CHHMA - EYE ON OUR INDUSTRY
Volume 11, Issue 27, July 20, 2011
Inside This Issue:
CHHMA Group Insurance & Benefits Program
Register for CHHMA Go Kart Night
Nine Things Successful People Do Differently
Bank of Canada Maintains Key Rate, Hints at Future Hikes
Canadian Home Resales Up 2.6% in June
TD: Canadian Housing Market to Undergo Moderate Correction
U.S. Home Building Improves in June but Still Facing Many Challenges
U.S. Consumer Prices Fall in June
U.S. June Retail Sales Edge Higher
Association News
CHHMA Group Insurance & Benefits Program
Last December's Group Insurance renewal marked the sixth year for the CHHMA Group Insurance program.
In today's cost-conscious and competitive environment we understand that you are looking for opportunities to balance the cost of benefit programs, while ensuring they meet the health and financial protection needs of your employees.
The benefits of the CHHMA Group Insurance program are as follows:
- Reduced premium costs to all members
- More competitive underwriting for the smaller members
- Flexible financial underwriting for the larger members
- Enhanced financial renewal formulas to provide consistent renewals
- Additional benefits not currently provided under the member’s existing plan.
For further information or to set up a meeting to review the program with one of our consultants from the Benefits Architect Group, please contact:
Claude Jeanson (416-258-9904, claude@benefitsarchitect.ca) or Nigel Ottley (416-934-1660, nigel@benefitsarchitect.ca) or call
toll-free at 1-866-379-3120.
Register for CHHMA Go Kart Night
The CHHMA Go Kart Night is taking place on Thursday, September 1st at the Circuit ICAR motorsports complex (http://www.circuiticar.com/accueil.html), located 20 minutes north of Montreal in Mirabel, Quebec.
The Go Kart racing will take place on an outside 1 km long track designed by 1997 F1 World Champion Jacques Villeneuve, where karts can reach speeds of up to 65 km/h.
The cost to attend is $100 for CHHMA members, $120 for non-members plus taxes and will include a cold buffet served in the clubhouse (5:00 p.m.) prior to the racing competition which will start at 6:30 p.m. The competition will be a team format so register a team foursome (individuals not registering as a foursome will be assigned to teams). The event is limited to 40 persons, so register soon!
Click here to register: http://www.chhma.ca/Public/CHHMA-Upcoming-Events.
Best Business Practices
Nine Things Successful People Do Differently
Why have you been so successful in reaching some of your goals, but not others? If you aren't sure, you are far from alone in your confusion. It turns out that even brilliant, highly accomplished people are pretty lousy when it comes to understanding why they succeed or fail. The intuitive answer - that you are born predisposed to certain talents and lacking in others - is really just one small piece of the puzzle. In fact, decades of research on achievement suggests that successful people reach their goals not simply because of who they are, but more often because of what they do.
This article was written by Heidi Grant Halvorson, Ph.D., motivational psychologist and author and appeared in the Harvard Business Review.
1. Get specific. When you set yourself a goal, try to be as specific as possible. "Lose 5 pounds" is a better goal than "lose some weight," because it gives you a clear idea of what success looks like. Knowing exactly what you want to achieve keeps you motivated until you get there. Also, think about the specific actions that need to be taken to reach your goal. Just promising you'll "eat less" or "sleep more" is too vague - be clear and precise. "I'll be in bed by 10pm on weeknights" leaves no room for doubt about what you need to do, and whether or not you've actually done it.
2. Seize the moment to act on your goals. Given how busy most of us are, and how many goals we are juggling at once, it's not surprising that we routinely miss opportunities to act on a goal because we simply fail to notice them. Did you really have no time to work out today? No chance at any point to return that phone call? Achieving your goal means grabbing hold of these opportunities before they slip through your fingers.
To seize the moment, decide when and where you will take each action you want to take, in advance. Again, be as specific as possible (e.g., "If it's Monday, Wednesday, or Friday, I'll work out for 30 minutes before work.") Studies show that this kind of planning will help your brain to detect and seize the opportunity when it arises, increasing your chances of success by roughly 300%.
3. Know exactly how far you have left to go. Achieving any goal also requires honest and regular monitoring of your progress - if not by others, then by you yourself. If you don't know how well you are doing, you can't adjust your behaviour or your strategies accordingly. Check your progress frequently - weekly, or even daily, depending on the goal.
