Albertans lead country in long mortgages

水管工

-thirds of home-buyers will owe on their houses for 30 years or more, says RBC
% z9 M- i2 \* V. C* x0 fRon Chalmers, edmontonjournal.com
4 b& `3 V* f" t6 B* v( V: WPublished: 10:18 am
% K3 i5 X' k" G3 T7 J- b% ]6 lEDMONTON - Albertans lead the country in taking long-term mortgages, according to an RBC report released today.
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About 65 per cent of Alberta home buyers with insured mortgages are choosing amortization periods of 30, 35 or 40 years - compared to a national average of 55 per cent.
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% r+ K- n& H8 ^RBC spokesman Derek Holt traced that to Alberta's "stressed housing market," rising prices and strained affordability.

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1 e+ C5 q1 [! S1 v8 H- y" XWith Alberta's strong economic outlook, however, RBC apparently does not rate those long-term mortgages as especially risky, because "mortgage quality still remains impressive."

8 ~/ H) D0 h& wRBC has raised its Alberta economic growth forecast to 4.5 per cent in 2008.

% u2 M- z# u. A- E"Higher oil prices for a longer-than-anticipated period and strong agricultural conditions are the major factors," RBC chief economist Craig Wright said today in a news release.

Despite energy-industry outrage over a proposal to raise royalties, Wright sees only "modest downside risks to the investment and growth picture" from higher royalties or federal carbon taxes.

He expects the Canadian economy to grow by 2.5 per cent in 2008.
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Rising demand from emerging markets, especially China, has boosted prices of Canadian commodity exports, he noted.

"As a result of the improved terms of trade along with the lowest unemployment rate in more than 30 years, and solid wage gains, Canadians have seen their disposable incomes increase sharply over the past two and a half years," RBC reported.

"This boost has helped fuel the pace of both consumer and business spending."

2 g  H( o2 f; w3 LRBC predicted that moderating commodity prices and expectations of higher interest rates together will depress the Canadian dollar to 93 cents US by the end of 2008.

The report forecasts that Alberta, in 2008, will have retail sales growth of 9.8 per cent, employment growth of two per cent, inflation of 3.3 per cent, and 41,200 housing starts - down from the 48,500 starts expected this year.