Part of taking on responsibility, is being aware of dangers and pitfalls, and developing a plan to navigate them should they appear.

And so it is with home ownership. Despite efforts to plan and account for expenses, there are many things that may cross a homeowner’s path that they may have not anticipated- job loss, changes to family situation, or increase in consumer prices. Add to that a factor that many are aware of- but may not necessarily have built in- the eventual increase in interest rates, and there is potential financial disaster awaiting those who may have jumped into the home ownership pool without enough of a buffer to keep them afloat.

Jim Flaherty’s series of mortgage and HELOC changes were intended to sort through the homeowner pool, in a way, and to cut those out who were on the fringe- and representing trouble from the outset.

However, through these changes, and with Canadian household debt increasing, the Canadian housing market has still remained buoyant- and in some areas, absolutely exploded. Housing sales themselves have decreased this year- while the average prices for home nationally continue to increase.

Jeffrey Schwartz, Executive Director, Consolidated Credit Counseling Services of Canada, Inc. told Properywire.ca, that he is  seeing the positive effects from Flaherty’s changes, and feels that there has been some material impact on the market. It’s not a case of home ownership being an exclusive club, either; more so it is about matching appropriate product with appropriate consumer responsibly.

“There were two objectives with Flaherty’s mortgage changes. They have been effective in reducing the number of people taking on more debt than they can handle. Some can make payments today, but will be stretched pretty thin if income changes or rates go up. Those that are living on the fringe continue to have trouble, and are living on a tight wire. These mortgage changes have been useful in effectively taking these people out of the mortgage market.”

“The second objective was to encourage people to pay off debt faster, so that people are not carrying debt into retirement with them. People are encouraged to retire debt, so that they increase cash flow- and put out less towards interest payments.”

“We know this is working, because home sales have slowed. This is likely reflective of stronger people entering the market.”

It is important to view home ownership as goal, not as a right, and that certain steps must be taken and displayed in order to reach that goal, and that there is a downside if due diligence is not adhered to , as  Michael Kalles, President, Harvey Kalles Real Estate Ltd., Brokerage told Propertywire.ca, “Home ownership is an excellent option for those who are able to afford it, but don’t assume that it is for everyone…For everyone who can afford it, yes home ownership makes sense.  Look at what happened in the US. People were getting mortgages when they didn’t really qualify… In that case, it was a poor investment. “

“For those that are able to afford it, home ownership offers the opportunity for people to invest in themselves, take advantage of capital gains, build equity and house their families.”

Kalles is quick to remind too, that it always comes down to assessing and delivering on the client’s best interests, even if that is not what they have indicated: “It’s not about making a quick commission; it is about the best needs of the client.”

Sometimes , even though it seems counterintuitive in a heavily competitive business reliant on winning clients over, it makes good sense to send them away: “If any client has only been approved for, say 600,000- but are absolutely insistent that they look at $800,00 properties,  than they are stretched beyond their financial comfort level. “

Schwartz suggests that solutions must be more behavioural than episodic: “People need to understand where their money is going, and look for alternatives to save money- for instance in entertainment, dining out and groceries .These are easy areas to turn a household budget into a surplus rather than a deficit each month.”

“Furthermore, people need to take that money and turn it into savings, and make that process invisible- through payroll deductions or automatic transfer of funds. Take this process out of your hands, and it will happen. If you don’t, it won’t.”

Canada’s unemployment rate fell to its lowest in more than two years as a combination of more self-employed workers and fewer job seekers in May pushed the key economic marker down to 7.4 per cent.

Statistics Canada said 22,300 new jobs were created last month, slightly above consensus estimates following April’s strong 58,000 jobs gain. The last time Canada’s unemployment rate was as low as 7.4 per cent was in January 2009, a few months after the economy had plunged into recession.

The finer details of the May report were less impressive, however.

The jobless rate dropped two-tenths of a point due as much to the fact that 27,500 fewer Canadians were actively looking for work as to the new jobs created.

