By The Canadian Press

OTTAWA – Canadian home prices continued to soar above year-ago levels in June, but economist believe price hikes could soon ease, spelling relief for buyers in expensive markets like Toronto and Vancouver.

The Canadian Real Estate Association said Friday the national average price for Canadian home resales was $372,700 in June, up 8.7 per cent from the same month last year, but down 0.9 per cent from May.

Realtors sold 48,487 resale homes last month, 10.8 per cent more than in June 2010, when sales began to taper off from an earlier hot streak when buyers rushed to beat interest rate hikes. Last June, the Bank of Canada raised interest rates from emergency lows for the first time since the recession.

Last month’s sales activity was also 2.6 per cent higher than in May, bucking a four-month trend of monthly declines.

“Canadian housing demand remains resilient, thanks to low interest rates, job growth, and home buyer confidence in the economy,” CREA president Gary Morse said in a statement.

June’s double-digit year-over-year sales increase was the fastest pace recorded since April 2010, said Bank of Montreal economist Robert Kavcic.

“However, the strong growth figure somewhat masks more moderate recent activity, as sales fell more than 16 per cent between April and June last year amid stricter mortgage rules, making for an easy comparison,” he wrote in a research note.

Despite the year-over-year price hikes, seasonally-adjusted prices have now dipped for three straight months, suggesting the changes to mortgage rules that limited the maximum amortization period “might be having at least a modest impact on pricing,” he said.

Some industry watchers have speculated that prices have now peaked and expect to see declines, especially when interest rates inevitably rise.

“Stricter mortgage rules and declining affordability appear to be taking at least some momentum out of prices, a trend that could continue if the Bank of Canada resumes its tightening campaign in the fall,” Kavcic said.

Sonya Gulati, an economist at TD, said June’s figures suggested a pickup in activity after a “particularly muted” over the past few months, but added that they could be a blip.

“We expect the mini reprieve to be fleeting and in turn, sales gains should be muted for the remainder of the year and into 2012,” she said.

Gulati said she expects prices to decrease by 10 per cent over the next two years, accompanied by a 15 per cent decline in sales.

“The lag between sales and prices usually comes in between two to three quarters. In turn, we anticipate prices to temper early next year,” she said.

Sales picked up in a majority of the country’s cities, with two notable exception — the pricey and once overheated markets of Vancouver, down 1.7 per cent and Toronto, 0.4 per cent lower.

In Toronto, average seasonally adjusted home prices fell 1.1 per cent, but are still up nearly 10 per cent year-over-year. The market remains one of the most competitive in Canada as demand so far this year has far outweighed the number of listings, contributing to higher prices.

In Vancouver, average prices are about 23 per cent higher than they were last year, but the average is being skewed higher by a flurry of activity at the high end of the market. Sales in expensive West Vancouver and Richmond have eased since February, which helped to reduce the impact on average prices, CREA noted.

That area has recently been a hotbed of housing activity, and high end sales helped drive June average home prices in Greater Vancouver to $630,921.

However, the national figures in June showed less of an impact from the sales of high-priced homes in Vancouver, although that city continued to skew the national results, CREA said.

About 60 per cent of local housing markets in Canada were balanced in June — meaning the number of sales and new listings were about the same. However, new listings increased just marginally, by 1.8 per cent in June from May.

Calgary, Montreal, Ottawa, Hamilton, London, Ont., and Victoria all saw gains over May.

Nevertheless, national sales activity in the second quarter (April, May and June) was down 4.5 per cent compared with the first quarter of 2011.

CREA attributed the decline from the first quarter to new mortgage rules announced in January and implemented at the end of March and an increase in mortgage rates in April and May.

CREA’s monthly report comes ahead of Tuesday’s Bank of Canada announcement on its target overnight interest rates. The central bank is widely expected to keep the key rate unchanged at 1.0 per cent, where it has been since September .

Earlier in the year, economists had expected the Bank of Canada would begin raising its short-term rate to quell inflation. However, sentiment has changed amid signs that the U.S. economic growth has been less robust than expected.

In contrast with the United States, Canada’s job growth has been stronger, its federal government is making more headway in dealing with budget deficits and its resource exports are relatively strong — putting home buyers in good shape.

“The Canadian housing sector remains on a solid footing,” said Gregory Klump, CREA’s chief economist.

