Housing market will be stable next two years: RBC
A stronger economy will offset the effects of higher mortgage rates and
keep Canadian house prices stable over the next two years, according to
the Royal Bank of Canada.
In a market update that has the bank forecasting price gains of 0.5 per
cent in 2011 and 1.3 per cent in 2012, economist Robert Hogue said that
after two years of “gyrating wildly,” the Going forward, we see nearly
perfectly offsetting forces driving Canada’s housing market,” he said.
“On the upside, the economic recovery will gather strength in 2011,
continuing to boost employment and family incomes. On the downside,
interest rates are expected to rise.”
The Bank of Canada will likely raise interest rates by 100 basis points
this year and another 150 basis points in 2012, he said, making mortgage
payments more expensive for the majority of homeowners. But real gross
domestic product is expected to increase to 3.2 per cent in 2011 from
2.9 per cent in 2010.
“The net effect of these forces is expected to be close to nil, thereby
leaving resale activity largely flat,” he said.
There have been a flurry of forecasts issued in the last week,  as the
market starts the year stronger than expected
Canadian housing market is likely to be a much less interesting place
for the next several years. Capital Economics issued a cautious report
that suggested higher interest rates could drive prices down as much as
25 per cent over the next three years, while the Canadian Real Estate
Association raised its sales forecast for the next two years as it
suggested that a stronger economic recovery and continued low interest
rates would keep the market balanced.
“Even though mortgage rates are expected to rise later this year, they
will still be within short reach of current levels and remain supportive
for housing market activity,” CREA chief economist Gregory Klump said.
“Strengthening economic fundamentals will keep the housing market in
balance, which will keep prices stable.”
Capital Economics economist David Madani said too many optimistic
forecasts are based on too short a time frame to be useful, because many
mortgages won’t reset until rates rise much higher than they are today.
“Let’s balance this discussion a bit and think longer term,” he said in
a recent interview. “As far as housing prices are concerned, we think
they’re overvalued and we don’t see income growth closing that gap.”

By The Canadian Press

OTTAWA – Interest rates are going up, and the federal finance minister says he expects them to rise even more.

The Royal Bank increased several of its posted and special mortgage rates on Tuesday, joining TD Bank and CIBC.

All three banks have increased the posted rate for a five-year closed mortgage by a quarter of a percentage point, to 5.44 per cent.

RBC also raised its special fixed rate offer for a five-year closed mortgage by the same percentage amount, to 4.39 per cent.

Finance Minister Jim Flaherty said he’s not surprised.

“The recent increase by a couple of the banks is exactly what we expected,” Flaherty told reporters in the foyer of the House of Commons.

And more increases should be coming, Flaherty predicted, since lending rates have been hovering close to historic lows.

“We’re likely to see higher interest rates as we go forward because interest rates are still very low.”

Flaherty commented as he denounced a Liberal opposition day motion calling on the Harper government to reverse a planned 1.5-percentage-point corporate tax cut.

http://ca.finance.yahoo.com/news/Flaherty-warns-even-higher-capress-1588973775.html

By LuAnn LaSalle, The Canadian Press

MONTREAL – Your current lifestyle may impact your retirement more than you think.

Can it be sustained? How much money will it take to maintain the standards you’re used to? What will it take in RRSPs, investments, savings and private and government pensions once retired?

“Understand how much it costs to keep the lifestyle that you are enjoying today and lock it in,” says Patricia Lovett-Reid, senior vice-president of TD Waterhouse.

That sounds like a simple plan, but Lovett-Reid says many she talks to register a little shock when they hear that it could take $1 million to enjoy retirement as much as their working days.

Much of what’s needed is driven by what people intend to do once they retire, says Lovett-Reid, who writes and speaks about personal finance. Planning should take into account the expenses they anticipate will result from their spending choices once their working days are over.

Portfolio manager Adrian Mastracci says most retired couples can live on $50,000 to $60,000 gross total income from various sources per year. It can be done on less, but might not be “pleasant,” he says.

Mastracci says Canadians may not be saving enough for retirement, but he notes the economic climate as well as costs like housing and children that tend to eat up paycheques.

“I think we’re a little too hard on a lot of investors,” said Mastracci, of KCM Wealth Management Inc. in Vancouver.

Mastracci says he doesn’t believe most will need the equivalent of 60 per cent to 70 per cent of their working salaries in retirement.

“What I buy into are the expenses you have. Chances are the expenses before retirement and after retirement aren’t going to change very much, if any. Can you live on whatever that tells you?”