While all the jobs were full time, they came in the less desirable self-employment category, which could indicate that many Canadians turned to creating their own employment because they were unable to find more traditional work.

“Small business is of vital importance to the Canadian economy, but job creation within this category in a soft spot for the economy (and) is always a knock against the quality of the headline gain,” Derek Holt, vice-president of economics for Scotiabank, said in a note to clients.

The number of employees in Canada actually dropped by 7,500 in May and the goods producing sector of the economy saw a pullback in employment, with manufacturing taking the biggest hit with 22,500 fewer jobs. The month also showed the public sector is starting to tighten, shedding 44,300 jobs as governments begin dealing with large deficits.

The markets treated the report as a status quo finding. The loonie barely budged after the data was released early Friday, although the currency swooned in later trading on dipping oil prices.

Holt noted that hours worked rose just 0.3 per cent and wages were only 2.2 per cent higher than last year, down from 2.6 per cent in March.

“After stripping out inflation, real wages are going nowhere and that remains bearish for consumer spending as households are simply unable to post income growth beyond covering higher fuel and grocery costs in a generalized commodity shock,” he said.

Still, analysts said any job gain following April’s strong advance is good news. It showed April was not a mirage.

“The details in this month’s job growth were not all rosy, but any gains at all were impressive given that they came on the heels of an outsized 58,000 prior-month tally and amidst signs that the economy is decelerating sharply in the second quarter,” said CIBC chief economist Avery Shenfeld .

Not to be overlooked, he added, is that private sector employers added workers, although a small number.

Another positive for the future, said Jimmy Jean of Desjardins Capital Markets, is that the factory sector is likely to recover once supply chain disruptions from the Japanese natural disaster are resolved.

The summer months will also benefit from an additional $10 million Ottawa is pumping into the summer jobs program to encourage student hiring. Labour Minister Diane Finley says government support will create 36,000 student jobs this summer.

Most economists had predicted a slowdown in job creation not only because they viewed April’s increase as an above-trend anomaly but also because other economic indicators pointed to slowing activity.

Meanwhile, consumer spending and housing have fallen off of late and, earlier in the week, the government reported that the important export sector shrank by 1.1 per cent in volume terms in April.

Despite the softness, Canada’s economy is doing far better than its southern neighbour, which in the same month created only 54,000 jobs, a tiny amount given the size of the U.S. labour force.

In the past year, Canada has more than recouped all the jobs lost during the 2008-2009 recession, creating 273,000 in the last 12 months alone, most full time and in the private sector. Meanwhile, the U.S. remains several million shy of its pre-crisis level and the jobless rate is above nine per cent.

In May, most of Canada’s employment gains came in the retail and wholesale trade industries, and in information, culture and recreation. There were losses in manufacturing and educational services, mostly of those in post-secondary institutions.

Regionally, the lion’s share of job creation came in Quebec, which saw its employment rise by 24,800, while Ontario saw a drop-off of 16,100. http://ca.finance.yahoo.com/news/Canada-jobless-rate-falls-capress-4119373303.html?x=0

Canada’s recreational property market appears to be bouncing back from a recessionary lull as buyers seek to capitalize on equity and stock-market gains, Re/Max says in a report Monday.

Demand rose 78% in the 46 markets across the country covered by the realtor’s Recreational Property Report, while sales had risen or were on par in 41% of those centres.

“Buyers who held off during the recession are back in recreational property markets from coast-to-coast,” says Pamela Alexander, chief executive of Re/Max for Ontario-Atlantic Canada. “Their patience has been rewarded with more affordable recreational values and greater inventory levels.”

While prices have remained stable in many markets, values could be found for higher-end properties, pushing luxury sales higher in almost half of the markets examined, Re/Max said in its report.

Opportunities were also to be found in Western Canada.

“Prices are down as much as 20% from peak levels reported in 2006-2007, bringing ownership within reach to many potential purchasers,” said Elton Ash, regional executive vice-president of Re/Max in Western Canada.

