Financial Meltdown past few months in GTA

This will give you some perspective on the drop in the TSX over the past few weeks.

The TSX Index is down about 36% from its high of just over 3 months ago. If you are like me, you are probably a little concerned about your investments in the markets.

If you've been watching the news or reading the papers you might be thinking this is a unique and horrific event. You might also be wondering what you should do in the short and long term.

First, this market meltdown is not unique. There have been 3 bear markets with even steeper losses in recent times including the tech boom and bust from August 2000 through to September 2001 with a decline in the markets of 39%.

As for being horrific and insurmountable – the one common feature of a bear stock market is: they all end and are replaced by bull markets.

If you believe the world will continue to develop and grow; if you believe Canada is well positioned with many of the resources needed to facilitate that growth; if you believe you need to achieve "real" returns in excess of the rate of inflation, you should believe it's time to invest.

There appears to be many opportunities in the financial markets. But, when is the bottom and have we hit it yet and is now the time to invest? My rsp's have dropped about 40% since July of this year, one would say, plow in a pile of cash into the market and reap the rewards over the next year or two. Or is the market still going to continue to drop? Anybodys guess. Some will turn out winners and some losers.

This graph bwlow shows the TSX Index values since January 2000 and you may note that even at today's value, an investment of $100,000 made in September 2001 is now worth about $147,000 – an increase of 47%. Click the graph to see it full size.

A review of the performance of various investments over the past ten years is quite enlightening. The chart below reflects the ten year period ending August 31, 2008 with an update to October 8, 2008 shown to the right for 5 selected Canadian funds.

The "safe" options have made steady money and continue to do so although the rates of return are quite modest.

House prices in the GTA have done very well with 12 consecutive years of increasing prices up until the 3% decline recorded this September. It may be that house prices have peaked and it could be a number of years before appreciable increases are seen again. If you are a client of mine, you know that the appreciation of the investment is not critical for a rental property, the tenant is paying off the investment for you. That's your largest return.

Even after allowing for the sharp decrease in market values over the past 3 months, the 5 selected mutual funds have each outperformed both the safe options and the housing option. So, if you've been invested in good quality funds over the past decade you have done well even though you may not feel this way over the past couple of months.

I say it may be the best of times because it looks like a good time to invest. More specifically it looks like a good time to borrow to invest.

· Interest rates are low (Prime + ¾% is available based on credit score only)

· The cost of borrowing is tax deductible

· Some are offering free interest for the first 3 months

Borrowing to invest is not for everyone. It should only be considered by those who:

· Are prepared to commit to a 10 year minimum period

· Are comfortable in their ability to maintain a payment schedule

· Understand it is possible to incur losses in the short and long term.

If you borrowed a $100,000 to invest 10 years ago:

· Total cost of borrowing was $61,700

· The net cost of borrowing was $41,340 (based on a 33% tax rate)

· The taxable capital gain ranged from $75,000 to $165,000

Would you be willing to commit to a net monthly cost of less than $300 for the opportunity to invest $100,000 today?

Or, would you be willing to invest some money into the real estate market where you will gain significantly over the longer term?

The choice is yours to make.

I wish you all the best,

Mark

Landlord and Tenants and the current rental marketplace

Good morning,

In light of the current economic crisis happening in the US and now in Canada, the rental market in Mississauga remains very tight. Most rental properties $1500 and under rent within a few days of being listed.

You are always safe when you have a rental property that is located near major amenities, such as The Erin Mills Town Centre or Square One or Heartland and one that shows well and is priced according to market rents. These properties tend to be the first ones that rent, everything else follows suit.

My experience also shows that similar to a property that is for sale, when a rental property shows well, it rents right away and at top value rent.

You cannot go wrong using an agent to list your property for rent. Reasons are many, but mainly because corporate relocation tenants and quality tenants all search rentals through the MLS and with an agent. Thus, if you are only trying to save a months rent by trying it yourself, you reduce your potential marketplace considerably. Quality tenants don't have time to scour the rental sections of the newspapers, they want everything online and my site and mls.ca provide this exposure for you.

