Scotiabank reports fall in profit and revenue

The Canadian Press
Mortgage Broker News

 Bank of Nova Scotia’s president and chief executive says he’s “cautiously optimistic” about the economy’s ability to bounce back from COVID-19 next year.

Brian Porter told analysts Tuesday that he is feeling reassured by countries that have doled out billions in pandemic relief, cut interest rates and offered wage support.

“We are seeing clear evidence that the stimulus is having the desired impact across our footprint,” he said on a conference call to discuss the bank’s latest financial results.

“In Canada, retail spending has reached pre-pandemic levels, the housing market is experiencing robust growth and auto sales have largely recovered.”

Porter hadn’t factored in the potential rollout of a COVID-19 vaccine, but if Pfizer, Moderna or AstraZeneca get the go-ahead to inject people with their early vaccine candidates, he said his optimism would grow even more.

His remarks came as most of the bank’s consumer relief programs that targeted Canadians hit hard by the pandemic are expiring and as the bank topped analyst expectations in its latest quarter.

Scotiabank reported a fourth-quarter profit of $1.9 billion or $1.42 per diluted share, down from $2.3 billion or $1.73 per diluted share in the same period a year earlier.

On an adjusted basis, the bank earned $1.45 per diluted share for the quarter ended Oct. 31, down from an adjusted profit of $1.82 per diluted share last year.

Analysts on average had expected Scotiabank to earn and adjusted profit of $1.22 per share, according to financial data firm Refinitiv.

Revenue totalled $7.5 billion, down from nearly $8 billion in its fourth quarter last year.

The bank was weighed down by record levels of support it offered through mortgage, credit card and personal loan programs, and funds it had to stow away in the event that customers can’t pay off their loans.

Throughout the pandemic, Porter said the bank doled out $120 billion in support for customers, who increased their adoption of digital offerings by 90 % in the last year.

Scotiabank’s provisions for credit losses – money it puts aside to account for potential bad loans – in its latest quarter totalled $1.1 billion, up from $753 million a year ago, but down from nearly $2.2 billion in the third quarter.

Scotiabank executives indicated that they expect such provisions to continue to sink as the bank and economy rebound.

“We expect 2021 will be a transition year toward a return to the full earnings power of the bank,” said Porter.

“The bank’s capital position is strong and will remain so in 2021 as the focus shifts from capital adequacy to capital deployment. I am confident we are well-positioned to take advantage of opportunities as they arise.”

 

 

Copyright © 2020 Key Media

Canadians on the move: Not an exodus, but the re-location trend across Canadian housing market is real

RE/MAX Staff
other

• 35% of RE/MAX brokers indicate that “move-over” buyers from other cities and provinces will continue to spark market activity in 2021
• 45% of RE/MAX brokers indicate that move-up buyers will likely be a primary driver of the housing market demand in 2021
• Half of Canadians (53%) are confident that Canada’s housing markets will remain steady in 2021
• 52% of Canadians believe real estate will remain one of the best investment options in 2021

RE/MAX Canada is anticipating healthy housing price growth in 2021, with move-up and move-over buyers continuing to drive activity in many regions across the Canadian housing market. An ongoing housing supply shortage is likely to continue, presenting challenges for homebuyers and putting upward pressure on prices. Due to these factors, the 2021 RE/MAX Housing Market Outlook Report estimates a four to six per cent increase in the average residential sales price nation-wide.

 

 

Click to download the data table

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“We’ve seen a lot of anecdotal evidence since the summer that households are considering significant lifestyle changes by relocating to less-dense cities and neighbourhoods,” says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX of Ontario-Atlantic Canada. “This has sparked unprecedented sales this year in suburban and rural parts of Canada and we expect this trend to continue in 2021.”

Despite the disruption of the virus, consumers are feeling optimistic, according to a Leger survey conducted on behalf of RE/MAX Canada, with 52 per cent of Canadians eyeing real estate as one of the best investment options in 2021, and expressing confidence that the Canadian housing market will remain steady next year.

 

The impacts of COVID-19 on the Canadian housing market

While many economists predicted employment disruptions would negatively impact the Canadian housing market, the pandemic directly influenced only six per cent of Canadians to sell their home, according to the survey. Furthermore, 40 per cent of Canadians realized that their home needed renovations during the pandemic, and 29 per cent discovered that they need more space.

When it comes to where Canadians would prefer to live – urban, suburban or rural – they are evenly split, with roughly three in 10 preferring to live in each area. In fact, many suburban markets across the country have been heavily impacted by out-of-town buyers, a segment that is expected to drive market activity in 2021. This was a trend that was evident in many regions across the country, including North Bay, Kingston, Moncton and Greater Vancouver, among others.

Unsurprisingly, younger Canadians (under age 35) are significantly more likely to have realized that they need more space and are motivated to move out of their current neighbourhood.

“Despite the tragic impacts of the pandemic, our optimism in the strength of Canada’s housing market has always remained,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “While we’ve seen a significant shift in buyer preferences this year, we believe factors such as the supply issue, pent-up demand and historically lower interest rates will continue to fuel activity in 2021.”