“The rise in monthly home sales activity at the end of the second quarter, upbeat business sentiment and hiring intentions, and signs that the Bank of Canada is in no rush to raise interest rates bode well for home sales activity and prices going into the second half of 2011.”

By The Canadian Press

OTTAWA – The C.D. Howe Institute’s monetary policy council recommended Thursday the Bank of Canada raise its target for the overnight interest rate.

The group of economists recommended the central bank raise the key rate by a quarter point to 1.25 per cent at its rate announcement next week.

Bank of Canada governor Mark Carney is expected to keep rates on hold at one per cent when the announcement is made July 19.

“The principal theme of the group’s discussion was the contrast between the Canadian domestic scene, which most attendees felt justified a more restrictive stance by the Bank,” the think tank council said in a statement.

However, the recommendation by the mix of private sector economists and academics was not unanimous.

Five members of the panel recommended the increase, while four others suggested the Bank of Canada keep the rate at one per cent.

The bank last hiked interest rates in September 2010.

“Looking abroad, participants generally agreed that the potential negative impact on global growth and on financial conditions in Canada and elsewhere of sovereign debt defaults was enormous, but they differed in their views about how the Bank of Canada should respond to this prospect,” the council said.

“Some argued for more accommodative policy on the grounds that inflation expectations are well anchored and the Bank should support domestic demand. Others stressed the risks of postponing needed tightening for too long in preparation for events that might not occur. “

The group was unanimous though in their recommendation that the rate, which is at an exceptionally low level, needs to rise over the coming year.

The central bank will make its decision next week as the U.S. and global economy present an uncertain future. Even as the Canadian economy appears on track, weakness in the U.S. and threats of sovereign debt defaults threaten the outlook.

Speaking to a Senate committee last month, Carney warned that the U.S. economy is a shadow of its former self and a mountain of debt weighing on the balance sheets of advanced countries around the world will dampen growth for years.

Carney told the committee that the second quarter in Canada could see growth drop all the way to the one per cent range, from 3.9 per cent in the first three months.

The average price of a resale home in Canada will fall by more than 10 per cent over the next couple of years, an analysis by TD Economics predicted Wednesday.

Calling it a “moderate correction,” the report’s authors also say sales will decline by more than 15 per cent over the same period.

“A combination of more subdued job and household income growth, rising interest rates, the recent tightening in borrowing rules for insured mortgages and fewer first time home buyers are expected to be the chief culprits behind the slowdown,” the report said.

TD economists profiled 12 urban markets across the country. They highlighted Vancouver and Toronto — currently the two most expensive housing markets in Canada — as the cities most vulnerable to a larger-than-average decline, “reflecting in part their exposure to the condominium segment, which appears particularly ripe for a correction.”

No city will experience a housing boom in the near-term, the authors say. But price drops in Regina, Saint John, N.B., Halifax, Calgary and Edmonton will be less than the average — what the report calls “a soft landing.”

On a national basis, the report’s prediction of an average 10.2 per cent price decline translates into an average resale price of $329,000 in 2013, down $38,000 from its 2011 peak.

But the red-hot Vancouver market, where the average resale home now goes for about $793,000, the authors predict a 14.8 per cent decline by 2013 to a still lofty $675,000 — a drop of $118,000.

“Vancouver has been the poster child for those individuals worried about a real estate bubble here in Canada,” the report says, with the authors pointing out that household debt levels are higher in Vancouver than in any other city.

Toronto’s forecast price drop over the same period will be almost as dramatic — an 11.7 per cent cent decline to $415,000 by 2013. That’s $55,000 lower than the current peak.

The authors note that sales are already off their peak. But they say the biggest drivers of housing demand are likely to remain “supportive” for the rest of 2011. The bulk of the price correction will come in 2012 and 2013, they say.

TD economists say the Bank of Canada is likely to start hiking interest rates again at the start of 2012.

With the central bank’s policy rate directly tied to variable rate mortgages — which 40 per cent of current mortgage holders now have — the authors point out that a $400,000 mortgage will cost $440 a month more to service by mid-2013, assuming the Bank of Canada raises its key overnight rate from the current 1.00 per cent to 3.00 per cent by that point.

By Craig Wong, The Canadian Press

OTTAWA – Businesses across the country are planning to kick their hiring into high gear over the next year, according to a Bank of Canada survey that found corporate Canada in a generally upbeat mood.

