Tag Archives: TD Bank

Housing Correction Forecasts

We keep asking and wondering if there’s a housing correction coming in Canada – or at least in the hot-market cities. Well, good luck finding a definitive answer. A heads up first: This is exactly like investing. Ignore the forecasts and news stories and just carry on with your life. If you’re not selling in the next while – who really cares? It should be entertainment news more than useful news to 90% of home owners!

The Globe and Mail recently published the forecast and predictions of a whole bunch of experts and companies that ought to be the experts. The short answer? It might go down a ton…or it might go up. You pick who you want to believe. If you’re a pessimist, there’s a forecast you’ll love. If you’re an optimist, there’s a forecast to fit your mindset…

Deutsche Bank: 60% drop coming…their analyst used prices compared to incomes and prices compared to rents.

Fitch Ratings: 26% drop…their emphasis was on factors that drive demand for homes.

Bank of Canada: 20% drop..factoring in the 10-year bond rate as measuring stick for mortgage rates and our per-capita after-tax income.

International Monetary Fund: 11% drop…they’re new at Canadian estimating and include population growth, income and employment growth as major factors.

TD Bank: 11% drop…TD economists consider median family income, interest rates and employment levels as their key factors.

CMHC: 3% drop…They use four different models and the most complex calculations that would take half an hour to explain. They believe the housing market is anywhere from 16% overvalued to 13% undervalued, making it an average estate of a 3% drop.

Or you could pick one of the other models if you prefer to hear that prices will go up 13%.

Housing economist Will Dunning: 9% increase in values…As with CMHC, it’s complex to explain the modeling used. However, it’s the connection between rates and return on investment. Dunning believes we haven’t fully taken advantage of low rates, causing him to forecast a 9% increase this year and 25% over the next few years.

Pick the forecast you like, and good luck to you. But the question is what difference does it make? If you’re an investor, it might. But you and I need to live somewhere. We probably like our home, we’ve paid a ton of payments into it, may have kids in the school system and really aren’t going to move.

These forecasts help investors and lenders to tighten up, loosen up mortgage lending or other factors. But if you and I start to act on one of these forecasts, we’d be in big trouble.


Besides, are these forecasts for basically Calgary, Toronto and Vancouver? Would they apply to a condo in Penticton? Would they apply to an average but expensive home in Rutland or the outskirts of Edmonton? Is your home average and you’ll  be impacted? Is yours one of the top 10 most expensive in town?


Who knows who’ll get impacted or what economic earthquake or growth is coming…they’re guestimates and I choose not to let that impact my life, my home or my thinking, spending and actions.


Maybe we should revisit these forecasts next year. But, by then, there’ll be a lot of new ones to wonder about.

Three Short Insights You Should Know

J.D. Power Fall 2009 Credit Card Satisfaction Survey

Each fall J.D. Powers conducts a very comprehensive credit card survey. It rates overall satisfaction, along with how happy cardholders are with their rewards, payment processing, problem resolution, customer service, and fees.

This year, American Express rated five stars, head and shoulders above other national card issuers in all categories. At the bottom of the bottom, with the worst score on customer’s satisfaction with their credit cards were Capital One, along with GE Money. GE is a surprise, as they handle the Wal Mart cards, and Wal Mart prides itself on great customer service! As to Capital One – what’s in your wallet? I hope it’s not one of their cards!

But the scary response to the survey was that 53% of us did not know the interest rate on their card, even though it is printed on every statement. Not knowing that we are paying around 20% on our credit cards is not good news!

Scotiabank can’t be happy with a bunch of national press recently. But there’s a great lesson for anyone over age 59 to learn! All banks offer seniors a no charge service banking packages, or greatly reduced service charges at various ages, but for most it’s at age 59. Barry Ashpole, a 66-year old college teacher, had the TD and Royal automatically lower his fees, because all the banks have your birth date on file. But Scotia kept charging him the full service charges for seven more years! When he discovered the huge overcharges, he hit a wall of no help to get this reversed, and fought it all the way to their Ombudsman’s office. At that point, he received a six month refund of $71. They wouldn’t refund the other six and a half years! You need to make sure you know when you are entitled to a break of the huge service charges, or you’ll get taken, as Barry Ashpole found out the VERY expensive way.

And a final update on your credit cards: Time and time again, I point out how critical it is to check your credit card statement line by line. Stuff shows up that’s not yours, merchants who accidentally, or because of a kinky staff member, charge things twice, and all kinds of errors can and do happen. But less than 10% of us look at our statement items – and that number is way lower if you get your statement on-line!

There is a phrase you need to know. It’s called post transactional marketing. You buy something from a retailer on-line, or join a web site. Often you’ll get a pop-up asking you to join a loyalty program for deals, alerts, or whatever. Be careful, because in many instances, these pages look like they come from the retailer, but they’re third parties, and deeply buried in the fine print is a note that you’re actually going to have a monthly fee charged to your credit card! And it’s not small business, but the 1-800 Flowers, Barnes & Noble, airlines, Priceline and buy.com sites!

Be careful, as these marketers have scammed people out of over $1.5 billion so far, Facebook has now been hit with a class action lawsuit, alleging that they allow, promote, or profit from these post transactional marketing, and the U.S. Congress is holding hearings on the issue.