company and key members of the state legislature to put the project back on the rails.
The ECB and Italy Did the European Central Bank hasten the downfall of Silvio Berlusconi? For whatever reason, it certainly looks that way.
As The Globe and Mail's Eric Reguly reports today, the central bank of the euro zone said yesterday that it purchased about €4.5-billion in sovereign bonds last week, the it didn't disclose the countries involved.
That's less than half of what it acquired a week earlier and came as Italy's bond yields spiked to crisis level, leading to the resignation of Mr. Berlusconi as prime minister. Put a different way, the ECB under its new chief Mario Draghi was scaling back its purchases as Italy's bond yields topped the key 7-per-cent mark, holding back potential support and sending shivers through markets.
Don't take that to suggest that the central bank was trying to add to the pressure on Mr. Berlusconi, who quit on the weekend, leading to attempts to install a new government under Mario Monti, a former ECB official. The central bank maintains its job is not to step in to ease these types of burdens on individual countries, and that's certainly a debate some are having.
As ING economist Carsten Brzeski told The Washington Post, the ECB is in something of a Catch 22. Moving too aggressively lets governments off the hook, while a weak response risks tipping other countries over the edge.
Regardless of the why, its moves appear to have had an impact.
"The ECB's actions last week appeared to be an attempt to ratchet up the pressure on EU politicians to act in concert to implement reforms and make changes in order to address the structural issues affecting the economies in Europe," said Michael Hewson, market analyst at CMC Markets in London.
"In Italy's case, they were effective in forcing Berlusconi out and bringing about a change in leadership of the Italian government the passing of the long-promised austerity budget."
That certainly doesn't solve the problem. Despite the frantic moves in the euro zone, the strong words and the toppling of governments, the crisis still shows no signs of easing.
Borrowing costs spiked again today, with the focus on Spain and Italy, illustrating that the markets lack faith in the reforms that have been promised, despite the events of the last several days.
"There are concerns that PM-designate Monti is facing some pushback in the Italian Parliament, which could make his job more difficult," said Benjamin Reitzes of BMO Nesbitt Burns. "He continues to meet with Italy’s political parties and could announce he’s ready to take the helm of the troubled country within the next few days."
The troubles continue to send shivers through global financial markets.
"The euro zone’s debt crisis and a poor Spanish bills auction continued to plague markets overnight, sending Spanish, Italian and French borrowing costs higher once again," said Derek Holt and Karen Cordes Woods of Scotia Capital.
"With German bunds rallying at the same time ... the 10-year spread between these countries and German bunds continues to mount, pushing to new euro era highs each day and currently sitting at 457 basis points, 530 basis points and 185 basis points, respectively."
The markets clearly wanted Mr. Berlusconi gone, yet the concerns remain, among them the speed of the reform agenda and the ability of the new leaders in Italy and Greece to deliver, said CMC's Mr. Hewson.
"This week's general election in Spain is also an additional uncertainty, and the fact remains that despite the recent changes in European governments the markets are now finally waking up the fact that unless someone such as the ECB acts as lender of last resort for the euro zone then the euro could well be finished, and we could well see countries start to drop out," Mr. Hewson added.
"Mixed messages coming from Germany regarding this ECB option only serves to heighten the uncertainty."
This comes as new statistics show the euro zone eked out economic growth of just 0.2 per cent in the third quarter, though France and Germany rebounded. The 17-member monetary union is expected to sink back into recession.
While the so-called periphery struggles, Germany's economy expanded by 0.5 per cent in the quarter, and France's by 0.4 per cent.
"Considering those two members account for nearly half the region, everyone else was lagging badly to limit regional growth to just 0.2 per cent," Mr. Reitzes said.
"Indeed, Portugal contracted for a fourth straight quarter, while the Netherlands saw a negative print as well, and Spanish growth was flat. Unfortunately, it’s almost certainly only down from here, with the euro area potentially already in recession."
- ECB backing away from role of emergency lender
- Euro crisis deepens as bond yields spike
- Euro zone posts growth, downturn expected
- France draws fire after 'alarm bells' warning
Android leaps The popular Android operating system from Google Inc. now controls more than half the market for platforms around the world, Gartner Inc. says in a new report today.
The iOS from Apple Inc. slipped in the third quarter, partly because consumers were waiting for the new iPhone.