Besides, how many agents do you know in Mississauga produce a virtual tour slideshow to market your rental property? Not many. Here is a recent example:
http://www.mississauga4sale.com/listings/5525-Palmerston-Crescent-Streetsville-GO.htm

If you need help with your rental property, please send me an email.

Thank you,
Mark

Credit history affects ability to borrow

The ongoing credit issues have caused mortgage lenders to review their lending criteria, and they have become stricter allowing fewer approvals on an exception basis. The credit bureau report is a very important tool used by lenders.

Most clients have a strong credit history but there are always a few situations, either due to illness, previous unemployment or marital issues where a responsible borrower experiences a credit score drop below the lender's minimum. Credit scores change daily. A weak score can be improved within a few months (& the opposite is true also....scores can drop 75 points or more within a few months if credit is overuse or abused).

Many factors affect credit scores - I hope you find the information below helpful in understanding the score & how it can change. Also, I've included some tips for those who are starting to establish credit.

If you need a mortgage contact, please let me know.

Thanks

Mark

Credit Bureau – Credit Score

• Often referred to as a beacon score
• Score indicates credit worthiness
• Score is a statistical formula that indicates to lender the statistical probability of delinquency
• range from 300 – 900
  

Scores range from 300 – 900 & is determined by:

• 35% - payment history
• 30% - amount owed
• 15% - length of time on file
• 10% - new credit (how new account is handled)
• 10% - type of credit (bank credit cards, store cc, installment loans)
  

How to improve score?:

• Pay all bills on time – no matter how small the payment
• Keep account balance below 75% of credit limit
• Avoid applying for credit unless needed
• Too many inquiries – lenders will interpret as financial difficulty
• Score can be improved significantly over a few months if these tips are followed.
  

What causes a score to drop?:

• Late payment – can cost 30 – 75 points
• Maxing out on credit cards – can drop score by 50 – 100 points
  

For Mortgages:

• Scores under 580 – Prime lenders not interested – will need to look at alternate (B lenders)….higher interest rates & fees
• Prime lenders prefer scores of 600 + ….will consider between those around 580 & higher but really need to understand cause of low score (may require guarantor/insurance – case by case).
• 680 – considered a strong score – qualify for 100% financing, no income verification etc.
  

TIPS for New Borrowers – late teens/young adults should establish credit:

• Apply for credit card – major bank
• Pay on-time monthly
• Apply for an installment loan – shows ability to repay fixed amount on monthly basis. Make it small loan – can be secured by a GIC – keep it outstanding for full term (ie: 12 months)
• Avoid numerous credit cards – ie: retail stores.
  

Your rights with the Credit Bureau:

• View your bureau report (on-line or by post)
• Advise them of incorrect information (will be investigated)
• In event of identity theft or lost/stolen wallet they will add line to bureau to alert credit grantors to be extra cautious of verifying identity.
  

Interesting Perspective on the Canadian Markets

Good morning,

A good friend of mine forwarded this article to me yesterday and I found that it was extremely enlighten, very honest and straightforward analysis of our markets.

It also gives you an alternative to the markets and real-estate, not sure if it's a good method, but at least you can have another alternative!

I hope you like it too!

Mark

In light of the recent events in the financial world and those which will unfold in the coming months I thought you might be interested in hearing about what I believe to be the larger risk.

Recovery Risk

In one of the most memorable movie scenes of all time Butch Cassidy and the Sundance Kid find themselves trapped on top of a very high cliff overlooking a raging river. With the posse closing in, their only possible escape is to jump off the cliff into the river. The Kid is visibly reluctant and when Butch asks him what his problem is, the Kid replies “I don’t know how to swim!”...Butch starts to laugh uproariously and exclaims “Kid, it’s the fall that’s gonna kill ya!”

Sometimes our immediate fears cause us to overlook the larger risk and that is the case for many with respect to the recent turmoil in the financial markets. While the losses are of concern, the larger risk can be in how long it takes to recover. So, in this case it’s not the fall but the length of time it stays down that is the larger risk.

