It is almost becoming an affront to the legacy of George Washington to have to grace the lowly greenback.

While the currency managed to claw back some ground amid turmoil on global markets this week, it remains on the verge of sinking below a pair of important thresholds. The first is the 2008 record low.

But perhaps an even greater indictment of the U.S. dollar is its depreciation against the euro, a currency that’s one sovereign default away from an existential crisis. At US$1.50, the euro will have climbed all the way back from last year’s plunge.

The downward trend is quickly lowering confidence in the currency among the major creditors of the United States.

“I think you’ll see a lot of turnover once we cross those thresholds,” said Mark Calabria, director of financial regulation studies at the Cato Institute in Washington, D.C. “And I think we’re going to cross those thresholds.”

Of the forces guiding the greenback, almost all of them promise further weakness.

About the only mitigating factor is the sheer economic power of the United States, which remains the world’s safe haven of choice, effectively putting a limit on the dollar’s losses.

“Absolutely, there is a floor under the dollar, but we’re not there yet,” Mr. Calabria said. And nobody knows quite where that floor sits.

Against a basket of currencies, the dollar has lost almost 18% since last June and more than 10% since December, raising the concern that panic selling has already set into foreign exchange trade. The U.S. dollar index fell to 72.933 on April 29, nearing the all-time low of 71.329 set during the financial crisis in 2008.

“The rout of the U.S. dollar has begun in earnest,” Dennis Gartman, a trader and editor of the Suffolk, Va.-based Gartman Letter, wrote in a recent commentary, noting the dollar’s fall against virtually every major currency in the world.     For the rest of the story, click here http://www.financialpost.com/news/Vanishing/4743690/story.html

Last September, my wife and I started scouring the city for a new house. We were living in a cozy bungalow, but with a growing kid and another on the way, we decided it was time to move.

Buying a new house is, of course, expensive, so I wanted to do whatever it took to reduce my costs. Most of the fees couldn’t be avoided, but there was one costly payment I desperately wanted to steer clear from: The mortgage penalty charge.

I had just over 12 months left on my five-year mortgage term, which meant that I either had to break my mortgage or stay with my current lender by transferring my mortgage to my new house. The latter option would have allowed me to avoid the fee. However, my lender couldn’t give me the best interest rate.

The new lender, a bank, was offering a variable rate of 2.25 per cent, a much lower rate than my old lender was willing to offer. I calculated that over the term I’d be better off paying the fee and taking the lower rate.

It was going to cost me $10,000 to break my contract. It felt like an unnecessary cost — I paid my lender so much in interest over the four years, why would I have to cough up so much cash?

I asked my broker to see if the lender would waive the fee, even though I was using a new lender for my next house, but they didn’t. Peter Veselinovich, vice-president of banking and mortgage operations at Investors Group, isn’t surprised. “The charge isn’t negotiable,” he says.

While the penalty may seem like an arbitrary sum, it’s not a cash-grab, he says.

The lender takes mortgage funds from money invested in GICs and other products and then it pays investors interest on those investments.

The idea is to match a five-year mortgage with a five-year GIC, so investors can get paid back at the same time as the mortgage comes due.

If a mortgage is broken, the lender needs to come up with money to fill the gap between the investment coming due and the mortgage ending. Hence the fee. The lender then takes that lump sum and invests it, so it can pay investors back when its GIC comes due.

The penalty is calculated two ways: you either pay 90 days of interest or what’s called an interest-rate differential, which is a penalty based on your old rate and a new rate based on a shorter term.

For example, let’s say you wanted to exit your 5 per cent five-year term with three years left to go. The lender would look at the current three-year term rate, which, say, is 3 per cent, and then charge you interest on the difference, 2 per cent, for 36 months. The sum also depends on how much money you still owe the bank.

However it’s calculated, the payment can be huge.

Darick Battaglia, a mortgage broker and owner of Dominion Lending Centres’ Barrie location, says that while it may seem as though people have to empty their bank account to pay the penalty, ultimately, by paying the lower rate, they’re getting that money back in mortgage savings.