On British Columbia’s Salt Spring Island, for example, starting prices for oceanfront properties have fallen to $669,000 today from $1.3-million in 2008.

In the North Okanagan Valley, a three-bedroom, winterized recreational property on a standard-sized waterfront lot — the common measures used in Re/Max’s report — that sold for $1.5-million in 2008 now sells for $995,000.

Starting prices for similar properties on Alberta’s Sylvan Lake are now at $800,000 from $1.25-million previously and in the Rocky Mountain resort town of Canmore, a two-bedroom condo has fallen to $229,000 from $320,000.

“The strengthening oil sector has . . . brought Albertans back into mix, driving demand for both local and coastal B.C. properties,” Ash said.

Another factor influencing the recreational property market has been that Americans who bought when the Canadian dollar was at 65 U.S. cents are now cashing out, boosting inventories.

The report found that there has been some tightening for entry-level properties in about one-third of the markets covered. As well, it noted, the supply of properties has tightened considerably at the lower end in Ontario, Quebec and Atlantic Canada.

It also noted that recreational properties are moving more toward year-round homes, with fewer traditional cottages available for sale.

“These waterfront properties are disappearing from the landscape. Meanwhile, today’s average recreational getaways are truly earning the distinction as the “home away from home,” with many of the bells, whistles and comforts of their residential counterparts http://business.financialpost.com/2011/06/13/recreational-property-markets-bouncing-back-remax/

 The TD Bank says Canadians can expect borrowing costs to remain near record lows for the rest of the year.

That’s because the pace of the economic recovery is expected to slow sharply in Canada, the United States and much of the world.

As such, the Bank of Canada will likely refrain from raising its key interest rates until 2012, TD says.

The central bank has had its policy rate set at one per cent since September. The rate was set at all-time low of 0.25 per cent through much of the recession, to stimulate borrowing and spending, until a series of rate hikes began last summer.

The still-low rates have been a double-edged sword for Canadians who are already piling up debt at record levels, according to the Certified General Accountants Association of Canada.

The association says Canadian household debt has reached a record $1.5 trillion, and calculates that more than half of indebted Canadians are borrowing just to afford day-to-day living expenses such as food, housing and transportation.

Low interest rates will make it easier for Canadians to keep borrowing, setting them up for a fall further down the road.

Debt is partly contributing to a slowdown in Canadian growth, says the TD Bank, because households are too tapped out to spend and stimulate the economy.

The bank says Canada’s economy is believed to have already slowed to 1.3 per cent growth during this current quarter that ends at the end of the month, one-third the pace of the first quarter’s 3.9 per cent gain.

The rest of the year will see growth crawl along between two and 2.5 per cent, the bank says.

As the recovery moderates, so will job growth. The bank says it expects the unemployment rate in Canada will remain above seven per cent throughout its forecast period to the end of 2013.

With little help from consumers, Canada will need to depend on exports and business investment to fuel growth. http://www.therecord.com/news/business/article/547758–td-bank-forecasts-low-interest-rates-this-year

VANCOUVER – Canada’s housing market is entering overheated territory and many Canadians could be financially hurt once interest rates begin to rise, Bank of Canada governor Mark Carney is warning.

The central banker on took his case for moderation on Wednesday to Vancouver, the epicentre of Canada’s hot housing market where he says home prices are now on par with Hong Kong and Sydney, Australia, as they relate to average incomes.

And some sectors of the market, like condos in big cities, could overshoot because of speculation from foreign investors.

The housing market is still expected to moderate, he said, but recent signals have been mixed.

Carney has been cautioning Canadians for about two year against getting overextended on mortgage borrowing, but Wednesday’s speech to the Vancouver Board of Trade suggested some frustration that his words have mostly fallen on deaf ears.

The governor said he has been expecting the housing market to slow, but besides some stuttering signals, it has picked up again of late along with borrowing and mortgage credit.