“The balance of opinion on employment has risen to a record high level,” the bank said in its summer business outlook survey released Monday.

“Intentions to increase employment over the next 12 months were widespread across all regions and sectors, particularly in the services sector.”

The central bank said 57 per cent of the firms surveyed expected to hire new workers over the next year compared with just four per cent of firms that expected to have fewer employees over the next 12 months.

The Bank of Canada’s report followed a better-than-expected Canadian employment report on Friday. Statistics Canada reported a net gain of 28,000 jobs for June, the third consecutive month of gains, which was in stark contrast to a disappointing report of only 18,000 jobs added in the United States.

The central bank survey was taken between May 24 and to June 16.

BMO Capital Markets senior economist Michael Gregory noted that businesses may not be as upbeat today as they were when the survey was done due to the turmoil in the global economy.

“But even if business expectations have become moodier, they still started from a position of relative, absolute and surprising strength,” Gregory wrote in a note to clients.

“The survey is telling the Bank of Canada that its very accommodative monetary policy is doing a good job in stimulating the economy, closing the output gap and pushing underlying inflation back up to target.”

The report also found that 25 per cent of firms faced difficulties finding workers and were limited in their ability to meet demand, suggesting there was less slack in the labour market than a year ago.

However the bank noted that the share of firms facing labour shortages was below the survey average.

The report comes as the Bank of Canada governor Mark Carney prepares to make his next interest rate announcement next week.

However, despite the positive outlook on the jobs front, the survey did little to push economists to change their belief that the Bank of Canada would likely keep its policy setting at one per cent.

“Key to our outlook for the Bank of Canada’s overnight rate is the combination of the improving domestic growth outlook and rising inflation expectations,” TD economist Francis Fong said in a note.

“At this point, we feel that the increasingly dire situation in Europe and protracted softness in the U.S. are likely to keep the Bank on hold for the remainder of 2011 – however, we must concede that rising domestic inflationary pressures could potentially push them off the sidelines if they prove to be non-transitory.”

The central bank also said Monday that its survey found on balance that firms saw an increase in sales growth over the past year and that they expect sales to rise even faster over the coming year.

The bank said strong commodity demand is fuelling the view by companies in Western Canada that sales growth will accelerate over the coming year, while those in the rest of Canada expect stable growth.

“Firms based in Central and Eastern Canada generally expect sales growth to be similar to that over the past 12 months, given an economic background characterized by continuing softness in U.S. demand, strong competition and a high Canadian dollar,” the central bank said.

“Nonetheless, a number of firms reported that they expect to benefit from recent efforts to reposition their businesses or diversify their markets.”

In its senior loan officer survey, the Bank of Canada says lending conditions in Canada for businesses are continuing to ease.

Jameson Berkow  Jul 4, 2011

Detailed analysis shows a highly segmented market that will see prices drop over time, but preconditions for a market crash don’t exist

TORONTO, July 7, 2011 /CNW/ – The Canadian housing market is becoming highly segmented and multi-dimensional which is making traditional measures, like average prices, increasingly irrelevant in gauging the health and state of the sector, finds a new report from CIBC World Markets Inc.

“Glancing at popular metrics such as the price-to-income ratio or the price-to-rent ratio, it is tempting to conclude that the housing market is already in clear bubble territory and a huge crash is inevitable,” writes Benjamin Tal, Deputy Chief Economist at CIBC, in his latest Consumer Watch Canada report.

“Tempting, but probably wrong. When it comes to the Canadian real estate market at this stage of the cycle, any statement based on average numbers can be hugely misleading. The truth is buried in the details—and there the picture is still not pretty, but much less alarming.”

He notes that while the average house price in Canada rose 8.6 per cent on a year-over-year basis in May, that number slows to 5.6 per cent if you take Vancouver out of the picture. Remove Vancouver and Toronto and the average price increase drops to 3.7 per cent.

By digging into the details on the high profile Vancouver market he found that the gap between average and median prices is reaching an all-time high. While the average house price climbed 25.7 per cent on a year-over-year basis to more than $800,000 in May, he found that by removing properties that sold for more than a $1 million there was a much more moderate price appreciation in the market. It also reduced the average sale price by $220,000 to just over $590,000.

