Latest news with #FinancialPost
Yahoo
a day ago
- Business
- Yahoo
Underwater on your home? Selling now should be your last resort
One last gasp for the Canadian residential market. That was the headline on the last story I wrote for the Financial Post nearly eight years ago. I'm back, and clearly the housing market had the profound ability to hold its breath longer than many anticipated. Who envisioned massive spikes in immigration, a pandemic and record-low lending rates would drive home prices to even greater heights? 'The housing market was a little more gaspy,' Phil Soper, chief executive of Royal LePage, one of the country's largest residential brokerages, joked in an interview. Soper gave me some credit: 'You were right, the market got hammered,' he said, pointing to the 18 months that followed my last article, when tougher rules on financing forced Canadians to qualify at an even higher interest rate than the ones listed on their mortgage, in a move intended to slow the market. But the roller coaster ride that followed only looks predictable in hindsight. Today, some bears are thrilled by tales of lost deposits, buyers unable to close and prices off by 20 per cent from the peak. They were finally right after two decades. It's ugly if you bought at the top, as an investor or an end user. Don't look backwards. It rarely makes sense unless you can learn from a mistake. The honest debate today should only be what you will do now and into the future, based on your housing needs. 'The real question is whether your housing is adequate. If it's adequate, that's a paper challenge and not a real challenge,' Soper said. What you paid? Tough luck. My father, a long-retired accountant, always instilled in me that something is only worth what someone will pay for it. There is no question that the price decline has been steep. Real estate is a local game, and national prices have limited meaning, but the average selling price for an existing home at the peak was $824,192 in February 2022, according to the Canadian Real Estate Association. The peak of housing sales was 2021 but the first quarter of 2022 was red hot for activity with about 675,000 homes changing hands on an annualized basis. The number would be filled with people downsizing, some move-up buyers but also a large swath of first-time buyers who are the backbone of any housing market. Many of those home owners have seen chunks of their equity wiped out. But before we panic about prices, context matters. The average selling price for an existing home at the end of 2017 was $496,500, according to CREA. Using the Bank of Canada's inflation calculator, that puts us at around $625,000 in 2025 dollars. At mid-year, the average selling price was $691,643. Appreciation in housing prices is constantly overstated without inflation considered. I've never really understood why people think the price of a home shouldn't be adjusted for inflation. This is like watching reruns of The Price is Right from the 1970s and expecting to buy a car for $4,000. I'm not sure why people expect that 2017 price or even the pre-pandemic average price of $540,000 in February 2020. How far do they want prices to fall? Shouldn't prices be rising with inflation with maybe a couple of extra points return per year to make it a decent investment? All that said, if you bought at the top, you have serious issues to consider, especially if you purchased a pre-construction unit and cannot get financing because you have no equity or negative equity. John Andrew, a retired Queen's University professor who is now an independent wealth adviser, has a family friend whose daughter is in that exact scenario. 'She has a little bit of buyer's remorse in the sense of, 'What have I done?'' said Andrew, who ran regular real estate seminars for some of the country's top executives for years, about a 2023 purchase. Andrew says to stay put and consider the long-term cost of your house, including financing. Let go of the idea that 'real estate prices just always go up,' but consider the long-term return you will probably get, which he still thinks can beat inflation. For the end user, a home, be it a low-rise property or a high-rise condo, has always been part investment and part consumable commodity. Broader market indices have gone up for decades, but you can't get Canada Mortgage and Housing Corp.-backed financing to invest in the TSX composite with five per cent down and 20-to-1 leverage, can you? Leverage has destroyed many in real estate, especially investors. It was an easy formula to buy a $1 million condo with, say $100,000 down, watch it climb to $1.1 million in a short period and make 100 per cent on your investment. Roll the dice, and you lose sometimes. Leverage, and the pain is far worse. Ben Myers, president of condo research firm Bullpen Research & Consulting Inc., still believes a prime motivation for Canadians to own real estate is forced savings. He's correct: behaviour matters. Realtors often cite the corny expression that you can't live in your investments, and they are partially correct. The other reason to own is security of tenure, a long-term place to raise your family without the risk of a landlord kicking you out for a variety of reasons. If you need a house today for the life circumstances, that is justification for buying. Timing the market when it comes to a principal residence doesn't always match your personal needs. The investor who now has to close on a property bought three years ago? Myers said they can assign the property to someone else, but that comes with a risk that the person may not close and leave you liable. 