Housing sales swoon
Global turmoil takes toll on real estate; Alberta MLS numbers fall 35 per cent
By Mario ToneguzziDecember 16, 2008
The MLS residential market is continuing to reflect the grim economic reality in the country.
Sales have plunged from a year ago, average sale prices have dropped and a forecast calls for the housing funk to remain for several more months.
According to data released Monday by the Canadian Real Estate Association, sales plunged by 42.2 per cent in November--the second consecutive steep monthly decline -- across the country compared with November 2007. Every province witnessed a sharp drop led by British Columbia at 62 per cent and Ontario at 43.5 per cent. Alberta experienced a year-over-year sales decline of 34.6 per cent.
Average sale prices also took a hit during the month, falling by 9.8 per cent nationally to$280,880 compared with$311,485 in November 2007.
In Alberta, prices dropped by 4.2 per cent to $338,354 compared with $353,125 a year ago. British Columbia registered the steepest drop in prices--12.5 per cent -- to $395,687 from $451,991 in November 2007.
September MLS numbers were higher year-over-year in Alberta and it appeared the market was taking a turn for the better, but October coincided with the elimination of 40-year mortgages and zero-down mortgages, said Richard Corriveau, regional economist for Canada Mortgage and Housing Corp.
"With that, we've seen a decline in overall activity. It's not a surprise given the current economic turmoil," he said, adding the province remains in buyer's market conditions.
Corriveau said the prospect of further price reductions is helping to postpone people's decisions on buying residential property as they take a wait-and-see approach and are in no rush to buy.
"We think this type of market will prevail heading into the first six months of 2009," said Corriveau. "And only when buyers really gain confidence that prices have stabilized, and of course economic conditions are improving as well, only then will we see higher sales. On a year-over-year basis, we don't think that will occur until perhaps the second half of 2009 or even into 2010."
New listings across the country were also down by 4.6 per cent compared with a year ago, while in Alberta they were off by 18.8 per cent.
"The housing market reflects the economic reality of Canada,"said real estate association president Calvin Lindberg in a news release. The association also said research shows the decline in housing activity so far this year translates into $2.8 billion less in spinoff consumer spending in Canada.
On a year-to-date basis to the end of November, sales in Alberta are down by 20.3 per cent from a year ago and national sales are off 16.3 per cent.The average MLS sale price for the period is down by 0.7 per cent in Alberta($353,712) and by 0.3 per cent across the country ($304,462).
"These changes in the Canadian housing market reflect a broader and weakened picture of both the economy and buyer sentiment," said real estate association chief economist Gregory Klump in a news release. "National sales activity and price trends will continue reflecting increased cautiousness on the part of lenders and buyers, as the economy works its way."
Friday, December 19, 2008
Monday, December 15, 2008
Rental market softens
By Harley Richards - Red Deer Advocate
Published: June 06, 2008 6:18 AM
0 Comments The challenge of finding rental accommodation in Red Deer has eased, according to Canada Mortgage and Housing Corp.’s spring rental market survey.
The national housing agency reported on Thursday that the average vacancy rate for apartments in the city was 3.2 per cent in April.
That compares with 2.1 per cent in April 2007.
The vacancy rate for bachelor units jumped from 2.5 to 5.3 per cent during this one-year period. For one-bedroom apartments it went from two to three per cent, and in the case of two-bedroom suites, the figure rose from three to 3.2 per cent.
Bucking the trend were larger apartments with three or more rooms. Their average vacancy rate decreased from 5.4 to 2.9 per cent.
Regine Durant, a CMHC market analyst in Calgary, said the average vacancy rate in Red Deer was the fourth highest of the 17 larger urban areas in Alberta considered.
Grande Prairie, Brooks and Edmonton had higher averages.
She said reduced natural gas drilling activity, a decline in the number of people migrating to Alberta and a record number of local housing starts in 2007 trimmed demand for rental accommodation. Also, the number of rental units in Red Deer is up 17 per cent over last year.
Durant added that there are large inventories of new and existing homes on the local market.
Provincewide, CMHC concluded that the average vacancy rate in urban centres with 10,000 or more people was 2.9 per cent in April, as compared with a figure of 0.9 per cent a year earlier. Among the communities looked at were Sylvan Lake, which had an average vacancy rate of 1.5 per cent, and Lacombe, which came in at 1.2 per cent.
