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Existing market grows more slowly in September: CREA

24 October 2016
By the Numbers

OTTAWA – Even though sales of existing homes, and their prices, continued to grow at a pace several times higher than the rate of inflation during September, the Canadian Real Estate Association is expressing fears new government regulations will actively discourage first-timer buyers from entering the market.

The realtors’ group said national home sales through its Multiple Listing Service (MLS) only gained 0.8% on a month-over-month basis in September while noting sales have eased in each of the previous four months and are not 5.6% below the record set in April 2016.

However, on an actual basis, sales climbed 4.2% year-over-year in September while the national average price climbed 9.5% from the levels seen in September 2015.

Chart courtesy of the Canadian Real Estate Association.CREA also noted the number of local markets reporting increases was about evenly split with the number says the opposite – although in a continuation of trends seen over the past few months, sales climbed further in and around the Greater Toronto Area (GTA) while those in and around the Lower Mainland of British Columbia fell.

The decline in B.C. was attributed almost entirely to the new foreign buyer’s tax implemented in August by the provincial government in a bid to ratchet down fast rising asking prices. In fact, it maintains the situation in Greater Vancouver is responsible for the national slow down as well.

“The Finance Minister’s recent changes to regulations affecting mortgage lending has added to housing market uncertainty among buyers and sellers,” CREA president Cliff Iverson said in a statement. “For first-time home buyers, the stress test for those who need mortgage default insurance will cause them to rethink how much home they can afford to buy.”

“First-time home buyers, particularly in housing markets with a lack of affordable inventory of single family homes, may be priced out of the market by the new regulations that take effect on October 17,” CREA chief economist Gregory Klump continued. “First-time home buyers support a cascade of other homes changing hands, making them the linchpin of the housing market. The federal government will no doubt want to monitor the effect of new regulations on the many varied housing markets across Canada and on the economy, particularly given the uncertain outlook for other private sector engines of economic growth.”

Actual sales activity was up 4.2% year-over-year in September as transactions were up in almost two-thirds of all Canadian markets led by the GTA and environs, the increase was held in check by the drop in activity in B.C.’s Lower Mainland.

The number of newly listed homes inched up by 0.5% in September 2016 compared to August. As with sales, the number of markets where new listings were up on a month-over-month basis were evenly split with those where they fell.

With a sales-to-listings ratio of 62.1%, September’s was considered a sellers’ market – particularly in B.C., the G.T.A. and southwestern Ontario.

Chart courtesy of the Canadian Real Estate Association.CREA also prices rose in nine of the 11 markets it actively tracks with the largest gains being recorded in B.C. Double digit gains were also seen in the G.T.A. and on Vancouver Island while prices fell in Calgary. Modest gains were made in the rest of the country.

The actual national price for homes sold in September was $474,590 – a year-over-gain of 9.5%. It continues to be pulled upwards by sales activity in both B.C. (mainly Greater Vancouver) and the G.T.A. – removing those hotspots from the calculation drops the average price to $358,884.

In her commentary, Diana Petramala of TD Economics noted the excesses seen Greater Vancouver Market have begun to unwind and activity “is returning to more normal levels, following a year of excessive growth.” She also wonders if this foreign buying frenzy hasn’t simply shifted east to Toronto, with record immigration and strong growth in the numbers of first time buyers.

“The fundamental factors supporting housing activity appear stronger in Toronto than Vancouver – helping drive existing home sales and prices up,” she remarked. “Having said that, the sales-to-population ratio in Toronto has risen sharply recently, suggesting that foreign investment and speculation are playing a part, albeit likely smaller than in Vancouver.”

She also believes the new mortgage and tax rules enacted by the federal government recently should take some of the stream out of the market through 2017. “This is the sixth time in eight years that the government has tightened mortgage regulation, and in each event, sales have fallen between 6% and 14% in the following three to six months,” Petramala pointed out. “The difference this time around is that the rules are more broadly targeted at insured borrowers (raising the bar on income testing), lenders (restricting the use of portfolio insurance) and foreign investors and speculators (increasing oversight of capital gain taxes on real estate and restricting non-residents from taking advantage of the principal residence exemption).

“As such, we expect that the regulations will shave as much as 10% off of existing home sales and up to 1% off of home prices next year,” she added. “The impact is expected to be more pronounced in Toronto where activity is starting to look a little frothy but should be spread across the country.”

‘Shadow’ named Benjamin Moore’s colour of the year

24 October 2016

MONTVALE, New Jersey – Paint producer Benjamin Moore has named a rich, royal amethyst named Shadow 2117-30 as its 2017 Colour of the Year. The company has also unveiled its 2017 colour trends, which it believes will be a corresponding palette consisting of deep, saturated hues.

