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Canada Bagnall: Why Ottawa house prices are rising even as employment numbers fall

02:00  07 june  2020
02:00  07 june  2020 Source:   ottawacitizen.com

Tax hikes 'unavoidable' to offset raft of COVID-19 spending, federal budget watchdog says

  Tax hikes 'unavoidable' to offset raft of COVID-19 spending, federal budget watchdog says OTTAWA — The government will eventually make the “unavoidable” decision to seek new sources of revenues through tax hikes, as policymakers look to offset a raft of recent Liberal spending measures, the federal budget watchdog says. In testimony before the Senate Finance committee on Tuesday, Parliamentary Budget Officer Yves Giroux said Ottawa will have to make a “sharp turn” in its fiscal approach in coming months. The Liberal government has introduced around $146 billion in financial aid programs since early March, aimed at shielding businesses and Canadians against the economic fallout from COVID-19.

The situation is different from the economic downturn in 2008, when home prices fell sharply as a housing bubble popped. Now, with many states lifting restrictions on home tours, the housing market is reawakening. Even where visits are allowed, not all sellers are comfortable offering them.

OTTAWA — Canada clawed back 289,600 jobs in May as provincial governments began easing public health Statistics Canada said the number of people who worked less than half their usual hours fell by The number of jobs men gained in May outpaced gains by women, who had seen significant job

a close up of a sign:  A Faulkner Real Estate “sold” sign stands in front of a Westboro home on Saturday. © Ashley Fraser A Faulkner Real Estate “sold” sign stands in front of a Westboro home on Saturday.

I caught up Saturday morning with Chris Scott, the realtor who for the past 16 years has been selling homes under the Keller Williams Integrity Realty banner. He had just finished showing homes for a military official who was being transferred from New Brunswick to Ottawa.

“When he returns to New Brunswick, he’ll have to self-quarantine for two weeks,” Scott said. “He’s got to find something this week or he’ll have to do it all over again.”

That is just one example of what’s driving up Ottawa house prices in the midst of a pandemic. Scott, who specializes in real estate services for military personnel, pointed out that many potential buyers have been frustrated by the scarcity of listings and the resulting bidding wars.

Coronavirus: The prices of old housing continued to climb during the health crisis

 Coronavirus: The prices of old housing continued to climb during the health crisis Notaries believe that there was 90% less sales during confinement © A. GELEBART / 20 MINUTES View of Paris and the Paris region from the Montparnasse tower. (Illustration) IMMOBILIER - Notaries believe that there was 90% less sale during confinement The market for housing old stopped for two months and "we can not make up for these two months" , stresses Parisian notary Thierry Delesalle, on the occasion of quarterly market figures, established jointly by the profession with INSEE.

The housing market is simply too pricey , and consumers are starting to worry about the economy First-time buyers usually have less wiggle room in their wallets, and home prices are rising fastest on the That is why builders are not increasing the supply of these homes. They are also facing rising

The report noted that “ employment rose sharply in leisure and hospitality, construction, education and health services, and retail trade,” even as Stocks were already poised to rise before the government reported that employers added 2.5 million jobs in May, but the news sent share prices sharply higher.

a man wearing a suit and tie:  Chris Scott, a sales representative with Keller Williams VIP Realty. Scott specializes in finding and selling homes for military personnel. © James Bagnall Chris Scott, a sales representative with Keller Williams VIP Realty. Scott specializes in finding and selling homes for military personnel.

A recent listing in Munster Hamlet, for instance, attracted eight offers, pushing the $415,000 asking price for the single-family dwelling to $460,000.

“The buyers are there,” Scott said. “They’re ready.”

This, in part, explains why average prices for resale homes in May jumped 11.2 per cent year over year to $548,000, while sellers of condos saw average prices surge 15.5 per cent to nearly $344,000.

What’s missing, big time, is available properties. At the end of May, just 1,933 residences and condos were listed for sale in Ottawa, down 50 per cent from a year earlier. This, in a city with 264,000 owned properties, including 59,000 condos.

Ottawa residential prices jump sharply despite COVID-19 fears

  Ottawa residential prices jump sharply despite COVID-19 fears It’s actually rather astonishing that Ottawa’s real estate agents sold 1,066 residential properties in May, along with 279 condominiums. While that’s little more than half the total number of units sold during May 2019, it’s still a lot of sales activity considering we’re in the midst of a pandemic. The accompanying surge in prices has been even more remarkable, according to data published Wednesday by the Ottawa Real Estate Board. The average price for condos resold in May was $343,600 — up 15.5 per cent year over year — while residential properties gained 11.2 per cent over the same period to $548,140.

-many part-time employees would like to work full-time, but are unable to get the additional work. Which of the following is false? A. People looking for full-time work who grudgingly settle for a part-time job are counted as employed , even though they are only "partly" employed .

Employment falls along with output; this, coupled with the higher inflation rate ( rising prices ), is represented by a rightward shift of the short-run Phillips curve. A fall in inflation and a rise in unemployment are captured by a movement of the economy down along the short-run Phillips curve.