Ed Tkachuk, business manager with Hearthstone Property Management Inc. of Central Alberta, said CMHC’s numbers seem low.
“I know of buildings in Red Deer with 15 per cent vacancy rates today,” he said, adding that he heard about one building that’s 40 per cent vacant.
Tkachuk suggested that CMHC’s figures might be skewed because not all landlords and property managers disclose their vacancy rates.
Richard Corriveau, a CMHC economist for the Prairies and Territories, said his agency was unable to obtain information for 5.8 per cent of the units it surveyed — which equates to about 284 suites.
“Our 94-plus per cent response rate gives us a very reliable vacancy rate estimate,” he said.
Corriveau added that CMHC only considers structures of which half or more are designated for rental. Consequently, a basement suite in a house, or rental units in a condominium that is predominantly owner-occupied, would not be included.
Regardless, Tkachuk said renters now have much greater choice. This is particularly true in the case of one- and two-bedroom apartments, he said.
“There’s still a huge demand for single-family homes.”
Despite the higher average vacancy rate in Red Deer, rents here still appear to be rising. CMHC’s survey revealed year-over-year increases for all apartment types, with the average for bachelor suites up 3.6 per cent to $570, one-bedrooms jumping 8.7 per cent to $723, two-bedrooms climbing 5.3 per cent to $866, and apartments with three or more rooms rising 11.8 per cent to $1,013.
Durant attributed this to the continued high prices of new and existing homes, which prevents many renters from buying.
The average rent for two-bedroom apartments across Alberta’s largest communities was $1,049 in April, up 12.6 per cent from a year earlier. The numbers ranged from $2,350 in the Regional Municipality of Wood Buffalo (Fort McMurray) to $670 in Medicine Hat.
In Sylvan Lake, it was $757, while in Lacombe the figure was $679.
“That seems really low when you look in the newspaper or online,” said Tkachuk, referring to CMHC’s averages for Red Deer and Sylvan Lake.
He noted that more higher-end properties are going up for rent, a consequence of investors taking advantage of buying opportunities on the real estate market.
Contact Harley Richards at hrichards@reddeeradvocate.com
By Harley Richards - Red Deer Advocate
Published: June 06, 2008 6:18 AM
0 Comments The challenge of finding rental accommodation in Red Deer has eased, according to Canada Mortgage and Housing Corp.’s spring rental market survey.
The national housing agency reported on Thursday that the average vacancy rate for apartments in the city was 3.2 per cent in April.
That compares with 2.1 per cent in April 2007.
The vacancy rate for bachelor units jumped from 2.5 to 5.3 per cent during this one-year period. For one-bedroom apartments it went from two to three per cent, and in the case of two-bedroom suites, the figure rose from three to 3.2 per cent.
Bucking the trend were larger apartments with three or more rooms. Their average vacancy rate decreased from 5.4 to 2.9 per cent.
Regine Durant, a CMHC market analyst in Calgary, said the average vacancy rate in Red Deer was the fourth highest of the 17 larger urban areas in Alberta considered.
Grande Prairie, Brooks and Edmonton had higher averages.
She said reduced natural gas drilling activity, a decline in the number of people migrating to Alberta and a record number of local housing starts in 2007 trimmed demand for rental accommodation. Also, the number of rental units in Red Deer is up 17 per cent over last year.
Durant added that there are large inventories of new and existing homes on the local market.
Provincewide, CMHC concluded that the average vacancy rate in urban centres with 10,000 or more people was 2.9 per cent in April, as compared with a figure of 0.9 per cent a year earlier. Among the communities looked at were Sylvan Lake, which had an average vacancy rate of 1.5 per cent, and Lacombe, which came in at 1.2 per cent.
Ed Tkachuk, business manager with Hearthstone Property Management Inc. of Central Alberta, said CMHC’s numbers seem low.
“I know of buildings in Red Deer with 15 per cent vacancy rates today,” he said, adding that he heard about one building that’s 40 per cent vacant.
Tkachuk suggested that CMHC’s figures might be skewed because not all landlords and property managers disclose their vacancy rates.
Richard Corriveau, a CMHC economist for the Prairies and Territories, said his agency was unable to obtain information for 5.8 per cent of the units it surveyed — which equates to about 284 suites.