The Colour of the Year was unveiled recently at a gathering of leading interior designers, influencers and media at an event held in New York City.

“Allusive and enigmatic, Shadow is a master of ambiance. It is a colour that calls to mind a ‘past’, yet it can also make a contemporary, colour-confident statement,” Ellen O'Neill, Benjamin Moore’s creative director said in a statement. “Shadow is sophisticated, provocative and poetic, it can bring energy to a space or harmony and a moment of respite.”

Described by the Denver Post as a deep purple, Shadow (seen on the wall here) is Benjamin Moore’s Colour of the Year for 2017. The Benjamin Moore Colour Studio forecasts colour trends after a year of research attending major industry shows around the world, while also taking cues from standouts in architecture, fashion, textiles, home furnishings and the arts. Fine art emerged as a leading inspiration, highlighting the correlation between an artist's use of colour and light to create mood.

The Colour Trends 2017 palette features 23 rich and sophisticated hues ranging from muted pales to saturated deeps. In curating the palette, the Colour Studio lent significant consideration to the pairing of colours and relationships between colour families, as well as a newfound level of colour confidence in deeper hues among design professionals and consumers.

The inspirational Colour Trends 2017 colour card illustrates the use of colour in ways that celebrate how shadow and light travel throughout a space during the course of a day. The 23 colours of the Colour Trends 2017 palette include the following: Shadow 2117-30; Amulet AF-365; Salamander 2050-10; Guacamole 2144-10; Sandlot Gray 2107-50; Sea Star 2123-30; Etruscan AF-355; Chalk White 2126-70; Porcelain 2113-60; Sea Life 2118-40; Stormy Monday 2112-50; Grandfather Clock Brown 2096-30; Wet Concrete 2114-40; Cloud Cover OC-25; Dinner Party AF-300; Wish AF-680; Night Shade 2116-10; Knoxville Gray HC-160; Ebony King 2132-20; Gentleman’s Gray 2062-20; Pink Bliss 2093-70; Iceberg 2122-50; and, Dark Burgundy 2075-10.

In support of its 2017 colour trends palette, the company will be offering pint samples and curated palette cards of each hue at all its 3,500 independently owned retail outlets across the U.S. and Canada.

Click here to review the entire 2017 Colour Trends palette from Benjamin Moore.

Getting the three keys to success

24 October 2016
Retail, Opinion

A coaching client recently told me: “Either I need to re-ignite my passion for the business, or I need to replace myself.” To succeed in business today, we need wisdom, passion and focus – having two out of three ain’t good enough.

Every business is faced with increased competition, shrinking margins, more demanding customers and the challenge of finding and keeping great staff.  The battle for customer ‘ownership’ and long-term profitability is tough...and getting tougher.  Mediocrity is no longer an option.

So we need wisdom. We need to truly understand our business, our customers, our market and our industry as well as the math of profitability and the principles of management. We all need to manage smarter.

Then, we must be passionate. We must absolutely love what we do, and who we do it for. As a business owner, leader or manager, we are the source of energy, passion and joy in our business, or our part of the business. Nobody will love it more than we do. Not our staff, not our customers – nobody.

Third, to be successful, we must be focused. The passionate and energised mind will constantly be seeing hundreds of new possibilities and directions. Seeing possibilities is important. In fact, the future belongs to those who can see possibilities and who know what to do with them. But, to be successful, we must focus on just a few of those possibilities and execute them brilliantly.

How do we keep focused? Here's how:

  1. By being clear about who our target customers are and our commitment to them. If we're trying to be ‘something to everyone’, we're doomed.

  2. By being clear about the compelling value and experiences that we pledge to deliver and which will give us a clear, sustainable and profitable competitive advantage.

  3. We need to be clear about what the business must become. What will it look like in three to five years? How it will do business and how must it change? How it will get there and what will it ‘stand for’ along the way.

Creating this kind of clarity about the business is what management is all about. If that seems like too much work, don't own or manage a business. You’ll drag it down, lose money and ruin lives! A business owner recently asked me to help him figure out why he and his business had ‘hit a wall’ in the past two years. He had started his business from nothing and built it into a significant enterprise but now it was stalled.

After hearing him describe his business journey for 20 minutes, I told him: “Here’s your problem. At some point, when you started out years ago, you had passion and focus, but not so much wisdom. You worked hard over long hours and you gradually achieved a high level of wisdom about your customers, your market, your industry and how to grow this business. And that wisdom, together with your passion and focus, made you successful.

“The problem is that somewhere along the way, you lost your passion and focus. For years you’ve tried to do it all yourself and now you’re tired, you’re overwhelmed, you need to delegate and you don’t know how. You’re frustrated and you don’t know what to do next.