This “Recovery Risk” is highly sensitive to just how close an investor is to retirement.

Retired: Significant to Catastrophic Risk – for those drawing income the depletion of their capital is critical and a lengthy recovery seriously increases the chance they will run out of money. The risk is highest in the early retirement years and decreases somewhat for older retirees – a function of the total income needed for the balance of their lifetimes.

Within 15 Years of Retirement: Significant Risk – for those counting on investment growth for future retirement income, a lengthy recovery may result in a later retirement than planned and/or continued work of some sort during retirement. Those closer to retirement are at greater risk as they will start to draw income sooner.

More than 15 Years from Retirement: Possible Risk – historically, most recoveries take less than 15 years so the younger an investor is the lower the risk. Those in their 20’s and 30’s benefit from a long term investment period while the risk increases progressively starting at age 40.

For some perspective let’s take a look at the Dow Jones Industrial Average:

First, note that the Great Depression starting in 1929 saw the Dow fall by more than 85%, a magnitude of loss not seen since. But it’s the fact that the Dow did not recover for 25 years that was the bigger issue.
As you can see on the chart there have been other lengthy recovery periods including the one we are presently in, which began in October 1999.
So, what are the alternatives? Putting money into a Money Market Fund, Savings Account or GIC just locks in the loss of purchasing power over time:
Investment Amount $100,000
Interest Earned 4.0% $4,000
Income Tax 33.0% -$1,320
Inflation (July 2008) 3.4% -$3,400
Net Earnings -0.7% -$720
This may be viable for some retirees but is questionable for those under age 75.
Real Estate is another possibility although after 13 consecutive years of rising values we may be looking at a downturn soon. Prices in the GTA rose by less than 1% in the past year and sales are down more than 22%. It took more than 12 years for the real estate market to recover after the peak in 1989.
For those who have retired there is a way to guarantee retirement income of 5% for life while remaining invested such that future market gains may be realized. In fact, it is possible to have both the initial guarantee and to improve upon the guarantee value through resets over time.
For those within 15 years of retirement there is a way to guarantee 5% annual increases in future retirement income while remaining invested such that future market gains may be realized. In fact, it is possible to have both the initial guarantee and to improve upon the guarantee value through resets over time.
The Income Plus program was introduced in Canada less than 2 years ago and in my opinion is the best way in which to minimize risk for those who are building or drawing retirement income.
If you, or someone you know, is within 15 years of retirement or, has been retired for 15 years or less, you should learn more about Income Plus. In this period of uncertainty, it offers both a guaranteed minimum amount of income and the potential to benefit from future market gains – a unique combination in my experience and one which may not be available with the same features in the future.
In my view this is the best protection available today with respect to many risks but especially for Recovery Risk.
*Income Plus offers a unique benefit for new clients:
For those not taking an income in 2008, a 5% income bonus is paid on the initial deposit. This means that if you open an account before the end of the year you will receive a 5% increase in your Guaranteed Withdrawal Balance even though you may only have been a client for a few weeks or months.

New clients over age 65 may take a 5% income withdrawal in 2008 without reducing the amount of their guaranteed annual income for life.

In order to realize these benefits I recommend you act quickly as it often takes several weeks or longer to transfer funds and this benefit only applies to those funds received prior to December 31st.

How To Minimize Interest Rate On Your Investment Property

With low interest rates and many attractive loan programs available today on residential real estate, now may be the perfect time to buy an investment property or second home. Be aware, though, that lenders charge somewhat higher interest rates for mortgages on non-owner-occupied properties. There's good reason.

Lenders consider investment property a riskier proposition because owners have less to lose by walking away from an unaffordable investment than from leaving a home they live in. There's a greater risk the owner could walk away should the property sit vacant for any length of time because an owner who relies on rental income to make the monthly payment can quickly run into trouble. In addition, a renter may not take care of the property as well as an owner who lives in it—eroding the property's value.

If you are considering purchasing an investment property or second home, here are a few things you can do to minimize the interest rate on the mortgage:

• Make sure your credit is in the best possible shape before loan application.
  