“Our 94-plus per cent response rate gives us a very reliable vacancy rate estimate,” he said.
Corriveau added that CMHC only considers structures of which half or more are designated for rental. Consequently, a basement suite in a house, or rental units in a condominium that is predominantly owner-occupied, would not be included.
Regardless, Tkachuk said renters now have much greater choice. This is particularly true in the case of one- and two-bedroom apartments, he said.
“There’s still a huge demand for single-family homes.”
Despite the higher average vacancy rate in Red Deer, rents here still appear to be rising. CMHC’s survey revealed year-over-year increases for all apartment types, with the average for bachelor suites up 3.6 per cent to $570, one-bedrooms jumping 8.7 per cent to $723, two-bedrooms climbing 5.3 per cent to $866, and apartments with three or more rooms rising 11.8 per cent to $1,013.
Durant attributed this to the continued high prices of new and existing homes, which prevents many renters from buying.
The average rent for two-bedroom apartments across Alberta’s largest communities was $1,049 in April, up 12.6 per cent from a year earlier. The numbers ranged from $2,350 in the Regional Municipality of Wood Buffalo (Fort McMurray) to $670 in Medicine Hat.
In Sylvan Lake, it was $757, while in Lacombe the figure was $679.
“That seems really low when you look in the newspaper or online,” said Tkachuk, referring to CMHC’s averages for Red Deer and Sylvan Lake.
He noted that more higher-end properties are going up for rent, a consequence of investors taking advantage of buying opportunities on the real estate market.
Contact Harley Richards at hrichards@reddeeradvocate.com
Thursday, December 11, 2008
Local housing starts plummet
By Advocate staff
Published: December 08, 2008 7:09 PM Housing starts in Alberta’s seven largest cities this year are down 37 per cent from the same point in 2007, with the decline most pronounced in Red Deer.
Statistics issued by Canada Mortgage and Housing Corp. on Monday revealed that residential construction starts in the city from January to November numbered 530, which is 65 per cent lower than for that period in 2007, when the tally was 1,510.
So far this year, work has begun on 325 single-detached homes and 205 units in multi-family buildings, as compared with 928 single-detached and 582 multi-family projects during the first 11 months of 2007.
Housing starts in Alberta’s other major cities during the past 11 months were down as well. Building in the Edmonton metropolitan area fell 56 per cent, in Medicine Hat the decline was 46 per cent, Grande Prairie dropped 40 per cent, Lethbridge and the Regional Municipality of Wood Buffalo were each off 23 per cent, and the Calgary metropolitan area experienced a 15 per cent decline.
During the month of November, there were 27 starts on single-detached homes and 35 starts on multi-family units in Red Deer, for a total of 62. This was down 60 per cent from November 2007, when work was started on 97 homes: 55 single-detached and 97 multi-family.
Elsewhere in the province, November starts in the Edmonton metropolitan area were 74 per cent lower than a year ago, in Medicine Hat the figure was down 66 per cent, in Grande Prairie it declined 27 per cent, in the Calgary metropolitan area the drop was 26 per cent, and in Lethbridge it was 22 per cent.
November housing starts in the Regional Municipality of Wood Buffalo was one per cent higher than a year ago.
Published: December 08, 2008 7:09 PM Housing starts in Alberta’s seven largest cities this year are down 37 per cent from the same point in 2007, with the decline most pronounced in Red Deer.
Statistics issued by Canada Mortgage and Housing Corp. on Monday revealed that residential construction starts in the city from January to November numbered 530, which is 65 per cent lower than for that period in 2007, when the tally was 1,510.
So far this year, work has begun on 325 single-detached homes and 205 units in multi-family buildings, as compared with 928 single-detached and 582 multi-family projects during the first 11 months of 2007.
Housing starts in Alberta’s other major cities during the past 11 months were down as well. Building in the Edmonton metropolitan area fell 56 per cent, in Medicine Hat the decline was 46 per cent, Grande Prairie dropped 40 per cent, Lethbridge and the Regional Municipality of Wood Buffalo were each off 23 per cent, and the Calgary metropolitan area experienced a 15 per cent decline.