Once again, Carney repeated his warning to Canadians about becoming overextended.

“It is important that it’s emphasized, because it can be forgotten, that we are living in extraordinary times with interest rates that are unusually low, that the outlook for the Canadian economy, the strength of the Canadian economy, the expectations both in the medium term and sooner than the medium term, is that rates are not going to stay at these unusually low levels,” he said told a later news conference.

“And so Canadians in taking on debt, or Vancouverites, more specifically, in taking on debt, need to…ensure that they can continue to service those debts comfortably in a higher-rate environment.”

Carney’ speech came on the day the Canadian Real Estate Association released new data showing that average resale home prices rose 8.6 per cent in May from a year ago, and that in Vancouver prices were up 25.7 per cent to $831,555.

At those levels, Carney said Vancouverites are paying 11 times family household income for a home, a multiple similar to global housing hot spots Hong Kong and Sydney, Australia.

When asked if he had any advice to young people who hope to buy a house in Vancouver, Carney responded, “Well, get a good job. That would probably be a good one. Study hard, stay in school and get a good job. How’s that?”

The situation is not as dramatic in the rest of the country, but it’s bad enough, he said.

He noted that it took nearly 12 years for real estate investment to regain its peak after the 1990s recession. It has taken a year and a half this time and, in fact, average home prices are now 13 per cent higher than where they stood before the 2008-2009 slump.

Carney takes some of the blame for the unprecedented run-up in prices, since the key difference between the two eras is that he drove interest rates down to historic lows in order to salvage the economy. The policy succeeded, but at a cost of driving investment from more productive outlets of the economy to housing.

But he also lays some blame on home buyers, who he implies should know better. He said some Canadians are taking on mortgages as if they believe current ultra-low rates will last forever. They won’t, he warns.

“Rates will not remain at their current levels forever,” he said. “(And) the impact of eventual increases is likely to be greater than in previous cycles.”

A four per cent real mortgage interest rate would see home affordability in Canada fall to the worst level in 16 years, he said. The current real mortgage interest rate, which excludes inflation, is about 2.4 per cent.

Other than issuing a general alert, Carney gave few hints what he can do about it and implied that the ball is in the federal government’s court to tighten borrowing requirements again if necessary.

Carney refused to comment when asked whether the government should restrict home ownership to those with Canadian citizenship.

“Obviously, if one restricts demand and takes an important element of marginal demand out of the equation there’s going to be an adjustment to price,” he said.

“But those type of decisions are decisions for communities to make, and they’re complex decisions, and nothing should be read into our commentary about the current environment and housing, whether it’s in Vancouver or across the country.”

“We’re not weighing into that issue at all.”

Finance Minister Jim Flaherty this week also expressed concern with household debt — now amounting to a record $1.5 trillion in the aggregate — and noted he has tightened mortgage requirements three times in the past three years.

Carney suggested in his speech that he will use monetary policy, or interest rate setting, to impact the inflation rate and not exclusively the housing market. http://ca.finance.yahoo.com/news/Carney-warns-trouble-capress-560228003.html?x=0

The European sovereign debt crisis, a potential hard landing in China, weak U.S. economic data, and the U.S. debt ceiling debate have provided investors with plenty to worry about. Since none of these problems look like they will be resolved in the immediate future, don’t be surprised if global financial markets continue to be in a rough patch for at least a few more weeks.

Despite the unpleasant stew that is brewing, it is not noxious enough to either derail the economic recovery or upend the market rally of 2011, says Joseph P. Quinlan, chief market strategist at U.S. Trust, Bank of America Private Wealth Management.

In a recent research note, Mr. Quinlan points out that June is often a lousy month for equities, as the Dow Jones Industrial Average has fallen for the past six years.

“Early indications are that this June will be no better,” he says. “However, beyond the daily gloom and doom, investors should not overlook the fact that the financial markets and global accounting, while facing some stiff headwinds, also have a number of significant tailwinds working in their favor.”

The strategist provided ten reasons why investors should not panic.

