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Canada’s housing market ‘teeters precariously,’ Financial Times warns Add to ...

These are stories Report on Business is following Monday, Nov. 11, 2013.

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Canada’s housing market ‘teeters’
The Financial Times is warning that Canada’s housing market is “perched precariously at its peak.”

The publication has taken a close look at what some observers say is among the frothiest markets in the world, citing the cranes that dot Toronto’s skyline and the record debt burden of Canadian families.

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In an article headlined “Canada’s housing market teeters precariously,” the news organization quotes economist David Madani of Capital Economics, who has been warning for some time now that residential real estate is heading for its day of reckoning, and has been out of line with other economists.

Others believe the market has staying power, having rebounded from the slump that began in the summer of 2012 when Finance Minister Jim Flaherty moved to head off a bubble with another round of mortgage insurance restrictions.

At least some of that is believed to be related to expectations of further mortgage rate increases, so that sales are being pushed forward as buyers move before they otherwise would.

Later this week, for example, the Canadian Real Estate Association is expected to report another month of surging home sales in October, something in the area of 12 per cent, The Globe and Mail’s Tara Perkins reports.

Much of the Financial Times article focuses on Toronto, and the condo market in particular, though the publication also cites Vancouver and Montreal as areas of concern.

Senior economist Robert Kavcic of BMO Nesbitt Burns said today he expects the CREA numbers this week to show average resale home prices up 6.5 per cent, driven higher by a pickup in sales from more expensive cities such as Vancouver, while the MLS home price index is projected to rise 3.4 per cent.

"Cue the bubble mongers," Mr. Kavcic added, pointing to the Financial Times article.

Watsa expands on CEO decision
Prem Watsa says he never asked Thorsten Heins to leave BlackBerry Ltd.

The smartphone maker’s chief executive officer decided that on his own because, says Mr. Watsa, there can only be one person in charge of a company.

Last week, when BlackBerry announced the collapse of a tentative deal to be acquired by Mr. Watsa’s Fairfax Financial Holdings Ltd., it also disclosed that Mr. Heins was leaving, and that it was bringing in former Sybase Inc. chief Jon Chen as executive chair and interim CEO.

“Thorsten did a very good job given the hand that he was dealt, but resigned because you can’t have two people being in charge,” Mr. Watsa told The Globe and Mail’s Tara Perkins.

“He said to me, ‘It’s very appropriate for me to resign. I like John Chen, but I’m a CEO and there is one person in charge.’"

Mitel strikes Aastra deal
Another Canadian tech company is doing a cloud-based deal.

As The Globe and Mail’s Bertrand Marotte reports today, Mitel Networks Corp. announced it’s acquiring Canada’s Aastra Technologies Ltd. for $400-million in cash and stock.

Shareholders of Aastra would receive the equivalent of $31.96 a share, the bulk of it in Mitel shares.

"The business communications market is ripe for consolidation and on the cusp of a mass migration to cloud-based services,” said Mitel chief executive officer Richard McBee.

“We believe that small competitors with narrow focus and limited global reach will quickly be marginalized.”

Just last week, Open Text Corp. struck a $1.17-billion deal for GXS Group of Maryland.

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