Foreclosure Lists
Attached - Mission & Abbotsford
Attached - Chiliwack & Sardis
Attached - Pitt Meadows & Maple Ridge
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Attached - Burnaby & New West
Attached - Surrey, Delta & Cloverdale
Detached - Pitt Meadows & Maple Ridge
Detached - Burnaby & New West
Detached - Chilliwack & Sardis
Detached - Mission & Abbotsford
Bank of Canada
As expected the Bank of Canada did hold steady this morning. Many are predicting this is the top, hold off, and see some drops by this time next year. Of course no crystal ball, however, the indicators are telling us this.
The Canadian economy has entered a period of weaker growth, which is needed to relieve price pressures.
We will wait to see the next inflation and unemployment numbers as those are key.
The next BoC meeting is October 25th with one more in December to wrap the year up.
Teaching kids about money
Financial independence is a critical skill for future success that your children will not learn anywhere else.
Not only does financial literacy help your children have more success in life, but it allows them to move out sooner and it avoids delaying your retirement with additional expenses to support them.
So, how do you teach your children about money?
Review Your Attitude Towards Money: The first and most important thing is to examine your own attitude towards money. Are you a penny pincher? Frivolous spender? Do you buy on impulse, or take a long time to make a purchase? How much debt do you have? Your financial habits will shape your children. To ensure that you are setting them up for their best financial future, parents need to consider what messages they are sending with their own money habits. Give Your Children an Allowance: Providing an allowance to your children (especially one in exchange for chores) is an age-old way of teaching your kids about money. A good guideline is $1.00 per year of your child’s age. For a 10-year-old, this would be $10 per week. Teach Your Child to Save: If you are giving your child $10 per week in allowance for chores, encourage them to put even just $1 per week into a piggy bank. In six months, show them how much money they have saved and talk to them about why it is important, and what they can do with that larger amount now. Encourage Kids to Think Before They Buy: While it’s hard to get a 10-year-old excited about an RRSP, there are other ways to help them plan ahead. One is to encourage them to think about their purchases before they commit. They saw a toy on TV and they have to have it - teach them about how advertisements are designed to make you want something. Ask them to wait a week. Do they still want it? Involve Your Children in the Family Finances: It is more valuable than you might think to let your kids see and hear you discuss financial planning; let them be part of opening and paying bills or planning vacations. Explain why and how much you pay for certain things and discuss affordable choices. This helps them be part of the conversation and will work to instill a sense of financial responsibility as they grow up.
Remember, you are the best example to your children about money. Don’t be afraid to share the ups and downs with them. Be patient with your kids, but don’t give up! The best thing you can do as a parent is to promote financial security and independence
Economic Insights from Dr. Sherry Cooper
The Bank of Canada has a single mandate—to ensure that inflation returns to the 2% target. This means that the Bank will raise interest rates if inflation is too high and lower interest rates if inflation is too low.
The U.S. Federal Reserve, in contrast, has a dual mandate—to maximize employment given a 2% target for inflation.
That is a subtle but meaningful difference.
July inflation data showed that the headline CPI inflation rose to 3.3%, up from 2.8% in June. One challenge in understanding year-over-year inflation data is base effects. Base effects occur when the current year's inflation is compared to the previous year's inflation, called the base year. If the base year has unusually high inflation, then the current year's inflation will appear lower than it is.
For example, inflation in Canada was very high in June 2022. This means that inflation in June 2023 appeared to be lower than it is, even if there is no change in the underlying level of inflation.
Gasoline prices peaked in June 2022 and trended downward for most of the year. That makes y/y comparisons look worse starting last month. If you are only focusing on the annual change in inflation, you will be misled.
Looking at monthly changes in the headline inflation data can also be misleading because so many components of headline inflation are highly volatile. For example, monthly consumer prices in July rose 0.6% compared to only 0.1% in June. The y/y increase was smaller for core inflation measures. And if you exclude food, energy and mortgage rates, y/y inflation was quite moderate.
The main point here is that it’s complicated. I am more sanguine about last month’s inflation data than most Bay Street economists. The overall Canadian economy has slowed. Following the strong first quarter growth of 3.1%, Q2 GDP growth will likely come in at around a much more muted 1.2%. Job vacancies have fallen for a year, and the unemployment rate has risen to 5.5%--still low by historical standards but up from the record low this cycle of 4.9%.
The single major economic release ahead of the September 6 Bank of Canada policy decision is Q2 GDP, released on September 1. The BoC is expecting growth of 1.5%.
The impact on the economy of higher interest rates has a long lag. The full effects of the tightening will not be evident for a few more years. Given that most Canadian mortgage borrowers renew their mortgages every five years, the largest impact is yet to come. Nevertheless, higher interest rates have slowed the most interest-sensitive sectors.
Canadian new home prices edged down 0.1% in July, deepening the year-over-year decrease to 0.9%. In the same month, the yearly decline in the benchmark price of an existing home (as measured by the MLS HPI) eased to 1.5%. While prices for existing homes are still rising modestly, the momentum looks to have slowed as the market returns roughly to balance following the Bank's latest two rate hikes.
Barring a massive upside surprise in Q2 GDP, the central bank will leave the policy rate unchanged at 5.0%. Longer-term market rates, however, have been rising, boosting fixed-rate mortgage yields. This results from economic and political concerns in the U.S. There is a good chance that overnight rates in Canada have peaked. If the economy remains too strong, the Bank will keep the door open for further tightening as inflation exceeds the 2% target.
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