1. Corporations are flush with cash

After a two-year profit boom, corporations are putting this money to work in the form of both climbing capital expenditures and hiring. At the same time, share buybacks and higher dividends are on their radars. So despite the deleveraging of U.S. households and the government’s credit limit challenge, the strong capital position of many corporations will be an important driver of the economic expansion in the medium term.

2. Unemployment numbers are misleading

The U.S. unemployment rate remains elevated at 9.1% in May 2011. However,95% of the skilled labour force is currently employed as workers with four-year college degrees or more have an unemployment rate of 4.5%. This cohort accounts for a disproportionate share of personal consumption.

3. U.S. exports are going strong

Total exports hit an all-time high of US$172-billion in March 2011. With the weak U.S. dollar and continued growth overseas, exports should remain strong over the medium term and cement America’s position as the top exporter of goods and services globally.

4. State finances are improving

The weak housing market continues to put pressure on state finances, but the worst is over for many as better-than-expected retail sales and other receipts are helping to establish a floor for their financial position.

5. The Fed isn’t changing its stance

The Fed’s second round of quantitative easing is due to conclude at the end of June, but the central bank’s benign monetary stance will be maintained well into the second half of 2011. The Fed is expected to err on the side of too-easy money rather than premature tightening, unlike the European Central Bank.

6. China will engineer a soft landing

With some US$3-trillion in reserves, the Chinese government has the wherewithal to keep growth in the 7% to 8% range in the near term. Despite challenges such as rising wages and higher food and energy costs, China’s economy may slow, but it will still grow faster than most countries again this year. It managed to post more than 9% GDP growth in 2009 as the global economy slumped.

7. Economic weakness provides relief for food and energy prices

The soft patch for global economies will help contain inflation risks and improve consumer sentiment around the world.

8. The euro crisis will be contained

The euro zone’s wealthiest member, Germany, will provide both the political will and capital to prevent Greece, Portugal or Ireland from imploding.

9. The U.S. debt ceiling will be raised

The debt ceiling has been increased more than 100 times in the past. Once this happens again, the focus will shift to tackling the U.S. federal budget deficit.

10. Everyone is not broke

Nor are they in the midst of austerity campaigns. In fact, the IMF estimates that developing nations have somewhere around US$7.5-trillion in international reserves. The deployment of these excess savings will come faster as a result of slow growth in the United States and Europe, helping the global economy maintain a growth rate of 3.5% to 4% in the near term.

http://business.financialpost.com/2011/06/16/10-reasons-not-to-panic/

Statistics Canada says Canadian households slid deeper into debt in the first quarter as the use of credit outpaced income growth.

The ratio of household debt to disposable income rose to 149.47 per cent from 147.64 a year earlier.

That means Canadians owe $1.49 for every after-tax dollar they earn.

Credit market debt grew by 1.3 per cent in the quarter, while personal disposable income grew by 0.7 per cent.

Mortgage debt grew, as Canadians continued to take advantage of historically low interest rates.

However, the increase in consumer credit debt slowed along with lower household spending.

http://ca.finance.yahoo.com/news/Canadians-slid-further-debt-capress-3742141688.html?x=0

1. Moncton, N.B.

For the second year running, Moncton tops our list as the best place in Canada to buy real estate. Not only are houses here very affordable — with an average price of $163,000 — but household incomes average a respectable $72,093. This year, it was the only city out of 35 that got an A+ in our value ranking, meaning that homes are well within reach for local residents who make a typical salary. In fact, it takes only 2.26 year’s worth of the average family’s annual household income to buy (before taxes and other expenses).

With a population of 126,400 — and growing — the city has a wide range of housing. Jobs abound in this diversified bilingual town, with UPS, FedEx, Purolator, Royal Bank and ExxonMobil all calling Moncton their regional home.

