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Business Briefing Toronto home prices soar (but they ‘won the lottery’ in Vancouver)

A movie scene I'd love to see

Source: Giphy.com

“Begone, before the housing market kills you, too.”

Sales, prices surge

Toronto’s raging housing market has been doing business at a pace of more than $6-billion a month since May as sales rise and prices surge.

Having said that, Toronto has nothing on Vancouver, where “you basically won the lottery” if you own a detached home.

The Toronto and Vancouver housing markets are a source of concern among bubble-ologists, and the latest numbers show they’re still going strong.

According to the Toronto Real Estate Board today, sales in the area climbed 8 per cent in July from a year earlier, at 9,880.

Sales jumped across the board, with condos up sharply.

The board's MLS home price index, which tracks the benchmark, surged 9.4 per cent, while average prices rose 10.6 per cent to $609,236.

The average price of a detached home in Toronto’s 416 region - that’s the area code - rose 13.3 per cent to $996,770. That’s actually down from June as prices on a month-to-month basis are seasonal.

Condo sales in the Greater Toronto Area led the way last month, climbing 14.4 per cent, though price gains trailed at 4.1 per cent.

“With the level of inventory in the GTA trending below two months, many listings continued to generate a lot of interest from buyers,” Jason Mercer, the group’s chief of market analysis, said in a statement.

“Not surprisingly, this supported further price increases well above the rate of inflation,” he added.

“Assuming similar interest rate and economic environments over the next five months, strong price growth will remain the norm for the rest of 2015.”

The total value of homes changing hands topped $6-billion, shy of the $7-billion or more pace of the last few months though well up from March.

There’s Toronto. And then there’s Vancouver, where The Globe and Mail’s Brent Jang reports a 30-per-cent surge in July sales from a year earlier.

The benchmark price for all types of properties in the Vancouver area now stands at $700,500, up 11.2 per cent from a year earlier.

Sellers in Vancouver now “rule with an iron fist,” noted BMO Nesbitt Burns senior economist Sal Guatieri.

“It’s a seller's market in Toronto, too, but if you own a detached home in Vancouver you basically won the lottery.”

Canadian Natural cites higher taxes

Canadian Natural Resources Ltd. is the latest oil patch concern to be whacked by the collapse in crude prices, warning, too, of the hit from higher Alberta taxes.

The energy giant today posted a second-quarter loss of $405-million, or 37 cents a share, a dramatic turnaround from a profit of $1.1-billion or 97 cents a year earlier.

“The company has proactively reduced its development programs in the context of lower commodity prices and lower cash flow,” chief financial officer Corey Bieber said in a statement.

Canadian Natural would have earned $174-million but for a $579-million hit from a 20-per-cent hike in corporate income tax rates, he added, warning that “this charge effectively translates into lower future cash flows and, therefore, lowers reinvestment in the business.”

Quote of the week (so far)

“The recovery will be characterized by slower commodity demand growth compared to the past decade.”
Rio Tinto CEO Sam Walsh

BCE profit up

BCE Inc. posted a jump in second-quarter profit today, boasting of “strong increases in subscribers, revenue and operating profitability.”

The telecommunications giant’s profit climbed to $759-million or 90 cents a share from $606-million or 78 cents a year earlier.

Adjusted earnings per share at BCE, which owns part of The Globe and Mail, rose to 87 cents from 82 cents.

BCE said it added, on net, 61,033 postpaid wireless customers and lost 38,923 of prepaid subscribers.

Barrick up

Shares of Barrick Gold Corp. climbed today in the wake of last night’s announcement that it’s taking steps to shore up its finances.

Barrick unveiled a 60-per-cent dividend cut late yesterday, along with plans to sell some U.S. assets.

Mr. Ackman, you make good cookies

Shares of Mondelez International Inc. also rose on a move by shake-up artist Bill Ackman to shake things up at the food company.

Mr. Ackman’s Pershing Square Holdings Ltd. says it now holds 7.5 per cent stake in the company that owns the Oreo cookie and Cadbury chocolate brand.

Manulife profit slips

Manulife Financial Corp.’s profit dropped in the second quarter, even as the company posted higher sales of wealth and insurance products and benefited from currency changes, The Globe and Mail’s Jacqueline Nelson reports today.

The Toronto-based insurer’s net profit fell to $600-million, or 29 cents a share, in the quarter, from $943-million or 49 cents a share a year earlier.

Manulife’s core earnings rose to $902-million or 44 cents from $701-million or 36 cents.

Stat of the day

$1.14-million
Benchmark price for detached Metro Vancouver home, up 16.2% from a year ago
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