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4 key trends that are helping the Canadian housing market avoid disaster

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Photo: Boris Kasimov/Flickr

The Canadian housing market’s performance has been even worse than TD expected, but there are multiple reasons one of Canada’s biggest banks doesn’t predict “a further sustained deterioration” — or worse — this year.

“These [reasons] include another year of strong population growth, healthy labour market conditions and a more patient Bank of Canada,” writes Rishi Sondhi, a TD economist, in a report titled “The Winter of Discontent.”

TD goes on to chart four of the trends it expects to insulate the Canadian housing market from a worse year than 2018, which saw the biggest price drop since 1995.

Immigration drives a housing fundamental: population growth







What’s going on here: Federal Immigration levels dating back to 2013, including a forecast for this year’s total.

The takeaway: A growing population supports demand for new homes, and TD notes that the Canadian government’s immigration target for 2019 is 331,000, up from 330,000 last year. “Moreover, a significant portion of Canadian residents are in their household formation years, providing a solid foundation for demand,” writes Sondhi.

Canadian labour market to post “healthy” gains in 2019







What’s going on here: Annual employment growth presented as a percentage.

The takeaway: “Our forecast calls for over 150k jobs being added in 2019 while unemployment remains low. This should keep household incomes growing at a reasonable pace,” says Sondhi.

Toronto and BC are soft, but not all surrounding local markets are equal







What’s going on here: TD shows the sales-to-new listings ratio, which is an indicator of market strength, for Toronto and Vancouver, as well as the respective provinces they are in (minus those markets).

The takeaway: Ratios above 60 percent indicate conditions that favour sellers, and clearly a number of markets in Ontario are holding their own. “Outside of Toronto and Vancouver, an important (and perhaps overlooked) point is that markets in Ontario and B.C. are holding up much better,” Sondhi explains.

Five-year bond yields are trending lower, and that matters







What’s going on here: The yield on five-year bonds has been generally declining since late last year.

The takeaway: While the central bank’s policy rate tends to influence variable mortgages, the five-year bond yield has pull on five-year fixed-rate mortgages, the most popular option for Canadian borrowers. “Bond yields have moved significantly lower since November, which should feed through into lower mortgage rates.”

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New home? Prepare for the unexpected

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(NC) Buying a house, getting married or having your first baby are all major life events that are likely to affect your finances. But whether you’re in the midst of a major life event or not, it’s important to check in on your finances regularly to maintain good financial health.

Your financial health encompasses things like your spending, savings, borrowing and future financial plans. It also means dedicating a set amount of savings for unexpected future events. It can even include optional credit protection insurance, such as TD protection plans, to help cover your debt balances in case of death, a covered critical illness or total disability.

Even though it can be tough to think about the unexpected, life is unpredictable and it’s important to plan for the unexpected. Find more information at td.com.

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Mortgage pitfalls to avoid

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(NC) Throughout life, you may have moments where you’ll make a large purchase or invest in a costly item, like your family home. But whether you’re in the market for your first new property or already have a mortgage, leaving this asset unprotected can be costly.   

Insuring your housing financial debt, as well as debt for other big-ticket items like a new boat for your lakefront cottage or keepsake jewelry like an engagement ring, is a smart investment in your well-being.

To help protect your debt balances like a mortgage, your bank may have optional credit protection insurance products.

“Your home is one of your biggest assets, yet illness can happen at any stage of life. Worrying about your mortgage when the focus should be on health isn’t a situation anyone would wish for,” explains Shirley Malloy, vice president at TD. “Fortunately, we offer mortgage protection to provide coverage for your outstanding balance should you face a covered critical health event.”

Mortgage protection can be purchased whether you’re in the process of applying for a mortgage or already have a home financing solution. But what about protection options for credit card debt?

“Given the unprecedented circumstances of this year, many Canadians are trying to plan for the unexpected to protect themselves and their finances,” says Malloy. “TD balance protection plus is an optional product designed to help you deal with your credit card payment obligations in the event of a covered event, such as loss of employment.”

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Is your internet too slow? It’s probably not you

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(NC) We all know the aggravation of a school lesson that just won’t stop freezing or the family video call that looks more like a photo montage. And, as we adjust to the impact of COVID-19 on our day-to-day, that slow connection can have frustrating consequences.

Working from home and learning remotely, both need fast, stable internet, something not enough Canadians have yet. Even if you have fast devices in your home, if the infrastructure in your area is not optimal, your connection won’t be either.

Right now, cities have the infrastructure needed to ensure access. But rural and remote communities are hugely underserved, with fewer than half having high-speed internet, and fewer than a third of households on reservations have high-speed connections.

Fortunately, change is coming. The Universal Broadband Fund is backing projects across Canada right now to ensure the reliable, high-speed internet connections families need to work, study, access services online, and safely stay in touch with each other.

The fund existed before COVID, but as a response to the pandemic, its timetable has been moved up by four years to a target of 98 per cent of Canadians with high-speed internet access by 2026. With the faster pace, at least 90 per cent of us should be connected by the end of 2021.

The fund is focused on improvements in rural and remote communities across Canada to fix the disconnect between internet access for urban and rural households.  This means more remote work opportunities, better access to remote learning and safer access to healthcare, no matter where you live.

It’s not just for good connections at home, either. The improvements mean much better access to mobile networks on highways between remote communities. The result is better, safer navigation and access to emergency services for your family, even on the road in the middle of nowhere. Mobile projects will be focused on serving Indigenous communities and the roads leading to them.

The shape these improvements will take in your area will depend on where you live. Canada is huge, and its communities are hugely diverse, with diverse needs. Keep an eye out for local projects — they’re a small part of something much bigger.

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