Canadian Real Estate

Current Financial Crisis and Housing Market

First Published Date: February 15, 2009

When the current financial crisis hit, the first industry shaken was the housing market. After all, one of the catalysts for the so-named “credit crunch” was the vexation in the United States’ “sub-prime” mortgage market, where irresponsible lending at unsustainable levels caused banks to lose solvency with terrifying rapidity.

As a result, the real estate market in the US and beyond fell victim to a major crisis of confidence, and the knock-on effects of this continue to shake the world’s economy. Injections of capital by some governments, and lock, stock and barrel takeovers of banks by others have introduced some measure of stability, but even now that stability is under almost permanent threat.

The consequence of this uncertainty has been a fall in house prices, as home owners have defaulted on mortgages and had to sell up and the market, for so long a seller’s domain, has turned to favour the buyer. Getting a mortgage to buy for the first time may have become a little more difficult, but for those of us lucky enough to have amassed some disposable income the market suddenly looks altogether more favourable.

Although house prices have fallen in Canada – just as has happened everywhere – the fall has been markedly less steep than elsewhere, particularly just south of the border in the US. In the past year, the Canadian real estate market has seen a drop in prices to the tune of 8.9%, and sales themselves have fallen month-on-month. But despite the more troubled market, Canadian banks continue, thanks to judicious management, to make mortgages available to those looking to buy a house. Set against the open panic in the States, where once it was too easy to get a mortgage and now has become a quest on a par with the search for the Holy Grail, this is resulting in a far more serene market in Canada.

Indeed, in some cities it is believed that the market is bottoming out in Ca nada, and ready to at least stabilize if not yet commence an upward climb. While prices have fallen, senior analysts are making the point that even if they continue to fall, the rate at which they are falling has slowed, and anyone waiting for the housing market to hit rock bottom so that they can jump on board will have a long and forlorn wait. As more potential buyers realize this, it is likely that we will see the numbers of sales starting to rise again. If, however, the strong employment numbers nationally take a hit, then the market could yet have austere days ahead of it.

The moral here certainly seems to be that sensible and realistic management of the banking and lending system is equipping Canada to see out the current global crisis in much finer fettle than many of its more storied counterparts. It could just be the case that Canada becomes a model for the other nations to follow.

To streamline and minimize blog maintenance, I will be discontinuing maintaining the Canadapersonalfinancewebsite.com website (however, I will still hold the domain). I will gradually move all articles from this site to A Dawn Journal. This article originally published on the above website on Feb 15, 2009.

Top Ten Emerging and Frontier Markets

Bloomberg’s 2015 Top Market Lists

Published Date : March 22, 2015

Bloomberg Market recently published its lists of top 25 and 19 emerging and frontier markets. These lists are made based on several factors, such as investing climate, ease of doing business, GDP growth, and so on. Let’s look at the top 10 countries from both emerging markets and frontier markets lists.

Top Ten Emerging Markets

1. South Korea
2. Qatar
3. China
4. U.A.E
5. Chile
6. Malaysia
7. Panama
8. Peru
9. Latvia
10. Poland

Source: Bloomberg Market

Top Ten Frontier Markets

1. Saudi Arabia
2. Estonia
3. Slovakia
4. Lithuania
5. Bahrain
6. Slovenia
7. Bulgaria
8. Vietnam
9. Kazakhstan
10. Romania

Source: Bloomberg Market

The term “emerging market” refers to market or country that is not yet fully developed, but has some elements of a developed market and on is its way to become a developed market in the future or was a developed market in the past. A frontier market or country refers to a developing market that is slower than an emerging market.

For example, MSCI, a leading provider of indexes, considers Saudi Arabia a frontier market, but considers Qatar and UAE emerging markets. South Korea, a widely considered developed market, is still considered emerging market by MSCI due to market restrictions in Korea.

The World’s Top Strongest Banks

4 out of 5 North American Strongest Banks are Canadian

First Published Date: August 12, 2014

Business and financial news website Bloomberg recently published a report featuring the world’s strongest bank. In order to find the strongest banks, Bloomberg looked at banks with at least $100 billion in assets and five categories such as Tier 1 capital compared with risk-weighted assets, efficiency, nonperforming assets against total assets, and more.

Private banks are also included for consideration. The results? Canadian banks scored well and 3 banks are included in the list, such as Desjardins Group (3rd), CIBC (15th), and RBC (18th).

