- TSX +40.16 to 13,621.55 (CP) as investors closed the books on a year that saw a solid advance, up 9.55 per cent for the year, with the advance racked up over the last five months. The market started to transition from one that was driven by central bank stimulus to an environment where investors started to focus more on economic fundamentals.
- Dow +72.37 to 16,576.66 also ended the year at a new high, as traders digested a mixed bag of data on home prices, consumer confidence and manufacturing. For the year, U.S. home prices reflected big gains in earlier months. They rose 13.6 per cent over the past 12 months, the fastest pace since February 2006 — before the U.S. real estate crash.
- Dollar +.02 to 94.022 US the end of a year in which the loonie fell below parity with the U.S. dollar, with little expectation it will regain that level any time soon. The currency started the year at 100.51 cents U.S. Part of the reason for the slide was increasing strength in the U.S. dollar on rising speculation starting in late May that the U.S. Federal Reserve would start to taper its US$85 billion of monthly bond purchases, a key stimulus measure that has kept long term rates low and supported a strong equity market rally. Most importantly, the view on the Bank of Canada changed, as we came into this year expecting the BoC to hike rates at some point
- Oil -$.59 to $98.70 US
- Gold +$5.20 to $1,209.00 US The gold sector fell about 48 per cent for the year while the precious metal has fallen about 28 per cent, the first annual loss since 2000.
Five Canadian mortgage market predictions for 2014
Robert McLister Special to The Globe and Mail Dec. 30 2013
1. New mortgage rules
Expect more rule tightening in 2014 designed to reduce mortgage risk for lenders, mortgage default insurers and the government. By definition, those rules will make it slightly harder to get approved for some mortgages and further slow the housing market.
2. Credit unions will steal market share
Since they’re provincially regulated, credit unions have more flexible lending guidelines than federally regulated banks. They’ll use that to their advantage in addition to marketing more heavily, both online and to mortgage brokers. We’ll also see some big mergers this year as credit unions seek out economies of scale.
3. Stronger online players
A new breed of online mortgage broker is sacrificing commissions for volume, and selling cut-rate mortgages. This trend will heat up competition industrywide, delivering greater mortgage discounts to all consumers.
4. Hybrid mortgages will grow more popular
Economists and government officials have been warning us of higher rates for four years. So far they’ve been wrong, and now many consumers aren’t sure what to believe. More Canadians will hedge their rate bets with hybrid mortgages (part fixed and part variable).
5. Consumer IQs will increase
For those in the mortgage industry who prefer an uninformed consumer, your days are numbered. Canadians will spend more time researching rate comparison websites, online mortgage forums, news portals, blogs, calculators and other online mortgage tools. They’ll become increasingly savvy about fine print like penalty calculations, rate blend policies and refinance restrictions.