Lovett-Reid says 50 per cent of pre-retirement income is enough to lead a “modest” lifestyle in retirement. But she likes to use the 70 per cent rule. If the gross salary for the average couple is $63,900 at age 65, that couple would need to generate 70 per cent of that yearly in retirement.

For those going into retirement with consumer debt and mortgages, they’re going to have to get “creative,” said Gail Vaz-Oxlade, longtime financial writer and TV host.

That could mean getting a roommate, being a companion to an elderly person who doesn’t get out much, working at a part-time job or selling your house to get out of debt, she said.

“Unfortunately, there have been people who have gone into retirement thinking they can behave as if they’re still working,” said Vaz-Oxlade, whose latest book “Never Too Late” offers advice for retirement planning to those who are unsure of how to get started.

As the March 1 deadline to make an RRSP contribution looms, Canadians will hear numerous cheerful advertisements from financial institutions about making their contributions so they can retire in style. But whatever vehicle you choose to invest in for the future, in the end it will need to produce enough to match your expectations, and that’s what you should be thinking about right now.

“We were sold retirement as being the day you stop working and climb on a sailboat and head out into the Caribbean. But that’s not what retirement is for 85 per cent of us,” said Vaz-Oxlade.

“If you want to travel the world every year, you had better be socking away a ton of money.” http://ca.finance.yahoo.com/news/Lifestyle-expenses-determine-capress-3095576925.html

By Sunny Freeman, The Canadian Press

TORONTO – Canadian home sales this year will be better than previously thought, helped by improving consumer confidence that will partially offset the anticipated deterrent of interest rate hikes, the Canadian Real Estate Association predicts.

CREA released a revised forecast Tuesday that estimates there will be 439,900 existing homes sold in 2011, down 1.6 per cent from 2010, but better than the nine per cent decline that CREA had forecast at the end of last year.

The real-estate association is also taking a more positive view of pricing, with the national average price now expected to rise by 1.3 per cent in 2011 to $343,300. CREA had earlier predicted that the national average home price in 2011 would fall by 1.3 per cent from last year to $326,000.

CREA’s January sales data won’t be released until next week. But recent reports on building permits and housing starts — two indicators of how much new housing will be available for sale in future — indicate a measured start to 2011.

Canada Mortgage and Housing Corp. reported Tuesday that the pace of new-home construction in Canada increased slightly last month, rising to 170,400 units, up from 169,000 in December on a seasonally adjusted annual rate.

That puts the country on a pace for about 10 per cent fewer housing starts than last year.

Krishen Rangasamy, an economist at CIBC World Markets said housing starts will likely soften over the coming months as home prices moderate and the Bank of Canada resumes its tightening cycle by mid-year.

A moderation in housing starts is a sign that supply is contracting in line with reduced demand, which could avoid an unhealthy glut of available houses on the market if demand declines when interest rate hikes are announced.

Some economists have warned that a combination of higher interest rates and new mortgage rules that go into effect March 18 could put a chill on demand in the later months of this year.

CREA predicted Tuesday that some sales that would have been made later in the year will likely occur in the first quarter, as a result of the new rules. A previous change in mortgage rules last year contributed to extremely strong first-quarter demand as buyers sought to beat the deadline.

“This is expected to produce a milder version of the volatility in sales activity that we saw last year which resulted from additional transitory factors,” said CREA’s chief economist Gregory Klump.

Last year, sales were also pushed ahead to the first part of the year as buyers in two provinces — British Columbia and Ontario — rushed to avoid a switch to the harmonized sales tax on July 1.

Those factors exacerbated the effect of interest rate hikes last summer and the market reached a trough in July.

Following last year’s pattern, sales will likely be robust in the first quarter as buyers enter the market before the tighter mortgage rules take effect and then drop off in the second quarter.

However, CREA predicts that the market will gain traction in the second half of this year as economic conditions, job and income growth and consumer confidence improve, in contrast to 2010 when economic growth softened.

“Even though mortgage interest rates are expected to rise later this year, they will still be within short reach of current levels and remain supportive for housing market activity. Strengthening economic fundamentals will keep the housing market in balance, which will keep home prices stable,” Klump said.

The Bank of Canada has forecast that housing will be a minor net negative for the economy this year, although it also cautions the market is a potential key downside risk for the economy.

