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The Canadian real estate market is entering a cyclical downturn but should avoid the cataclysmic devaluation seen in the U.S., according to a report from RBC Economics.

“Many of the factors that triggered the collapse in the United States are either absent or of much lower significance on this side of the border,” said Robert Hogue, senior economist, RBC.

The upside to the waning marketplace is that housing affordability is improving. RBC’s affordability index measures the proportion of pre-tax income needed to service the costs of owning a home.

Nationwide, the standard condominium unit remained the most affordable in the third quarter, costing 31.4% of household income to service. The standard townhouse requires 36.9% of income, while a detached bungalow needs 45.7%. A standard two-storey home remains the least affordable, gobbling up 52% of household income.

Using the bungalow as a benchmark, Vancouver remains the least affordable major city, requiring 74.8% of income. Toronto is the second least affordable, at 53.3%.

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Mackenzie fund goes bargain hunting in U.S.

Mackenzie Financial has launched a new U.S. equity fund under its Ivy banner. The Mackenzie Ivy American Class will invest mainly in high-quality U.S. companies.

The fund will be managed by Jerry Javasky, senior vice-president, Mackenzie Investments, and head of the Ivy team, and David Arpin, vice-president, Mackenzie Investments.

Mackenzie describes the Ivy Investments philosophy as bottom-up fundamental analysis, with no attempt made to forecast short-term market movements.

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TD rolls out new wrap program

TD Asset Management has announced the launch of the TD Comfort Portfolios, wrap products that will be sold through TD Canada Trust branches.

“The TD Comfort Portfolios provide customers with access to some of our top-quality funds through one ready-made solution,” says Tim Pinnington, president of TD Mutual Funds. “Investors can rest assured that through our best-in-class fund managers, we are helping them stay on track in reaching their investing goals.”

The program offers five risk tolerance settings and are available in no-load Investor Series units only.

(12/08/08)