During the month of November, there were 27 starts on single-detached homes and 35 starts on multi-family units in Red Deer, for a total of 62. This was down 60 per cent from November 2007, when work was started on 97 homes: 55 single-detached and 97 multi-family.
Elsewhere in the province, November starts in the Edmonton metropolitan area were 74 per cent lower than a year ago, in Medicine Hat the figure was down 66 per cent, in Grande Prairie it declined 27 per cent, in the Calgary metropolitan area the drop was 26 per cent, and in Lethbridge it was 22 per cent.
November housing starts in the Regional Municipality of Wood Buffalo was one per cent higher than a year ago.
Housing starts tumble to last month to lowest levels since late 2001, CMHC says
By The Canadian Press
Published: December 08, 2008 7:02 PM Construction of new homes in Canada slowed last month to levels not seen since late 2001, driven by a drop in condominium construction and a tougher environment for borrowers, according to a national housing agency.
Canada Mortgage and Housing Corp. said Monday the seasonally adjusted annual rate of housing starts fell to 172,000, down 19 per cent from 211,800 in October.
That was far below private-sector economist expectations of about 200,000, and the biggest percentage decline since last December.
Several bank economists noted that new-home construction has been lower this year compared with 2007, because pentup demand has been largely satisfied, but the pace of decline sped up in November because of changes in the credit markets.
And the decline is expected to continue throughout next year, the federal Crown corporation said.
November marked a significant deterioration in CMHC’s outlook for 2009 as both market value and consumer confidence crumbled to their lowest levels in recent memory.
But the November numbers “remain consistent with our forecast, which calls for more moderate activity of 212,000 units this year and 178,000 units next year,” commented CMHC economist Bob Dugan.
Dugan noted that home construction bulged early in the current decade because of pent-up demand, but “over the last few years, this excess demand gradually decreased and our forecast for 2008 and 2009 reflects this new reality, with housing starts more aligned with long-run demographic demand.”
The rate of urban starts dropped 21.6 per cent month-over-month to 144,800 in November, with declines in all parts of the country as volatile multiple starts tumbled 29.1 per cent to 81,700 while single-family starts eased 9.0 per cent to 63,100.
“After showing a great deal of resilience over the past year, the Canadian housing market is cooling,” said Dina Cover, an economist at TD Bank.
“With our expectation that homeowners will be facing tight credit conditions and a softening job market over the next two to three quarters, the rapid rate of growth in housing starts seen since early in the decade — which was simply not sustainable — is likely to continue to unwind.”
A correction in the Western Canadian housing market has been playing out since the start of the year, said Marc Pinsonneault, senior economist at National Bank.
“The pentup demand that was accumulating in the ’90s has been satisfied, so we viewed a lower level of activity in Canada even without the fear of a North American recession,” he said in an interview.
For the first 11 months of 2008, total residential construction starts were down 7.6 per cent compared with the corresponding period of last year, with urban single starts down 18.4 per cent but multiple-unit starts up 8.6 per cent.
“While single-family starts have been trending gradually lower for about five years, the pace of decline has accelerated in recent months — now down more than 35 per cent year-over-year — alongside falling sales and tighter credit conditions,” commented BMO Capital Markets analyst Robert Kavcic.
“Canadian housing starts have outpaced household formation for about six years, but with sales falling, credit conditions tight, and fading support from condos, a correction is now upon us.”
Kavcic said the latest data shows a second consecutive-month drop in condo starts.
The CMHC numbers coincide with a Royal Bank report saying the housing sector is entering a cyclical downturn but the risk of a U.S.-style meltdown is remote.
RBC senior economist Robert Hogue says many factors that triggered the U.S. housing collapse are absent or much less evident in Canada.
He predicts the housing market will hold up even as a sluggish economy threatens income growth and erodes consumer confidence, because subprime mortgages are not prevalent in Canada, while the banks are stable and households are generally not overstretched financially.
“These factors should provide enough of a foundation to prevent housing markets from spiralling down even as the Canadian economy slips into recession,” Hogue added.
Published: December 08, 2008 7:02 PM Construction of new homes in Canada slowed last month to levels not seen since late 2001, driven by a drop in condominium construction and a tougher environment for borrowers, according to a national housing agency.
Canada Mortgage and Housing Corp. said Monday the seasonally adjusted annual rate of housing starts fell to 172,000, down 19 per cent from 211,800 in October.