'You may be looking at paying someone to take your investment over,' he said, adding the best option at this point is somehow to figure out a way to close, rent the unit and hope the market picks up. It's just one missed mortgage payment. What's the big deal? The battle for Muskoka: How a mysterious developer's proposed mega-resort is sparking an existential crisis in cottage country If your life changes or you really need to move, there are valid reasons to sell and take your lumps. But moving is a wealth destroyer, you do it when necessary. When you add up real estate commissions, land transfer taxes, moving costs, breaking your mortgage, lawyers and other fees, you can easily chew up close to 10 per cent of your equity. People get mad paying $9.95 for a stock trade, but giving up tens of thousands on a real estate trade hasn't bothered them in a rising market. Limit your moves, even in a falling market today. Your last move out of your home should ideally be in a box. Every one will cost you. • Email: gmarr@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Calgary Herald
a day ago
- Business
- Calgary Herald
Underwater on your home? Selling now should be your last resort
This advertisement has not loaded yet, but your article continues below. In his return to the Financial Post, Garry Marr looks at what a homeowner who bought at the top should do in a market that has finally come off the boil Many homeowners who bought at the peak of the market in 2022 have seen chunks of their equity wiped out. Photo by Colleen De Neve / Postmedia One last gasp for the Canadian residential market. That was the headline on the last story I wrote for the Financial Post nearly eight years ago. THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY Subscribe now to read the latest news in your city and across Canada. Unlimited online access to articles from across Canada with one account. Get exclusive access to the Calgary Herald ePaper, an electronic replica of the print edition that you can share, download and comment on. Enjoy insights and behind-the-scenes analysis from our award-winning journalists. Support local journalists and the next generation of journalists. Daily puzzles including the New York Times Crossword. SUBSCRIBE TO UNLOCK MORE ARTICLES Subscribe now to read the latest news in your city and across Canada. Unlimited online access to articles from across Canada with one account. Get exclusive access to the Calgary Herald ePaper, an electronic replica of the print edition that you can share, download and comment on. Enjoy insights and behind-the-scenes analysis from our award-winning journalists. Support local journalists and the next generation of journalists. Daily puzzles including the New York Times Crossword. REGISTER / SIGN IN TO UNLOCK MORE ARTICLES Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account. Share your thoughts and join the conversation in the comments. Enjoy additional articles per month. Get email updates from your favourite authors. THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK. Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account Share your thoughts and join the conversation in the comments Enjoy additional articles per month Get email updates from your favourite authors I'm back, and clearly the housing market had the profound ability to hold its breath longer than many anticipated. Who envisioned massive spikes in immigration, a pandemic and record-low lending rates would drive home prices to even greater heights? 'The housing market was a little more gaspy,' Phil Soper, chief executive of Royal LePage, one of the country's largest residential brokerages, joked in an interview. Your weekday lunchtime roundup of curated links, news highlights, analysis and features. By signing up you consent to receive the above newsletter from Postmedia Network Inc. Please try again Soper gave me some credit: 'You were right, the market got hammered,' he said, pointing to the 18 months that followed my last article, when tougher rules on financing forced Canadians to qualify at an even higher interest rate than the ones listed on their mortgage, in a move intended to slow the market. But the roller coaster ride that followed only looks predictable in hindsight. Today, some bears are thrilled by tales of lost deposits, buyers unable to close and prices off by 20 per cent from the peak. They were finally right after two decades. It's ugly if you bought at the top, as an investor or an end user. Don't look backwards. It rarely makes sense unless you can learn from a mistake. The honest debate today should only be what you will do now and into the future, based on your housing needs. 