These are stories Report on Business is following Thursday, May 16, 2013.
Toronto home sales sink
Toronto home sales sank 9.7 per cent in the first two weeks of May from levels of a year earlier, marking a setback at this point from April’s better showing.
Sales in the Greater Toronto Area fell to 4,476, while prices held up. The condo market, which has been a focus of concern, was particularly hard hit.
The drop in sales was greater in the city proper than in the surrounding area, at 11.4 per cent and 8.6, respectively, the Toronto Real Estate Board said today.
Sales of detached homes fell 7.5 per cent, while condo sales tumbled 13 per cent.
It’s a reading of just two weeks, but one that’s disappointing given that sales fell by just 2 per cent in April, ending a string of sharp declines and pointing to a better spring market.
In the first two weeks of April, sales dipped by less than 1 per cent from a year earlier, though there was an extra selling day because Good Friday fell earlier.
Still, the average selling price rose 5.4 per cent to $543,838 from a year earlier.
“Despite fewer sales this year compared to last, competition between buyers in most segments of the market remained strong enough to promote annual rates of price growth above the rate of inflation,” said Ann Hannah, the group’s president.
“A household earning the average income in the GTA can comfortably afford the mortgage payments associated with the purchase of an average priced home.”
Average prices for detached homes climbed 5.6 per cent to $682,451, while condo prices gained 1.1 per cent.
As The Globe and Mail’s Tara Perkins reports, Canada-wide numbers released yesterday point to a soft landing in the country’s real estate sector, with sales down just 3 per cent from a year earlier.
- Signs of spring - and a soft landing - in Canadian real estate
- David Parkinson in Economy Lab: In Canada's housing market, the other shoe has already dropped
- House price gains expected to dip to lowest since 2009
- Flaherty's concerns throw 30-year mortgages in spotlight again
- Vancouver home resales down 6.1% in April from year ago
- GTA home resales fall only 2% in April in wake of steep declines
- Why is the man who bet against U.S. housing so worried about Canada?
- Peter Munk's contrarian bet on Toronto's condo market
Telus seeks to acquire Mobilicity
One of Canada’s major phone companies is seeking to swallow one of the country’s troubled upstarts.
Telus Corp. said today it has struck a deal to acquire Mobilicity for $380-million, subject to approval by antitrust and other regulators, as well as the latter’s debt holders.
All of the funds will go toward paying the smaller company’s debt.
Mobilicity was one of the wireless carriers that launched amid attempts by the government to spark more competition in the industry.
“A concern for our customers and employees led us to approach Telus, which has a reputation for a strong customer focus, as evidenced by their industry leading client loyalty,” Mobilicity president Stewart Lyons said in a statement.
“I am confident Telus will look after our employees and our customers, mitigating any disruption to their service, while offering the best outcome for all stakeholders.”
Japan’s economy shoots ahead
Japan’s economic growth of 3.5 per cent, annualized, in the first quarter of the year suggests Abenomics is beginning to have an impact, at least in terms of consumer confidence.
Fresh statistics from Japan’s Cabinet Office today showed a surge in growth, pumped by consumer spending and the country’s traditional export strength.
While early days, the numbers suggest Prime Minister Shinzo Abe’s program, backed up by the Bank of Japan, is working.
While the government maintains its efforts are aimed at juicing the economy, the yen has tumbled, helping the country’s exporters. Japanese stocks have surged in response.
“It would be over-interpreting these data to suggest they are evidence that Abenomics is already paying dividends – the fiscal easing and shift in BoJ policy won’t be felt until Q2,” said Adam Cole of RBC Europe.
“But the rise in consumption in the quarter, which accounted for around half of the rise in GDP, almost certainly did benefit from improved consumer confidence and higher equity prices.”
Gold price sinks
Gold prices slipped again today, holding below $1,400 (U.S.) an ounce, as reports showed demand slumping and more key players cutting back.
Global demand for gold fell in value terms fell in the first quarter of the year to $51-billion, down 23 per cent from the final quarter of 2012, the World Gold Council said today.
In volume terms, demand fell 19 per cent.
That came before the April rout that drove prices down sharply into bear market territory, leading some analysts to suggest that the long run in bullion had ended.
At the same time, the average price slipped 5 per cent to $1,632 an ounce.
Also today, reports showed George Soros cutting his holdings in the SPDR Gold Trust in the first quarter of the year, also before the massive hit. Others big players have also pared their interests.
“Gold-backed ETFs, which made up 6 per cent of gold demand in 2012, have some some holders, primarily in the U.S., collect profits and move into equities,” said Marcus Grubb, the managing director of investment at the World Gold Council, said in a statement, though this has been “balanced” by a 10-per-cent increase from the same period a year earlier in investments in gold bars and coins.
- Scott Barlow in ROB Insight (for subscribers): Sorry, gold bugs, Fed has no effect on money supply: economist
- Also for subscribers: Stress mounts for precious metals investors
How can I get a job like Mike Duffy’s?
I can’t. You can’t either.
So the only thing to do is rewrite the rules for private business to bring them more into line with those of the public sector, keeping in mind the bar set by Nigel Wright, the PMO chief of staff, in giving Senator Mike Duffy more than $90,000 to repay improper government expense claims.
Let’s build on these:
Wages, benefits and social insurance
Old version: The U.S. government breaks down hourly compensation in Canada into three parts, wages and salaries, social insurance and directly-paid benefits, the latter including vacation pay, allowances for commuting and family events, and “seasonal and irregular” bonuses.
New version: Bonuses can now be as “irregular” as we want them to be.
Old version: The U.S. government stipulates that bonuses and premiums will paid each pay period.
New version: There are now 24 months in a year.
Old version: A one-time payment of $100,000.
New version: A one-time payment of $100,000 and a written guarantee that the boss’s executive assistant will bail you out if you get into trouble.
New version: If the boss’s executive assistant doesn’t have the funds readily available, you can’t go to the CFO. For at least a year.
Old version: Hourly wage will rise by 25 cents for every percentage point increase in the consumer price index.
New version: With inflation tame, should the consumer price index actually fall, it’s one thing you don’t have to pay back.
New version: Have as many as you want. And travel to each one as many times as you want.
New version: Don’t tell Pamela Wallin we gave you the money.
- Ethics watchdog to review Harper aide’s $90,000 gift to Duffy
- Globe Editorial: A strange, $90,000 gift to the underserving Senator Duffy
Streetwise (for subscribers)
- Infrastructure still the hot sector for private equity
- Global body revisiting the rules for credit default swaps
- Central bank moves working, but return to normal could be bumpy: Economists
- Respect is key to aboriginal approval of Northern Gateway pipeline
ROB Insight (for subscribers)
- Oil-fixing probe risks further muddying the waters
- Should the Bank of Canada raise rates before the Fed?
- Dell's profit dives as billionaire battle rages on
- Alcoa to downsize Quebec smelter, cut 500 jobs
- Canada Pension Plan fund earns 10.1 per cent returns
- Glencore Xstrata brings in former BP boss as chairman ousted
- S&P downgrades Warren Buffett's Berkshire Hathaway
- U.S. jobless claims jump in warning sign for labour market
- U.S. inflation falls by most in four years on gas-price drop
- Food costs lead Canadians to shop around, cut back: study
- Wal-Mart profit misses Street on weak U.S. sales
- Cooling prices, falling imports highlight euro zone's malais