• Show the lender you can afford the payments without relying on rental income—or that you at least have enough cash set aside to weather several months of vacancy.
  
• Make a sizeable down payment—more than the 20 - 25% standard if possible. The more you have invested in the property, the less risky the loan from the lender's standpoint.
  
• Demonstrate your ability to rent out the property by showing low local vacancy rates and proof that your rental amount jibes with other rental properties in the area. Also let the lender know if a renter is already lined up for the property.

Read more about:

• Interest Rates


• Power of Sale Properties


• Price Trends


• or Search the MLS and more at my website

Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate

Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987
( BUS 905-828-3434
›mark@mississauga4sale.com
8 Website : Mississauga4Sale.com

• Thinking of selling in the next 3 to 6 months? Would you like a Complimentary & Quick Over-The-Net Home Evaluation ?


• On-Line Real Estate Newsletter sign up


• See seasonal housing patterns

REMAX reports that balance returns to recreational property markets

Balance returns to recreational property markets

across Canada this year, says RE/MAX

Mississauga, ON (June 10, 2008) --

After an extended period of extraordinary growth, more balanced

market conditions have emerged in recreational property markets across the country, according to a report

released today by RE/MAX.

The RE/MAX Recreational Property Report found that a substantial increase in the supply of recreational

properties listed for sale, combined with fewer buyers overall, characterized most recreational markets

this year. Of the 45 markets surveyed, 91 per cent (or 41 markets) were in the transition stage, moving

from strong sellers into balanced market conditions. The only exceptions were Salt Spring Island, two

markets in Saskatchewan—Last Mountain Lake and Qu'Appelle Lakes and Lakes Candle, Emma, and

Waskesiu -- and Newfoundland's East Coast —where inventory levels were relatively low. Affordability

was a primary factor in 35 per cent of markets surveyed, given serious upward pressure on recreational

values in recent years.

"Market conditions have shifted, but don't expect to see bargain basement prices or fire sales," says

Michael Polzler, Executive Vice President and Regional Director, RE/MAX Ontario-Atlantic Canada.

"The recreational market continues to experience solid demand -- a trend that is expected to continue

throughout 2008. The influx of new listings has yet to translate into downward pressure on recreational

property prices. Prime waterfront properties, while more plentiful than in year's past, will still command

top dollar."

Adverse winter weather conditions during the first four months of the year hindered recreational activity.

Sixty-seven per cent of markets reported softening in the number of sales year-to-date, while average

prices remained stable or experienced moderate increases over 2007 levels for the same period. Economic

concerns, fueled by negative GDP growth in the first quarter and soaring energy costs, have also played a

role in the transitioning market.

"We're coming off the longest period of economic expansion since World War II," says Elton Ash,

Regional Executive Vice President, RE/MAX of Western Canada. "Recreational property values have

appreciated beyond our wildest dreams across the country. More balanced market conditions are a

welcome change for purchasers."

- more -

RE/MAX Recreational Property Report…2

For the first time in many years, in fact, a good selection of entry-level waterfront is available in markets

across the country. Eighteen per cent of those surveyed offer properties under the $200,000 price point,

including; Central South Cariboo in British Columbia; Parry Sound, East Kawarthas and Kingston in

Ontario; Summerside, PEI; South Shore, Nova Scotia; Shediac, New Brunswick; and the East Coast of

Newfoundland.

Recreational property buyers also found themselves divided between two borders this year. The housing

market meltdown in the US combined with a Canadian dollar at par created serious investment

opportunities for secondary properties in Florida, Arizona, Texas, and California. Some of those very

same factors have spurred American recreational property owners in Canada to list their properties for

sale, with many looking to take advantage of ideal market conditions here.

"Many Canadians are capitalizing on market conditions in major American centres," says Polzler. "For

some purchasers, the move is strictly a short-term investment strategy with a pay-off at the end of the day,

while for others, retirement is the main objective."

The report also found that younger buyers were a factor in 40 per cent of recreational markets surveyed.

"Baby boomers are clearly not the only purchasers that appreciate the recreational lifestyle," says Ash.