'The real question is whether your housing is adequate. If it's adequate, that's a paper challenge and not a real challenge,' Soper said. What you paid? Tough luck. My father, a long-retired accountant, always instilled in me that something is only worth what someone will pay for it. There is no question that the price decline has been steep. Real estate is a local game, and national prices have limited meaning, but the average selling price for an existing home at the peak was $824,192 in February 2022, according to the Canadian Real Estate Association. The peak of housing sales was 2021 but the first quarter of 2022 was red hot for activity with about 675,000 homes changing hands on an annualized basis. The number would be filled with people downsizing, some move-up buyers but also a large swath of first-time buyers who are the backbone of any housing market. Many of those home owners have seen chunks of their equity wiped out. This advertisement has not loaded yet. This advertisement has not loaded yet, but your article continues below. But before we panic about prices, context matters. The average selling price for an existing home at the end of 2017 was $496,500, according to CREA. Using the Bank of Canada's inflation calculator, that puts us at around $625,000 in 2025 dollars. At mid-year, the average selling price was $691,643. Appreciation in housing prices is constantly overstated without inflation considered. I've never really understood why people think the price of a home shouldn't be adjusted for inflation. This is like watching reruns of The Price is Right from the 1970s and expecting to buy a car for $4,000. I'm not sure why people expect that 2017 price or even the pre-pandemic average price of $540,000 in February 2020. How far do they want prices to fall? Shouldn't prices be rising with inflation with maybe a couple of extra points return per year to make it a decent investment? All that said, if you bought at the top, you have serious issues to consider, especially if you purchased a pre-construction unit and cannot get financing because you have no equity or negative equity. John Andrew, a retired Queen's University professor who is now an independent wealth adviser, has a family friend whose daughter is in that exact scenario. 'She has a little bit of buyer's remorse in the sense of, 'What have I done?'' said Andrew, who ran regular real estate seminars for some of the country's top executives for years, about a 2023 purchase. Andrew says to stay put and consider the long-term cost of your house, including financing. Let go of the idea that 'real estate prices just always go up,' but consider the long-term return you will probably get, which he still thinks can beat inflation. For the end user, a home, be it a low-rise property or a high-rise condo, has always been part investment and part consumable commodity. Broader market indices have gone up for decades, but you can't get Canada Mortgage and Housing Corp.-backed financing to invest in the TSX composite with five per cent down and 20-to-1 leverage, can you? Leverage has destroyed many in real estate, especially investors. It was an easy formula to buy a $1 million condo with, say $100,000 down, watch it climb to $1.1 million in a short period and make 100 per cent on your investment. Roll the dice, and you lose sometimes. Leverage, and the pain is far worse. Ben Myers, president of condo research firm Bullpen Research & Consulting Inc., still believes a prime motivation for Canadians to own real estate is forced savings. He's correct: behaviour matters. Realtors often cite the corny expression that you can't live in your investments, and they are partially correct. The other reason to own is security of tenure, a long-term place to raise your family without the risk of a landlord kicking you out for a variety of reasons. If you need a house today for the life circumstances, that is justification for buying. Timing the market when it comes to a principal residence doesn't always match your personal needs. The investor who now has to close on a property bought three years ago? Myers said they can assign the property to someone else, but that comes with a risk that the person may not close and leave you liable. 'You may be looking at paying someone to take your investment over,' he said, adding the best option at this point is somehow to figure out a way to close, rent the unit and hope the market picks up. If your life changes or you really need to move, there are valid reasons to sell and take your lumps. But moving is a wealth destroyer, you do it when necessary. When you add up real estate commissions, land transfer taxes, moving costs, breaking your mortgage, lawyers and other fees, you can easily chew up close to 10 per cent of your equity. People get mad paying $9.95 for a stock trade, but giving up tens of thousands on a real estate trade hasn't bothered them in a rising market. Limit your moves, even in a falling market today. Your last move out of your home should ideally be in a box. Every one will cost you.