It is expected to maintain its key lending rate at a low one per cent until at least the second half of the year, as some global economic uncertainty lingers. The key lending rate has the most immediate impact on variable-rate mortgages whereas home owners with fixed-rate mortgages won’t be affected until renewal time.

The Royal Bank (TSX:RY), CIBC (TSX:CM) and TD (TSX:TD) said this week they are raising the posted rate for a five-year closed mortgages by 0.25 percentage points to 5.44 per cent.

Meanwhile, Finance Minister Jim Flaherty warned Tuesday that Canadians should expect long-term mortgage rates to rise further.

“The recent increase by a couple of the banks is exactly what we expected,” Flaherty told reporters in the foyer of the House of Commons. “We’re likely to see higher interest rates as we go forward because interest rates are still very low.”

Last week, in the gloomiest report to date, Capital Economics analyst David Madani said house prices were just a few interest rate hikes away from a 25 per cent correction over the next three years.

However, a report released Tuesday by real estate agency Re/Max suggests the Canadian market has shown resiliency in the wake of major events in the past decade, such as the 9-11 terrorist attacks in 2001, the SARS health crisis in 2003 and the 2008-2009 recession.

The report said the market has self-adjusted as inventory dwindled during periods of reduced demand.

Through tumultuous times in the past decade, fewer real-estate listings led to higher home values, with national home prices increasing at an average of 6.82 per cent annually.

The market is on track to a similar realignment this year as the number of available homes trends downward, suggesting that the market is closer to seller’s territory, in which prices spike said Christine Martysiewicz, a spokeswoman for Re/Max.

“Interest rates would have to go up significantly before we see any impact, and we wouldn’t see an immediate impact,” Martysiewicz said.

“To say that there might be another real estate bubble is really not a responsible comment.”

CREA forecasts that national sales activity will rebound in 2012 by three per cent to 453,300 units, which is roughly on par with the 10 year average.

It believes the market will continue to be relatively balanced between sellers, or supply and buyers, or demand, although the supply of new listings of existing homes is expected to trend higher. http://ca.finance.yahoo.com/news/Canada-housing-market-prove-capress-1306102310.html?x=0

Many people who would like to own homes have fears that prevent them from buying. If you’re one of these people, take heart – there are simple steps you can take to overcome your fears and become confident that you will make a sound purchase. Here are some of the top reasons you may be holding off on purchasing a home and how to overcome these hurdles. (For related reading, also check out 5 Mistakes Real Estate Investors Should Avoid.)

A Loss in Property ValueHomes can decline in value, even without a disaster. Neighborhoods can gradually decline, newly-built homes can make older neighborhoods less attractive, or an unpleasant development (prison, landfill, highway, etc.) could be built nearby. A poor or mediocre economy can also keep home values down.

Even savvy home buyers can’t always predict what will happen to home prices. But you can take precautions, like buying in a low-crime area where the homes are well-kept, primarily owner-occupied and with high-quality schools nearby. You can buy in an area where there are multiple sources of employment, so if one business shuts down or leaves, the entire town doesn’t have to move to find work. And you can contact the city government to ask about future development plans in the area you want to buy.

1. Overwhelming Maintenance CostsAll homes have upkeep costs, and many homes have very large maintenance bills. If you become a homeowner, you won’t be able to avoid these costs. However, there are numerous things you can do to mitigate and prepare for them:
   • Buy a home that has been well-maintained.

      

   • Buy a home that has recently had major components upgraded or replaced (e.g., new roof, new water heater, new plumbing, new electrical)

      

   • Buy a new home (though new homes sometimes have undiscovered defects).

      

   • Regularly maintain your home to prevent small problems from becoming major repairs.  

Go into the purchase with a generous emergency fund set aside for home maintenance and add to that fund every month.

To avoid buying a money pit, you should also have a home inspection before you buy. (For more on home maintenance, take a look at Do You Need A Home Inspection?)

1. Buyer’s RemorseAre you concerned about buying the wrong house? Maybe it’s because you don’t know what you want. Fortunately, you can solve that problem.  

Make a wish list that includes features your home must have, as well as features that you’d like it to have but aren’t necessary. Look at many houses to see what’s available in your price range. If you find a home you think you want to buy, sleep on your decision before making an offer. And don’t exceed your budget, as you will quickly regret buying any house that strains your finances. Also, don’t be afraid to walk away from a house – new homes are always coming on the market.

1. Being Unable To Afford Your Mortgage PaymentMany people wonder how they will afford their mortgage if they lose their job. They also might see that the mortgage payment required to afford a home in their area exceeds what they currently pay in rent.  