That was far below private-sector economist expectations of about 200,000, and the biggest percentage decline since last December.
Several bank economists noted that new-home construction has been lower this year compared with 2007, because pentup demand has been largely satisfied, but the pace of decline sped up in November because of changes in the credit markets.
And the decline is expected to continue throughout next year, the federal Crown corporation said.
November marked a significant deterioration in CMHC’s outlook for 2009 as both market value and consumer confidence crumbled to their lowest levels in recent memory.
But the November numbers “remain consistent with our forecast, which calls for more moderate activity of 212,000 units this year and 178,000 units next year,” commented CMHC economist Bob Dugan.
Dugan noted that home construction bulged early in the current decade because of pent-up demand, but “over the last few years, this excess demand gradually decreased and our forecast for 2008 and 2009 reflects this new reality, with housing starts more aligned with long-run demographic demand.”
The rate of urban starts dropped 21.6 per cent month-over-month to 144,800 in November, with declines in all parts of the country as volatile multiple starts tumbled 29.1 per cent to 81,700 while single-family starts eased 9.0 per cent to 63,100.
“After showing a great deal of resilience over the past year, the Canadian housing market is cooling,” said Dina Cover, an economist at TD Bank.
“With our expectation that homeowners will be facing tight credit conditions and a softening job market over the next two to three quarters, the rapid rate of growth in housing starts seen since early in the decade — which was simply not sustainable — is likely to continue to unwind.”
A correction in the Western Canadian housing market has been playing out since the start of the year, said Marc Pinsonneault, senior economist at National Bank.
“The pentup demand that was accumulating in the ’90s has been satisfied, so we viewed a lower level of activity in Canada even without the fear of a North American recession,” he said in an interview.
For the first 11 months of 2008, total residential construction starts were down 7.6 per cent compared with the corresponding period of last year, with urban single starts down 18.4 per cent but multiple-unit starts up 8.6 per cent.
“While single-family starts have been trending gradually lower for about five years, the pace of decline has accelerated in recent months — now down more than 35 per cent year-over-year — alongside falling sales and tighter credit conditions,” commented BMO Capital Markets analyst Robert Kavcic.
“Canadian housing starts have outpaced household formation for about six years, but with sales falling, credit conditions tight, and fading support from condos, a correction is now upon us.”
Kavcic said the latest data shows a second consecutive-month drop in condo starts.
The CMHC numbers coincide with a Royal Bank report saying the housing sector is entering a cyclical downturn but the risk of a U.S.-style meltdown is remote.
RBC senior economist Robert Hogue says many factors that triggered the U.S. housing collapse are absent or much less evident in Canada.
He predicts the housing market will hold up even as a sluggish economy threatens income growth and erodes consumer confidence, because subprime mortgages are not prevalent in Canada, while the banks are stable and households are generally not overstretched financially.
“These factors should provide enough of a foundation to prevent housing markets from spiralling down even as the Canadian economy slips into recession,” Hogue added.
City construction slowing
By Harley Richards - Red Deer Advocate
Published: December 08, 2008 7:10 PM At first glance, the numbers paint a grim picture of the state of the residential construction sector.
The City of Red Deer issued 1,704 permits for $97.2 million worth of residential projects from January to November — as compared with 2,671 permits valued at $184.3 million during the first 11 months of 2007.
Canada Mortgage and Housing Corp.’s tally of residential construction starts in Red Deer so far this year consists of 325 single-detached homes and 205 units in multi-family buildings. That’s down nearly 65 per cent from the 928 single-detached and 582 multi-family starts accumulated to the end of November 2007.
But there’s more to Central Alberta than Red Deer, says Scott Boyd, executive officer with the Central Alberta branch of the Canadian Home Builders’ Association.
CHBA members obtained 324 building permits in communities outside Red Deer from January to October 2008. That’s just six per cent lower than the 346 permits pulled by CHBA members in rural areas during the same period in 2007.
Boyd thinks this city-town disparity boils down to one key factor.
“It kind of goes back to the lack of serviced land available in Red Deer.”
Jonas Neidert, a partner in Avalon Central Alberta and president of the local CHBA, sees some validity in Boyd’s assessment.
“Early in the year, when there was demand, there wasn’t a lot of serviced land in Red Deer so probably a lot of it was going out of town,” he said.