Yahoo
3 days ago
- Business
- Yahoo
Canadian steelmakers need to focus on domestic market as tariffs lock them out of U.S.: Algoma CEO
Canadian steelmakers might need to pivot their focus on the domestic industry as steep tariffs lock them out of the United States market, according to the chief executive of Canada's second-largest steel producer. 'We'll have little to no business in the U.S. if the 50 per cent tariff continues,' Algoma Steel Inc. CEO Michael Garcia said in a recent interview with the Financial Post's Larysa Harapyn. 'Once the full effect of (the tariffs) plays out, it will effectively lock out Algoma and frankly other Canadian steel producers from the U.S. market.' Garcia said not having economic access to customers in the U.S. would be a big challenge for Canadian steelmakers because that's where most of their product goes. 'There really are no practical foreign markets for Canadian steel other than the U.S. market,' he said. But entering the domestic market comes with its own obstacles. Garcia said roughly two-thirds of the country's steel is supplied by foreign companies, so Canadian steelmakers would face a lot of competition. 'Much of that steel is unfairly traded and dumped into the Canadian market,' he said. 'That's accelerated now that the U.S. has 50 per cent tariffs on all foreign steel coming into the U.S.' Garcia said another problem is that most of the steel produced domestically is coil, and steelmakers would need to diversify their product to appeal to Canadian businesses. 'That requires investment, that requires time,' he said. 'There has to be an environment where Canadian steelmakers are making the … type of steel that is consumed in Canada and have a free-trade environment to win that business.' The federal government said last month that it is setting aside $1 billion from its Strategic Innovation Fund to help Canadian steel companies advance new projects. But Garcia said there isn't an uptick in demand for those projects yet. 'We've got concerns': Steel import restrictions spark fear of shortages in Western Canada Carney says Canada to curb steel imports to protect industry 'Our challenge is to bridge the company into the future,' he said. 'Make sure we're making the right type of products, that are demanded by Canadian customers, and be there when that demand appears.' • Email: novid@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Calgary Herald
4 days ago
- Politics
- Calgary Herald
Opinion: Solid reasons to lower the voting age to 16
Article content With recent news covering referendums in Alberta, the Longest Ballot Committee signing up more than 200 candidates in the Battle River–Crowfoot byelection to protest for electoral reform, and a Canadian senator calling for the voting age to be lowered to 16 — as Britain has recently done — there has been renewed discussion around democratic engagement. Article content While it is not yet a popular idea, I echo Sen. Marilou McPhedran's advocacy to lower the voting age to 16, as this would increase political engagement and most opposition is based on misconceptions. Article content Article content Article content Many opponents argue that teenagers are not mature enough to vote. However, most people are unaware that provincial and federal political parties already allow membership at 14 years old, giving teens the ability to vote in leadership contests such as those that selected Prime Minister Mark Carney and Premier Danielle Smith, as well as on party resolutions that often become law. Canada has already accepted that teens younger than 16 are mature enough to vote within internal party processes. Article content Article content In Alberta, one could argue that the several thousand UCP members who vote at the party's annual AGM hold more sway over the premier and provincial policy than the average voter, especially considering legislation passed in recent years that reflects party resolutions. Article content Some claim that because many teenagers do not have jobs or pay taxes, they should not vote. But it is worth noting that ' on average, two of every five Canadian households do not pay anything toward federally and provincially funded expenses' (Financial Post, 2019). Article content Article content No one is seriously suggesting that 40 per cent of voters should lose their vote. Moreover, 16-year-olds in Canada are legally allowed to drive, enter into contracts, work in most jobs, be tried as adults, make independent medical decisions and, with parental permission, join the military or get married. If we grant them these responsibilities, why not the vote? Article content Young people are the least likely to vote in elections. Elections Canada estimates that only 53.9 per cent