“What makes Vancouver abnormal is the high end of its property market,” says Mr. Tal. “And in this context many, including Bank of Canada Governor Mark Carney, point the finger at foreign—mainly Asian wealth—as the main driver here.”

Data on the extent of the role that Asian investors have played in Vancouver housing prices is quite limited. Mr. Tal‘s analysis of data obtained from Landcor Data Corporation suggests that only 10 per cent of the nearly 4,500 transactions involving foreign money over the past five years were above the $1 million mark, with an average purchasing price of just under $600,000.

According to the information provided by Landcor, foreign money accounted for only 2.6 per cent of all sales during the same period. However, Mr. Tal believes that could be a serious underestimate, as it is based on where property tax assessments are mailed, and would exclude offshore buying on behalf of children or other local proxies. “There are many reasons to believe that a significant portion of what is perceived to be buying by offshore investors is, in fact, driven by Chinese immigrants that are integrated into the community but still maintain strong links to mainland China, with many residing and working in China while their family establishes roots in B.C.”

“Looking beyond the average price numbers reveals a highly segmented and multi-dimensional market that is probably influenced by different forces,” says Mr. Tal. “But even a multi-dimensional market can overshoot—and the likelihood is that prices in the Canadian market and its sub-segments are higher than what can be explained by factors such as income growth, rent and household formation. Given that, the housing market will eventually correct. The only question is what will be the mechanism of that correction.”

Mr. Tal feels the price correction in Canada will be gradual as the two key triggers for a price crash – a significant and quick increase in interest rates and/or a high-risk mortgage market that is very sensitive to changes in economic factors – are not at play in Canada.

“In Canada, a sharp and brisk tightening cycle is unlikely. The market expects a gradual increase in short-term rates in the coming years. The rising number of mortgage holders that carry a variable rate mortgage will be the first to feel the pain. But if history is any guide, they will return quickly to the comfort of a five-year fixed rate the minute the Bank of Canada starts hiking.”

He also believes that the country is in relatively good shape when assessing the two sub-segments of the mortgage market that traditionally account for most defaults: mortgage holders that carry a debt-service ratio of more than 40 per cent and those with less than 20 per cent equity in their house.

Just over six per cent of households have a debt service ratio of more than 40 per cent—a number that has risen by a full percentage point since 2008. “However, this ratio is still well below the ratio seen in 2003, when the effective interest rate on debt was more than a full percentage point higher, and no correction in house prices ensued,” adds Mr. Tal.

“All other things being equal, even a 300-basis-points rate hike by the Bank of Canada would take this ratio to only just over eight per cent. Not surprisingly, Vancouver has the highest ratio of households with high debt-service ratio, followed by Toronto.”

A little more than 17 per cent of the Canadian residential real estate pool is in properties with less than a 20 per cent equity position, a number that has been rising over the past few years. More than 80 per cent of households with less than a 20 per cent equity position are first time buyers.

“Digging deeper and looking at the households with both low equity positions and high debt-service ratios, we found that this fragile segment of the market accounts for only 4.6 per cent of total mortgages—a number that has been on an upward trend over the past few years,” says Mr. Tal. “Shock the system with a 300-basis-points rate hike and that number would rise to a still-tempered 6.5 per cent. Historically, even in that group, the default rate has been well below one per cent. Thus, short of a huge macro shock, there does not appear to be the risk of large scale forced selling that would typically be the trigger for a precipitous plunge in the national average house price.

“As a result, while house prices are likely to adjust as interest rates eventually climb, the national pace of any correction is likely to be gradual. That could still entail a period in which housing underperforms other assets as an investment class, until rising incomes and a tame price trajectory bring the market back to equilibrium.”

The complete CIBC World Markets report is available at: http://research.cibcwm.com/economic_public/download/cw-20110707.pdf.

CIBC’s wholesale banking business provides a range of integrated credit and capital markets products, investment banking, and merchant banking to clients in key financial markets in North America and around the world. We provide innovative capital solutions and advisory expertise across a wide range of industries as well as top-ranked research for our corporate, government and institutional clients.

Garry Marr, Financial Post

Are the banks doing an incredible job of retaining customers or are Canadians just too lazy to shop around when renewing their mortgages?

SHELLEY WHITE

There was a time when no one wanted to end up in Toronto’s Liberty Village.