4. Be a realistic optimist. When you are setting a goal, by all means engage in lots of positive thinking about how likely you are to achieve it. Believing in your ability to succeed is enormously helpful for creating and sustaining your motivation. But whatever you do, don't underestimate how difficult it will be to reach your goal. Most goals worth achieving require time, planning, effort, and persistence. Studies show that thinking things will come to you easily and effortlessly leaves you ill-prepared for the journey ahead, and significantly increases the odds of failure.
5. Focus on getting better, rather than being good. Believing you have the ability to reach your goals is important, but so is believing you can get the ability. Many of us believe that our intelligence, our personality, and our physical aptitudes are fixed - that no matter what we do, we won't improve. As a result, we focus on goals that are all about proving ourselves, rather than developing and acquiring new skills.
Fortunately, decades of research suggest that the belief in fixed ability is completely wrong - abilities of all kinds are profoundly malleable. Embracing the fact that you can change will allow you to make better choices, and reach your fullest potential. People whose goals are about getting better, rather than being good, take difficulty in stride, and appreciate the journey as much as the destination.
6. Have grit. Grit is a willingness to commit to long-term goals, and to persist in the face of difficulty. Studies show that gritty people obtain more education in their lifetime, and earn higher college GPAs. Grit predicts which cadets will stick out their first gruelling year at West Point. In fact, grit even predicts which round contestants will make it to at the Scripps National Spelling Bee.
The good news is, if you aren't particularly gritty now, there is something you can do about it. People who lack grit more often than not believe that they just don't have the innate abilities successful people have. If that describes your own thinking ... well, there's no way to put this nicely: you are wrong. As I mentioned earlier, effort, planning, persistence, and good strategies are what it really takes to succeed. Embracing this knowledge will not only help you see yourself and your goals more accurately, but also do wonders for your grit.
7. Build your willpower muscle. Your self-control "muscle" is just like the other muscles in your body - when it doesn't get much exercise, it becomes weaker over time. But when you give it regular workouts by putting it to good use, it will grow stronger and stronger, and better able to help you successfully reach your goals.
To build willpower, take on a challenge that requires you to do something you'd honestly rather not do. Give up high-fat snacks, do 100 sit-ups a day, stand up straight when you catch yourself slouching, try to learn a new skill. When you find yourself wanting to give in, give up, or just not bother - don't. Start with just one activity, and make a plan for how you will deal with troubles when they occur ("If I have a craving for a snack, I will eat one piece of fresh or three pieces of dried fruit.") It will be hard in the beginning, but it will get easier, and that's the whole point. As your strength grows, you can take on more challenges and step-up your self-control workout.
8. Don't tempt fate. No matter how strong your willpower muscle becomes, it's important to always respect the fact that it is limited, and if you overtax it you will temporarily run out of steam. Don't try to take on two challenging tasks at once, if you can help it (like quitting smoking and dieting at the same time). And don't put yourself in harm's way - many people are overly-confident in their ability to resist temptation, and as a result they put themselves in situations where temptations abound. Successful people know not to make reaching a goal harder than it already is.
9. Focus on what you will do, not what you won't do. Do you want to successfully lose weight, quit smoking, or put a lid on your bad temper? Then plan how you will replace bad habits with good ones, rather than focusing only on the bad habits themselves. Research on thought suppression (e.g., "Don't think about white bears!") has shown that trying to avoid a thought makes it even more active in your mind. The same holds true when it comes to behaviour - by trying not to engage in a bad habit, our habits get strengthened rather than broken.
If you want to change your ways, ask yourself, what will I do instead? For example, if you are trying to gain control of your temper and stop flying off the handle, you might make a plan like "If I am starting to feel angry, then I will take three deep breaths to calm down." By using deep breathing as a replacement for giving in to your anger, your bad habit will get worn away over time until it disappears completely.
It is my hope that, after reading about the nine things successful people do differently, you have gained some insight into all the things you have been doing right all along. Even more important, I hope you are able to identify the mistakes that have derailed you, and use that knowledge to your advantage from now on. Remember, you don't need to become a different person to become a more successful one. It's never what you are, but what you do.
Economic News
Bank of Canada Maintains Key Rate, Hints at Future Hikes
As widely expected, the Bank of Canada announced yesterday that it will maintain its overnight rate at 1% for the seventh consecutive meeting, but hinted more strongly that it will start hiking rates sooner than later.
The bank pointed to global threats on both sides of the Atlantic and weaker than expected exports for not increasing rates at this time but also signalled that the domestic economy is moving closer to full capacity and the likelihood of higher rates.