To deal with potential job loss, make sure to have a large emergency fund set aside. You can use this money to continue paying the mortgage if you lose your job. Also, though you may experience unpleasant collection activities, your home isn’t likely to be taken away from you the first time you miss a mortgage payment.

Before you take on a mortgage, set up a budget so you know what your existing expenses are and how much money you take home every month. Also, think about new expenses that will come with home ownership, like water and trash bills. Pay little attention to what your lender thinks you can afford. You may think that your lender is the financial expert, but in actuality, you know more about your finances than anyone else. You can also try making fake mortgage payments for a few months and see how it affects your finances. If a mortgage would cost double what you currently pay in rent, make an extra “rent” payment every month into your savings account. Can you still live comfortably with this extra payment?

 Tricky MortgagesIf you feel that you are not financially sophisticated enough to manage a mortgage, there are two simple remedies to this problem:

1.  
   • First, start educating yourself about how mortgages work, and don’t buy a home until you understand what you’re getting into. There are numerous books, articles and classes available on the subject. For more information www.angelacalla.ca

      

   • Second, if you’re still uncertain, geta fixed-rate mortgage. These mortgages have withstood the test of time and are the most basic and most foolproof mortgages available.  

The Bottom LineBuying a home will likely be the largest purchase of your life, so you’re justified to be hesitant. But millions of people, many of them less intelligent than you, have taken the plunge and are successful homeowners. Do your research, make the necessary preparations, and feel confident in purchasing your first home.

HAMILTON — A 45-year-old Hamilton woman has pleaded guilty to six charges in connection with the use of false documents to defraud local financial institutions of more than $200,000 in mortgage funds.

Lauren Paolini is believed to be one of six accused involved in the scheme that saw large mortgages obtained with stolen identification for modestly priced homes before the properties were flipped for substantial profits.

The mortgages would immediately go into default leaving the lending institution with significant losses.

Paolini will be sentenced for her role in the scams after a pre-sentence report is presented to Ontario Court Justice Richard Jennis on April 13.

Crown counsel Kevin McKenna read an agreed statement of facts Thursday indicating in June, 2007, a woman using the name of Orla O’Brien secured a property mortgage for the purchase of a $107,000 Oak Avenue home from Scotiabank in the amount of $152,000.

The mortgage immediately went into default and the bank sold the property for $82,000.

Orla O’Brien was in fact Patricia Bobb. Bobb obtained a mortgage with various pieces of indentification and pay stubs in the name of O’Brien from Hunt Material Handling. Paulini, who worked for Hunt, provided the documentation knowing it would be used fraudulently.

The loss to Scotiabank was $67,000.

Later that year, Paolini personated Jacqueline Soehner of Kitchener to obtain a $279,278 mortgage from the Canadian imperial Bank of Commerce for the purchase of a Queen St. S. home valued at $140,000.

“Ms Soehner had not purchased this property and was the victim of identity theft,” McKenna told court.

Paolini’s secured mortgage obtained fraudulently in Soehner’s name immediately went into default. The loss to the bank was more than $121,000.

On Nov. 14, 2009, Paolini used the stolen identification of Christine McSavaney of Kitchener to obtain a $120,000 mortgage from My Next Funding Corporation to buy a Cannon Street East home valued at $80,000.

The mortgage immediately went into default costing the lender almost $36,000. Paolini obtained a line of credit with the CIBC in the name of McSavaney in the amount of $16,350. The money has been used and no payments made toward the debt.

On Jan. 4, 2010, Paolini presented herself as Ruth Ann Piggott at 1130 Barton St. E. Paolini used an Ontario driver’s licence in the name of Ruth Ann Piggott to obtain a $6,000 loan. The money is gone and there have been no payments toward the debt.

Paolini also used the same driver’s licence to seek a $9,000 loan from Wells Fargo Financial Corporation in Etobicoke in December 2009.

The lender provided her with $4,442 of the amount. That money has disappeared.

McKenna said Paolini was a relatively minor player in the frauds. Still the Crown counsel said he will be seeking jail time at the sentencing hearing. http://www.therecord.com/news/local/article/481417–scheme-saw-large-mortgages-obtained-with-stolen-identification

By The Canadian Press | The Canadian Press – Thu, 27 Jan 1:43 PM EST

TORONTO – A new report from the TD Bank suggests that Canadians are taking the phrase “Go West, young man” seriously.