"Generation X is quickly becoming a force in the marketplace, spurring demand for condominium

product on ski hills, oceanfront properties in good surf locales, and water frontage on trendy lakes with

celebrity residents."

Other highlights

:

Alberta's red-hot economy has helped boost recreational property markets in British Columbia,

Atlantic Canada, and some parts of Ontario.

Affordability is prompting buyers to consider back lots, riverfront, condominiums, hobby farms

and leased land.

Some purchasers looking to secure an exit strategy are buying recreational properties or

secondary homes in residential neighbourhoods in close proximity to the water's edge.

RE/MAX is Canada's leading real estate organization with over 18,000 sales associates in more than 656

independently-owned and operated offices. The RE/MAX franchise network is a global real estate

system operating in over 65 countries. More than 7,000 independently-owned offices engage over

110,000 member sales associates who lead the industry in professional designations, experience and

production while providing real estate services

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate

Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS Newsletter
RE/MAX Realty Specialists Inc.
Providing Full-Time Professional Real Estate Services since 1987
( BUS 905-828-3434
2 FAX 905-828-2829 ÈCELL 416-520-1577
› E-MAIL : mailto:mark@mississauga4sale.com?subject=Mississauga
Website : Mississauga4Sale.com

• Thinking of selling your home in the next 3 to 6 months? Would you like a Complimentary & Quick Over-The-Net Home Evaluation ?
• If you have not already signed up to receive my monthly real estate newsletter, you may do so here: On-Line Real Estate Newsletter sign up
• See seasonal housing patterns
• Would you like me to send you a 2008 Calendar?

Real Estate Investing - is it something for you?

Is Real Estate Investing Right for You?

Investing in property is simply another form of investment. Buyers can invest directly by purchasing property individually, or indirectly by investing in a managed fund or timeshare. Although real estate agents may understand the property market, prospective buyers should still seek independent advice, because property investment may not be right for everyone.

What to Know Before You Buy

Don't fall for pressure-selling techniques and high-pressure seminars

Some sales people can be extremely persuasive and persistent. They often use gimmicks like offering you a "once in a lifetime opportunity".

Determine your overall financial plans

Think about what you want to achieve financially and how soon you want to achieve it.

Understand the risks involved

All investments carry risks. Make sure you are comfortable with the risks associated with a particular investment.

Get advice

Decide whether or not you need professional advice. If you're dealing with a financial advisor make sure they're licensed.

Investing directly or indirectly

You can invest directly or indirectly in many assets, including real estate, through a managed fund. Time- shares are a type of managed investment.

Do your homework

Find out as much as possible about any investment you are making. Make sure you really understand the pros and cons of choosing a particular investment asset. Weigh the advantages and disadvan- tages against your financial goals.

Consult with your accountant

There may be tax issues to consider that you may not be aware of. Once you've decided to take the leap and purchase investment property, be sure to read and keep all documents you receive about your investment. If your asset is being managed by someone else, make sure they keep you updated on all pertinent information. Reputable investment managers will be happy to answer your questions and will expect you to take an interest in your investments.

6 Investment Tips You Can Use!

Hire and pay for skilled workers to do your renovations.
Location. Location. Location. Invest in the best location you can afford.
Be affordable for tenants by buying small and staying small.
Look at a property for what it can be, not for what it is.
Focus on the money coming in and going out - not the cap rate.
Don't go unique - choose rental properties that will appeal to anyone.
One More Thing...

Real Estate Investment Trusts

Real estate investment trusts, known as REITs, are entities that invest in different kinds of real estate or real estate related assets, including shopping centers, office buildings, hotels, and mortgages secured by real estate.

There are basically three types of REITS:

Equity REITS, the most common type of REIT, invest in or own real estate and make money for investors from the rents they collect.

Mortgage REITS lend money to owners and develop- ers or invest in financial instruments secured by mortgages on real estate.

Hybrid REITS are a combination of equity and mort- gage REITS.