The most stunning part of today's report from the research firm was the jump by Android to a market share of 52.5 per cent in the third quarter, from just 25.3 per cent a year earlier. Apple slipped to 15 per cent from 16.6 per cent, and Research In Motion Ltd. , which is bringing in a new system, to 11 per cent from 15.4 per cent.
"Android benefited from more mass-market offerings, a weaker competitive environment and the lack of exciting new products on alternative operating systems such as Windows Phone 7 and RIM," Roberta Cozza, the principal research analyst at Gartner, said in a statement.
"Apple's iOS market share suffered from delayed purchases as consumers waited for the new iPhone. Continued pressure is impacting RIM's performance, and its smartphone share reached its lowest point so far in the U.S. market, where it dropped to 10 percent.
Where actual sales of mobile devices are concerned, Nokia leads with 23.9 per cent, Samsung with 17.8 per cent, Lg Electronics with 4.8 per cent and Apple with 3.9 per cent.
U.S. retail sales rise The celebrated launch of the iPhone 4S - that's the one that talks to you - appears to have played a role in pumping up electronics sales in the United States in October.
Overall, retail sales in the U.S. climbed 0.5 per cent last month, better than expected and on the heels of a 1.1-per-cent rise in September, according to Commerce Department data released today.
The electronics sector alone chalked up a gain of 3.7 per cent, which economists linked to the release of the new smartphone from Apple Inc. . That didn't really skew the overall numbers - it can't compare to the cost of a big-ticket item, for example - but it certainly moved its sector along.
Apple's most successful product launch ever was the iPhone 4 in June 2010, which saw the electronics industry gain 1 per cent, noted senior economist Jennifer Lee of BMO Nesbitt Burns.
As for the full numbers, Ms. Lee wondered if consumers are pulling forward holiday buying. She warned, though, that personal income gains remain weak in the U.S., and unemployment remains high, which suggest some of this buying may be coming from savings. That's not the best development but the numbers are "still encouraging," she said.
Separately today, Research In Motion Ltd. unveiled two new BlackBerries as competition heats up in the sector.
Factory sales climb Canada's manufacturers have chalked up their third straight month of gains as refineries bounced back.
Sales from the country's factories climbed 2.6 per cent in September, Statistics Canada said today, pumped up by the oil, coal industries, and the transportation equipment sector, where aerospace and auto shipments rose 7.1 per cent.
Worth noting for the aerospace industry, which includes both products and parts, production climbed 17 per cent to its best level since July of 2009. Auto industry sales rose 6.2 per cent as many of the country's plants rebounded to full production.
September's showing wasn't strong across the board, though. Just 10 of 21 industries measured, representing about 60 per cent of Canada's manufacturing, posted gains.
Inventory levels rose 0.4 per cent, to their highest since March of 2009, while the inventory-to-sales ratio fell to 1.30 from 1.33. Unfilled orders lcimbed 3 per cent, the ninth consecutive increase, and also to their highest since March 2009. New orders rose 4.8 per cent.
"The report provides yet more evidence that Canada avoided a recession this year," said senior economist Krishen Rangasamy of National Bank Financial.
- Sino-Forest says it's not a fraud, delays third-quarter results
- Wal-Mart profit below expectations
- Home Depot tops Street, boosts dividend
- Staples sales miss estimates
Bombardier strikes Mideast deal Bombardier Inc. has reached a deal with the first Middle Eastern airline to buy its new C Series airplanes, The Globe and Mail's Greg Keenan reports.
Atlasjet Havacilik AS of Turkey signed a letter of intent to buy 10 of the larger CS300 version of the plane and taken options on another five planes.
A deal for the 10 planes would be worth $776-million (U.S.), based on list prices, but the order would grow to $1.18-billion if the options were exercised.
In Economy Lab How can we reduce dairy prices without ruining present-day dairy farmers who bought their quotas in good faith? Stephen Gordon looks at the supply management question.
In International Business Ontario's wine industry is trying to broaden the choice for Europeans -- and boost sales -- with a little help from Canadian trade commissioners in Europe. Eric Reguly reports from Rome.
In Globe Careers Employee engagement has been on the skids this year as organizations pile more expectations on reduced staffs in a lagging economic recovery, Wallace Immen writes.
In Personal Finance To retire like a champ, don't count on a large inheritance, winning the lottery or making a killing from an IPO.
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