Let’s look at the top 10 banks from the report:

1.    Hang Seng Bank (Hong Kong)

2.    Desjardins Group (Canada)

3.    Norinchukin Bank (Japan)

4.    Oversea-Chinese Banking (Singapore)

5.    Qatar National Bank (Qatar)

6.    Bayerische Landesbank (Germany)

7.    DBS Group Holdings (Singapore)

8.    Pohjola Bank (Finland)

9.    Skandinaviska Enskilda Banken (Sweden)

10.    Boc Hong kong Holdings (Hong Kong)

Source: Bloomberg

An important twist is that only one American bank (U.S. Bancorp) made it to the list, at the 19th position. If you look at the tops North American banks, 4 out of 5 are Canadian banks. To view the full report, visit here.

Hybrid, Electric, and Green Car

GREEN CAR TECHNOLOGY: THE CURRENT WAVES

First Published Date : August 23, 2014

Green car technology is a method that is adapted in an attempt to save our precious environment by avoiding the usage of fossil fuels that makes the environment polluted. Over the years researchers have been experimenting with the technology that facilitates the use of electrically maintained cars and are also trying to find a substitute to the existing vehicles that use fossil fuels. Earlier this century, it was quite shocking to know that our planet was on its threshold with respect to greenhouse effect.  The main reason behind this was known to be the usage of fossil fuels which in turn contributed to the depletion of ozone layer thereby increasing greenhouse effect. With an attempt to reduce this menace, car manufacturers across the globe began manufacturing greener ecologically aware cars.

Presently in this century, the vehicles have been manufactured with a hybrid engine which is nothing but a conservative motor engine, which is combined with the usual electric engine. These are capable of toggling between power of an electric motor and the ignition engine.  With normal speeds, the car is powered by electric motor and at high speeds; the ignition engine powers the vehicle. Here are a few green technology cars presently available:

Electrically powered vehicles have gained a lot of popularity in the recent past as they possess an electric motor, which is powered with battery packs and these packs are a combination of Nickel metal-hydride or Lithium-ion, which are charged with a connection to main power supply typically charged for an entire night.  Also, these electric cars have iterative braking system due to which the batteries are charged when brakes are applied

Currently, hybrid cars use both the electric motors and petrol engines.  The electric motor is powered by the batteries, which are charged and useful at lower speeds, while the petrol engine possesses a small unit which powers it during high speeds thereby allowing this engine to function only at optimum speed.  Also, the renewable energy sources like rapeseed; sunflower or soybean oil is used to produce biodiesel, wherein the carbon dioxide gas emitted is neutralized as it is absorbed by the fuel crop, which facilitates its growth.

Ethanol, which is a sugarcane product, contains high octane content, which increases engine performance and is broadly used in Europe wherein flexi-fuel vehicles are developed on Ford, Saab etc. Liquefied Petroleum Gas (LPG) contains propane and butane, which produces less CO2 than petrol and diesel. The internal engine can be modified because of which the vehicle can use petrol or LPG.

Fuel cells are conversion devices which provide energy from electrochemical reaction and electricity can be continually produced with the flow of reactance.  However, this technology is proven to be expensive.  Another fossil fuel is the compressed natural gas found underneath the earth surface, which also produces less CO2 gas and this gas is compressed in the cylinder and mixes well with the air before combustion, thereby making it an efficient fuel.

However with the advent of the green technology, environment awareness is being fast spread to various industries and manufacturers thereby creating efficient business opportunities to the investors. This awareness has led to the creation of vital engines with most advantageous performance and is also eco friendly. Green car technology has revolutionized the vehicle manufacturing process thereby saving our planet Earth to a certain extent.

China’s Yuan Keeps Rising

China’s Economy Improves

Published Date : September 6, 2014

China’s Yuan is on a roll. For the third straight month, it rallied against the U.S. dollar. Last year, the picture was different as the yuan tanked. As China’s economy continues to improve, the yuan has further room to climb up.

Although the yuan has gained 1.5 percent since last year’s low, the yuan is still down 1.9 percent for 2014. As recent economic data shows better growth, especially in manufacturing and real estate, the Chinese government may be lenient and let the yuan go even further.

Chinese stock markets seem to be doing just as well. The Shanghai Composite Index reached its highest level in seven months, making investors grab more blue chip stocks recently. Also, in the offshore currency market, global investors – especially hedge funds – are betting on more positive currency runs.

China, the world’s second largest economy, averaged 10 percent growth yearly for 30 years in the past. However, recently China is struggling to achieve its target of 7.4 percent growth per year. The IMF recently predicted that China’s economic growth will be 7.1 percent in 2015 and will slow down further in the future.

In the past, especially in early 2014, there were many reports and predictions pointing out the collapse of the Chinese economy. None of them proved to be correct, however, as several recent economic data show that the Chinese economy is not going downhill, but rather climbing upward.