The central bank said global expansion is proceeding broadly as projected with modest growth in major advanced economies and robust expansions in emerging economies. In Canada, core inflation will reach its 2% target earlier than previously anticipated and economic growth will re-accelerate in the second half of the year after a second-quarter slump, which has been largely influenced by supply chain disruptions in the aftermath of the earthquake in Japan and high energy prices restricting consumption.
The bank maintains its projection that the Canadian economy will return to full capacity by the middle of 2012 and that inflation will remain well-anchored.
The bank revised its forecast slightly for economic growth in Canada this year from 2.9% to 2.8%, but maintained its forecasts for 2012 and 2013 at 2.6% and 2.1%, respectively. It anticipates that total CPI inflation, which hit 3.7% in May, will stay above 3% in the near term due to temporary factors such as higher energy and food prices but return to the 2% target by mid-2012. Annual core inflation, which was 1.8% in May, is "slightly firmer than anticipated" and is "expected to remain around 2% over the projection horizon," the bank said. Growth in household spending is also projected to be slightly better, reflecting higher household income relative to the previous April projections.
Household debt in Canada is still solid and business investment, a soft spot earlier in the recovery, is robust the bank said. Net exports however, are still weak in part because of "ongoing competitive challenges" and a strong loonie as well as "modest U.S. demand". The U.S. economy continues to struggle as consumers tighten their belts and as the labour market fails to produce enough meaningful new jobs.
The bank also said that growth in much of Europe has outpaced expectations but fiscal austerity in many countries will restrain the continent's recovery. It acknowledges that its projection "assumes that authorities are able to contain the ongoing European debt crisis, although there are clear risks around that outcome."
Several economists are calling for October and/or December as when they expect the Bank of Canada to start raising rates.
The next scheduled date for announcing the overnight rate is September 7th.
Canadian Home Resales Up 2.6% in June
According to statistics released last Friday by the Canadian Real Estate Association (CREA), seasonally adjusted MLS home sales rose 2.6% from May to June, with two-thirds of local markets posting month-over month gains in June. Year-over-year sales were up 10.8%, reflecting falling demand that occurred in June of last year.
Sales activity remained stable in Toronto with gains recorded in Victoria, Calgary, Montreal, Ottawa, London and Hamilton. June sales declined in Vancouver and nearby Fraser Valley.
"Canadian housing demand remains resilient, thanks to low interest rates, job growth, and home buyer confidence in the economy," said Gary Morse, CREA's president. "That said, local housing market trends often differ from national trends."
Gregory Klump, CREA's chief economist, further added that "the Canadian housing sector remains on solid footing. The rise in monthly home sales activity at the end of the second quarter, upbeat business sentiment and hiring intentions, and signs that the Bank of Canada is in no rush to raise interest rates bode well for home sales activity and prices going into the second half of 2011."
National sales activity was down 4.7% in the second quarter from the first quarter. This decline partly reflects the new mortgage rules that were announced in January and implemented at the end of March which pulled sales forward into the first quarter at the expense of sales activity in April and May. Mortgage interest rates also rose in April and May, which may have moved some home buyers to the sidelines.
A total of 245,170 homes have traded hands via Canadian MLS in the first half of 2011. Year-to-date sales are running in line with the 10-year average and monthly sales also coming close to 10-year averages. CREA noted that this highlights the relative stability of demand this year compared to the past three years, when sales swung significantly above and below average monthly levels.
The number of newly listed homes also rose nationally by 1.8% from May to June. Gains in Toronto, Vancouver and Ottawa contributed most to the national increase. The rise in new listings will be especially welcome news for home buyers in Toronto, where listings have been in short supply relative to demand this year.
The national housing market remains firmly planted in balanced territory. The national sales-to-new listings ratio, a measure of market balance, stood at 52.6% in June, little changed from 52.2% in May. The seasonally adjusted number of months of inventory stood at six months at the end of June on a national basis, holding steady from May.
The national average price for homes sold in 2011 was $372,700, down slightly 0.9% from May, but up 8.7% from June 2010. The national average price is becoming less affected by home sales in some expensive Vancouver neighbourhoods, but is still being pitched higher by the value of those sales. In addition, broadly based price gains in other housing markets are keeping the national average price up. Close to 80% of local markets posted year-over-year average price gains in June.
In general, analysts are predicting a cooling demand for home sales next year.