Whether you’re moving houses, or just want to break a mortgage to take advantage of a lower interest rate, people often pay the penalty so they can free up more disposable income.

“It can help people get into a better financial position, because they have more disposable income,” says Battaglia. “They may find that it’s better to invest that money in an RRSP.”

If you’re moving, there are strategies to help reduce the penalty or even not pay it at all.

Almost all mortgages allow people to put a certain percentage of money down on a house every year; I was allowed to pay 20 per cent of my balance every 12 months.

In some cases, lenders will allow you to designate the first 20 per cent — it could be less or more depending on your lender — of the proceeds of a sale of a house towards the prepayment in order to pay down the outstanding balance and so reduce the mortgage penalty.

Investors Group is one institution that allows this, but not all do.

Battaglia has dealt with many lenders who refuse to honor this type of arrangement. They want two checks: one for the prepayment and one to pay off the mortgage.

My own lender refused to let me make one payment; I had to borrow money from my broker, who paid my prepayment three days before closing. I had to pay him back with some of the proceeds of the sale. It was a major hassle. But I did save about $1,500.

Some lenders will eat the fees themselves to retain the business. Again, most want the money. Battaglia says that some banks — he’s seen this happen with Scotiabank and TD — will waive the fee as long as you extend your term. He often uses the penalty as a negotiating tool.

“I’ll tell a lender I’m shopping around and while we’d like to keep a client’s business with your company, what can you do on the penalty?” he says. “A lot of times the penalty gets reduced or it’s paid off by the lender.”

Porting a mortgage to a new house is another way to avoid the fee.

Let’s say you have $100,000 left on a mortgage with a 4 per cent rate, but you need $200,000 more for the new house. The bank will give you the additional money at the new rate, which could be 3 per cent. You’d keep the same term or extend it and now you’d pay a blended rate, in this case 3.5 per cent on $300,000.

“There are no penalty costs, because you’re still honouring the original contract,” says Veselinovich.

Most people will have to open their wallet when they break a mortgage.

Fortunately, you can avoid paying administration fees that the lender will charge you. It’s not necessarily a big cost — Veselinovich says people get charged between $75 and a few hundred dollars — but why pay more money than you have to?

“These fees should be readily negotiable based on your past performance and your relationship with the lender,” he says.

While I did get my penalty reduced by making a prepayment before closing, I still had to write a cheque for about $8,000. It was painful at the time, but now that I’m in my new house, paying a new mortgage at a much lower rate, I don’t think about the penalty anymore.

Now I have to figure out a way to convince Best Buy to give me a deal on TVs http://www.moneyville.ca/article/981221–why-i-paid-10-000-to-break-my-mortgage

Canada’s economy created an impressive 58,300 jobs last month, almost all of them in Ontario, and a big portion of them part-time.

It was enough to bring the unemployment rate down to 7.6 per cent, matching the lowest jobless level since the early months of the recession.

Economists had expected a more modest 20,000 pick-up following a weak March. But they also noted that a higher number was in the offing due to possible one-time hiring for the federal election. Statistics Canada says most of the gains were in the service sector, but it was unclear whether many were related to the election campaigns. Although the jobs increase was dominated by part-timers, there were 17,200 new full-time jobs created in April.

The agency says that was enough to recover all the full-time jobs that were lost in the 2008-2009 recession for the first time.

However, hours worked still remain slightly below pre-recession levels.

Regionally, Ontario saw 54,800 jobs added, while six of 10 provinces actually saw their level of employment drop moderately during the month. http://ca.finance.yahoo.com/news/Canadian-unemployment-rate-capress-3308494693.html?x=0

A young couple who have been renting in our modest Toronto condo building recently bought a home a couple of miles away in a nice old neighbourhood with the aim of starting a family. The house is a big, detached fixer-upper and the renovation costs will be extensive.

In moving up to the rungs on the property ownership ladder, our young friends are committing themselves to a quantum leap in monthly expenses: They came up with a substantial down payment; they are taking on a mortgage payment, property tax bill and other expenses almost twice as large as their $1,600 rent; and they are spending a large amount on the renovation and other costs associated with buying a house.