More Canadians were on the move last year as a percentage of the population than any year since 1998, the bank says.

And most were headed West to take advantage of better job prospects and higher standards of living.

The analysis shows 337,000 Canadians migrated within the country’s border’s last year, 45,000 more than in 2009. The level represents about one per cent of the total population, the highest since 1998.

Except for New Brunswick, only Saskatchewan, Alberta and British Columbia experienced a net inflow of people last year.

And the report predicts that westward bound migration will continue over the next two years, although not up to the levels seen during the resource boom prior to the recession.

In relative terms, Manitoba and Prince Edward Island are losing the most people. Ontario and Quebec will continue to keep shedding numbers, but by a tiny fraction relative to their populations, the bank said.

By Julian Beltrame, The Canadian Press

OTTAWA – Canadians may be starting to get the message about the perils of mounting debt, suggests a new report from CIBC.

A new analysis by the CIBC shows that many measures of household debt moderated in the third quarter of 2010, just as the often-quoted indicator of debt-to-disposable income hit a record 148 per cent.

The paper says that alarming number was due to falling incomes in the July-September compared with the April-June quarter — when Canadians were getting juicy tax refund cheques from Ottawa — not because debt levels were rising.

In fact, behind the scenes, credit growth was already falling.

Household debt in the third quarter grew at the slowest pace in nine years, while in the last month for which there is data — October 2010 — it was the softest in 15 years.

As well, lines of credit are now rising at a monthly clip of 0.3 per cent, the slowest pace since 2007.

While the mortgage market expanded by seven per cent year-over-year — still faster than income growth — mortgage debt was a small portion of household assets, a function of improved stock market portfolios and better home values.

“I’m not saying debt is not a problem. What I am saying is the problem is getting smaller,” said economist Benjamin Tal, author of the CIBC report.

“Everybody is assuming debt is rising like crazy, but the reality is that if you look closely you see that the rate at which debt is accumulating is going down notably. We should not get panicky because it seems the system is starting to correct itself.”

The Bank of Canada and the federal government have been warning Canadians about their debt exposure for well over a year.

But the hectoring picked up in recent months after the debt-to-income ratio rose to a record high in the third quarter, even beating out the U.S. indebtedness ratio.

In mid-January, Finance Minister Jim Flaherty announced new measures to rein in borrowing, including reducing the amortization period on mortgages from 35 to 30 years, limiting the size of home-equity loans and removing government insurance on lines of credit secured on homes.

Responding to the report at an event in Oshawa, Ont., Flaherty said he acted because he was seeing some “excesses” in borrowing and was concerned a minority of homeowners would not be able to make their monthly payments once interest rates start rising.

“Moderation is the key,” Flaherty said.

Tal said Canadians got the “message” from the warnings of policy makers, but also that there was a natural exhaustion with borrowing.

Other economists, including Scotiabank’s Derek Holt, have also talked about the Canadian consumer entering a new phase in which pent-up demand, particularly for housing, has been exhausted.

Still, Tal believes Flaherty acted correctly in tightening credit conditions, and also in keeping those measures modest and targeted. He estimates that when the new rules take effect in March, they will curtail new mortgage credit by between two and three per cent over the next 12 months.

“They chose an almost surgical approach where it hits where it hurts without causing too many side effects,” Tal said. “They targeted marginal borrowing … they will not derail the housing market.”

The latest downward trend on credit will take some pressure off Bank of Canada governor Mark Carney to raise interest rates to keep Canadians from loading on too much debt.

Economists are divided as to when Carney will move off the super-low one per cent policy rate.

Some argue that uncertainty over the recovery, risks in the global economy and fear about stoking the dollar — more that debt levels — may be more decisive in convincing Carney to stay on the sidelines until at least the third quarter.

Tal believes the move will come early, possibly in May. He said while the central bank’s 2.4 per cent growth forecast for 2011 is modest, the composition of that expansion is superior to what occurred last year.

Last year’s recovery was bolstered by consumer borrowing and government stimulus, he said, while future growth will be anchored by “a vibrant business sector.”

Tal said he does not believe higher rates, when they come, will cause a major panic among borrowers or disruption in the economy.

He notes that personal bankruptcies are already on the way down, and that all expectations are that Carney will be raising rates in a slow, measured way, rather than in large increments.