The situation has improved, added Neidert, with lots coming on stream in the Southbrook and Clearview Ridge subdivisions. Both are projects of Melcor Developments Ltd.
Howard Thompson, manager of Red Deer’s Land and Economic Development Department, said much of the city’s residential land inventory was consumed quicker than anticipated.
Now it’s preparing to open up new areas in the city’s northeast, but must first install major trunk lines.
“It takes some time and investment to move into new areas,” he said, adding that this servicing has in some cases taken longer than anticipated.
“Some of that (delay) is at the planning stage, some of it’s at the approval/regulatory stage and some is at the actual construction stage.”
The city did hold a public lot draw for 130 city-owned sites in Timberlands, Johnstone Park and Oriole Park Estates on Nov. 26. That only resulted in successful bids on 19 lots.
Another reason that Red Deer might not be as attractive to some builders and buyers is that lot locations are more limited.
Thompson acknowledged that the selection of subdivisions isn’t as broad as it once was.
“I know there wasn’t as much choice for lots over the last couple of years as the different subdivisions filled up and you move to new subdivisions.”
Neidert thinks builders are also looking beyond the city’s boundaries because they now have the resources to do so.
“Now that things have slowed down in Red Deer, we’re looking at doing work out of town,” he said.
“We had a lot of people asking (previously) if we’d do an acreage, or if we’d build here or there. To do that we would have had to hire more people, which at the time wasn’t easy to do, so we just didn’t do it.”
Boyd wonders if land prices are also influencing decisions to build in rural communities.
“They’re typically less costly than in the city, so that could be part of the factor too.”
But Thompson maintains that lot prices also vary within most towns.
The pace of development this year in communities outside Red Deer varies, depending on who you talk to.
Planning officials in Blackfalds and Lacombe expect residential construction to be comparable with 2007, and perhaps even higher. Those in Sylvan Lake, Stettler, Rocky Mountain House, Penhold and Ponoka describe a slowdown relative to last year — although generally not as pronounced as Red Deer’s.
Some pointed out that construction levels appear worse than they really are because they’re being compared with the record tallies of 2007.
Penhold development officer Rick Binnendyk, for instance, estimates that residential construction in his town is about 65 per cent of last year’s pace. But it’s still better than 2006, which was the record year prior to 2007.
“A lot of people say that 2007 was almost uncontrollable,” he said.
“It’s fair to say that things have slowed down, but to me it’s much more manageable at this point.”
Carey Keleman, Ponoka’s economic development officer, agrees.
“It’s still healthy growth, it’s just not as crazy as in 2007.
“It’s kind of going back down to the average before the big boom.”
Thompson takes heart in a Canada Mortgage and Housing Corp.’s forecast that building activity will rebound in the next few years. In the meantime, he doesn’t mind seeing residential construction levels in neighbouring communities outpacing that in Red Deer.
“It’s all good for Central Alberta.”
Published: December 08, 2008 7:10 PM At first glance, the numbers paint a grim picture of the state of the residential construction sector.
The City of Red Deer issued 1,704 permits for $97.2 million worth of residential projects from January to November — as compared with 2,671 permits valued at $184.3 million during the first 11 months of 2007.
Canada Mortgage and Housing Corp.’s tally of residential construction starts in Red Deer so far this year consists of 325 single-detached homes and 205 units in multi-family buildings. That’s down nearly 65 per cent from the 928 single-detached and 582 multi-family starts accumulated to the end of November 2007.
But there’s more to Central Alberta than Red Deer, says Scott Boyd, executive officer with the Central Alberta branch of the Canadian Home Builders’ Association.
CHBA members obtained 324 building permits in communities outside Red Deer from January to October 2008. That’s just six per cent lower than the 346 permits pulled by CHBA members in rural areas during the same period in 2007.
Boyd thinks this city-town disparity boils down to one key factor.
“It kind of goes back to the lack of serviced land available in Red Deer.”
Jonas Neidert, a partner in Avalon Central Alberta and president of the local CHBA, sees some validity in Boyd’s assessment.
“Early in the year, when there was demand, there wasn’t a lot of serviced land in Red Deer so probably a lot of it was going out of town,” he said.
