Briefing highlights
- Canada slips in rankings
- Stocks slump as Huawei CFO arrested
- A BoC scene I’d love to see
- OPEC expected to cut supply
- A look at Canadian oil prices
- Bombardier sets 2019-20 targets
- Oil shock not as bad this time: Poloz
- Trade deficit widens on prices
- Aphria strikes special committee
Canada tumbles in rankings
Canada has slipped again in a global ranking of housing markets, marking a steady decline since the heady days of 2016 and early 2017.
Canada ranked No. 44 in Knight Frank’s third-quarter report, dropping from No. 37 in the second quarter, No. 15 in the first three months, and No. 10 in the final three months of 2017.
Go back further, and you’ll see Canada held the No. 4 spot, based on annual price gains, for several consecutive quarters in 2016 and 2017, before beginning to slight in the third quarter of last year.
The decline, of course, followed provincial measures in British Columbia and Ontario, aimed at cooling off the bubbly Vancouver and Toronto area markets.
And, more recently, new national mortgage-qualification rules from the federal bank regulator came into effect in January, which have had a marked impact.
Along with those provincial and federal measures are the impact of stretched affordability and rising interest rates, Liam Bailey, global head of research at the Knight Frank consulting group, added in an interview.
Here’s the latest look:
Canada’s regional housing markets differ, of course, with Vancouver and Toronto coming off the boil. The bottom line is policy makers appear to have pulled off the soft landing they’d hoped for.
Indeed, the Bank of Canada pointed to a less uncertain picture Wednesday as it held interest rates steady.
“Household credit and regional housing markets appear to be stabilizing following a significant slowdown in recent quarters,” the central bank said.
“The bank continues to monitor the impact on both builders and buyers of tighter mortgage rules, regional housing policy changes, and higher interest rates.”
Household credit and regional housing markets appear to be stabilizing following a significant slowdown in recent quarters. The Bank continues to monitor the impact on both builders and buyers of tighter mortgage rules, regional housing policy changes, and higher interest rates.
Read more
- Janet McFarland: Toronto area home sales fall sharply in November: TREB
- Brent Jang: Vancouver home sales for November hit 10-year low
- From stagnation to slim gains: Canadian housing markets in 2019
- Rob Carrick: The case for 30-year mortgages as a financial stress reliever for new buyers
- How vulnerable is your housing market? Check out this cool-to-hot heat map of 15 Canadian cities
- The more affordable grows less affordable as Toronto condo rents, prices surge
- Dianne Nice: Condo buyer’s guide: How to get into a hot real estate market without getting burned
- CMHC survey reveals a vast majority of first-time home buyers maxed-out their budgets
- Gary Mason: Vancouver’s housing crisis will forever haunt Gregor Robertson’s time as mayor
Markets at a glance
Global markets are falling after the arrest in Canada of Huawei’s chief financial officer, whose pending extradition to the U.S. has renewed fears over U.S.-China relations.
Read more
- Follow our Inside the Market
- Robert Fife, Steven Chase: Canada arrests Huawei’s global chief financial officer in Vancouver
A BoC scene I’d love to see
Okay, January’s out. I can’t meet in February. How’s March looking?
Bank of Canada senior deputy governor Carolyn Wilkins and governor Stephen PolozAdrian Wyld/The Canadian Press
Read more
- Barrie McKenna: Oil patch crisis threatens Bank of Canada efforts to hike key interest rate
- David Parkinson: How the severe slump in prices for Alberta crude has changed the Bank of Canada’s thinking
OPEC expected to cut
Call it Round 2 for the oil market.
OPEC begins a meeting today that is expected to see the cartel and its oil allies agree to a production cut of at least 1 million barrels a day.
Speculation and signals alone have already pushed crude prices higher, though key will be just how deep the cuts are.
OPEC meets today, followed Friday by a broader meeting with allies in a previous production cap agreement, including Russia.
This follows Rachel Notley’s OPEC-style price management, the Alberta Premier having ordered supply cuts of 325,000 barrels a day beginning next year.
“As is mostly the case, there is uncertainty going into the OPEC meeting, given wide-ranging extreme views from no cut to 1 to 1.5 million barrels a day of a cut,” said Joan Pinto, associate, energy specialist at CIBC World Markets.
She warned that any cut less than 1 million by OPEC and its allies, a group known as OPEC+, would sink oil prices to “eventually test” the lows of two years ago.
“Given our framework, we expect OPEC+ to cut output by around 1.5 million barrels a day for six months, and reassess global balances next in June, 2019,” Ms. Pinto said.
“A cut of this magnitude would extend the rebound in oil prices.”
Read more
- David Parkinson: Economists say Alberta’s oil production cuts will dent Canada’s 2019 GDP growth
- Shawn McCarthy, Justin Giovannetti: Alberta crude soars as international oil prices climb
- Jeffrey Jones: Notley tries her hand at OPEC-style intervention
- Justin Giovannetti, Shawn McCarthy: Alberta orders 8.7 per cent cut in oil production to deal with price crisis
- Oil surges on trade truce and expected supply cuts
And on that note ...
The Globe and Mail’s Matt Lundy looks at Canadian oil prices, here.
Poloz says it won’t be as bad this time
The hit to Canada’s economy from the recent oil price drop is likely to be smaller than when crude plunged in 2015, Bank of Canada Governor Stephen Poloz says.
That’s because the oil and gas sector’s contribution to the economy has been cut nearly in half since 2014 – to 3.5 per cent of GDP from 6 per cent, The Globe and Mail’s Barrie McKenna reports.
“Given the consolidation that has taken place in the energy sector since 2014, the net effects of lower oil prices on the Canadian economy as a whole, dollar for dollar, should be smaller than they were in 2015,” Mr. Poloz said in a speech today in Toronto.
But all Canadians will still feel pain, Mr. Poloz said.
Read more
Bombardier projects $18-billion in revenue
Bombardier Inc. has set a 2019 revenue target of US$18-billion or more.
In a statement before its Investor Day in New York, the Canadian plane and train maker said that would mark an annual increase of about 10 per cent from what it expects this year.
It pegged its 2020 target at US$20-billion.
Read more
Trade deficit widens
Today’s trade numbers tell an interesting tale.
Canada’s trade deficit swelled to $1.2-billion in October from September’s $891-million, Statistics Canada said today.
That came as exports slumped 1.2 per cent, largely because of oil, eclipsing the 0.6-per-cent decline in imports.
But when you strip out price changes, exports actually rose 1.2 per cent in volume terms.
Not only that, auto exports gained almost 4.5 per cent.
“So despite the downside miss on the headline, this is a solid first indicator for manufacturing shipments and monthly GDP,” said Andrew Grantham of CIBC World Markets.
Michael Babad