TD: Canadian Housing Market to Undergo Moderate Correction
Canada's housing market is set to undergo a "moderate correction", with resale activity poised to drop 15.2% and average prices likely to fall 10.2% over the next two calendar years, according to a report released by TD Economics last week.
"A combination of more subdued job and household income growth, rising interest rates, the recent tightening in borrowing rules for insured mortgages and fewer first-time home buyers are expected to be the chief culprits behind the slowdown," said the report prepared by deputy chief economist Derek Burleton and economist Sonya Gulati.
Among the 12 major markets profiled in the report, "Vancouver and Toronto looked poised for larger than average declines over the next few years, reflecting in part their exposure to the condominium segment, which appears particularly ripe for a correction," the TD economists said. Vancouver is destined for a large 25.4% peak-to-trough decline in sales activity and a 14.8% drop in prices while Toronto will see a gradual correction in sales in the order of 25% over the next seven to eight quarters and a price decline of 11.7%.
Over 2011-2013, Calgary, Edmonton and Regina housing markets are set to lead the way. In Calgary, sales are expected to decline 8.8% from peak-to-trough over the two year outlook and prices are expected to dip 6.4%. In Edmonton, sales are expected to drop 9.5% from peak-to-trough and prices to fall 6.6%. In Regina, sales are forecast to edge down 3.8% and prices by 6.1%.
However, recent home price and sales data suggest stronger conditions are present for the summer and early fall before softness sets in by year end. "With most of the drivers expected to remain supportive to housing demand in the near term, we anticipate that the brunt of the adjustment will take place in 2012 and 2013," the report said.
Over the forecast period, TD sees the housing market constrained by national economic growth that is expected to slow from 2.8% in 2011 to 2.3% in 2012 and 1.9% in 2013. As well, personal disposable income will remain subdued at around 3.8% over the forecast horizon, while job creation slows from 1.7% in 2011 to 1.2% over 2012-2013. "With the forecast growth performances below historical trends, economic activity should not generate enough momentum to sustain above average price and sales gains."
Another factor that will limit home buying activity will be increasing interest rates. TD expects the Bank of Canada to start lifting its key lending rate in January where it will reach 2% in 2012 and then 3% by mid-2013 from the current 1%. As well, new insured mortgage financing rules that came into effect earlier this year will make home affordability more difficult with the rising rates and chase many first-time home buyers out of the market.
First-time home buyers accounted for as much as a half of overall sales in recent years, up from a historical average of about one third. TD assumes that this ratio will fall back to about 40% in their forecast as their numbers shrink and higher home affordability prices them out of the market.
By 2013, the average resale home price will decline 10.2% to $329,000 (currently $365,170 in Q1 of 2011), while sales activity will average 416,400 units.
In the new home market, housing starts, which are currently at a 195,200 level in the second quarter of 2011, are projected to fall back to an average of 164,000-171,000 per month over the next two years. New home demand will be affected by similar factors as the resale market.
The report say Canada has become the tale of two markets. On the one hand, there is the multi-residential component, which tends to be more prone to sharp up and down cycles, and the singles component that is usually less volatile. The gravitation towards multi-residential properties has been apparent in national statistics recently with an outsized proportion of first-time buyers and increasing interest from both foreign and domestic investors being key drivers. Looking ahead however, the number of first-time buyers is expected to decline as mentioned and the economics in favour of investment properties are likely to become less attractive, particularly in the condo market as supply increases and borrowing costs rise.
U.S. Home Building Improves in June but Still Facing Many Challenges
The outlook among U.S. home builders improved in June but the future prospects for U.S. home construction are anything but promising.
The National Association of Home Builders said on Monday that their index of builders' outlook rose two points to 15 in June. Any reading below 50 indicates negative sentiment about the housing market. The index hasn't reached 50 since April 2006, the peak of the housing boom. In May, the index had hit its lowest level in nine months and remains just seven points above the lowest reading on record that took place in January 2009.
U.S. builders are struggling to compete with deeply discounted foreclosures and short sales. In addition, lower than expected home appraisals are preventing deals and loans are harder to come by with most private lenders now requiring 20% down payments and higher credit scores for the best rates.
Last year, the number of people who bought new homes hit its lowest level on record and this year is shaping up to be just as bad.
New home sales fell in May to a seasonally adjusted annual rate of 319,000 homes according to the Commerce Department. That's well below the 700,000 level that economists say is required to sustain a healthy housing market. Renting has now become a preferred option for many Americans who lost their jobs in the recession and who were forced to leave their rapidly depreciating homes.