He breathed a huge sigh of relief. “That’s it. That’s exactly it. I have the wisdom, but I’ve lost much of my passion and focus. I’m tired and I’m frustrated.

So, working together and using my 34-page Vision Critical guidebook, we put into place a process that will bring clarity, focus and passion back to the business – and balance back to his life. He is also making the important and difficult transformation from being a ‘player’ to being a ‘coach’.

To do this, he’s learning two important things: 1) The skill of being an effective leader and coach, and; 2) He’s learning new ways to feel good about himself and his new role in the business.

In addition, he has redefined what ‘success’ looks like in his life. He and his family have created a ‘Life Plan’ that includes doing, together, a whole list of wonderful things that they’ve put ‘on hold’ for way too long. He’s back to having the wisdom, passion and focus that got him where he is today.

Do you have the wisdom, the passion and the focus that your business or job needs you to have? If not, which one is missing, and what’s your plan to get it back – or, to move on?

Industry needs help to grow, Richard tells parliament

12 October 2016
Furniture, Manufacturing

OTTAWA – The furniture industry should be a big part of the federal government’s promised strategy to grow this country’s manufacturing sector as it is not only still here a decade after the great recession but it remains a vibrant and innovative source of jobs, taxes and international trade. That’s the message Pierre Richard and Rejean Poitras took to the House of Commons’ Standing Committee on Industry, Science and Technology in a recent appearance before it.

In fact, it may have been the first time industry representatives had ever given in-person testimony before a parliamentary committee – at least in the modern era. The committee, which is currently studying the manufacturing sector to develop recommendations for the federal government’s promised industrial strategy, is made up of M.P.s from all three parties in the House.

Pierre RichardRichard, president and chief executive officer of both the Quebec Furniture Manufacturers Association (QFMA) and the Canadian Furniture Show (CFS),  told Home Goods Online it was vitally important to do more than just submit a brief to the committee. “I wanted to raise the profile of the industry,” he said. “I wanted to let them know we still exist. They needed to know the industry is vibrant and makes great contributions to the health of the country’s economy.”

Also taking part in the presentation, which lasted almost two hours, was Rejean Poitras, who is vice chairman of the QFMA’s board of directors and president of metal furniture specialist Amisco.

In the brief, Richard reminded the assembled M.P.s that Canada is the world’s eighth-largest furniture producer that currently employs some 63,300 workers, making it the second largest consumer products industry in Canada – after food processing. In fact, it employs almost the same number of workers as does the aerospace industry and about 25% of the total number employed by the auto sector.

One of the industry’s main challenges at this point in time is recruiting qualified people to work in furniture manufacturing. “We are growing and we are creating jobs,” he said, adding its filling those jobs that’s proving difficult.

Aiding the industry to create awareness of the career potential it offers is one of the recommendations the association made, urging the government to offer financial support in the form of scholarships and tax credits to students choosing to work in the furniture.

The association’s other recommendations to the committee included:

  • Enhancing and ensuring accessibility of assistance programs for research and development to promote both manufacturing innovation and new product development as well as improving the industry’s competitiveness;

  • Provide advice and support to manufacturers wanting to provide effective e-commerce platforms, particularly from both a strategic and technological viewpoint (creating and optimising web sites, marketing, customer service, etc.) while providing financial support to train employees tasked with developing online sales;

  • Introduce tax relief measures on the benefits derived from e-commerce for manufacturers getting into it for the first time – such as tax breaks for the first three years, for example, followed by imposing lower taxes over a set time frame.

  • Ensure the implementation of new consumer product safety measures is done in collaboration with the industry, with a gradual implementation scale over a reasonable time frame and easily adopted transitional measures;

  • Devise a furniture export strategy that uses existing Canadian and American trade shows (office and residential furniture) to attract major buyers from across North America by providing financial support to take part in these shows; and,

  • Conduct major promotional activities, such as ‘reverse’ trade missions where key buyers are invited to Canada to visit the Canadian furniture facilities (factories, stores, etc.).

While Richard doesn’t know how much of the association’s advice the committee will take, he believes the M.P.s who listened to his testimony now know the industry is here and is capable of making even greater contributions to the overall Canadian economy.

“They know we need assistance to grow,” he said. “They also know we bring money into the country when we sell to others. They also know this is a dynamic, innovative industry that’s worthy of their attention.”

The government is supported to unveil its new manufacturing strategy sometime next year.

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Home Goods and its accompanying newsletter - HGO This Week - covers the furniture, bedding, appliances, consumer electronics, accessories, lamps and lighting and floor coverings product sectors of the big ticket home goods market in Canada. HGO is also a forum for the dissemination of market research and hard-hitting articles on best practices for Canadian retailers.

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