The Internal Revenue Code lists the conditions a company must meet to qualify as a REIT. For example, the company must pay 90% of its taxable income to sharehold- ers every year. It must also invest at least 75% of its total assets in real estate and generate 75% or more of its gross income from investments in or mortgages on real property.

Many REITs trade on national exchanges or in the over- -the-counter market. REITs that are publicly traded must file reports with the SEC, such as quarterly and annual filings.

Read more about:

• Interest Rates
• Power of Sale Properties
• Price Trends
• or Search the MLS and more at my website

Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate

Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987
( BUS 905-828-3434
›mark@mississauga4sale.com
8 Website : Mississauga4Sale.com

• Thinking of selling in the next 3 to 6 months? Would you like a Complimentary & Quick Over-The-Net Home Evaluation ?
• On-Line Real Estate Newsletter sign up
• See seasonal housing patterns

CMHC Update clients can now purchase rental properties (up to 4 units) with as little down as 5%

CMHC Update on investment property purchase

CMHC has just released an update where clients can now purchase rental properties (up to 4 units) with as little down as 5%.
And mortgage lenders are now allowed to use 80% rental income offset which makes it much easier for you to qualify! Let me know if you require more details and I will put you in touch with my mortgage people.
http://www.mississauga4sale.com/Investment-Property-Purchase.htm
Thank you and all the best!
Mark

read more about:

• Interest Rates
• Power of Sale Properties
• Price Trends
• or Search the MLS and more at my website

Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate

Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987
( BUS 905-828-3434
›mark@mississauga4sale.com
8 Website : Mississauga4Sale.com

• Thinking of selling in the next 3 to 6 months? Would you like a Complimentary & Quick Over-The-Net Home Evaluation ?
• On-Line Real Estate Newsletter sign up
• See seasonal housing patterns

Weekly Bottom Line in Economics TD Canada Trust

The Weekly Bottom Line in economics courtesy of TD/Canada Trust

HIGHLIGHTS

Non-manufacturing ISM spurs more recession talk in the U.S.
TD Economics revises U.S. growth projections
Canadian jobs data a shocker

This week, investors continued to seek the relative safety of bonds at the expense of equities. Notably, U.S. 2-year government bond yields fell below 2% for the first time since April of 2004. Canadian 2-year government bond yields declined as well, though they still remain above 3%. Despite the 125 basis points in interest rate cuts by the Fed over the past 3 weeks, equity markets recorded losses across the board, led by the tech-heavy Nasdaq (-5%). Declines in the S&P 500 and Toronto's S&P/TSX were 4% and 3%, respectively.

U.S. economic news disappoints

In addition to being served up with a number of disappointing fourth quarter earnings reports, investors continued to fret about the rising risks of a U.S. recession. Following poor January employment numbers last week, the ISM non-manufacturing reading for the same month was even worse, plummeting from 53.2 to 44.6. The sizable drop in January was not only the largest monthly decline on record, but also the lowest level since the series was created in 1997. The culprits behind the weak performance were substantial losses in the business activity, new orders and employment sub-indices. While these figures certainly paint a dismal picture for the U.S. economy, they can be quite volatile on a month-to-month basis. Still, even if February records a moderate reversal, these data build the case that no growth was being recorded in the U.S. economy as the year kicked off.

Adding to concerns was Thursday's report on initial jobless claims, which came in above expectations at 356,000. On a 4-week moving average basis, jobless claims continued to edge higher. This report has proven to be a good leading indicator of recessions in the past. At this stage, the trend is not sounding off alarm bells, even though the January payrolls report increases the risks that the trend in claims could continue to worsen.

Worries about economic growth were also echoed in Fed speeches this week. Richmond Fed President Lacker acknowledged the possibility of a mild recession, similar to the last one experienced in 2001. He noted that business investment will likely slow this year, but still remain in positive territory, and that job growth will likely be lethargic for the better part of the year. Lacker also signaled upside risks to inflation, thereby making rate decisions even more difficult. Philadelphia Fed President Plosser also raised concerns about economic growth, but he too sounded a word of caution about inflation, arguing that "ignoring price stability during times of economic weakness risks undermining our ability to achieve economic growth over the long run."

