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Business Briefing The priciest to cheapest housing markets per square foot, from (gasp) downtown Vancouver to (sigh) Moncton

Briefing highlights

  • Housing prices per square foot
  • Affordability eroding, study shows
  • Bombardier sells units for $900-million
  • Bombardier to cut 5,000 positions
  • Bombardier sells de Havilland trademark
  • Markets at a glance
  • Too early for a Santa rally, but ...
  • What to expect from the Fed
  • Magna posts jump in profit
  • Telus, Canadian Tire beat estimates

From gasp to sigh

If anything underscores just how pricey Vancouver has become, it’s this: Eight of the region’s communities rank among Canada’s 10 most expensive areas, based on the cost per square foot.

Toronto is no slouch, either. Nor is Montreal, the other city to round out the top 10 in an annual ranking by Century 21 Canada.

This comes amid concerns in Canada over affordability in some centres, notably the Vancouver and Toronto areas, and after federal and provincial measures aimed at cooling inflated prices.

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Indeed, a new National Bank of Canada study released today showed affordability getting even worse in the third quarter.

Here’s what a Century 21 survey of its franchises, from the beginning of the year to the end of June, shows:

This comes amid concerns in Canada over affordability in some centres, notably the Vancouver and Toronto areas, and after federal and provincial measures aimed at cooling inflated prices.

Indeed, a new National Bank of Canada study released today showed affordability getting even worse in the third quarter.

Some regional highlights from Cent:

British Columbia: “Going back 20 years most Metro Vancouver prices have tripled or quadrupled - to $681 [price per square foot] this year from $192 in 1998 in North Vancouver, for example.”

Alberta: “Alberta real estate prices have been soft over the last year, falling in most communities while rising in very few.”

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Prairies: “The price per square foot of homes across much of Saskatchewan and Manitoba retracted in the last year after two decades of growth. Only Winnipeg bucked the trend, with prices for a detached house there rising to $282 from $267 per square foot while prices in Regina and Saskatoon saw modest declines.”

Ontario: Prices in downtown Toronto climbed more than 10 per cent over the past year and “continue to top Ontario home prices, while prices rose and fell turbulently in GTA suburbs and other communities in the province.”

Eastern Canada: Prices “have risen moderately in the last year even while other parts of Canada faced more variable real estate markets.”

The National Bank study showed affordability worsening in nine of 10 markets tracked, despite an easing in home prices.

“Expensive housing markets such as Vancouver and Toronto slowed down markedly in 2018, and home prices even declined in Q3 due to the combined effect of rising mortgage rates (up for a fifth consecutive quarter) and macro prudential measures,” said National Bank’s Matthieu Arsenau and Kyle Dahms.

“Despite lower home prices, homebuyer affordability failed to improve as wages were down in those markets.”

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The Montreal and Ottawa area markets, which have been on fire, suffered the “sharpest deteriorations in affordability” in the quarter.

“But for another reason: Home prices surged respectively by 2.1 per cent and 2.5 per cent quarter over quarter,” said Mr. Arsenau and Mr. Dahms.

“These markets appear to be unaffected by rising interest rates and tighter credit standards as shown by resale market conditions being strongly tilted in favour of sellers.”

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Bombardier restructures

Bombardier Inc. unveiled an aggressive restructuring today, selling business units and the famous de Havilland trademark and cutting 5,000 jobs.

It said the move would help boost revenue by about 10 per cent next year to at least $18-billion, while “profitability is anticipated to grow at a faster pace.”

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Over all, The Globe and Mail’s Nicolas Van Praet reports, Bombardier will net about US$900-million from its sale of non-core assets.

The Canadian plane and train maker is selling its Q400 turboprop business to Viking Air, and its private aircraft flight training unit to CAE Inc. Along with the Q Series program goes the de Havilland trademark.

Bombardier also posted a quarterly profit of US$149-million or 4 US cents a share, compared to a loss of US$100 million or 4 US cents a year earlier.

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Markets at a glance

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Markets and the midterms

It’s too early to call it a Santa rally, but global markets sure did like the results of the midterms.

What to watch for today

The U.S. Federal Reserve delayed its rate decision, traditionally made on Wednesdays, by a day because of the midterm elections.

Not that it matters all that much, as the U.S. central bank isn’t expected to change policy this afternoon.

But markets, already anxious over rising interest rates, will be scouring the Fed statement.

"The Fed’s gradualist stance means no rate hike this month, but the text will justify expectations for a December move," said CIBC World Markets chief economist Avery Shenfeld.

And some notable earnings: Autocanada Inc., Bombardier Inc., Brookfield Asset Management Inc., CI Financial Corp., Canadian Tire Corp., Cascades Inc., Hydro One Ltd., Magna International Inc., Martinrea International Inc., Paramount Resources Ltd., Power Corp. and Power Financial Corp., Quebecor Inc., Telus Corp., TMX Group Ltd., Trican Well Service Ltd. and Walt Disney Corp.

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