Friday, December 30, 2016

10 crystal ball predictions for 2017

We are living in uncertain times..again. So, what can Canadians look forward to in the upcoming year – the unpredictable, for sure; however, there are a few trends we can pretty much bank on – maybe.

  1.  Fixed rate mortgages are increasing. Since the U.S. election we have already seen some upward pressure on bond yields, which is one of the reasons fixed rates have increased.  The U.S. Federal Reserve has already started to raise its rates. This may put pressure on the Bank of Canada (BoC) to start raising the overnight rate in 2017 and into 2018. 
  2. Trade disputes with the US. The incoming president of the US has already said he will get tough on trade deals. Our softwood-lumber agreement will soon expire and you can be sure that will be a tough negotiation.
  3.  Oil prices may be higher – this is already happening, which may lead to improvements in  the economies of Alberta and Saskatchewan.
  4.  Provincial growth. Royal Bank of Canada expects Ontario and Manitoba to be co-leaders in economic growth in 2017 while Alberta could place third and British Columbia and Saskatchewan may tie for fourth spot.
  5.  The battered loonie may make some gains. Economist Todd Hirsch predicts the Canadian dollar will dip 70 cents early in the year, but will finish out the year at 78 cents. He also predicts the Federal Reserve will raise rates three times in 2017, while the Bank of Canada will sit on the sidelines until 2018. However, the loonie should stabilize and regain some ground toward the end of the year.
  6.  Economy will expand to 2%. Bank of Montreal economist Douglas Porter predicts that the federal government’s long-awaited infrastructure stimulus measures should boost the economy.
  7.  Changes to NAFTA & TPP. This could have a negative impact on Canada’s growth.  The bulk of Canada’s exports go to the US. However, the new president hasn’t said too much about Canada, yet. In a best-case scenario, our trade ties could get stronger.
  8.  The pace of home prices will slow, especially in B.C. The latest numbers from the Canadian Real Estate Association (CREA) and the freshest reading of the Teranet-National Bank home price index are already showing this trend. An ample supply of listings relative to demand is anticipated to keep price gains in check.
  9.  Help for first-time homebuyers. CREA predicts that housing sales, nationally, will decline, especially in BC and Ontario due affordability issues and tightened mortgage regulations. However, both provinces have introduced measures for first-time homebuyers to help with affordability.
  10.  Housing sales will rise by 3.5% in Alberta. This is a hopeful prediction for the hard-hit province.  Sales are also forecast to improve modestly in Manitoba and New Brunswick. Sales will ease  slightly in Saskatchewan, Nova Scotia, Prince Edward Island and Newfoundland and Labrador.

Happy New Year!

No comments:

Post a Comment