House prices inch up, oil slides more & BlackBerry’s throwback: BUSINESS WEEK WRAP
There were more signs this week of high prices prices in Canadian housing, and that has some experts worried.
The Canadian Real Estate Association put out numbers this week showing the average Canadian home is now worth more than $ 413,000. That’s the latest record, and up six per cent in the past year.
The realtor group singled out two cities, as usual, for skewing the price higher: Toronto and Vancouver. If those two booming markets are stripped out, the average price for the rest of the country drops by almost $ 100,000.
But there’s a new city on the agency’s radar, as CREA says Calgary’s market could be one to watch as the impact of plunging oil prices could take a bite out of some frothy valuations.
“The effect of lower oil prices on Canada’s housing markets is something of a wild card,” CREA’s chief economist told us this week.
Oil keeps sliding
A welder works on a pipe in Fort McMurray. The oil boom has created jobs in many industries in Canada but that may change with the age of cheap oil here, CIBC warned this week. (Norm Betts/Bloomberg)
Indeed, housing isn’t the only part of Canada’s economy that’s vulnerable to the plunging oil price. One of Canada’s biggest banks pointed out this week that oil prices being off by about 50 per cent is going to have an impact across the country, in very uneven ways.
Yes, Alberta is going to pay dearly in the short term. But other governments are also going to suffer. The bright side, meanwhile, is that places not so oil-reliant (think: Ontario) could be poised for growth. Whether it’s enough to offset weakness in Alberta remains to be seen, but at the very least, the bank points out that cheap oil isn’t quite so cut and dried. “Because we’re an oil exporter, the easy answer is, it’s a net negative,” is how Avery Shenfeld described it in an interview with Amanda Lang this week.
Outside of that, cheap crude is likely to drag the loonie lower, to something around the 81 cent level as a floor, the bank said. But a big risk, the bank warns, is that Ottawa might suddenly find itself with billions less to play with.
BlackBerry hoped this week that a blast from the past might be enough to bring some of its core users backs. The Waterloo-based company unveiled a new device this week, called the Classic and the name seems apt — it looks like a modern version of the classic BlackBerry that won loyal fans all those years ago.
The phone is based on the Bold, but with a host of updated technology to keep up with modern smartphone demands.
The early returns are mixed, but some analysts say getting back to its roots may be part of what the company needs to help its turnaround take shape.
“It’s going to be another year of transition, but they are taking the right steps. Let’s see how the market responds,” one analyst told us this week.
Those were just some of the biggest stories we reported on this week. Be sure to check back with our website often for more, and remember to follow us on Twitter here.
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CBC | Business News