In light of the latest signs as to the direction of the U.S. economy, we have downgraded our U.S. economic growth forecast. We are now projecting Q4/Q4 growth of 1.4% in 2008 (previously 1.9%) and 2.5% in 2009 (3.1%). For details, see TD Economics Special Report: Economic Stimulus and the U.S. Outlook available on our website. The volatility in equity markets, weakness in employment, and continued erosion of the housing market are likely to curb consumer spending during the first half of 2008, leading to virtually no growth during each of the first two quarters. The fiscal stimulus package expected to be implemented by the U.S. government will support growth during the second half of this year. However, this will provide only a temporary boost, and as such, a sub-par expansion is likely to carry into 2009 (see chart). The prominence of downside risks to growth has prompted us to revise our Fed rate call as well, from a cut of 25 bps to 50 bps in March. However, due to the inflationary pressures weighing on the economy, we expect the next cut to be the last.

Canada's job market remarkable

As signs of U.S. weakness were further manifested, the Canadian economy continued to show remarkable resilience. Employment numbers released this morning showed that 46,000 jobs were created in January, bouncing back with a vengeance from December's revised 3,000 loss. The gain boosted the employment rate to a new record of 63.8%, and drove the unemployment rate back down to the 33-year low of 5.8% reached last October. January saw a reversal in recent trends, as growth in the private sector far outweighed declines in both the public sector and the self-employed, and the goods-producing sector outperformed the service-producing sector, which was relatively flat for the month. Perhaps the biggest surprise was the 18,000 jump in export-oriented manufacturing jobs. Still, employment in the sector over the past year is down 5.4%, dampened in part by the slowing U.S. economy. Elsewhere, job creation in other areas continued to be supported by domestic strength, with particularly large gains in professional, scientific and technical services as well as financial services.

Another key job generator in Canada was the construction sector. Today, we received news that Canadian housing starts also beat expectations in January, rising 21% from December to 223,000. While single-unit housing starts recorded a modest decline, multi-unit housing starts rose by a whopping 64% month-over-month. The largest gains stemmed from Ontario (44%) and Quebec (22%), while the Atlantic region (-17%) was the only area to weigh down the total number of starts.

While this week's data are likely to spur further talk of decoupling between Canada and U.S., our view is that January's surge in Canadian economic activity represents more of a blip than a sign of renewed strength. Hence, look for both indicators to cool in the coming months. With the risks of knock-on effects from the deteriorating U.S. economy growing since the Bank of Canada's last fixed announcement data and Canadian core inflation remaining below trend, we expect that the central bank will remain forward looking and cut interest rates by 50 bps points in March and 25 bps in April.

BOE cuts rates, ECB to follow

Similarly, the U.S. is not alone in its economic woes, as the Bank of England cut rates by 25 basis points this week, and the Eurpoean central bank has signaled that it may cut rates going forward. The increasing recognition that central banks around the world will be required to jump on the rate-cutting bandwagon is likely to be instrumental in spurring a moderate recovery in the U.S. dollar later this year.

Read more about:

• Interest Rates



• Power of Sale Properties



• Price Trends



• or Search the MLS and more at my website

Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate

Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987
( BUS 905-828-3434
›mark@mississauga4sale.com
8 Website : Mississauga4Sale.com

• Thinking of selling in the next 3 to 6 months? Would you like a Complimentary & Quick Over-The-Net Home Evaluation ?



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Here are some very innovative mortgage products for those in need

This is just a reminder of some the innovative mortgage products that are available for my clients.

- up to 100% financing... even on rental properties!
- up to 95% financing for self-employed individuals on STATED INCOME!
- money for renovations CAN be included in mortgage
- amortization of up to 40 years

Not to mention the absolute BEST customer service in the business!

*ask me about how I can offer you a FREE one-year warranty on their new home!