It is a story that has unfolded millions of times in Canadian history and one that will continue to unfold because home ownership is deeply ingrained in our culture, a cornerstone of getting established and getting on our way in life. People will make great sacrifices and otherwise twist themselves out of financial and emotional shape to buy into the dream.

They willingly become what we used to call “house-poor,” paying well over the one-third of household income that many professionals believe should be the threshold.

Over the past decade, owning has been a financial success for most people, with prices rising almost in a straight line, with low, low interest rates feeding into the equation and with homeowners’ equity subsequently bounding higher.

And yet, if it has been just about as good as it gets for so long, perhaps conditions are going to deteriorate at least somewhat, with prices likely to stabilize or retreat a little and with interest rates set to rise modestly at least.

Our friends and other buyers this spring will know that Canadian house price gains have been flattening out. The Teranet-National Bank House Price Index for February published this week showed house prices gained just 0.1% from January for a 12-month gain of 3.8%. It was the eighth consecutive month of deteriorating gains.

While the forecast of a 25% drop in house prices over the next few years by one widely quoted economist seems far-fetched under present circumstances, a pattern of smaller gains likely signals a flat to slightly lower market.

So, is it time to revisit buying versus renting? For most of the 30% of Canadians who rent their accommodation it’s simply not an option. Getting their hands on a significant down payment and having the flexibility to meet higher payments if rates rise is difficult at best.

But some people with the wherewithal to buy a property might want to keep renting, keep saving and investing, and keep their options open. Other long-time owners might even want to consider selling and renting, thereby locking in their tax-free gains.

If you wish to see how the math works, visit United Mortgage Group’s Rent vs. Buy Calculator website. Even your technodunce reporter could plug in some numbers and come away with worthwhile conclusions.

A two-bedroom condo in our building might sell for $400,000. Let’s say you have a $100,000 down payment, a mortgage rate of 4.5% over five years, a $672 monthly condo fee, $200 a month in property taxes and other expenses of, say, $100 month.

Let’s also say that a two-bedroom might rent for $1,600 a month in the building, other costs might total $100 a month and the rent might rise 2% a year over five years.

All other things considered, the purchased condo would have to appreciate 2.33% a year, selling at $441,571 to match the gain made by renting a similar property in the building and investing the difference in outgoings at a conservative 2.5% a year.

The other way around, an owner could sell for $400,000 — with net proceeds of about $375,000 — and rent for $1,600 a month. The $375,000 could pay a conservative net return of, say, $10,000 a year. That $1,600 a month plus $100 in expenses would add up to $20,400 a year.

But deduct the net investment return of $10,000 a year and the condo fees of $672 a month, property tax of $200 and other expenses of $100 (for $11,664 a year), and the monthly rent for the former owner is basically paid. Or the former owner could invest the $10,000 a year and still end up paying only about $728 a month more than he was when he was owning.

Of course, this is just the rough math, which doesn’t take into account other factors, such as pride of ownership, the sense of place and the strong probability of building equity.

But geez. If I could live in the building basically for what I’m paying now in fees, taxes and insurance (by deploying my $10,000 a year investing return), and have my $375,000 to “invest” in winters in Waikiki and nice overnighters in Niagara-on-the-Lake, well then ….

It’s a thought, but only that. They’ll probably carry me out of here feet first from our condo, the equity in which may one day be needed to help us out in one of the emergency situations that can arise in older age.

Meantime, it wouldn’t hurt for everyone to do some math and determine what’s best financially for them — renting versus buying. And then, of course, throw the math out the window and succumb to the emotional tug of home and hearth. http://www.financialpost.com/personal-finance/mortgages/Rent+math/4691358/story.html

The number one question you need to ask yourself if you’re selling your home this spring is: How do I net the most money?

It’s not how do I get the most money for my home. It’s how do I keep the most money in my pocket after paying all my expenses, including commissions and fees.

Discounters are popping up everywhere now that they can access the Multiple Listing Service. Then there’s still the full-service broker who promises a better price and ultimately more money in your pocket.