2. Regina, Sask.

Four years ago, Regina had the country’s hottest housing market. This year, the city nabbed the No. 2 spot on our list, mainly because its economy is on fire. Sectors such as oil, potash, uranium, diamonds and farming are all booming, and Regina has the lowest unemployment rate of all the cities we ranked, at 4.6 per cent.

Much of the growth is due to healthy immigration into the province, which reached a record 3,400 people in 2010. Although housing prices have more than doubled over the past four years, the average cost is still a reasonable $260,000.

GDP expected to grow by 3.4 per cent this year, and a large grocery warehousing and distribution firm recently opened a one-million-square-foot facility for trucks to drop off and transfer goods, making Regina a new Asia-Pacific gateway for trade and adding 800 new jobs in the city.

3. Fredericton, N.B.

Overall, the province of New Brunswick did well in our ranking. While Moncton topped the chart at No. 1, the provincial capital of Fredericton was right on its heels at No. 3—up from the No. 4 spot it held last year. What accounted for the rise? Its value score jumped up to an A and its momentum score was boosted to B+.

The data shows a cheap average house price of $174,000, coupled with a respectable average household income of $76,659 annually. That may not sound like a lot of money to people who live in big cities, but in Fredericton, an average worker’s buying power is huge. It takes only 2.27 years worth of that annual household income (before taxes and expenses) to buy a home—a close second to Moncton in our measure of affordability.

But though house prices are low, they still made healthy gains of 4.5 per cent over the past year, the second largest increase on our list. Then there’s Fredericton’s rock-bottom unemployment rate, which stands at just 5.6 per cent.

4. Winnipeg, Man.

From manufacturing and government to agriculture and education, Winnipeg boasts a diverse economy that has weathered the recession well. The city of 642,000 people has an average house price of $239,183, an average annual household income of $80,859, and an attractive affordability rating.

The south side of the city has traditionally been the most popular, particularly with families. Neighbourhoods like River Park South, Linden Woods, Whyte Ridge, Island Lakes and Sage Creek all boast top schools and facilities—as well as resale value.

There has been demand for condos in the downtown for a while, and many older factory buildings have been renovated into loft-style condos along the waterfront and are gaining popularity. Downtown revitalization remains an ongoing process with a new baseball stadium, the Forks and the MTS Centre providing a solid base for further development.

5. Saint John, N.B.

Saint John is the largest city in New Brunswick, situated in a scenic spot at the mouth of the St. John River. Though house prices here have risen by 27 per cent over the last four years, demand is forecast to stay strong well into 2011. That’s because the average home costs just $179,000, while unemployment is a super-low 6.4 per cent and projected to keep falling.

While known primarily as an industry town that is home to thousands of refined petroleum, manufacturing and transportation jobs, Saint John has also quietly developed a diverse and vibrant arts scene. The Imperial Theatre, built in 1913 and restored in the 1990s, has been designated a National Historic Site. It plays to packed houses year-round and is home to the city’s symphony, opera, ballet and theatre.

6. Saskatoon, Sask.

Saskatoon made our list mainly because of one thing: its hot economy. The city ranked No. 6 overall and received the highest marks for its growing industry and rock-bottom unemployment rate. Aside from being the world’s largest producer of potash, and home to one of the globe’s largest publicly-traded uranium companies (Cameco), Hub City has gradually evolved into a destination for young people in the technology and health sciences industries. Housing prices have grown by 27 per cent in the past four years and the average is now about $296,000.

For entry-level housing, the west side is your best bet. Though communities such as Stonebridge in the south and Willowgrove in the north are newly established, developers project a high demand and are responding accordingly.

7. Gatineau, Que.

Often obscured by Ottawa’s long shadow, Gatineau — just across the Ottawa River in Quebec — has all the benefits of the capital’s steady economy plus a much more affordable real estate market. It has several massive office towers for government workers, and the unemployment rate is expected to fall in the years to come. Gatineau earned a high grade for value, with the average house costing just $220,500 — about $14,000 less than in Ottawa.

