Canadian Funding Corp Reviews CMHC Sustainability Reports

As many of you have probably heard by now, this June was the best on record in terms of house sales as reported by The Toronto Real Estate Board.

The total number of houses sold rose by an amazing 27% in June while the average sale price rose 2%. Keep in mind that these statistics include all of the GTA from the Hamilton/Wentworth townline in the west to the Durham/Northumberland townline in the east and from Lake Ontario north into Lake Simcoe. Of course not all areas experienced the same amount of growth, however, Durham Region (on the most part) is in line with these increases. To see a 3 year comparable market evaluation for South Pickering, North Pickering, Ajax, Whitby, Oshawa and Courtice/Bowmanville click on Durham Region.

The other statistic to take notice of is the number of homes for sale this year as compared with last year. While sales have increased 27% this June, the number of new listings has decreased by 17% and the number of active listings has decreased by 30%. What does this mean for sellers and buyers? There is a lot less inventory to choose from and a lot more people who are looking to buy. This would explain the rise in the number of multiple offers we have been seeing over the past several weeks as well as the increase in prices.

Who knows where all of this will end up in the next several months. There is still some speculation in the economic circles that the “worst is yet to come” and yet others have changed their predictions to an earlier anticipated recovery.

http://getmovingwithkaren.blogspot.com/2009/07/june-housing-statistics-are-in.html

reviewed by Moishe ALexander, CFC  canadian funding corp CEO

By Brian Madigan LL.B.

Ordinarily, one would think that chattels are not included in an agreement of purchase and sale concerning real estate. And, most of the time they would be right.

However, this is not the case when we are talking about the sale of a business. Under the Real Estate and Business Brokers Act the term “real estate” is defined to include real property, leasehold and business whether with or without premises, fixtures, stock-in-trade, goods or chattels in connection with the operation of the business.

Bob operated a small electrical contracting company. After 25 years in the business, he felt that it was time to retire. In addition to the 10 trucks all clearly marked “Bob’s Electric”, he had recently purchased a minivan. Bob used this vehicle to get to work. He acquired it right at the end of the year so that he could maximize the depreciation. Bob listed the business and negotiated an excellent price.

You might imagine his surprise when it came to the day of closing and his lawyer had prepared a Transfer of the minivan for him to sign. Bob said it was not part of the deal. There was nothing about the minivan in the agreement of purchase and sale. This was true!

His lawyer reviewed the agreement and said that the definition of “real estate” when it concerned the sale of a business included chattels. Since the minivan had been acquired and used in connection with the business, no matter how remote this connection might be, the minivan was deemed to be part of the deal. The obligation rested upon Bob to clearly exclude it, if that was his intention. It did not have to be written into the agreement to become part of the deal. Silence meant the minivan was part of the deal.

So, on closing the purchaser received an assignment of the lease, the stock-in-trade, the fixtures, the 10 trucks, and to his surprise, Bob’s brand new minivan that he drove to work.

In addition, there is one more little problem here worth mentioning. Bob was attracted to the minivan because of the zero percent financing spread out over five years. You guessed it! The agreement of purchase and sale conveyed the title to the assets “free and clear of all encumbrances”. So, out of the funds due on closing, Bob had to pay off the loan on the minivan in order that the purchaser would get clear title.

This little glitch arises in many business transactions, but most of the time neither the buyer nor the seller are aware, and no one asks about the minivan that the owner uses to get to work. There was some good news however. Bob had been thinking about buying a Mercedes.

http://ontariorealestatesource.blogspot.com/2009/07/dont-sell-minivan-by-mistake.html

reviewed by Moishe Alexander, canadian funding corp CEO

The G-8 summit starts today in L’Aquila, Italy. The G-8 are the old guard: US, UK, Germany, France, Italy, Japan, Canada and Russia. And their opinions are starting to look a little redundant in the aftermath of the credit crisis.

The credit crisis has shifted the balance of power. Not since the days of the conquistadors has there been such an imbalance. Back then the Pope was the ultimate power and carved the New World in two between Spain and Portugal. Now it’s the split between old and new economies.

The levels of debt raised by the developed nations to bail out their banking systems is crippling compared to the emerging nations.  According to recent International Monetary Fund forecasts by 2014 the debt of economies in the developed world are expected to be more than 114% of GDP (up from 78% in 2006).  The forecasts for the emerging economies (including China) is just 35% (down from 38% in 2006).

With most of the developed nations in the worst economic condition since the second world war, the balance of power is clearly shifting in favor of the large emerging nations. China and India in particular.

Added to their new found lack of financial flexibility, the G-8 nations have another major problem: a lack of harmony in their thinking. Germany and Canada have been calling for a steady wind down of the emergency liquidity measures while the UK and US continue to favor pumping cash into the economies.

On the other hand the leaders of 5 major developing Economies (China, India, Brazil, Mexico and South Africa) are holding their own parallel meeting. This follows on from the first ever BRIC (Brazil, Russia, India, China) summit held last month in Russia. The developing powers are quickly putting in place their own structures and the old world is in danger of being left out of the new world order. The closer these developing powers become politically the less likely the dollar is to remain as the world’s reserve currency. Remember the BRIC nations currently hold some US$1.1 trillion of US government debt. At the BRIC summit Russia was calling for a move away from the US dollar.  It feels more and more like a whenrather than an if situation.

As investors, we are often faced with difficult decisions, especially those which involve putting cold hard facts ahead of personal feelings. We are entering such a phase now. We need to put aside our personal nationalism in the face of an obvious global power shift. Jim Rogers said in an interview last year that the best investment you could give your kids today is to buy them Chinese lessons. We agree.

As far as our financial portfolios are concerned we need to make sure we are having our piece of the emerging pie. There are unique risks to investing in the emerging world (e.g. political instability, weak legal systems etc) and you really have to do your homework. I would recommend keeping your exposure to less than 10% of your total portfolio. Also stick to highly liquid assets, like stocks and bonds. You don’t want to wake up finding that you never really owned that real estate you bought in China and it has been bulldozed to build a sports stadium, now do you?

http://www.contrarianprofits.com/articles/could-a-bric-alliance-crash-the-dollar/18846

reviewed by Moishe Alexander, CFC CEO