A settlement last year between the Competition Bureau and the Canadian Real Estate Association, which represents about 100 boards across the country and almost 100,000 agents, allows consumers to have “a mere listing” on the MLS. Being on the MLS system is key since about 90% of transactions are handled by organized real estate.

A poll commissioned by LawPro and TitlePLUS, which sells title insurance, was released Tuesday and it shows confusion still exists in the marketplace.

The poll found even though 72% of Canadians were not aware of the changes made to the MLS, 45% of Canadians would still consider selling privately or using a real estate lawyer to help them sell.

“What these findings show us is that there is an appetite among Canadians to conduct the sale of their home privately,” says Ray Leclair, vice-president of TitlePLUS.

So you can be a do-it-yourself real estate agent and use the MLS. But do you want to?

Market conditions have to factor into your decision. There hasn’t been a U.S.-style collapse here, but it’s no longer a seller’s market, meaning you don’t just stick a sign in the ground and wait for the pigeons to flock. You’re going to have to work.

“For the discount that you’re getting, am I willing to take the gamble that my house is being shown at its optimum,” says Gary Siegle, Calgary-based regional manager for mortgage broker Invis Inc., about private selling.

He says the industry has been sticking to its guns when it comes to commission rates -generally around 5% of the purchase price -so if you’re using an agent, the negotiation might be on the service being provided for that commission.

“The professional service real estate agent is not going to give [commission up] just because someone has access to the MLS. They have to articulate the value more to justify their fee,” Mr. Siegle says.

Phil Soper, chief executive of full-service firm Royal LePage Real Estate Services, says the industry has not moved much off commissions since the agreement with the government.

“I think the impact in the market in the first year postchanges has been in the low end of the market,” says Mr. Soper, who says that narrow segment of the market is less than 15% of the overall sales volume.

He says for sale by owner or FSBO companies are now merging their operations with independent agents so customers also get an MLS listing as part of their service. “I don’t think they are actually selling any more houses. The listings are just showing up on more websites than they used to,” Mr. Soper says.

One of those FSBO companies is PropertyGuys.com. Walter Melanson, managing director of the Moncton-based company, says he currently has about 9,000 active listings across the country.

“I watch the comments [of the major real estate companies] and they say nothing has changed and nothing will ever change and that’s the way they built their mousetrap,” Mr. Melanson says.

What he and others are doing is creating a service that allows you to list with his company for as little as $399. When you sign up, his website hooks you up with a registered real estate agent who doesn’t do much but put your home on the MLS, for an extra $299.

The company’s Ontario representative, a licensed real estate agent, has close to 1,000 listings. She’s based in Hamilton but accepts listings from as far away as Elliot Lake, so she’s not doing too many showings.

“We want someone to compare how much it costs to sell your home using PropertyGuys to, say, Re/Max. You do that math and you’ll see quite the difference,” he says.

It’s no small amount. When you consider the average home is now selling for close to $375,000, at 5%, that’s $18,750 in commission.

However, consider if you do choose do it yourself on the MLS, you are forcing buyers to jump through one more hoop. In the case of Property Guys, the buyer has to click on the MLS broker’s listing office and then punch in the listing number before he’s directed to the seller.

“The bounce rate is amazing,” Mr. Melanson says. “Who wouldn’t look for their dream home and make that extra click? Our data says people will make that click. We’ve had to deliver magic within a narrow set of rules.”

But you have to wonder whether that extra work will affect your sale price at the end of the day. If you save $20,000 in commission, what’s the point if your house sells for 5% less?

Market conditions ultimately play into any decision. It comes down to whether you think your agent can earn that commission by getting you a better price or meeting a goal of selling your home in the time frame you want. http://www.financialpost.com/personal-finance/mortgages/Selling+house+just+about+highest+price/4680266/story.html

Since they rely heavily on word-of-mouth to spread their businesses, contractors are motivated to fully satisfy their customers and build a solid reputation. But because bad news travels faster and farther than good news, it’s far more common to hear stories about bad contractors than it is to hear about good ones. (You think your updated house looks great, but potential buyers may not feel the same way. 