The former city of Alymer is now a suburb of Gatineau where many anglophones are taking advantage of the hot market for new homes—as well as its golf courses, spas, and bicycle paths. The former city of Hull, across the Gatineau River, is also a safe bet.

8. Charlottetown, P.E.I.

No longer known for just lobster and potatoes, Charlottetown has many of the attractions of a larger city — but with less crime and a close-knit community. It received a value grade of A for its extremely low average home price of $175,000. Over the past four years, 65 per cent of all homes listed were sold, making Charlottetown one of the healthiest resale markets in Canada. The unemployment rate is still high at 9.2 per cent, but it’s projected to dip below 8 per cent by the end of 2011.

When scouting out real estate buys, look for gorgeous historical homes in the downtown core that have been completely renovated, or consider a condo at Patterson Terrace. A two-bedroom unit near the ocean starts at $150,000. Second-home buyers will also not be disappointed.

9. St. John’s, N.L.

St. John’s tied with first-place Moncton for the highest score in momentum this year. Its biggest resource is the ocean, which now provides Newfoundland with an offshore oil industry attracting scores of newcomers in search of work. Last year, the economy in St. John’s grew by 5.8 per cent and the area saw the emergence of a new metal mining sector, with construction already underway on a nickel processing plant near Long Harbour, about an hour west of the city.

Although house prices have gone up by almost 36 per cent over the past four years, the average house still goes for just $255,000. http://ca.finance.yahoo.com/news/The-best-deal-real-estate-msense-1349119208.html

OTTAWA – Canada’s economy expanded an impressive 3.9 per cent in the first three months of this year, but there was little cheering in markets with the performance.

Not only was the number slightly below the four per cent consensus expectation, but the elements of growth clearly signalled a sharp braking in the economy ahead.

The most encouraging news in the much-awaited Statistics Canada report Monday is that the last month of the quarter — March — saw a gross domestic pick-up of 0.3 per cent, slightly above consensus.

“Its not just the headline that matters. It’s the composition of (first quarter) growth that is disconcerting,” said Derek Holt, vice president of economics with Scotiabank.

The composition included a heavy dose of production placed in storage awaiting future sales, with inventory build-up accounting for three quarters of the growth. Meanwhile, consumers were in hibernation, contributing only 0.1 percentage points to growth, and net trade was a drag, with the solid 1.6 per cent rise in exports from the previous quarter swamped by a 2.2 per cent gain in imports.

The bright spots were in business investment, manufacturing and housing.

Statistics Canada also made several revisions Monday, upgrading 2010 growth a notch to 3.2 per cent, but downgrading 2009 three ticks to a loss of 2.8 per cent, making it the second worst year for the Canadian economy in half a century. As well, the agency trimmed growth in the fourth quarter of 2010 to 3.1 per cent from 3.3.

Markets reacted negatively to the report initially, shaving one-tenth of a point off the loonie to 102.35 cents US.

The Canadian quarter was still much better than the U.S.’s 1.8 per cent advance, but it was below the Bank of Canada’s call for a 4.2 per cent pick-up. The central bank expects the second quarter, which ends on June 30, to slow to two per cent, but analysts said it could come in lower given the headwinds building in the world economy.

For the Bank of Canada, the report largely removes any question that governor Mark Carney will do anything but stand pat for another interest rate setting Tuesday, leaving the policy rate at one per cent.

Last week, several Canadian banks trimmed mortgage rates in another signal that the cost of borrowing will likely remain at very attractive levels for some time.

Bank of Montreal economist Douglas Porter said the omens are pointing a slower momentum for the economy than the central bank had projected in the spring, which should give Carney reason to remain inactive.

“A couple of weeks ago we pushed back our forecast on the first rate increase to September, and if anything, the risks are that the bank may wait even longer than that,” Porter said. Holt believes the bank may stay interest rate hikes until the end of the year.

Economists have also sounded a mild alarm on the global economy due to the aftershock of the Japan natural and nuclear disaster, the dampening impact of high oil prices and renewed concerns over government debt in Europe and the U.S.

