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These are stories Report on Business is following Wednesday, Jan. 7, 2015.

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Home prices rise
A shortage of listings is driving Toronto home prices sharply higher, the local real estate board says.

The average price of a home in the area climbed 8.4 per cent last year, from a year earlier, to $566,726, the Toronto Real Estate Board said today.

Home sales, in turn, rose 6.7 per cent to a near-record 92,867.

In December alone, sales rose more than 9.5 per cent, and the average price 7 per cent.

The so-called benchmark price as measured by the MLS home price index, which is deemed a better representation, rose 8 per cent in December from a year earlier to $521,300.

Of course, the difference in the types of homes means wide differences in the prices, from an annual gain of 6.8 per cent to $362,900 for a townhouse, to a rise of 8.8 per cent to $642,900 for a single-detached dwelling.

The average price, however, was the lowest in several months.

New listings actually rose in the month, by 9.5 per cent, but active listings declined by more than 10 per cent.

"The strong price growth we experienced in 2014 can be explained with two words: listings shortage," Jason Mercer, the group's director of market analysis, said in today's report.

"The constrained supply of listings was especially evidence for low-rise home types like singles, semis and townhouses," he added.

"The number of households looking to purchase these home types increased, while the number of homes from which they could choose decreased. This situation resulted in more competition between buyers and more aggressive offers."

Counting (down) ...
The Canadian dollar continues to plumb new depths today, sinking again to its lowest level in more than five years.

But in November, at least, the weakness in the currency appeared not to be filtering through to the country's exporters, as hoped.

The loonie, as Canada's dollar coin is known, touched a low today of 84.27 cents U.S., and a high of 84.64 cents. By late afternoon, it sat just above 84.5 cents.

This came as oil prices stabilized, but we'll need several days to see if that sticks, said senior currency strategist Camilla Sutton of Bank of Nova Scotia.

And we could yet see an 83-cent loonie if oil resumes its slide, as some expect it will.

Indeed, Brent crude set a new threshold today, slipping below $50 (U.S.) a barrel before regaining ground.

As The Globe and Mail's Scott Barlow reports, Morgan Stanley is particularly down on the loonie today, suggesting selling the Canadian currency as oil prices slip.

"The banking industry has increased exposure into the oil and Canadian real estate sectors over recent years," the Wall Street bank report said.

"Now, as real estate eases and the energy sector faces overcapacity, Canada's banking sector may see its asset base weaken."

Some observers believe today's move in oil may be a one-off.

"As it stands, this looks nothing more than a dead cat bounce and I expect traders to remain very reluctant to be overly bullish at these levels as the fundamental picture has not changed," said market analyst Craig Erlam of Alpari in London.

"I'll be very surprised if the $50 level holds until the end of the day, let alone in the longer term," he added.

"The fact of the matter is that there is still an oil supply glut and demand isn't there. Unless one of these factors change, oil prices are going to remain very heavy. The decline may slow and probably will, but I would not bet against both [West Texas Intermediate] and Brent breaking through $40 in the coming weeks."

Others, though, believe current crude prices won't last, but rather will rise later this year, though not back to the $100 range.

"We expect world oil prices to rise above $60 by the end of this year," Kip Beckman, principal research associate at The Conference Board of Canada, said today.

"A mix of demand, supply, and Saudi intentions will be behind the turnaround."

You might not think that now, he said, given that supply exceeds demand by some 1 million barrels a day.

But "history shows that, more often than not, tumbling oil prices are quickly followed by a sharp upturn."The focus for the loonie is whether oil prices resume falling, or whether the stability holds.

The weaker loonie is certainly taking its time feeding through in any big way to Canadian exports.

According to the latest report from Statistics Canada today, the country's trade deficit swelled in November to $644-million (Canadian) from October's $327-million.

A 3.5-per-cent drop in exports outpaced the 2.7-per-cent decline in imports, the federal agency said.

Export prices slipped 1.9 per cent, and volumes 1.6 per cent. On the other side of the ledge, import prices dipped 1 per cent, while volumes declined by 1.7 per cent.

True, most of the damage related to crude, with oil and bitumen down by almost 10 per cent, as expected.

But the rest of the trade report was hardly stellar, with exports falling across almost all sectors.

Still, the lower loonie should do its part at some point.

"The weaker Canadian dollar (and firming U.S. economic growth) should help trade performance in 2015, but there was no sign of that in November," said senior economist Benjamin Reitzes of BMO Nesbitt Burns.

Prices fall
Fears of deflation are rippling through Europe after a report today showed consumer prices dipping in December.

The 0.2-per-cent decline from a year earlier marked the first annual drop in the euro zone since the fall of 2009, our European correspondent Eric Reguly reports.

This was largely driven by the plunge in oil prices, but nonetheless raises the pressure on the European Central Bank to launch a stimulus program known as quantitative easing, or QE, when it meets later this month.

"The direction that price inflation is headed, generally, is clearly not a positive development given that the ECB goal is 2 per cent," said senior economist Jennifer Lee of BMO Nesbitt Burns.

"All in, this spells likely ECB action, possibly as soon as the Jan. 22 meeting."

This came as the Eurostat agency also reported that unemployment in the euro zone held at an elevated 11.5 per cent in November.

Air Canada eyes leaving island airport
Air Canada is considering ceasing flights out of Billy Bishop Airport in downtown Toronto amid a continuing push to cut overall costs and failed efforts to gain more access to the airport, The Globe and Mail's Greg Keenan reports.

"While Air Canada's traffic and load factor at Billy Bishop Toronto City Airport increased in 2014 over the previous year, as part of its continuing cost transformation initiatives, Air Canada is assessing the viability of Billy Bishop operations based on current imposed terminal rates and terms," the airline said in a statement.

The airport is owned and operated by the Toronto Port Authority, but its biggest user by far is Porter Airlines Inc., which owns the terminal at the airport but has put the building up for sale.

Air Canada offers 15 flights a day out of Billy Bishop, which permits only turbo-prop planes to use the airport. That's less than 1 per cent of Air Canada's total daily 1,500 flights across Canada.

Flex time?
Apple Inc. may be planning a bendable phone. One that's actually meant to bend.

Among 28 patents awarded yesterday to the tech giant is one for a "flexible electronic device" that, based on the drawings, you could put in your back pocket without fear.

"A flexible electronic device may include a flexible display, a flexible housing and one or more flexible internal components configured to allow the flexible electronic device to be deformed," the document says.

"Flexible displays may include flexible display layers, flexible touch-sensitive layers, and flexible cover layers," it adds.

"The flexible housing may be a multi-stable flexible housing having one or more stable positions."

It goes on to talk about the possibility of flexible internal components, flexible batteries and flexible printed circuits.

Being granted the patent in no way means that Apple will make such a product, but it does make sense in this day and age as technology advances and consumer needs change. At some point, at least.

"This could be the future of the smartphone as the 'phablet' develops into basically a tablet that will fold to fit into your pocket," said analyst Jasper Lawler of CMC Markets in London.

Apple, of course, is coming off "Bendgate," but there's a lot more here.

"Flexible electronic devices may be more resistant to damage during impact events such as drops because the flexible device may bend or deform while absorbing the impact," the document says, adding that "rigid electronic devices may be vulnerable to damage in the event of an impact such as a drop of the device on a hard surface."

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