29 Jul

Residential Market Commentary – Cautious economic optimism

General

Posted by: Frank Fik

Crystal-ball gazing to predict the economic future can be a murky business.  And some of the latest polling of Canadian economists shows just how opaque the view can be.  The Globe and Mail surveyed 15 prominent Canadian economists about what, they think, is going to happen.

There is general agreement that a slowdown is coming.  But when it came to the likelihood of a recession, expectations covered a very broad range from 25% at the low end to 90% at the high end.  One of those economists sees the country sliding into recession next year.  Some of the others are estimating longer timelines, stretching out to 24 months.  Certainly, a less than clear picture.

The Bank of Canada has lowered it forecast for economic growth significantly to 1.8% for next year.  Back in April the Bank was forecasting 3.2% growth.

Rampant inflation continues to be named as the culprit as the central bank pushes up interest rates in an effort to cool domestic demand.  Highly indebted Canadian households are particularly sensitive to rising rates.  That became apparent very quickly in the real estate market.

Demand for homes is easing, as illustrated by declining sales.  There is a growing inventory and price increases are returning to historical norms.  The moderation is largely welcome news; a hopeful sign of stability and predictability returning to the market.

Overall, the broad expectation from the economists is that the country can avoid a sustained economic contraction.  They point to rising commodity prices that tend to benefit the Canadian economy and high, COVID-era savings that could stave-off a collapse in consumer spending even in the face of higher prices.

There is cautious optimism that any recession will be relatively shallow and relatively short.

Published by First National Financial LP

11 Jul

Residential Market Commentary – Inflation and the “R” word

General

Posted by: Frank Fik

COVID variants.  Inflation.  Interest rates.  And now, recession.  It seems as though we are being exposed to a new crisis with every cycle of the moon.  No wonder consumer confidence is, at best, ambivalent.

The latest round of chatter from the nation’s economists says Canada will likely see an economic downturn toward the end of this year.  It has happened before as the central bank fought to control inflation.

But the news is not all bad.  The Canadian economy is strong.  Unemployment is at a historic low and GDP growth is the best in the G7.  Even the key items driving inflation have an upside.  High fuel prices are boosting Canada’s important energy sector and high food prices are bolstering the country’s agriculture industry.

None the less, the economists point out that, inflation is eating away at the spending power that was accumulated during the pandemic.  Sharply rising interest rates have already cooled the demand for housing and softened real estate prices, while increasing the burden on debt-laden Canadians.

The current debt-to-income ratio shows the average Canadian household owes $1.83 for every dollar of disposable income.

The expectation is, GDP will contract through the middle quarters of next year.

Generally, though, the economists seem to agree that any possible recession will be relatively moderate and short.  And they continue to use the phrase “soft landing” when talking about the economy returning to normal.  And once inflation is in check the Bank of Canada will be able to start reducing interest rates.

Published by First National Financial LP

4 Jul

Simple Home Technology Upgrades.

General

Posted by: Frank Fik

It’s an excellent time to be alive if you’re an early adopter of technology; it’s slightly less excellent if you’re a well-meaning-but-late-anyway adopter (like myself). The breakneck pace of technological innovation can easily leave you behind the curve, with new startups, apps, and devices appearing on an almost daily basis. Trying to catch up to the pack can be daunting and expensive even if you’re willing to get with the times. On the other hand, if you’re not interested in having the newest, shiniest toys, you’re likely wondering—what’s the point anyway?

The good news is: you’re not at a disadvantage if you’re late to the tech-savvy party. There are quick, reasonably-priced steps you can take to bring your home a step closer to the future. Here are four upgrades you can acquire right away, in order of practicality and ease of integration.

USB wall outlets

Oh yes, we’re starting off with real cutting-edge stuff here: clearly, combination power outlets are the most electrifying innovation to hit the market in recent years! I know this is a pretty tame entry point, but I’d argue the practicality makes up for the lack of sizzle. If you’ve owned an electronic device in the past twenty years, you likely have firsthand knowledge of the annoyances that come with charging the things. Not only do you need to have the right cable, you also need an appropriate adaptor, and all that comes before finding a free (and conveniently located) power outlet to plug into.

The USB (Universal Serial Bus) standard for connections, communication, and power supplies has been around and in use worldwide since 1996. Some companies do their own thing with proprietary cables just because they can, but there are almost no brands that bypass the USB connector altogether. Given their ubiquity, it was only a matter of time before they appeared on power outlets themselves. In one neat package, wall outlets with USB charging ports have solved the adaptor and free socket issue. You still need a compatible cable, but those are a lot easier to come by and less annoying to cart around. Plus, dedicated USB ports mean you aren’t required to unplug other devices, which is a big plus when you have multiple users who all need a charge.

These combo outlets go for as low as $30 per piece, and are fairly easy to install even with no experience!

