23 Jan

Residential Market Commentary – Lingering inflation pressures

General

Posted by: Frank Fik

The latest cost of living and employment numbers make it clear the Bank of Canada still has work to do in its fight against inflation.

The Consumer Price Index (headline inflation) did slow to 6.3% in December, from 6.8% in November, but it is still well above the Bank’s target rate of 2.0%.  Food and fuel continue to be the two biggest influencers.  Gasoline was down 13% compared to a month earlier but grocery store prices continued to rise at an annualized rate of 11%.

The Bank of Canada prefers to measure Core inflation when making its rate decisions.  Core inflation excludes, so-called, volatile items like food and fuel and is divided into three different types: CPI-common, CPI-median and CPI-trim.  Encouragingly, the average of those three measures slowed to 5.3% in December, down from 5.4% in November.  Higher shelter costs, including rising mortgage rates and increasing rents, were key components in the Core inflation calculations.

The Canadian economy added a stunning 104,000 jobs in December.  That was more than 20 times the 5,000 that had been forecast.  The unemployment rate fell to 5.0%.  The job growth and the inflation numbers suggest the economy is still quite strong.

It is all but certain there will be another increase to the BoC Policy Rate on Wednesday.  Most market watchers expect a quarter-point hike to 4.50%.

And on a hopeful note, the economic think-tank The Conference Board of Canada is forecasting that inflation will be back inside the BoC’s target range of 1% to 3% by the end of this year.

Published by First National Financial LP

20 Jan

Residential Market Commentary – High costs chase some Canadians out of big cities

General

Posted by: Frank Fik

Canada’s big cities are getting bigger and more expensive even as tens-of-thousands of people leave them, for more affordable lifestyles elsewhere.  A key factor in the expense and the migration is the cost of housing.

According to Statistics Canada nearly 100,000 people left the Toronto area in the 12-month period from July 1, 2021 to July 1, 2022.  Most of those people, 78%, stayed in Ontario.  The Montreal area saw an exodus of 35,000 people and 14,000 peopled exited Vancouver.

It is probably no surprise that Canada’s biggest cities come with the highest housing (or accommodation) costs.  As people are leaving they are more than being replaced by new arrivals from outside the country.  The data show that newcomers prefer large urban centers over rural areas.  The country’s biggest areas of population gained 600,000 people through international migration with nearly 220,000 going to Toronto alone.  By contrast, just 21,000 chose to settle in smaller centers.

Numbers crunched by the real estate web service Point2 show that, apart from Toronto itself, eight of the country’s highest priced cities are in the Greater Toronto/Hamilton Area.  Oakville tops the list with average costs of nearly $2,400 a month for homeowners and almost $2,150 a month for renters.

With the exception of Montreal, cities in Quebec dominated the list of lowest priced housing and rental accommodation in Canada.  Trois-Rivières came in as most economical with average monthly homeowner costs of less than $960, and less than $680 for renters.

Published by First National Financial LP

16 Jan

10 Money Saving Tips

General

Posted by: Frank Fik

When it comes to saving money, there are a lot of little things you can do that add up to make a big difference! Here are 10 of our favourite money-saving tips:

  1. Automatic savings are one of the most effective ways to save because you can’t spend what you can’t access! Instruct your employer to transfer a certain amount from your paycheck each pay period into an RRSP or savings account (or both) or set up automatic transfers in your banking account to coincide with your payday.
  2. Consolidating debt will result in a single monthly payment and lower interest costs! Many people don’t realize just how much money they are wasting on interest each month, especially if you have multiple loans or credit cards. Consolidating debt can help you gain control and maximize spend on the principal amounts to pay off loans faster.
  3. Budget with cash ifyou have trouble with overspending or find it too easy to use your card. After your bills are paid, take out the remaining cash (spending money) and only use that. Once the cash is gone, you’re out of money until next payday! Having physical cash in hand can also help you think twice when making purchases.
  4. Buying in bulk is a great way to save a bit here and a bit there when doing your regular grocery shop or purchasing other items. Know you’ll need more? Stock up at once for bulk savings, which will help you in the long run!
  5. Before Buying there are two things you should always do. The first is to wait at least 24 hours and the second is to shop around! If you still want to buy something the next day, make sure you get the best price available!
  6. Plan Your Meals.Most of us don’t have time to make breakfast (let alone lunch!) before we fly out the door for work. But what if I told you that getting up an hour earlier could save you over $100 a week!? Just think about how much you spend going out for breakfast AND lunch each day? Groceries are a lot cheaper and you can even prep a few days worth of meals on Sunday while you get ready for the week.
  7. Think in Hours versus Dollars every time you are looking to make a purchase, especially large ones to help you understand the TIME value of money. A new $24 Blu-Ray = 1 hour of work. A brand-new mattress = 41.67 hours of work. Understanding the time that went into earning money for a purchase can help with reconsidering frivolous items, or encourage you to look for the best deal on necessary products.
  8. Utility Savings can help you save each month! Don’t blast your A/C with all the doors in your house open, don’t pump the heat without sealing cracks and consider things like installing water-saving toilets and running cold-water wash cycles to save energy (and money!) every day.
  9. Master DIY – While sometimes you can spend $120 to make a $20 item yourself, there are some things that do benefit from DIY, such installing dimmer switches, that can help save you money in the long run.
  10. Save Windfalls and Tax Refunds for a rainy day. A good rule of thumb is to put 50% of bonuses, tax refunds or other windfalls into your savings account and put the rest against loans owing. While you might want to go on a shopping spree or plan a vacation, paying off your debt NOW will free you up in the future.

Published by DLC Marketing Team