Meanwhile, the Commerce Department also reported yesterday that U.S. housing starts rose more than expected in June to a six month high and permits for future construction unexpectedly increased, likely reflecting growing demand for rental apartments.
U.S. housing starts increased 14.6% from May to a seasonally adjusted annual rate of 629,000 units in June, the highest level since January and above economists' consensus forecast of 575,000 for the month. May's starts were revised down to 549,000 from the previously reported 560,000 unit rate. Compared to June of last year, residential construction was up 16.7%. Despite June's increase, housing starts remain roughly at half the 1.2 million homes per year level that economists say must be built to sustain a healthy housing market.
Housing starts for multi-family homes soared 30.4% in June to a 176,000 unit rate, while single-family home construction, which accounts for a larger portion of the market, increased 9.4% to a 453,000 unit pace.
New building permits (a gauge of future construction) rose 2.5% to a 624,000 unit pace in June. Permits were boosted by a 6.9% rise in the multi-family segment. Permits for the construction of buildings with five units or more increased 8.2%, their highest level since October 2008. Permits to build single-family homes edged up 0.2%. New home completions fell 1.7% to 535,000 units in June.
In the past month, President Obama has said that the housing market has "been most stubborn for us trying to solve the problem." And last week, Federal Reserve Chairman Ben Bernanke said the troubles facing home construction and sales were more persistent than previously thought.
U.S. Consumer Prices Fall in June
The Labor Department reported last Friday that the U.S. Consumer Price Index fell 0.2% in June because of a decline in gas, but Americans also paid more for autos and clothes. After excluding volatile food and gas costs, core prices rose 0.3% from May. That was the second straight monthly gain and the largest back-to-back increases since the summer of 2008.
Year-over-year consumer prices have risen 3.6% while cores prices have increased 1.6%, below the Federal Reserve's preferred target of 2%. Fed policy makers expect core consumer inflation to average between 1.5% and 1.8% this year.
Many of the trends driving the increase in the core index are expected to fade later this year. New car prices rose 0.6% in June, after jumping 1.1% in May. Those increases reflect supply shortages stemming from Japan's earthquake, which will ease in the fall.
Food prices increased 0.2%, the smallest gain since December.
Clothing prices soared 1.4% in June, the most since March 1990. That comes after a 1.2% rise in May. The increase reflects higher cotton costs and more expensive clothing imports. Wages for apparel factory workers in countries like China have been rising in recent months.
Federal Reserve Chairman Ben Bernanke has said that recent price increases are likely to be temporary. High unemployment makes it unlikely that workers can press for more wages, which in turn makes tit hard for companies to raise prices.
U.S. June Retail Sales Edge Higher
The Commerce Department reported last Thursday that U.S. retail sales rose marginally in June by 0.1%, as consumers spent more on cars and in big chain stores, while falling gas prices limited retail sales. This follows a 0.1% decrease in May, which was the first decline in 11 months. When excluding autos, retail sales were flat in June.
A rebound from spring supply disruptions helped push auto sales up 0.8% in June but auto sales aren't expected to consistently pick up until the fall when Japanese production will be back to full capacity. Sales at general merchandise stores rose 0.4%. Warm weather and deep discounts drew consumers to major chains like Target and Walmart. The International Council of Shopping Centers said retailers collectively enjoyed their best June in 12 years, based on a survey of 28 store chains for stores open at least a year.
Falling gas prices pushed station sales down 1.3% but consumers are still paying 93 cents more per gallon than they did a year ago.
CHHMA Events For 2011
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Soiree Karting/Go Karting Night
Thursday, September 1
Circuit ICAR, Mirabel, Quebec
Industry Memorial Golf Classic
Tuesday, September 27
Blue Springs Golf Club, Acton, Ontario
Industry Cocktail
Tuesday, November 29
Casino de Montreal, Montreal, Quebec
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To register for all events visit our website at www.chhma.ca or call Pam Winter at (416) 282-0022 ext.21.
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"Eye On Our Industry" is published by the CHHMA as an information resource for our members. Member input regarding content and format is welcomed. Please contact Michael Jorgenson by email: mjorgenson@chhma.ca, or call at (416) 282-0022, ext. 34. CHHMA is located at 1335 Morningside Ave., Suite 101, Scarborough, ON, M1B 5M4 www.chhma.ca