More than a century before the name was coined, the area between King Street West and the Gardiner Expressway (bordered by Dufferin Street to the west and Strachan Avenue to the east) was home to a men’s prison and a reformatory for women convicted of crimes like “sexual precociousness” and “incorrigibility.” More recently, it was a desolate collection of abandoned factories and empty warehouse buildings – but now, Liberty Village is one of Toronto’s most vibrant and fastest growing downtown neighbourhoods.

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It’s an example of an urban neighbourhood built from scratch – an essential part of modern city building, as tens of thousands of people flood into the downtown core each year. Clearly, Toronto needs somewhere for these people to live, but how do you make sure these newborn neighbourhoods thrive?

Liberty Village is a sort of test bed for the type of development that creates successful, high-density downtown nodes, said Ken Greenberg, an architect, urban planner and author of Walking Home.

“Liberty Village is kind of the ugly duckling that I like,” said Mr. Greenberg. “Designers look down their noses at it because it’s clumsy and not very beautiful, but it has all the ingredients of a successful neighbourhood.”

In his view, creating a successful neighbourhood from scratch is all about the mix.

Firstly, said Mr. Greenberg, communities require diverse housing options to accommodate singles, couples, families, retirees and low-income students. “The idea is being able to age in place, to go from one stage to another in the same neighbourhood, so you can put down roots,” he said.

Neighbourhoods also need a mix of housing and retail to create the crucial element of “walkability,” Mr. Greenberg says. It’s a move away from old-school city planning, which tended to separate the different aspects of daily life.

“Where are the grocery stores, the hardware store? Where are the daily life needs that you can walk to?” he said. “Very often the developers that are doing the condominiums don’t know anything about retail and don’t care, because their objective is to sell the condo units and get out. But they’re increasingly learning that there’s an opportunity there, and teaming up with experts in retail.

“If you extend that beyond shopping, if you want families to be there, where’s the daycare? Where are the playgrounds? Where are the schools? You have to think about it in a different way.”

The best new neighbourhoods combine the four pillars of good planning, said Gordon Stratford, design director at the architectural firm HOK Canada and chair of Toronto’s Design Review Panel. These pillars are financial (affordable housing), environmental (natural elements, like trees and parks), social (places where people can work, shop and interact) and cultural (a place with a defined culture, either through historical preservation or created by the community itself).

“Think about the perfect place you want to live in – I can live here, I can work close at hand, I can go to the park, I can get a library book, my kids can go to school here,” he said. “People are taking to heart the idea that if I don’t have to take hours and hours to commute from where I live to where I work, if I don’t have to go so far to get my food, if all these things can be in such close proximity, it can really work.”

In his view, the march of technology has created a need for people to be able to live in a neighbourhood that has a small-town feel.

“With the Internet and social networking, you can reach anyone in the world,” he said. “I think that as a counterbalance, people really are even more interested in having great neighbourhoods.”

GRANT ROBERTSON — BANKING REPORTER

Canada’s banks are locked in a war of attrition this summer, grinding down mortgage rates and competing more fiercely for personal loans in an effort to steal customers from each other.

Stuck in a market where the Canadian consumer is already highly leveraged and more concerned with paying down existing debt, the market for new loans is drying up. As a result, the banks have decided to fight each other on lending rates, hoping it will spur demand.

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Looking to bulk up their loan books, many banks are now sacrificing margin to maintain or increase their loan volumes. In a telltale sign, four major banks trimmed mortgage rates recently, just days after announcing disappointing second-quarter earnings that showed shrinking margins across most of the industry.

Though several banks raised mortgage rates on Monday, giving their margins some breathing room, it is the latest example of the kind of tug-of-war over rates that is expected to play out in the months ahead.

But this race to the bottom can’t last, predicts one bank CEO. Réjean Robitaille, chief executive officer of Laurentian Bank of Canada, figures the sector could be headed for a breaking point.

“The market can be undisciplined for a while, but not for a long period of time,” Mr. Robitaille said in an interview. “There is pressure, lots of competition right now. But when you look at history, usually the market is a bit more disciplined.”

The first signs of what Mr. Robitaille is talking about have already started to emerge. On Monday Royal Bank of Canada, Toronto-Dominion Bank and Laurentian moved first to raise rates on residential mortgages, including five-year fixed-rate mortgages. Other banks will likely follow in lock-step. However, while fixed-rate mortgage rates usually fluctuate depending on the cost of borrowing in the bond market, spreads on deposits and other lending continue to be under pressure.