 

A deeper dive: 2021 Canadian housing market insights

RE/MAX brokers and agents were asked to provide an analysis on their local market activity in 2020, as well as an outlook for 2021. Heading into the new year, 84 per cent of RE/MAX brokers and agents surveyed are anticipating sellers’ markets.

 

WESTERN CANADA

Vancouver and Greater Vancouver are good examples of the steady activity that’s anticipated to continue in 2021. According to the RE/MAX broker network in western Canada, sellers’ markets are likely in both regions next year, driven in large part by low inventory levels, low interest rates and high demand, as was the case in 2020. In Greater Vancouver, suburban neighbourhoods such as Pitt Meadows, Ladner and Maple Ridge are expected to be top neighbourhoods next year due to affordability and easy access to more outdoor space. Both regions are expected to see average residential prices increase by four and five per cent respectively in 2021.

Markets in Calgary and Edmonton, on the other hand, are currently balanced, which is anticipated to continue into 2021. The luxury market in Edmonton continues to be strong, with seemingly no impact felt by the pandemic. Both regions are predicting to see average residential prices increase by two and three per cent next year.

 

Get more insights and download the infographics:

 

Victoria, BC

Nanaimo, BC
Vancouver, BC

North Vancouver, BC

West Vancouver, BC

Tri-City (Greater Vancouver), BC 

Fraser Valley, BC

Kelowna, BC

Edmonton, AB

Calgary, AB

Saskatoon, SK

Regina, SK

Winnipeg, MB

 

ONTARIO

According to the RE/MAX broker network in Ontario, market activity across the province is estimated to remain very steady in 2021, with the potential for average sale price increases of between seven and 12 per cent in regions like London (10 per cent), Kitchener-Waterloo (seven per cent), Hamilton-Burlington (seven per cent), Niagara (12 per cent), and Kingston (10 per cent), Cornwall (10 per cent) and Thunder Bay (10 per cent). This is being attributed to high demand and low supply, coupled with shifting home-buying trends toward local liveability factors such as more space, larger yards and closer proximity to amenities like parks.

Move-up and move-over buyers are also impacting luxury segments in the province. Cities such as Ottawa and Hamilton-Burlington have seen a massive spike in demand for luxury homes since the start of the pandemic. This is expected to continue in 2021.

The urban-to-suburban buyer interest in Ontario has impacted Toronto’s downtown core, specifically for condos, which is currently a buyer’s market. Supply levels throughout Toronto are continuing to drop and are not expected to improve in 2021, which will impact average home prices. Immigrants are also expected to drive some market activity next year, which alludes to those coming to Toronto for education purposes, along with the expected influx of immigration from outside the country. Similar to Ottawa and Regina, Toronto’s luxury market remains unimpacted by COVID-19 and is driven by move-up buyers.

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Get more insights and download the infographics:

 

Windsor, Ont.

London, Ont.

Niagara Region, Ont.
Kitchener-Waterloo, Ont.

Hamilton-Burlington, Ont.

Oakville, Ont.

Mississauga, Ont.

Toronto, Ont.

Durham Region, Ont.

Brampton, Ont.

Barrie, Ont.

Collingwood, Ont.

Muskoka, Ont.

Sudbury, Ont.

North Bay, Ont.

Thunder Bay, Ont.

Kingston, Ont.

Ottawa, Ont.

Cornwall, Ont.

 

ATLANTIC CANADA

Much like the rest of the country, the majority of Atlantic Canada is a sellers’ market, which is anticipated to continue next year. In Moncton, Halifax and Saint John, housing activity has been driven primarily by out-of-province buyers and move-up buyers who have either expedited retirement plans or are working from home and no longer need to be in an office.

Overall, similar to other areas across the country, increased space has become a prominent buyer demand in the wake of the pandemic, with detached homes serving as the most popular home type in cities like Moncton, Saint John and Charlottetown. This is expected to persist in 2021 according to RE/MAX Canada brokers in the region.

 

Get more insights and download the infographics:
Fredericton, NB

Saint John, NB

Moncton, NB

Halifax, NS

Charlottetown, PEI

St. John’s, Newfoundland

 

Additional findings from the 2021 RE/MAX Canadian Housing Market Outlook Report:

• More than one-third (36 per cent) would prefer to work with realtors who use technology/virtual services to enhance the buying/selling process
• 15 per cent of Canadians have spent more time researching/monitoring the real estate market during the first and second wave of the pandemic

 

About the 2021 RE/MAX Canada Housing Market Outlook Report
The 2021 RE/MAX Canada Housing Market Outlook Report includes data and insights supplied by RE/MAX brokerages and local real estate boards. RE/MAX brokers and agents are surveyed on market activity and local developments. Regional summaries with additional broker insights can be found at blog.remax.ca.

 

About Leger
Leger is the largest Canadian-owned full-service market research firm. An online survey of 1,534 Canadians was completed between November 6 and 8, 2020 using Leger’s online panel. Leger’s online panel has approximately 400,000 members nationally and has a retention rate of 90 per cent. A probability sample of the same size would yield a margin of error of +/- 2.51 per cent, 19 times out of 20.

 

 

Copyright © 2020 RE/MAX Ontario-Atlantic Canada Inc