Hiring a top-notch contractor will pay off in the long run, even if the initial cost is a bit higher than if you simply go with the lowest bidder. If the job is done right to begin with, it will last longer and avoid the cost to correct shoddy workmanship. Plus, you save yourself a lot of time and aggravation because you’re dealing with someone you can trust.

The Search
Millard Blakey, cofounder of the remodeling company WreckCREATIONS, in Lexington, KY, says that it’s best to know the qualities you’re looking for in a contractor before you begin your search. Once you determine those qualities, use referrals from friends, family and neighbors to come up with an initial list of names. Interviewing at least three potential contractors before deciding to ask for a cost proposal is recommended, in order to ensure that you are comfortable with your decision.

Shaun Smith of Koru Landscape Construction in Louisville, CO says that the interview process works both ways. “My experience lets me know very fast what they are really trying to achieve, and if I am the right contractor for them.” He encourages homeowners to contact local resources for a list of local contractors. This will help to narrow the search and support the craftsmen in your area. He also recommends touring nearby neighborhoods to find a few homes that are undergoing construction. “Stop by and talk with the owners about how their project is coming along,” he advises.

Smith warns against contractors who try to convince you they are the only one for your job. He says that their work should speak for itself, and a strong portfolio, good references and pictures of previous jobs can often say more than the answer to any interview question can.

Contracting
Many homeowners get into trouble because the work they want done isn’t clearly defined at the outset. Then, as the work progresses, they change the scope of work causing additional costs to the contractor that are passed on to the owner. That’s not the contractor’s fault, but he often gets the blame. The way to avoid this is to produce a thorough remodel plan that completely covers every aspect of the job, including the specific materials to be used. A good contractor will let you know if your proposed project and budget is realistic. (Some renovations will mean a bigger sale price on your home, while others will just cost you.

Get everything written down in the form of a contract that includes cost, schedule, materials, bonding and insurance information and a list of subcontractors. For the homeowner, a fixed-price contract is preferred over paying by the hour, because it locks in the maximum liability. However, this leaves you open to price increases if you change any of the work content.

Contractors are entitled to a reasonable down payment in order to cover their initial labour and material costs. This is negotiable, depending on the nature of the job, but should usually not exceed one-third of the total contract amount. The balance of the money can be allocated to completion milestones that incentivize the contractor to stay on schedule. For example, discrete milestone payments could be made upon completion of the framing, plumbing and electrical installations. Hold a sizable amount of money for the final payment that is contingent on your personal inspection and satisfaction of the finished project.

Responsibilities
Perhaps most important is to keep the lines of communication open. A failure to effectively communicate may be the reason for many failed relationships between homeowners and contractors. Whether the issue is money, jobsite cleanliness, finish expectations or even how to deal with additional work, it’s critical to discuss these matters as soon as they arise. If you believe the work being done is unsatisfactory, approach the contractor immediately and attempt to get a resolution. Most contractors will work with you to try and solve the problem.

The Payoff
The importance of hiring the right contractor can’t be overstated. A good contractor will save you money by doing the job right the first time, and will not only save you money in the long run, but also eliminate stress by ensuring a quality finished product. http://ca.finance.yahoo.com/news/Tips-dealing-renovations-investopediawp-3489575795.html?&mod=pf-sp14d

The most enduring and simplistic argument for buying a house is that you’re making an investment.

What an understatement. Between your mortgage, property taxes, utility bills, maintenance, furnishings, renovations, landscaping and such, you’ll be investing non-stop in your home. But what’s the return on your money?

Looking back a decade, houses have been an excellent investment that rivalled the stock market. But the view ahead is not nearly so positive. Bear this in mind if you’re considering a jump into this high-priced and increasingly unaffordable real estate market of ours.

How did the market get where it is today? Housing economist Will Dunning says resale housing prices have grown by an average annual 4.9 per cent in Canada since March, 1988, which is the year that comprehensive real estate industry data begins.

The more recent experience with housing is even better, Mr. Dunning found. The 10-year average annual price gain for a house is 8.3 per cent, almost on par with the average 8.9-per-cent increases logged by the S&P/TSX composite index, including dividends.

