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Briefing highlights

  • Five-year home price forecast
  • Stocks, loonie, oil at a glance
  • Air Canada posts quarterly loss
  • Enbridge profit climbs
  • From today’s Globe and Mail

‘Slower, steadier’

The heady days are clearly a thing of the past.

A new forecast for Canadian house prices suggests “slower, steadier” increases in 2019 and marginal to moderate growth in many centres over five years.

Several cities will see average annual price declines, though largely marginal, over the five-year period, according to the latest outlook from Moody’s Analytics, which bases its projections on RPS Real Property Solutions data.

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The best any city can expect – and there are only two of them in this category – are price gains of 4 per cent or slightly better.

“The Canadian housing market is going through a period of decompression: It is now well over two years since the first policy intervention to head off house price bubbles in Greater Vancouver and Toronto, along with addressing the affordability crisis in both metro areas,” said economist Andres Carbacho-Burgos of Moody’s Analytics, the rating agency’s sister company.

“At this stage of the process, authorities can claim at least a partial success.”

He was referring to measures by the B.C. and Ontario governments, which were followed by new mortgage-qualification stress test from the federal bank regulator.

Here’s the Moody’s outlook for the next five years:

“House prices in Toronto and Vancouver have leveled off and affordability is no longer deteriorating, though it still has lots of room for improvement,” Mr. Carbacho-Burgos said.

“At the same time, home resales and new-home sales are falling in the Prairie and Atlantic provinces, with prices level at best and falling at worst; currently, only Quebec seems to have some degree of normality in its housing markets.”

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That’s where things stand now.

“Over the coming year, only Montreal will have moderate house price appreciation compared with the other large metro areas, but in subsequent years there will be a partial recovery, with Toronto doing somewhat better, though Vancouver will still be lucky to maintain level prices given how overvalued house and apartment prices are currently.”

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Markets at a glance

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Air Canada posts loss

Air Canada swung to a fourth-quarter loss of $231-million, or 85 cents a share, from a profit a year earlier of $81-million or 2 cents.

On an adjusted basis, Air Canada posted a lower quarterly profit of $54-million, or 20 cents, compared to $60-million or 22 cents.

The airline boasted record passenger revenue of $3.8-billion, topping the year-earlier period by 11.3 per cent.

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The latest quarter included a bigger hit on foreign exchange losses.

“These quarterly results showed an improvement over last year’s fourth quarter on many fronts – including passenger revenues, traffic and yield – and complete a strong fiscal year,” chief executive officer Calin Rovinescu said in releasing the numbers.

“During the year, we successfully managed many challenges, including intensifying competition and a volatile fuel price environment which resulted in approximately $1-billion in additional costs or 20 per cent more than in 2017,” he added.

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Enbridge profit climbs

Enbridge Inc. posted a hefty jump in quarterly profit, to $1.1-billion, or 60 cents a share, from $207-million or 13 cents a year earlier.

On an adjusted basis, profit rose to almost $1.2-billion or 65 cents.

“We ended the year as a much stronger, lower risk and simpler company than where we started the year,” said chief executive officer Al Monaco.

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