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These are stories Report on Business is following Monday, Dec. 17, 2012.

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Home sales slip
Economists still see a soft landing for Canadian real estate as the market continues to cool.

As The Globe and Mail's Tara Perkins reports, sales plunged 11.9 per cent in November from a year earlier, slipping 1.7 per cent from October.

Those numbers, released today by the Canadian Real Estate Association, prompted the group to cut its sales forecast for this year and next.

While prices are still relatively firm compared to sales, CREA said the national average slipped 0.8 per cent in November from a year earlier.

The MLS home price index, which factors in changes in the types of homes sold, rose 3.5 per cent, though that's the weakest increase since May of 2011.

Demand has been slowing since August, the group said, after the latest mortgage restrictions brought in in July by Finance Minister Jim Flaherty.

Sales, it added, have been running about 8 per cent below the levels of the first six months of the year.

There are regional differences, of course. While Vancouver, Toronto and Montreal have slumped, for example, Calgary continues to run strong.

Most analysts still see a soft landing.

"Note that despite all the intense focus on the housing market this year, overall sales in the first 11 months of the year were down just 0.2 per cent while average prices were up 0.2 per cent," said deputy chief economist Douglas Porter of BMO Nesbitt Burns.

"In other words, the value of housing transactions in the January-to-November period was precisely the same as a year ago … New listings dipped 0.9 per cent [seasonally adjusted] in November, and 3.1 per cent year-over-year. As a result, the sales-to-new listings ratio eased a bit further, but remained firmly in balanced terrain at 50.3 per cent last month."

Mr. Porter is not alone.

"The Canadian housing market is not poised to undergo a U.S.-style housing correction," said senior economist Sonya Gulati of Toronto-Dominion Bank.

"Instead, the brunt of the regulatory-induced slowdown has been felt on the sales front.  We expect market conditions to stabilize in early 2013, as tighter mortgage rules loosen their grip on market trends and low interest rates lure homeowners back onto the market."

She was referring to the latest round of mortgage restrictions from Mr. Flaherty, which came into effect in July, part of his ongoing efforts to engineer a soft landing.

Ms. Gulati noted that national prices would have climbed 3.2 per cent over the year if Vancouver, Toronto and Montreal were factored out.

Vancouver, where sales plunged almost 29 per cent in November alone, and MLS-measured prices have slipped 4.5 per cent in the past six months compared to 1 per cent nationally, appears to be of particular concern.

"Despite the klieg-light focus on the Canadian housing market this year, its performance has been far from exciting," said Mr. Porter.

"It increasingly looks like most major markets are indeed undergoing a policy-induced correction. But, for now, the landing looks to be soft in most cities (with some cities actually still lifting off), with the rather obvious exception of Vancouver."

As Mr. Porter added in an interview, "I don't think you can call what's going on in Vancouver a soft landing anymore."

Nothing inappropriate, central bank says
The Bank of Canada moved today to squash a budding controversy over Governor Mark Carney's summer visit to Liberal MP Scott Brison's vacation home. Now, it's the Liberal Party's turn to answer some questions.

There was nothing inappropriate about the visit by Mr. Carney and his family, the central bank said, noting that the governor and Mr. Brison have been friends for about 10 years.

Even though Mr. Brison is the Liberal finance critic, I agree there's nothing untoward about the visit given that their friendship spans a decade. I still, however, question the wisdom of a small group of Liberals who tried to recruit Mr. Carney for a Liberal leadership bid.

"The Bank of Canada's general counsel, who is responsible for enforcing the bank's conflict of interest policy, has assessed that this visit does not breach the Bank's Conflict of Interest guidelines in any way," a spokesman for the central bank said in a statement.

"Neither the Bank of Canada, nor Governor Carney, have an actual or potential commercial or business relationship with Mr. Brison," he added.

"Mr. Carney's acceptance of hospitality provided by a personal friend does not arise out of 'activities associated with official bank duties.' Nor can it be defined as partisan or political activity."

The central bank's comments followed a story in The Globe and Mail on how a small group of Liberals courted Mr. Carney over the possibility of a Liberal leadership bid against Justin Trudeau.

The issue, of course, is the separation of monetary policy from politics, and Mr. Carney has said he did nothing to prompt the Liberty effort

But the decision among some in the party to court Mr. Carney to run against Mr. Trudeau seems rather dumb, despite the central banker's obvious attractiveness to voters. And questions remain over why he doesn't appear to have nipped the Liberal courtship in the bud.

He is leaving his current job early to take the position of governor of the Bank of England, but you've got to wonder how the country would have embraced him had he jumped from the central bank to politics before his term was up, and upon learning that he'd been flirting with politics while conducting monetary policy.

Yen slips amid pressure on central bank
Observers are wondering today just how far Japan's new government will go in pressuring the country's central bank.

Victor Shinzo Abe had promised to push the Bank of Japan to act more forcefully as the country fights its fifth recession in 15 years.

Japan is battling inflation and a high yen, which slipped today in the wake of Sunday's election.

"This weekend's landslide election victory for the Japanese LDP could well be the precursor to a much more interventionist policy with respect to monetary policy from the new Japanese government," said senior analyst Michael Hewson of CMC Markets.

"The nature of this weekend's victory makes it much more likely that the new incumbent Shinzo Abe will be able to follow through on his pledges, pre-election to push the Bank of Japan to be much more aggressive in its policies to fight deflation, and promote economic growth, he said in a research note.

"Part of the LDP's election manifesto was the setting of a clear inflation target of 2 per cent and to work towards that by means of aggressive monetary easing with the help of the Bank of Japan. With the U.S. Federal Reserve already in full easing mode it seems likely that to make a dent in the high value of the yen the Bank of Japan will have to be much more aggressive than it currently has been in stemming the yen's strength."

Indeed, Mr. Abe wasted little time today in suggesting the central bank move at its next meeting, which is scheduled for this week.

"It is very unusual for monetary policy to be a focus of attention in an election," Mr. Abe said, according to the Financial Times.

"But there was strong public support for our calls to beat deflation. I hope the Bank of Japan takes that into account."

Sun Life sells unit
Canada's Sun Life Financial Inc. is retreating from the U.S. annuity business, selling its operations to a subsidiary of Guggenheim Partners for $1.35-billion (U.S.).

"This transaction represents a transformational change for Sun Life," chief executive officer Dean Connor said today as he announced the deal with Delaware Life Holdings.

"It significantly advances our strategy of reducing Sun Life's risk profile and earnings volatility, focuses our U.S. operations on our areas of greatest strength and opportunity, and crystallizes future earnings and capital releases that will further support our growth and shareholder value creation."

As The Globe and Mail's Bertrand Marotte reports, Mr. Connor has put the focus on plans to invest in its U.S. employee benefits and voluntary benefits businesses.

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