“The overall speed and magnitude of future rate hikes will be limited by the growing effectiveness of monetary policy and a modest recovery,” he said.

http://ca.finance.yahoo.com/news/Message-heard-Canadian-capress-3310848876.html?x=0

By The Canadian Press

OTTAWA – Ottawa says over three million Canadians took advantage of the temporary home renovation tax credit, on average pocketing about $700 each.

But that is less than what Finance Minister Jim Flaherty targeted when he introduced the one-year program in 2009 as part of the government’s stimulus package.

The government had estimated in the budget that about 4.6 million Canadians would take advantage and claim on average about $650 in credits each.

In total, the program was to cost the government $3 billion, but appears to have topped out at over $2.1 billion.

Still, National Revenue Minister Keith Ashfield called the program a success, saying it increased spending on home renovations by about 18 per cent.

http://ca.finance.yahoo.com/news/Three-million-Canadian-cash-capress-2250261711.html?x=0

By Julilan Beltrame, The Canadian Press
OTTAWA – North American consumers are starting to feel better about
their personal finances and the economy, a hopeful sign for the still
fragile recovery.
Two fresh surveys, one by the Conference Board in Canada and another
from the International Monetary Fund in the U.S., detected an identical
pattern of rising confidence in January, although relative optimism
continues to be stronger north of the border.
Canada’s confidence index rose 7.1 per cent this month to 88.1 points,
the highest since the initial optimism coming out of the recession in
the latter half of 2009 and early 2010.
Overall, the U.S. measure still lags Canada but in January it reached
its highest level in eight months, rising to 60.6 from 53.3 in December,
according to a Conference Board survey there.
Releases from both the IMF and the Conference Board note that levels are
still below what would be considered positive, although they are
improvements over recent months. Analysts generally welcomed the
stronger consumer sentiment.
“In all, better consumer expectations in January bode well for a
continued upturn in consumption…which will in turn prove supportive of
overall economic activity,” said Martin Schwerdtfeger and economist with
the TD Bank.
The increases follow a month of generally more upbeat economic news,
particularly in the U.S., which has seen the early stages of an
employment recovery and strong manufacturing activity.
But Conference Board of Canada economist Pedro Antunes said while
positive news played a part, both in Canada and the U.S., there is also
a predictive element to the surveys.
“This is really about looking ahead…and people are a little more
optimistic,” he said.
Still, some economists cautioned against reading too much into surveys –
for instance, whether more upbeat consumers will translate into more
sales of homes, cars and appliances.
“It’s actions that speak louder than words,” said Scotiabank economist
Derek Hold. “The way people manage their money and spend can be very
different from how they say they will.”
While conditions appear to be improving, that comes after last year’s
summer period faced generally downbeat news, when Canada’s recovery
slowed to one per cent and the U.S. became so weak both the central bank
and the government launched a second round of stimulus measures.
On Monday, the International Monetary Fund gave a modified thumbs up to
the global recovery, while noting that advanced countries, including
Canada and the U.S., will continue in the slow-growth lane for the next
two years.
The IMF predicted Canada’s growth will average 2.3 per cent this year
and 2.7 per cent in 2012 – one-tenth of a point less than the Bank of
Canada’s estimate of the previous week. The U.S. will grow by three per
cent and 2.7 per cent in the next two years, largely thanks to stimulus,
the Washington-based financial institution said.
Both countries will get a better measure on how their economies are
progressing in just over a week’s time when employment figures for
January are released.
Canadians’ rising confidence was seen across a range of measures, but
not uniformly across the country.
One of the clearest signals was that 28.1 per cent of respondents said
they expect their financial situation to improve in the coming six
months, up 3.3 percentage points. The number who felt the next six
months looked worse, dropped by 0.7 point to 15.1 per cent.
The respondents were also more confident about Canadian labour markets,
with those who felt job opportunities would increase over the next six
months rising 1.4 percentage points, while those who felt conditions
would get worse falling 2.7 points.
There was also a clear signal that more respondents felt good about
making a major purchase, although the optimistic camp and pessimistic
group each represented about 44 per cent of respondents.
“Whether this sudden improvement on the major purchases question can be
sustained remains to be seen. But, coupled with the increasing optimism
about future employment opportunities, it does suggest healthy consumer
consumption going forward,” the Conference Board said.
Regionally, confidence rose the strongest in Ontario and the Prairies.
Quebec registered a modest increase and British Columbia and Atlantic
Canada were slightly less optimistic than they were in December.
The Canadian finding is based on the result of over 2,000 interviews
conducted between Jan. 6 and 17. The margin of error is estimated at
plus or minus 2.2 percentage points.