of 18- to 24-year-olds voted in both the 2015 and 2019 federal elections. Turnout rises with age, reaching 79.1 per cent among voters aged 65 to 74. In Austria, where 16-year-olds have been eligible to vote since 2007, researchers found that they turned out between two and 10 percentage points more than first-time voters aged 18 to 20, and maintained the habit in future elections (Aichholzer & Kritzinger, 2020). Article content In Scotland, post-referendum research shows that teens enfranchised at 16 continued to vote at higher rates than peers who had to wait until 18, confirming that starting earlier helps build lifelong voting habits (Eichhorn & Huebner, 2025). Article content Canadian students are often introduced to democratic participation early through the Civix Student Vote program, which mirrors real elections and helps prepare future voters. In the most recent federal election, 949,361 students cast a ballot in this mock vote. Article content It would be far more effective to allow these students to vote in real elections while they are still in school, taking social studies courses that keep them informed about current events and the political process. For those in Alberta concerned that schools are indoctrinating students with progressive beliefs or influencing them to vote for the Liberals or NDP, the most recent Student Vote results are revealing. In 2025, students would have elected a Conservative minority government, compared to the adult population, which returned a Liberal minority. Article content Article content That alone casts doubt on fears of ideological bias. Article content Canada lowered the voting age from 21 to 18 in 1970 without disruption. According to Statistics Canada, enfranchising 16- and 17-year-olds would increase the voting population by only about three per cent. And if that three per cent has such a profound effect on election outcomes, then I would argue we have far bigger issues in our democracy than teenage maturity. Article content
Calgary Herald
6 days ago
- Business
- Calgary Herald
Cohere launches AI agent platform for businesses
Toronto-headquartered artificial intelligence startup Cohere Inc. has officially launched its AI agent service for businesses. Article content The company is aiming to sell its agentic AI platform, called North, to private and public sector organizations in Canada and worldwide. Cohere is 'working with large enterprises across key markets in North America, APAC, and EMEA,' it told the Financial Post in an emailed statement. Article content Article content Cohere initially debuted North in January. The startup integrated the platform into the workflows of a select group of companies including the Royal Bank of Canada, Dell Technologies Inc. and South Korea's LG CNS Co. Ltd., an IT service firm and subsidiary of conglomerate LG Corporation. Article content Cohere and RBC for instance, jointly developed North for Banking, a generative and agentic AI workspace tailored to financial services firms. The platform lets users search for answers and solutions via a customized chatbot, and to use AI agents to automate tasks from drafting emails to summarizing reports and creating data visualizations. Article content Last week, Cohere announced a partnership with telecommunications giant BCE Inc. to sell AI tools to governments and businesses in Canada. The tie-up will allow organizations to access Cohere's AI services, including North and its large language models, through Bell Canada's AI data centres and fibre network. Article content Article content Cohere's public launch of its AI agent platform comes as the startup makes a major push to secure its position as Canada's top AI provider and as a leading global supplier of AI tools for enterprises. Article content Article content In June, the company announced a new alliance to deploy its AI tools and platforms across the Canadian and U.K. governments to 'strengthen the public sector and national security,' it said in an official release. Article content In July, Cohere said that it would open a second Canadian office in Montreal this year, which will initially hire seven staff, with the aim to triple that number within a year. In the same month, the company launched a new office in Seoul, South Korea, in an effort to shore up its regional operations and to win more Asia-based clients. Article content Cohere has over 400 staff in offices in Toronto, San Francisco, New York and London, with the majority of its workers based in Canada. Founded in 2019, the startup has raised over US$970 million from investors like chip giant Nvidia Corporation, cloud computing provider Oracle Corporation, and Quebec-based venture capital firm Inovia Capital. Article content
