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Business Briefing Canada’s housing market tumbles in global ranking, but ‘opportunistic buyers’ are afoot

Briefing highlights

  • Canada sinks in real-estate ranking
  • Stocks, loonie at a glance
  • Oil spikes on tanker attack
  • Household debt burden dips
  • HBC loss wider than expected
  • Transat profit slips
  • China stands firm in trade spat

Canada tumbles in ranking

Canada’s housing market continues to tumble in global rankings, but “opportunistic buyers" are now afoot.

The latest report from Knight Frank ranks Canada as No. 44 of 56 countries measured in the first quarter of the year. That’s based on prices rising 1.5 per cent on a one-year basis, and falling 1.7 per cent over six months and 0.8 per cent over three months.

Canada has been sliding down the real-estate consulting group’s ladder for some time, from No. 39 in the fourth quarter of last year. For annual comparisons, Canada ranked No. 15 in the first quarter of 2018, with annual price growth of 6.6 per cent, and No. 10 in the first three months of 2017, with 10.3 per cent.

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Of course, this was supposed to happen. Frothy Canadian markets, notably the Vancouver and Toronto areas, prompted provincial and federal policy makers to cool things down, with tax and other measures and mortgage-qualification stress tests to head off big-time credit trouble.

National numbers can be skewed by major centres, such as Vancouver, of course. And, remember, the winter months were not kind.

Knight Frank partner Kate Everett-Allen cited several reasons for Canada’s decline, including the stress tests, an earlier rise in interest rates and “economic headwinds” globally.

“However, sales in some markets are starting to tick upwards, buoyed in part by a healthy labour market and by opportunistic buyers seeking relative value,” she said.

Indeed, as The Globe and Mail’s Janet McFarland reports, Toronto’s housing has now seen two stronger months, though, as Brent Jang writes, Vancouver is still laid low.

But Kevin Skipworth, chief economist at Dexter Realty in Vancouver, said that city is “primed for a comeback” given the latest month-over-month sales and listing numbers.

“We actually see renewed confidence as evidenced by recent sales and these new and active listing counts,” he said.

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Markets at a glance

Oil is in the spotlight, up sharply after reports from the Gulf Oman of attacks on tankers.

“The number of attacks in the region is on the rise, with today’s reports coming a day after explosions onboard Iranian vessels,” said IG chief market analyst Chris Beauchamp.

“Geopolitical concerns are now front and centre, although the cause of today’s explosions is yet to be identified,” he added.

“Oil prices have suffered heavily off the back of rising U.S. crude stockpiles, but today the price of both Brent and [West Texas intermediate] has rallied off the lows of June. With an OPEC report due to be released soon, the oil price looks primed for further upside in the short term, at least.”

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Ticker

Debt burden dips

From Reuters: Canadian household debt as a share of income, a measure closely watched by policy makers, slipped to 173.0% per cent in the first quarter from 173.7 per cent in the fourth quarter but is still near record levels, Statistics Canada said.

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HBC loss bigger than expected

From Reuters: Hudson’s Bay Co. posted a wider-than-expected loss and a 3.3-per-cent fall in first-quarter revenue as it closed some stores and sales at its Lord & Taylor unit fell.

Transat profit slips

Transat AT Inc. posted a smaller profit in the second quarter as fuel costs rose and the Canadian dollar slipped against the U.S. currency, Eric Atkins reports. In talks to be acquired by Air Canada, Transat said profit attributable to shareholders fell to $2.3-million, or 6 cents a share, from $7.9-million or 21 cents a year earlier.

Dollarama tops sales estimates

From Reuters: Dollarama Inc. beat quarterly same-store sales estimates and raised its full-year comparable sales forecast as the discount store operator attracted more shoppers.

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China stands firm

From Reuters: China’s commerce ministry said Beijing will not yield to any “maximum pressure” from Washington, and any attempt by the United States to force China into accepting a trade deal will fail. China will not make concessions on matters of principle, ministry spokesman Gao Feng told reporters at a regular briefing.

Required Reading

Rogers eliminates overage fees

In a major change to wireless pricing, Rogers Communications Inc. will be the first of Canada’s national carriers to offer plans with no monthly overage charges as it prepares for a surge in data usage expected with faster 5G technology. Christine Dobby reports.

Nowhere near free

Canada’s trade relationship with the U.S. is back to normal, but it’s nowhere near free, columnist David Parkinson argues.

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Governor seeks halt

California’s governor called on a racetrack owned by The Stronach Group to end its racing season early after of rash of thoroughbred deaths, adding pressure to a company that is in the middle of a bitter family dispute between Frank Stronach and his daughter, Belinda Stronach. Tamsin McMahon reports.

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