The situation has improved, added Neidert, with lots coming on stream in the Southbrook and Clearview Ridge subdivisions. Both are projects of Melcor Developments Ltd.
Howard Thompson, manager of Red Deer’s Land and Economic Development Department, said much of the city’s residential land inventory was consumed quicker than anticipated.
Now it’s preparing to open up new areas in the city’s northeast, but must first install major trunk lines.
“It takes some time and investment to move into new areas,” he said, adding that this servicing has in some cases taken longer than anticipated.
“Some of that (delay) is at the planning stage, some of it’s at the approval/regulatory stage and some is at the actual construction stage.”
The city did hold a public lot draw for 130 city-owned sites in Timberlands, Johnstone Park and Oriole Park Estates on Nov. 26. That only resulted in successful bids on 19 lots.
Another reason that Red Deer might not be as attractive to some builders and buyers is that lot locations are more limited.
Thompson acknowledged that the selection of subdivisions isn’t as broad as it once was.
“I know there wasn’t as much choice for lots over the last couple of years as the different subdivisions filled up and you move to new subdivisions.”
Neidert thinks builders are also looking beyond the city’s boundaries because they now have the resources to do so.
“Now that things have slowed down in Red Deer, we’re looking at doing work out of town,” he said.
“We had a lot of people asking (previously) if we’d do an acreage, or if we’d build here or there. To do that we would have had to hire more people, which at the time wasn’t easy to do, so we just didn’t do it.”
Boyd wonders if land prices are also influencing decisions to build in rural communities.
“They’re typically less costly than in the city, so that could be part of the factor too.”
But Thompson maintains that lot prices also vary within most towns.
The pace of development this year in communities outside Red Deer varies, depending on who you talk to.
Planning officials in Blackfalds and Lacombe expect residential construction to be comparable with 2007, and perhaps even higher. Those in Sylvan Lake, Stettler, Rocky Mountain House, Penhold and Ponoka describe a slowdown relative to last year — although generally not as pronounced as Red Deer’s.
Some pointed out that construction levels appear worse than they really are because they’re being compared with the record tallies of 2007.
Penhold development officer Rick Binnendyk, for instance, estimates that residential construction in his town is about 65 per cent of last year’s pace. But it’s still better than 2006, which was the record year prior to 2007.
“A lot of people say that 2007 was almost uncontrollable,” he said.
“It’s fair to say that things have slowed down, but to me it’s much more manageable at this point.”
Carey Keleman, Ponoka’s economic development officer, agrees.
“It’s still healthy growth, it’s just not as crazy as in 2007.
“It’s kind of going back down to the average before the big boom.”
Thompson takes heart in a Canada Mortgage and Housing Corp.’s forecast that building activity will rebound in the next few years. In the meantime, he doesn’t mind seeing residential construction levels in neighbouring communities outpacing that in Red Deer.
“It’s all good for Central Alberta.”
Wednesday, December 3, 2008
MLS® STATISTICS FOR THE MONTH OF NOVEMBER 2008
MLS® STATISTICS FOR THE MONTH OF NOVEMBER 2008
Prepared for the members of the Central Alberta Realtors® Association
City Residential Sales
November 2008 85
November 2007 121
January 01, 2008 to November 30, 2008 1,894
January 01, 2007 to November 30, 2007 2,147
Value of City Residential Sales
November 2008 $24,974,000
October 2007 $37,018,703
January 01, 2008 to November 30, 2008 $584,129,595
January 01, 2007 to November 30, 2007 $661,775,168
Selling to Listing Ratio (CITY)
November 2008 34,394%
February 2008 55.16%
Prepared for the members of the Central Alberta Realtors® Association
City Residential Sales
November 2008 85
November 2007 121
January 01, 2008 to November 30, 2008 1,894
January 01, 2007 to November 30, 2007 2,147
Value of City Residential Sales
November 2008 $24,974,000
October 2007 $37,018,703
January 01, 2008 to November 30, 2008 $584,129,595
January 01, 2007 to November 30, 2007 $661,775,168
Selling to Listing Ratio (CITY)
November 2008 34,394%
February 2008 55.16%
Tuesday, December 2, 2008
As sellers today please remember that there is uncertianty among buyers they must see value before they will make a commitment and they all seam to want something extra. It will be interresting too see if we have a government change next week and how that will effect the financial and real estate markets here over the next 6 months. Does that mean we may see a increase in inventories my guess is yes as my opinion is that a government change will effect our economy directly. I think a balanced market is about 3 months supply of inventory and our inventory level is higher than that now. We are seeing European counties offer 0% mortgage rates. Are we headed in that direction? Credit is tightening with the banks because their loss loan provisions are increasing, credit amounts for consumers thru credit cards are being lowered. I am seeing forcasts of oil at about $43.00 a barrel in the first quarter and very limited asset growth next year. As I see it our first quarter will be a challenge no matter what we do.
