Retail Sales Canada February 2016

Real Estate Market North America June 2016By: Paul Young, CPA, CGA

DisclaimerThis presentation discuss Retail Estate Market for North America

Paul Young - Presenter

BioCPA/CGA25 years of experience in Academia, Industry and Financial solutionsYoutube Channel - https://www.youtube.com/channel/UCAArky1bAXPSuV2NLtUnyLg

AgendaHousing StartsHousing Market USAHousing re-sale marketRetail Sales / CanadaClean Energy

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Housing Starts

Scotia Bank/TD Bank/Stats Canada/BEA5

World Real Housing Prices

http://www.gbm.scotiabank.com/English/bns_econ/retrends.pdf Global Forecast http://www.gbm.scotiabank.com/English/bns_econ/forecast.pdf

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Canada Real Estate - Trends

1. http://www.gbm.scotiabank.com/English/bns_econ/retrends.pdf

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Average Housing Prices

Concerns CPI index is averaging 2%Wage growth since March 2015 is 0.7%Economic Growth is average 1.5 to 2.4% for CanadaHousing prices are rising close to 8% per year.

http://www.gbm.scotiabank.com/English/bns_econ/retrends.pdfhttps://www.youtube.com/watch?v=xqLDHQ-iJU8http://www.huffingtonpost.ca/2016/05/27/wages-canada-inflation_n_10150716.html http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/labor93a-eng.htm8

Retail Sales Canada (Household Focus)

Stats Canada - http://www.statcan.gc.ca/daily-quotidien/160520/dq160520b-eng.pdf

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Issues Real EstateSoftwood Lumber - During the duration of the SLA, Canadas market share went from 34 per cent in 2006 to just over 28 per cent by around the time of its expiration. During that same period, the U.S. lumber industrys domestic market share grew from 61 per cent to 71 per cent. So why wouldnt our neighbours to the south be supportive of keeping the agreement as it was? Slow economy - Canada 1.5 to 2.2% range and USA 2.1% to 2.6% rangeSlow wage growth - Economists said falling oil prices would amount to a pay cut for Canadians, and the latest data on wages could be the proof. Average weekly earnings in Canada for January were up a paltry 0.4 per cent over the prior 12 months, a recentStatistics Canada releaseshows. Thats far slower than inflation. Theconsumer price indexshows prices were 2 per cent higher in January than a year earlier. This suggests inflation-adjusted wages have fallen by some 1.6 per cent over the past year.New down payment requirements for insured mortgages between $500K and $1 million kicked in on February 15th. As such, we expected that the jump in February sales numbers in Vancouver and Toronto might be slightly overstated, as people rushed to purchase before rule implementation. We saw a very modest pullback in these markets in March, in line with our expectations, but the rule changes had little effect nationally as they were targeted at a small share of the market. Low interest rates will continue to support the housing market, helping offset the slight rise in national unemployment which we expect will nudge up to 7.5% by mid-year. Regionally, the divergence among the Canadian housing markets is expected to become even more pronounced throughout 2016. The weak economic conditions likely to prevail in the Prairies will feed through into a broadly weakening housing market. On the other hand, low financing costs will be the key driver in markets that are more fairly balanced, like Montreal and Halifax, helping to absorb built up inventories. Deterioration in housing affordability in Toronto and Vancouver continues to erode the benefits of cheaper financing experienced in other regions. We expect affordability and new lending rules will temper demand and be leading factors in determination of future price growth. Overall, we expect Canadian home price growth to slow to below 3% y/y this year, but prices in Toronto and Vancouver should continue to grow well above that pace, though will decelerate for the remainder of the year. Over the longer-term, rising interest rates will gradually weigh on demand.Generation Y are now entering the housing market as such US experts strong Housing starts from 2016 through to 2030.

http://www.woodbusiness.ca/industry-news/first-cut-march-april-2016-3119http://www.huffingtonpost.ca/2016/04/04/inflation-outpacing-wage-growth-earnings-shrinking_n_9611794.htmlTD Bankhttp://www.gordcollins.com/real-estate/us-housing-market-looking-strong-2016-to-2020/10

Housing Prices RBC Economicshttps://ca.finance.yahoo.com/blogs/balance-sheet/ontarios-high-prices-drag-down-housing-154031433.html. Yet RBC said something different in 2014 - http://www.theglobeandmail.com/real-estate/the-market/rbc-economist-predicts-home-price-declines-in-2016-as-rates-rise/article20142425/.

Housing /issues Where is the bank of Canada on reforms? https://www.td.com/document/PDF/economics/comment/CanadianSchembriSpeech_Feb2016.pdfBanks need to do better assessment of proper valuation including look at income growth, cost of housing, mortgage based on taxable income, etc. (how banks starting policing themselves with proper policy on valuation?)There is movement on credit card fees - http://www.cbc.ca/news/business/bank-fee-outcry-unites-consumers-and-even-politicians-1.3098400How about the schools make financial planning and taxation course mandatory as part of the Secondary diploma granting process? (who is responsible for education?)How about the schools promote people going into careers that have better opportunities for jobs (who is pushing kids to careers that have limited or low income prospects) FYI This relates to student debt!Harper/Flaherty changes the mortgage rules - http://business.financialpost.com/personal-finance/mortgages-real-estate/ottawa-cuts-mortgage-amortizations-to-25-yearsVideo - https://www.youtube.com/watch?v=BuuSBN9V7r4 Myths Household Debt - http://globalnews.ca/news/1889329/canadians-net-wealth-hits-new-highs-debt-bubble-a-myth-experts/ A http://www.cbc.ca/news/business/stephen-poloz-says-bank-of-canada-not-responsible-for-record-debt-1.3268738. People need to take responsibility for their own actions and stop blaming the government for their distress. BMO Myths - http://www.bmonesbittburns.com/economics/focus/20150227/feature.pdf

1, http://www.theglobeandmail.com/report-on-business/rob-commentary/canadas-housing-problem-is-supply-and-the-solution-is-local-not-federal/article30396780/http://www.theglobeandmail.com/report-on-business/rob-commentary/canadas-housing-problem-is-supply-and-the-solution-is-local-not-federal/article30396780/

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Clean Energy / OptionsSolar Windows - http://www.bloomberg.com/press-releases/2016-03-01/solarwindow-enters-into-third-phase-of-technology-development-agreement-with-u-s-department-of-energy-s-national-renewableResidential Trends -http://www.homes.com/blog/2016/03/residential-solar-trends-2016/Microgrid - http://microgridknowledge.com/dc-linked-microgrid/

Other Sources:Commercial - http://www.us.jll.com/united-states/en-us/Research/north-america-cow.pdf?0439a3f9-8e98-4e2b-b08a-bfa9d50cf9fb Canada Retail Sales - http://www.slideshare.net/paulyoungcga/retail-sales-canada-february-2016USA Retail Sales - http://www.slideshare.net/paulyoungcga/retail-sales-usa-march-2016Nearshoring - http://cerasis.com/2016/04/04/nearshoring-and-reshoring/