The expectation is that Canadians likely saw the best the economy has to offer in the first quarter, although as yet no reputable economist is predicting an outright contraction.

In the first three months, all major industrial sectors, except for retail trade and arts, entertainment and recreation, increased their output.

Goods production rose 1.8 per cent from the previous quarter while service-producing industries increased 0.7.

Manufacturing as well as mining and oil-and-gas extraction were the largest contributors to growth.

Construction, transportation and wholesale trade also recorded notable increases.

The Canadian Press http://www.therecord.com/news/business/article/539796–canadian-economy-grows-3-9-in-first-quarter

Buying a house in the city or suburbs can be complicated enough, but buying a cottage or vacation property outside of town requires even more due diligence.

In town, you probably wouldn’t ask if the water coming out of the tap is drinkable. Nor would you wonder if the plumbing was hooked up to the sanitary sewer. But these are exactly the sorts of questions you should ask when buying a cottage, plus a few more.

1. Get an inspection: Cottages are usually occasional residences and so may not be as properly maintained as they should be. This is why every purchase should be conditional a satisfactory professional home inspection. If the cottage has a wood-burning stove or fireplace, then a certificate must be requested from a Wood Energy Technical Transfer specialist, to confirm that the system was installed and is operating correctly.

2. Is the water drinkable? There are two areas of potential concern when it comes to water – the quantity and quality. Is there enough to satisfy family needs and is it good enough to pass the local health department requirements.

Ask the sellers for these things:

• A potability certificate from the local health authority, confirming the water is safe to drink;

• Confirmation that the well, the pump and related equipment have performed adequately during the Seller’s occupancy;

• Confirmation that there is an adequate rate of flow for normal household use;

• Provision of a well driller’s certificate, if available; and

• The location of the well.

A separate inspection may be needed by a well specialist. If nothing else it gives you an idea of what it would cost to replace the well if it fails.

3. How’s the septic system? Septic systems present their own difficulties because it is usually difficult to tell during an inspection how long the system may last. The replacement cost can be up to $20,000, especially if there are stringent environmental regulations in effect in your area.

Buyers should ask for confirmation that:

• The system was installed with all necessary permits;

• The system has been adequately maintained;

• The seller is not aware of any malfunctions;

• The seller will provide copies of any inspection or approval reports in their possession;

• The seller agrees to pump out the tank at their expense prior to closing; and

• There are no work orders on file with the Ministry of the Environment or the local municipality.

The buyer should arrange for their own separate inspection of the system itself.

4. What’s the road allowance? Even if your cottage fronts on water, this does not give you ownership of the land up to the lake. The first 66 feet fronting onto the lake is typically owned by the local municipality and is referred to as the shore road allowance.

Although you have access to the water, you can’t stop others from using it. Nor can you build anything on that 66-foot piece of land. Many cottagers have found out afterwards that either all or part of their cottage was built on land that they do not own.

You may be able to buy the land from the municipality, but it is a process. If you can get an up to date survey from the seller, this should answer your questions. Also inquire to make sure that any required permits were obtained to build a dock or boathouse, as there is no automatic right to do this. In all cases, make sure you have title insurance, which should assist with most of these types of issues.

5. Access to the cottage: If you do not have year round access by a city road, then you must ask how you get from the road to your property. If it is a private right of way over a neighbour’s land, you must understand the terms of this agreement to ensure it is year round access and it is clear who is responsible for maintaining the road.

If there is no registered right of way, it can be a nightmare, with owners fighting over who has the right of way and who owns it.

For all of these reasons, it is recommended that buyers work with a local real estate agent who should be familiar not only with each of these issues, but more importantly, will be able to recommend the professional inspectors and town officials who can satisfy a buyer’s concerns.

By being properly prepared before buying a cottage, you will avoid unwelcome surprises after closing http://www.moneyville.ca/article/996575–5-things-to-ask-when-buying-a-cottage