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business briefing

These are stories Report on Business is following Thursday, Oct. 30, 2014.

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Home sales, prices to rise
Canada Mortgage and Housing Corp. has released a new report with everything you could possibly want to know about projected sales and prices across the country, forecasting a "steady" showing nationwide next year, followed by "some moderation" in 2016.

Housing starts in Canada, it predicted today, will range next year from 172,800 to 204,000, and in 2016 from 168,000 to 205,800.

Resales next year will come in between 457,000 and 507,300, and in 2016 between 448,000 and 508,000.

Prices are particularly interesting.

Average prices this year, which, of course, differ widely across Canada, are expected to range from $401,600 to $405,400, which means a so-called point forecast of $404,800.

Next year, according to CMHC, prices will be between $403,600 and $417,800, for an increase in the point measure to $410,600.

Then in 2016, expect prices to range between $407,300 and $424,500, or a point forecast of $417,300.

West to east, here's what CMHC forecasts in terms of average prices:

  • British Columbia: Average resale price to rise to $566,300 in 2015 and $573,000 in 2016.
  • Alberta: Average to rise to $407,800 and $417,500.
  • Saskatchewan: Average to rise to $303,000 and $309,300.
  • Manitoba: Average to rise to $272,600 and $278,800.
  • Ontario: Average to rise to $435,900 and $443,800.
  • Quebec: Average to rise $270,800 and $276,600.
  • New Brunswick: Average to dip to $161,500 and $161,000.
  • Nova Scotia: Average to rise to $216,000 and $217,000.
  • Prince Edward Island: Average to slip to $157,000 in both years.
  • Newfoundland and Labrador: Average to rise to $294,000 and $298,000.

These findings, of course, mask the wide ranges from city to city, which CMHC also looked at.

For example, the average in Calgary, forecast to jump 5 per cent this year to $459,000, should rise further, to $472,000 in 2015 and $483,000 a year later.

Loonie to soften
Expect the Canadian dollar to weaken further in the wake of the Federal Reserve's policy statement yesterday.

Further still should tomorrow's report on Canada's economy comes in weaker than expected.

And further still should oil prices decline even more.

Yesterday's decision by the Fed, which opened the door to an earlier-than-expected hike in interest rates, put a spark into the U.S. dollar, thus weakening the Canadian currency, which stands above 89 cents U.S. today.

Already, the loonie, as Canada's dollar coin is known, has softened up on lower oil prices, and the suggestion that the Bank of Canada will lag the Fed in hiking rates.

Tomorrow's report from Statistics Canada on how the economy fared in August could well drag the loonie down further, said chief currency strategist Camilla Sutton of Bank of Nova Scotia.

And while crude prices look to have stabilized, a further tumble would weigh on the currency again, she said.

As The Globe and Mail's David Parkinson reports, the Fed yesterday ended its asset-buying stimulus program known as quantitative easing, turning the focus of the markets to when the U.S. central bank will actually hike rates.

U.S. economy better than expected
The U.S. economy is chugging along, albeit at a slower pace.

Gross domestic product expanded in the third quarter at an annual rate of 3.5 per cent, better than expected though slower than the second quarter's blistering 4.6 per cent.

That earlier showing, however, marked a rebound from a particularly harsh winter.

"Going forwards, we expect growth to average around 3 per cent in the coming quarters," said Andrew Grantham of CIBC World Markets.

"While that doesn't seem like much by historical standards, a lower speed-limit on growth now means it will be enough to keep the jobless rate moving down and see the sort of improvement in the labour market that the Fed began to acknowledge in yesterday's statement."

Bombardier profit slumps
Bombardier Inc.'s third-quarter profit fell almost 50 per cent as the plane and train maker took a charge related to previously announced job cuts, but profit on an adjusted basis beat expectations, The Globe and Mail's Bertrand Marotte reports.

Net profit was $74-million or 3 cents per share, compared with $147-million or 8 cents in the year-earlier period.

Revenue was up 20 per cent at $4.9-billion, above analysts' estimates of $4.82-billion.

On an adjusted basis, net profit was $222-million or 12 cents, compared with $165-million or 9 cents. Analysts had been expecting earnings per share of 10 cents in the quarter.

Earnings flood in
Bombardier's not alone as earnings from Canadian companies flood in.

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Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 20/02/24 4:00pm EST.

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Bank of Nova Scotia
Bank of Nova Scotia
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Canadian Imperial Bank of Commerce
Canadian Imperial Bank of Commerce
Maple Leaf Foods
Thomson Reuters Corp
Thomson Reuters Corp

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