What we have here is a housing market that has been rising at close to double its long-term rate in the past decade. Don’t expect this to continue.

“I’m not in the camp that says we have a big correction coming, but I think we are looking at a fairly long period of moderate changes in house prices – plus or minus 2 per cent,” Mr. Dunning said.

In its most recent update on housing affordability, Royal Bank of Canada predicted a period ahead of very modest price increases. “(The) rapid home-price appreciation of the past 10 years has likely run its course overall in Canada,” the report said.

We’ll call that the optimistic view of what’s ahead for the market. For the pessimists, the question is how far prices will fall, and for how long. Sample prediction: Toronto-based Capital Economics sees a decline in prices of up to 25 per cent in the next three years.

The negative outlooks for housing are based primarily on factors such as prices, income growth and interest rates, all of which are a function of current economic conditions and thus short-term in nature. A long-term concern for housing values is Canada’s changing demographics.

The fastest-growing component of our population comprises those who are 65 and older. In other words, people who are going to be selling houses over the decades ahead and doing very little buying, if any. That’s bound to affect demand for homes and the potential for price appreciation.

For an actual real life example of how real estate prices can fall, let’s look at what happened in Toronto between April, 1989, and February, 1996. According to Mr. Dunning’s numbers, the average resale home price in the city fell to $192,406 from $280,121, or 31 per cent.

That was an extreme plunge, fuelled in part by a level of rampant speculation that we aren’t seeing in today’s market. But prices can still fall in today’s market. Check out the Calgary market, which dipped 1.7 per cent in March.

“The fact remains that housing can decline in value, and for prolonged periods,” Moshe Milevksy, a finance professor at York University’s Schulich School of Business, wrote in his 2009 book Your Money Milestones. “It is definitely not a risk-free investment.”

Buying a house and living in it for decades can protect you from temporary market dips, just as long-term investing in stocks smoothes out the stock market’s ups and downs. Still, it’s worth noting that someone who bought an average-priced house in Toronto around the ’89 market peak and still owned it would be looking at modest annualized gains in the 2-per-cent range.

Historical changes in housing prices are just a guideline, anyway. They don’t consider things like mortgage interest, property taxes and maintenance, none of which add any value to a home.

Houses bought today have questionable investment value, but there are some other factors to consider if you’re thinking of getting into the market. First, gradually paying down the mortgage on your house is a kind of forced savings plan. Not a great savings plan, but better than nothing.

Second, there’s the best reason of all to own a house. It’s freedom: Your family, your rules, your lifestyle. That’s really what you’re investing in when you buy a home today. 

You walk into the open house, take one look and say to yourself: This is it. It’s the house I have to live in. Where do I pay? A bidding war? I’m in.

Over my years of buying houses, I never bought one that did not have that frisson moment, that thrill of finding a place so suited to my wants. Indeed, I have in the past decided that I wanted to buy a house in what seems, in retrospect, to be nanoseconds. (By contrast, I’ve taken weeks to decide on the right pair of shoes.)

It is no way to make an “investment,” to be sure. But, as I’ve previously discussed in this space, buying a house is perhaps the most uninvestment-like of investments.

Just about anyone who’s purchased a property or thought about purchasing knows that it is much about gut-feel, in which the senses can conspire to trump sense.

Now, as the major real estate selling season gets under way, along comes a survey commissioned by BMO Bank of Montreal to give statistical weight to the notion that intuition carries a particularly heavy weight in the house-buying process.

The survey by Leger Marketing found that more than two-thirds of Canadians cited a “good feeling” toward the property as a reason to buy. Meantime, though, good sense is not thrown out of that gorgeous bay window and into those manicured flower beds. More than 90% of house-hunters value affordability and location over resale value.

So, the axiom that there are three important things in real estate – location, location and location – might reasonably be replaced by the Three Ps: Price, place and personality.

Nevertheless, that resale value is not a big concern to these surveyed house-hunters – people between 25 and 45 who plan to buy a home within two years – is a telling sign of the real estate times.

