These are stories Report on Business is following Monday, Feb. 3, 2014.

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Housing market measures

Deutsche Bank puts it at 60 per cent, others in the area of 30 per cent. But Toronto-Dominion Bank says Canada's housing market is overvalued by just 10 per cent, based on a fairer measure.

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"The ongoing resilience of home prices in Canada continues to fuel considerable debate about the extent of an overvaluation in the marketplace," TD economist Diana Petramala said in a new report today.

"The challenge is that the estimation of overvaluation depends on what ratio you look at."

Deutsche Bank, of course, famously put Canada at the top of the list when it comes to the world's frothiest housing markets, basing its reading of 60-per-cent overvaluation by using two measures, the ratios of house prices to rent and prices to income, compared to their averages over time.

The Organization for Economic Co-operation and Development put Canada near the top, as did The Economist.

The price-to-rent ratio pegs the level at 60 per cent, Ms. Petramala said, but is "skewed" by rent controls, and thus it's hard to determine whether the prices are too high or if the rents are too low.

The price-to-income ratio puts overvaluation at up to 30 per cent, she added, but that really depends on what you consider income.

"A more encompassing definition of income, including government transfers and investment income, suggests the housing market is only 8 per cent overvalued."

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But it's affordability that is key, she said, and various readings don't factor in declining interest rates over the last 20 years. A "more normal interest rate environment" suggest 25 per cent, while current rates suggest fair value.

"However, current interest rates are likely unsustainable, nor are they expected to increase to more normal levels in the near future," Ms. Petramala said.

"Over all, given the expectations of a modest increase in interest rates, home prices are likely 10-per-cent overvalued."

Ms. Petramala expects stable prices, on average, this year and a decline of 2 per cent in 2015-16.

TD economists have used the 10-per-cent figure before, though then revised that down. The latest study comes in the wake of reports from the likes of Deutsche Bank, the OECD and The Economist.

The International Monetary Fund, meanwhile, also said today that the Canadian market is overvalued.

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The IMF estimated average Canadian prices are overvalued by some 10 per cent, Reuters reported.

Consumer debt in Canada is still high, the agency said, and "while house prices and construction growth have cooled off, high valuations and excess supply in a number of housing markets are sources of vulnerability."

Canada's housing market cooled rapidly after the federal government brought in another round of mortgage restrictions in the summer of 2012, though rebounded smartly as the effects wore off.

"If house prices and mortgage credit growth heat up on a more widespread and sustained basis, additional measures, such as high down payment requirements for first-time buyers, may be needed," the IMF said.

"Over the longer term, rethinking the role of government-backed mortgage insurance may reduce the government exposure to housing sector risks and lead to a more efficient allocation of resources."

Loonie gets a lift

Friday's U.S. State Department report on the Keystone XL pipeline is giving the Canadian dollar a lift.

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The loonie, as Canada's dollar coin is known, is the best-performing currency today, reaching almost 90.5 cents U.S. at one point before closing the session around 90.11 cents U.S.

"This is likely to sway Secretary of State Kerry to provide a favourable recommendation to President Obama on the construction of the pipeline, which will provide added capacity for Canadian oil to flow into the U.S.," said chief currency strategist Camilla Sutton of Bank of Nova Scotia.

Getting Canada's crude to the U.S. Gulf Coast is seen as key to the oil patch, in turn a boost to the economy.

"The CAD rally has created an opening for profit taking on short positions, which has added to CAD strength," Ms. Sutton added, referring to the currency by its symbol.

As The Globe and Mail's Shawn McCarthy, Kelly Cryderman and Jeff Jones report, the State Department concluded that TransCanada Corp.'s controversial project would not significantly increase greenhouse gas emission, buoying hopes among its proponents.

Valeant in new deal

Valeant Pharmaceuticals International Inc. has struck an agreement to acquire PreCision Dermatology Inc. for $475-million (U.S.), the latest deal in its bid to become one of the world's top five drug companies by the end of 2016, The Globe and Mail's Bertrand Marotte reports.

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Canada's largest publicly traded drug company said today it will pay an additional $25-million for PreCision upon the achievement of an unspecified sales-based milestone.

Valeant is building up its dermatology business and the PreCision acquisition is part of that strategy. Last year, Valeant bought skin-care product maker Obagi Medical Products Inc. for about $343.7-million (U.S.).

The times they really are a-changin'

It's not Bob Dylan's first ad, but in a social media era it may well be the one with the biggest impact.

Twitter is alive with comments about Dylan – our style is to use "Mr." but that doesn't sound right in this case – after the music legend became the pitchman for Chrysler Group LLC during yesterday's Super Bowl.

Dylan was the surprise star of a two-minute, overly patriotic (and blue collar-ish) ad for the auto maker that reportedly cost Chrysler $16-million (U.S.).

"So let Germany brew your beer, let Switzerland make your watch, let Asia assemble your phone," he says in the ad.

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"We will build your car."

It's a big deal because of Dylan's roots as the troubadour of the Sixties counterculture and now the pitchman for one very big business.

But it's not his first: He did an ad for General Motors Co. several years ago, and another for Victoria's Secret before that.

But those were before social media.

"All this Dylan outrage is cute," tweeted Seth Mnookin, who also teaches at the Massachusetts Institute of Technology.

"He's someone who has confounded expectations for 50 yrs.," Mr. Mnookin, who is also a writer, added on Twitter, and also reported by Bloomberg.

"Why anyone expects him to embody their squishy idealism is beyond me."

While the Dylan Chrysler spot is certainly the talk of the town, Forbes questions how successful it will be given its timing.

"The problem was that instead of a nail biter of a finish as expected, the game was a 36-0 blowout," writes Allen St. John on the Forbes website.

(The final score was 43-8 for the Seattle Seahawks)

"At my neighbour Will and Linda's Super Bowl party, the guests were saying their goodbyes as the Chrysler spot hit the air. I imagine exactly the same thing was happening at a lot of other Super Bowl parties across the country."

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