Carl Phin & Kim McLeod

01/24/2012BY: KRISTA FRANKS BROCK 

 

Capital Economics expects the housing crisis to end this year, according to a report released Tuesday. One of the reasons: loosening credit.

 



The analytics firm notes the average credit score required to attain a mortgage loan is 700. While this is higher than scores required prior to the crisis, it is constant with requirements one year ago.

Additionally, a Fed Senior Loan Officer Survey found credit requirements in the fourth quarter were consistent with the past three quarters.

However, other market indicators point not just to a stabilization of mortgage lending standards, but also a loosening of credit availability.

Banks are now lending amounts up to 3.5 times borrower earnings. This is up from a low during the crisis of 3.2 times borrower earnings.

Banks are also loosening loan-to-value ratios (LTV), which Capital Economics denotes “the clearest sign yet of an improvement in mortgage credit conditions.”

In contrast...

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By Robert Hiltz, Postmedia News

OTTAWA — It's not a bubble, it's a balloon. Unlike the catastrophic decline the U.S. housing market experienced in 2008, Canada's housing market is expected to deflate slowly rather than pop, according to BMO Capital Markets chief economist Sherry Cooper.

 

Cooper's report says that despite rising household debt, low interest rates and rising home prices, it is unlikely that a sudden correction will take place.

 

"The main take-away is that the national housing market appears somewhat pricey, but is far removed from bubble territory," Cooper said in the report, titled Will Canada's Housing Boom Forge On, Fizzle Out, or Flame Out?

 

The study, co-authored by BMO senior economist Sal Guatieri, says that despite rising home prices in most of Canada's major cities, that growth doesn't seem to be excessive.

 

On average, home prices have risen 104 per cent in the last 10 years. Along with that, the average price of a home has risen against...

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By Mario Toneguzzi, Calgary Herald

 Alberta’s economy is forecast to lead the country this year and next year, according to a report by TD Economics.

The provincial economic update also sees employment growth in Alberta topping Canada for 2012 and 2013 as well.

The TD Economics report predicts Alberta will see Real Gross Domestic Product growth of 2.6 per cent this year and 2.9 per cent in 2013 compared with 1.7 per cent and 2.2 per cent respectively across the country.

Employment growth in the province is forecast to be 1.5 per cent this year and a further 1.8 per cent in 2013 compared with 0.8 per cent and 1.4 per cent respectively across the country.

The positive economic report is good news for business owners in the province like Leah Layden of the Double ELLE Bakery in Calgary who has been open for business in the Ramsay neighbourhood for about a month.

“I’m brand new but the first month has gone well,” said Layden. “I’m the kind of person who...

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Edmonton Journal

By Ray Turchansky, Freelance

 Edmonton financial adviser Shawn Allen of Investors Friend Inc. has been prodding financial writers to lobby financial institutions to offer Canadians an "affordable" 30-year locked-in mortgage, insured and with minimum penalties for refinancing.

Allen argues that Americans can get 3.9 per cent mortgages locked in for 30 years, and can refinance relatively painlessly.

The idea raises two questions: Could it be possible in Canada? And is it prudent?

On the one hand, getting people into homes is deemed good for the economy, spurring spending and creating jobs. But on the other hand, Bank of Canada governor Mark Carney, federal Finance Minister Jim Flaherty, the International Monetary Fund, and most recently the Canadian Mortgage and Housing Corp., have warned that Canadians are already on the verge of drowning in household debt.

Mortgage lending rules have been tightened three times in the last two years, and many people feel that banks should...

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By Tamara Gignac

CALGARY — Albertans know all about the B-word: boom.

For much of the past decade the economic pace was blistering, led by massive projects in the oil sands. The result was scores of high-paying jobs, a red hot real estate market and an influx of thousands of new migrants.

The party was good while it lasted.

But in 2008, Albertans were blindsided by another B-word: bust.

A collapse in energy prices, the result of the U.S. financial crisis, took the steam out of Alberta’s once-buoyant economy.

The oil patch shelved or cancelled billions of dollars worth of projects, jobs evaporated virtually overnight and ordinary Albertans struggled to pay their mortgages.

But after sputtering for much of the last three years, Alberta appears poised to regain its position as Canada’s economic juggernaut.

All signs suggest prosperity is sweeping the province. Unemployment is low, cash registers are ringing and the energy sector is once again on a hiring spree.

It begs the...

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