I have mortgage broker contacts that will also find the lowest available rate for you if you are in any of the following situations:

-weak credit
-self-employed
-new immigrant
-power of sale
-past bankruptcies
-non-qualifying income
-debt consolidation
-refinancing
-renovations


These mortgage people that I deal with would love the opportunity to show you what they can do.

read more about:

• Interest Rates
• Power of Sale Properties
• Price Trends
• or Search the MLS and more at my website

Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate

Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987
( BUS 905-828-3434
›mark@mississauga4sale.com
8 Website : Mississauga4Sale.com

• Thinking of selling in the next 3 to 6 months? Would you like a Complimentary & Quick Over-The-Net Home Evaluation ?
• On-Line Real Estate Newsletter sign up
• See seasonal housing patterns

100% Financing now available on Rental Properties

100% Financing now available on Rental Properties

With the recent changes to CMHC rules, mortgage companies can start the new year offering financing of up to 100% on rental properties with 1-2 units, as it is now available!

This is great news for both real estate agents and investors alike! On rental properties with 3-4 units, 95% financing can be offered to qualified individuals.

Let me know if you have any questions, or if you have any questions about financing investment properties.

Let's have a great 2008!

Search the MLS or read more about Interest Rates, Power of Sale Properties, Price Trends and more at my website.

Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate

Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987
( BUS 905-828-3434
2 FAX 905-828-2829 ÈCELL 416-520-1577
› E-MAIL : mark@mississauga4sale.com
8 Website : Mississauga4Sale.com

• Thinking of selling in the next 3 to 6 months? Would you like a Complimentary & Quick Over-The-Net Home Evaluation ?
• On-Line Real Estate Newsletter sign up
• See seasonal housing patterns

Rental Market Outlook for 2008 - CHMC Rental Housing Market Report Highlights

CHMC Rental Housing Market Report Highlights

• The average apartment vacancy rate in the GTA was unchanged at 3.2 per cent in October 2007. Average same-sample two-bedroom apartment rents
increased by 1.2 per cent.
• Market conditions remained similar to 2006 because new renter household formation was offset by a movement of existing renter households into homeownership.
• The rental market will experience little change in 2008, with the average apartment vacancy rate at 3.5 per cent and average rents growing by less than the rate of inflation.

Market Conditions in Line With 2006

Rental market conditions in 2007 remained in line with those experienced in 2006. There was no change in the 3.2 per cent average apartment vacancy rate and same-sample
rents grew below the rate of inflation.

It is important to note that there was variation in rental market conditions across the different sub-markets of the GTA.
Market Several factors contributed to stability in vacancy rates in 2007. Increased home ownership demand, especially from the first-time buyer segment of the market, resulted in a substantial number of households vacating their rental accommodation

CMHC Rental Market Outlook for 2008

• Demand for rental housing in 2008 will remain on par with what was experienced in 2007.


• The overall apartment vacancy rate will be 3.5 per cent.


• The average two-bedroom rent will increase by 1.5 per cent.


• The movement to home ownership will continue to be a drag on the rental market, but in a different fashion.


• While both existing and new home sales are forecast to edge slightly lower next year, first-time buyers will continue to vacate rental accommodation in favour of home ownership. This movement, however, will be based on a strong increase in condominium apartment completions in 2008. More than double the number of condominium apartment completions experienced in 2007 will occur next year.


• In addition, investor-held condominium apartments in the secondary rental market will attract some renter households out of the primary rental market, due to a higher level of finishings and amenities.


• Factors that will continue to influence the demand for rental include the following:
  
• Growth in youth employment will continue due to tight labour market conditions;


• Immigration will continue to trend upward; and


• Rental affordability will continue to improve as household earnings outstrip growth in average
  rents.

Read more about rental properties and finding a rental property

Search the MLS or read more about Interest Rates, Power of Sale Properties, Price Trends and more at my website.

Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate

Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987
( BUS 905-828-3434
2 FAX 905-828-2829 ÈCELL 416-520-1577
› E-MAIL : mark@mississauga4sale.com
8 Website : Mississauga4Sale.com

• Thinking of selling in the next 3 to 6 months? Would you like a Complimentary & Quick Over-The-Net Home Evaluation ?


• On-Line Real Estate Newsletter sign up


• See seasonal housing patterns