Clearly some of the scarcity reflects potential sellers’ concerns about COVID-19. But in the past few weeks, Scott said, people who had delayed putting their houses up for sale are now calling him. “They’re more comfortable with the safety features we’ve put in place as an industry,” he noted, “as well as with the favourable trend in the number of infections.”

Yet the underlying weakness in the local job market is profound. The capital region’s jobless rate soared from less than five per cent pre-pandemic to more than 14 per cent in May. [link to https://ottawacitizen.com/business/local-business/bagnall-capital-region-job-market-not-as-strong-as-numbers-suggest/wcm/349d81b3-0c47-412b-9e4d-fb371c0fe374/]

That’s more than 100,000 people out of work in a regional workforce of 757,000. And that doesn’t include the many thousands who have been laid temporarily as a result of COVID-19, but aren’t counted among the officially unemployed. Many have little idea when they’ll be called back to work by employers.

CMHC tightens lending standards to protect housing market during COVID-19

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The number of unemployed persons rose by 15.9 million to 23.1 million, while the number of employed declined by 22.4 million to 133.4 million. In the United States, the unemployment rate measures the number of people actively looking for a job as a percentage of the labour force.

production has risen or prices have risen or both have risen . Which of the following is NOT a reason why • dividing the number of unemployed people by the number in the working-age population The demand for new motor vehicles falls when the economy enters a downturn, and as a result

a close up of a sign:  A Faulkner Real Estate “sold” sign stands in front of a Westboro home on Saturday. © Ashley Fraser A Faulkner Real Estate “sold” sign stands in front of a Westboro home on Saturday.

So why aren’t the jobless numbers having a bigger impact on house prices?

Part of it has to do with just who is being laid off. The hardest hit have been young and lower paid workers, people unlikely to be involved in bidding wars for half-million-dollar properties.

During the year ended in May, nearly one-third of the net 2.6 million jobs shed across Canada were those of people aged 15 to 24. This cohort accounts for just 14 per cent of the total working-age population. Drilling a little deeper, one million of the lost jobs were part-time; fully half of these had been occupied by young workers.

The year-over-year decline in jobs was sharpest in restaurants and hotels (down 45 per cent), culture and recreation (off 25 per cent) and wholesale and retailing (down 16 per cent).

In the national capital region, these sectors combined to account for roughly two-thirds of the jobs lost since May 2019.

These sectors have been sustained by a small army of service workers, many now relying on government cheques until the post-COVID-19 recovery, whenever that comes.

Canada gains surprise 289,600 jobs in May, jobless rate hits record

  Canada gains surprise 289,600 jobs in May, jobless rate hits record Canada gains surprise 289,600 jobs in May, jobless rate hits recordOTTAWA (Reuters) - Canada unexpectedly gained 289,600 jobs in May even as the jobless rate hit a record high at 13.7%, data showed on Friday, buoyed by the loosening of stay-at-home restrictions in certain parts of the country.

Even if a currency war does not break out, a country should be wary about the negatives of currency devaluation. If the value of the euro decreases against the dollar, the price of the cars sold by European manufacturers in America, in dollars, will be effectively less expensive than they were before.

Even as horrific and historic data continued to come in on the job market and economy, stocks largely remained resilient in their climb. Smaller stocks had the market´s biggest gains, as they typically do when expectations for the economy are rising . The Russell 2000 of small-cap stocks jumped 4 percent.

On the other hand, the Ottawa region is buttressed by several sectors that appear to offer rock-solid employment prospects: public administration, health, education and high-tech. Together, these make up about half the total workforce in Ottawa and Gatineau. Remarkably, their employment levels are roughly the same as a year ago.

“A lot of people have a direct connection to a government job here,” Scott said. “Even if they’re not employed directly, often they have a spouse or relative who is.”

That kind of security can make a profound difference when signing up for a 20-year mortgage.

Core pillars of Ottawa’s high-tech industry are also spinning off well-paid jobs, not to mention sharply higher share prices that benefit employees. Many of these firms are supplying technologies in high demand in the era of COVID-19.  Shopify helps retailers build or expand online businesses. Ciena, Ericsson and Nokia all build the underlying infrastructure that enables communications networks in a work-from-home world. Software built by Kinaxis makes sure some of the globe’s largest corporations can track and re-orient their supply chains as closed borders force such readjustments.

Provided the globe doesn’t slip into an extended economic recession, these jobs and paycheques should be safe enough to help underpin Ottawa’s resilient housing sector.

The real danger for the market would be political. If the federal government later decides to trim the public service as it begins the long job of reducing the country’s suddenly massive spending deficit, the price of houses locally would — on past experience — weaken quickly. For the moment, that scenario appears a long way off.


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Climate change report: Expect warmer and wetter Ottawa, shorter winters .
A new report says Ottawa will be warmer, wetter and have shorter winters in the decades ahead as carbon emissions continue to accelerate climate change.The National Capital Commission (NCC) and the City of Ottawa commissioned the report to improve the region’s resilience to extreme weather events and other impacts related to climate change. The NCC approved a five-year sustainability plan back in 2018, and Ottawa city council officially declared a climate emergency in the capital last year.

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