With some dips here and there, Canadian house prices have been rising strongly for more than a decade. Indeed, even the recession created just a downward blip in the chart of ever-growing values, with the average national price rising 8.9% last month from the previous March (but just 4.3% excluding Vancouver).

As a result, most of the house-hunters surveyed might never have been aware of a housing market that was not rising. I suspect many in this 25-to-45 demographic believe house prices basically keep going up forever, that though they downplay resale value in the survey, the expectation for solid gains is, well, a given. (Any significant drop in prices would surely shake that belief.)

In recent times, investors have been asked if they are stocks or bonds. If you’re a stock, you are prepared to take on more investment risk. If you’re a bond, you are not.

Perhaps, though, many people are probably houses when it comes to investing. A home is both partly a stock and a bond – and somehow neither.

It is a bond because over the long term it will likely produce modest returns through the enforced savings required by paying down the mortgage. It is a stock because the gains could be outsized if the investor were to buy and sell at propitious entry and exit points for market-timing gains.

And it is neither because it is an “investment” with many moving parts and frictional costs. You don’t live in a stock or a bond, but when the house leaks, it costs money and cuts into the investment. Meantime, the costs associated with buying and selling a property are becoming more daunting in many jurisdictions, with some observers reckoning that a house is often a mediocre investment at best.

But most young first-time buyers and mover-uppers are not fazed by such commentary. Home ownership is a cornerstone of our culture, with 70% of the population owning properties and many of the other 30% looking to join the majority.

And the real estate industry has become far more adept at marketing and selling than in the days decades ago when I was in the market. Today, houses are often professionally “staged” to produce that frisson moment. Prices are sometimes set artificially low to produce that exciting bidding war and that extra frisson of “winning.”

A house, it is said, is not a home. And a home is not strictly an investment. But does a stock have granite counters? Does a bond have stainless steel appliances? http://www.financialpost.com/personal-finance/thrill+buying+house/4655339/story.html

Higher food and gasoline prices and hefty debt loads likely to be made worse by interest rate hikes will impact consumers’ buying habits going forward, say those who track retail spending.

It’s going to be tough for consumers who have depended on a low interest rate environment, said TD Bank economist Francis Fong, adding that rates are expected to go up this summer.

“The rising interest rate environment, this high household indebtedness situation — that’s all going to impede the ability of consumers to spend going forward,” Fong said Thursday from Toronto.

Statistics Canada said retail sales increased 0.4 per cent in February to $37.3 billion, giving retailers some relief after declining sales at the start of the year.

Consumers filling their tanks with higher-priced gas, along with those buying furniture and clothing, pushed sales higher in February.

But Fong said consumer spending will no longer be the same driving force going forward as it has been throughout the economic recovery.

The Retail Council of Canada said consumers are “still hanging back a little bit,” especially now that they have to spend more of their incomes on food and gas.

“Clearly, if they’re going to have spend a little bit more on basic necessities, they may pull back a little bit on the nice-to-haves, but not on the need-to-haves,” said spokeswoman Anne Kothawala.

Consumer confidence is soft and that mirrors spending, she added.

“Gas and food prices are actually very closely related. It costs more to transport goods,” Kothawala said.

Statistics Canada said the largest contributor to February’s increase in retail purchases in dollar terms was gasoline sales, which increased 1.3 per cent.

Gasoline prices have been surging along with crude oil, which began rising sharply in February with the outbreak of unrest in Libya, an OPEC member that accounted for about two per cent of the world’s crude output before civil war there.

As of Thursday, the Canadian average price compiled by GasBuddy.com was 129.6 cents per litre, up from about 118 cents per litre at the end of February.

But lower retail sales in Quebec — a 0.8 per cent decline — contributed the most towards the dampening of national retail sales, Statistics Canada said.

“The decline reflected, in part, lower sales of new motor vehicles in the province,” the federal agency said. “This was the second decline in retail sales in Quebec following six consecutive monthly gains.”

Quebec also increased its provincial sales tax to 8.5 per cent in January, up a percentage point.