Montreal-based Laurentian, Canada’s seventh-largest bank with $24-billion in assets, dug in its heels this spring and tried to keep margins from eroding by refusing to drop rates lower than what it thought was prudent. The plan worked to some degree, since margins didn’t collapse as much as they could have. But that came at a cost: Laurentian watched as some mortgage customers jumped to other banks.

“On the personal loan side we did quite well. On the mortgage side though, because of the price war in Ontario and other provinces in the country, we decided on purpose not to join the rest of the group … so in that area, we did less volume,” Mr. Robitaille said.

These are the tough choices banks are facing right now as they search for a way to boost loan volumes without cutting profit margins. It’s a balancing act, since banks make the bulk of their money by taking in deposits at a low interest rate, then lending out that money at a higher interest rate.

“What’s happening is no one’s borrowing any more, because everyone’s loaded up with debt,” said Peter Routledge, an analyst with National Bank Financial. “So the banks are competing more – not only for deposits, but also loans.”

The narrowing spread between interest paid out on deposits and interest collected on loans leaves the banks searching for other ways to shore up revenue. Analysts expect cost-cutting will be one approach the banks may favour. Another small measure could be raising fees on consumer products, such as chequing and savings accounts.

“[When] you get the margin pressure we saw, that would probably be a reason to start thinking about it,” Mr. Routledge said of potential fee increases to ease the burden of eroding margins. “[Banks] can get some of it back by raising prices on the cost of the services.”

Toronto-Dominion Bank recently announced monthly fee increases on some of its accounts, boosting, for example, the cost of its mid-level personal accounts by a few dollars, and its premium account by $5. In some cases, TD was bringing its monthly fees in line with rivals such as RBC, which increased rates last summer.

But in other cases, such as its mid-range Infinity account, TD raised fees $1 or $2 above the competition, which analysts believe could set a bar for the other banks to come up to in search of more revenue. Or they could try to undercut those fees if they believe it will attract customers. However, Mr. Routledge notes many consumers are reluctant to subject themselves to the hassle of changing banks over a few dollars.

The banks tend to avoid sticking their necks out too far when it comes to hiking fees. A TD spokeswoman said some of the bank’s accounts hadn’t seen increases in several years. And when Bank of Nova Scotia, Canadian Imperial Bank of Commerce and Bank of Montreal increased some of their account fees over the past year, they did it within months of each other.

Such caution is warranted. Canaccord Genuity analyst Mario Mendonca doesn’t think the banks have much room to move on fees if they want to drum up revenue, since the deposit market is just as competitive as the loan market these days. “They are all dropping rates on mortgages and paying more for deposits,” Mr. Mendonca said. “[It] doesn’t seem to me that the banks are in a position to charge more for anything as the struggle for market share intensifies.”

Canada’s housing market is in a bubble that’s set to burst and prices could plunge by as much as 25 per cent, a major independent research firm warns.

“Housing valuations have lost all touch with fundamentals and household debt is at a record high,” economists at the research consultancy Capital Economics say in their most recent Canada Economic Outlook, issued Wednesday.

“Our fear is that, with the housing bubble now close to bursting and commodity prices retreating, Canada will go from leader to laggard.”

The report predicts a fall in house prices by as much as 25 per cent over the next three years.

A domestic housing boom coupled with high commodity prices worldwide have spared the economy the severe recession felt by other developed countries.

Canada’s economic success could become the thorn in its side as the threat of a downturn in the housing sector looms, the report says.

The firm says a burst housing bubble would shrink real estate investment and hurt consumption — two things that would considerably slow economic growth.

This decline in consumption would mean a slowly rising unemployment rate as well, according to Capital.

The company says Canadian house prices are overvalued by approximately 25 per cent, close to excessive levels seen in the frothy U.S. market at its 2006 peak.

Over-building is already visible; the number of unoccupied houses and condos is at a record high. It closely resembles the 1994-95 housing slump, when the construction industry experienced a severe downturn.

The report forecasts falling house prices and smaller residential investment. Real estate currently makes up 6.8 per cent of Canada’s GDP. Lower prices would mean a hit to household net worth as property now accounts for one-third of a family’s total assets, the report found.

The firm expects the Bank of Canada to stay the course in the near term, as financial worries at home and abroad will keep interest rates at their current level for a while.