Smart appliances

There’s a good chance that either you or someone you live with talks to their phone/watch/tv/magic speaker box thing already. A large majority of the technologically-inclined have embraced Alexa, Google, Siri, or Cortana, and are happily integrating them into their homes. Basic smart home setups are getting more affordable by the minute, and you likely own at least three of the foundational pieces already (smartphone, digital assistant, smart TV).

Which brings us to upgrade option number two: “smart” appliances. If you’re already on your way to having a connected home, why not consider upgrading to appliances with smart home functionality? At best, you can enjoy a greater degree of convenience and control; at worst, you’ll have a feature that you can safely ignore if you so choose. The fact is, smart functionality will likely become standard issue sooner or later. Even big-ticket appliances like fridges, dishwashers, washing machines have begun to include wifi-connectivity and apps that let you monitor and control how they operate remotely.

Digital assistants are here to stay, so why go out of your way to avoid them? While compatibility isn’t generally an issue, certain appliances work best when paired with specific assistants, so we recommend getting ahead of the problem and planning for the ecosystem you might like to have.

Obviously, we’re not saying you should toss out all your stuff right this second just to get with the times. Rather: whenever you reach a natural point for upgrading in the home renovation or sales process, give some careful thought to acquiring a smart appliance.

Smart locks

Smart locks, like the smart appliances mentioned above, are also part of the Internet of Things, but they get their own category because of how useful they are.

There are two kinds of people in the world: those who have lost their keys at least once, and liars. We’re all familiar with timeless questions like “Where on earth are my keys?” and “Uh oh, did I lock the door?”. Traditionally, this meant upending your house until you find them in your pocket or suffering in mild annoyance till you get back home. However, the modern answer is: who cares? You have a smart lock!

What exactly is a smart lock? It’s an evolution of the traditional mechanical lock, using electronics to allow for keyless entry. Smart locks are easy to install, and either replace or upgrade the existing locking devices on your doors. Once that’s done, you can wirelessly unlock your door with a smartphone, combination code or key fob.

To be clear: while there are some security benefits to using smart locks (such as logs that list every time your door was opened, etc.), they’re not necessarily more secure than a standard lock. Really, you’d be upgrading for the convenience they provide, and an improvement to your quality of life. Features like remotely locking or unlocking your door, temporary access codes for guests and digital assistant integration all make the switch worthwhile. Moreover, almost all smart locks can still be unlocked with a traditional key as a failsafe (in case of power outages or depleted batteries).

It’s a small change for your home and the closest thing we have to futuristic Star Trek doors that swoosh open. It’s hard to find a downside here!

Electric vehicle chargers

For those of you trying to be more eco-friendly, there’s a simple argument to be made for installing electric vehicle chargers in your home: pretty soon, you’re going to need one. While Tesla may have shot the idea of electric cars into the mainstream, plenty of car manufacturers read the writing on the wall and developed their own electric cars. It’s no longer a question of if electric will replace internal combustion engines, but when. Fossil fuels are a finite supply, and a new wave of ecological awareness will likely move the world away from dependence on them. The future of automotive technology is electric, and it’s easier than ever to join the revolution.

Electric vehicles (EVs) rely on high-powered chargers to refuel and are consequently most common among people living in or very close to major cities. Drivers have to plan around access to chargers when they’re away from home, although we’re trending towards increasing EV charger infrastructure. However, until these charging stations become as common as (or replace) conventional gas stations, folks will still rely heavily on their own homes to get a full charge for day-to-day use.

So how does this fit it into the home upgrade conversation? Admittedly this is the most speculative of our recommendations, but here’s the gist of it: if we assume either you or the people you know are soon going to be driving electric vehicles, it makes sense to start planning for the means to support them. Powerful EV chargers for the home aren’t exorbitantly expensive at the moment, are reasonably straightforward to install, and will serve as a source of convenience or potential income.

Charger systems are currently available in plug-and-play or integrated models, which differ in terms of price, portability, and power. Plug-and-play chargers are less expensive, very easy to install (you literally just plug them in), and can move with you if you change homes. Integrated chargers offer faster and more powerful charging, but are fixed once installed and come with a higher price tag. In either case, many provinces offer hundreds of dollars in incentives to folks purchasing EV chargers, which makes the price range a lot more palatable!

Bottom line

Fortunately for those of us frantically running behind the curve, we’re still a good number of years away from having truly crazy things like robot assistants/housekeepers that will need their own docking cradles or flying cars. Our recommendations above aren’t from the bleeding edge of tech development, but they don’t need to be. They’re practical, accessible upgrades that could improve your life with minimal intrusiveness. Though we’re looking ahead to the future, there’s no time like the present for the technologically-tardy!

Published by DLC Marketing Team & FCT