Sales at clothing and clothing accessories stores were up 2.5 per cent, offsetting a decline in January. Sales at furniture and home furnishings stores grew 2.1 per cent in February, helped by gains in real estate sales.

Prof. Ken Wong of Queen’s University business school said once consumers pay down debt and spend more money on food and gas, there isn’t much left for anything else.

“You have to ask yourself what can be delayed and what can’t be delayed,” Wong said of consumer purchases.

“We cannot rely on interest rates remaining as low as they are as long as they have been going forward,” said Wong, who teaches business and marketing strategy.

Geographically, retail sales in February gained in six of 10 provinces, powered by Ontario where sales increased 0.7 per cent after two consecutive monthly declines. http://ca.finance.yahoo.com/news/Canadian-consumers-expected-capress-3544800240.html?x=0

Friendly faces in a depersonalized, online world – that’s your local bank branch for you.

Branch staff are glad to talk about your financial situation, be it debt, saving or investing. They’re also eager to sell you stuff, so it’s important to know how to talk to bankers before you go in.

Online banking is flourishing in Canada, as well it should because it’s cheap and convenient. But there’s a back-to-the-branches theme to a lot of what the big banks are doing today. There are now 300 TD Canada Trust branches open Sunday. Bank of Montreal is installing free coin-counting machines in its branches to draw people in. Canadian Imperial Bank of Commerce has just begun a marketing campaign that talks up CIBC as the place to go for financial advice.

Bank branches today are much less places to cash cheques and pay bills than they are sales centres for mutual funds, mortgages and lines of credit. Just recently, CIBC said consumer lending is the main driver of its growth plans.

One way to lend more is to attract new clients, something CIBC is trying to do through its Switch campaign. The basic idea is for people who deal with other banks to come over to CIBC for what it described in a news release as “expertise, advice and innovation.”

This represents a new phase in bank strategy. It’s no longer “come into our branches for advice,” but “our branches give better advice than their branches.”

I asked people in my Facebook community (http://on.fb.me/fvo80W) how much they rely on banks for advice and the response was on the whole quite anti-bank. But there’s a point here that may have been missed. People are becoming increasingly aware that they need to cut debt and save more, but lots don’t know how to do it. Banks can help.

Go get that help if you need it, but don’t go in uninformed.

First, you have to understand that banks are essentially sales operations. We have lifelong relationships with our banks, we share private details with them and we sometimes depend on them in moments of stress or hardship. But banks place service to clients in the context of generating revenue and profit for shareholders.

You may hear the word adviser used in the branch, but that’s just a euphemism for salesperson in most cases. Some branches now include people with serious financial planning credentials such as Certified Financial Planner (CFP) or Personal Financial Planner (PFP), but even they’re subject to work rules that suggest it’s all about the sale, not the advice.

Beware of bank products that are highly packaged rather than straightforward. Wrap products are a great example. The banks are selling these prefab bundles of mutual funds like crazy today and it’s not because they’re better than building your own portfolio by selecting individual funds. Rather, it’s because wraps often result in a higher-fee mix of funds than having a customer choose funds individually.

Bank mutual fund families include some top-notch products, so don’t dismiss them. But be wary if you notice a conversation with your banker turning into a sales pitch to buy in-house funds. Be aware that you can open up an account with your bank’s online brokerage division and buy any company’s mutual funds, as well as lower-cost exchange-traded funds, stocks, bonds and term deposits with higher rates from other banks.

Whatever your bank recommends you buy or do, ask for hard numbers to document any advantage to you. Then, ask to have the same analysis applied to alternative approaches. When you’re done talking, go home and do your own research. Be sure the rates your bank is offering for both savings and borrowing are competitive.

Why see a bank at all for help with financial matters? One reason, frankly, is that going to a bank for advice is better than living in a state of uncertainty and inaction. Yes, it would be ideal if everyone who wanted advice used an independent financial planner or investment adviser, but that’s just not happening. If the familiarity of a bank branch makes someone comfortable enough to ask for help, so be it.

It’s also worth noting that the best way for banks to sell products is to keep customers and build relationships. Self-interested sales pitches disguised as advice are relationship killers.