Monday, December 1, 2008
U.S crisis spreads further
Commercial real estate market latest to be hit.
Heather Landy and Dana Hedgpeth The Washington Post New York.
Another levee in the U.S. financial markets is crumbling.
Fears about rising defaults rates and declining property values, which engulfed the home mortgage market at the start of the credit crisis, are spreading to the commercial real estate market, hammering the value of bonds backed by loans made to office building, shopping centers and apartment complexes.
With the slowing economy threatening the health of commercial borrowers, investors are wary of scooping up the bonds, even though some cash-strapped banks, hedge funds and money managers are willing to part with them at steep discounts.
As a result, the market for commercial mortgage backed securities has been sent into a tailspin by the now familiar combination of forced selling and bleak economic forecasts.
Until recently, investor has presumed that commercial mortgage bonds were relatively safe. They avoided taking a direct hit from the subprime meltdown, which derailed the market for bonds backed by residential mortgages, and the bonds’ default rate, while climbing, has stayed below one per cent. But a report this week about delinquent payments on two high profile loans one for a California shopping centre and the other for two Westin resorts in Arizona and South California – stirred fears about whether an era of rosy business projections and loose lending standards will, like the residential market, give way to missed mortgage payments and a tough refinancing environment.
“A lot of very foolish loans were originated between 2005 and 2007, and many of those loans begin to mature in 2010,” said Mike Kirby, director of research at Green Street Advisors a commercial real estate research firm.
“You have a significant amount of debt maturing at that time and yet you don’t have a market to replace that debt.”
Atlanta, Detroit, New York and Tamp are among the markets showing sign of rising defaults on commercial mortgages that have been packaged into bonds.
Skittish investors are demanding higher premiums to hold commercial mortgages bonds. Yields on the safest-rated category of commercial-mortgage-backed debt are now 15 per cent above benchmark interest rates, traders said. At the start of the week, that spread was just 8.5 per cent.
Investors buying at the current yields would have all of their principal protected even if all of the loans pooled into the bonds defaulted and offered only modest recovery values, said Lisa Pendergast, an analyst at RBS Greenwich Capital Markets.
“It’s gotten to the point where I believe it’s more about fear that anything else,” she said. “But at some point if borrowers and real estate (investors) cannot get capital, then you really do start to have fundamental issues.”
Some investors were banking on the U.S. Treasury Department’s financial industry bailout plan to keep the commercial-mortgage-backed securities market propped up. They hoped that cash-strapped banks would either be able to sell those assets to the federal governments or get more breathing room to sit on their holding by off-loading other assets onto the governments.
But late last week, the Treasury Department announced that it wouldn’t buy any assets from banks under its Troubled Asset Relief Program, and instead would use TARP funds to buy stock in banks.
“That was the last hope for a lot of people,” said Sean Kirk, a trader at the Seaport Group in Miami Beach. “After two months of holding out for some sort of miracle bid, the market realized it was not going to be there and now these things are trading at liquidation levels.”
Adding to the panic is a spate of recent bankruptcy filing by high-profile merchants such as Circuit City. Dimming prospects for consumer spending in a slowing economy has stirred concern about the value of commercial-mortgage bonds tied to properties dependent on retail tenants.
General Growth Properties, which owns shopping malls around the country and acquired the developer of Columbia, MD., in 2004, is trying to stave off filing for bankruptcy protection as it struggles to refinance more than $27 billion of debt. The Chicago-based company, which took on debt when it bought the Rouse CO., announced Thursday that it has hired law firm Sidley Austin as a financial adviser.
Heather Landy and Dana Hedgpeth The Washington Post New York.
Another levee in the U.S. financial markets is crumbling.
Fears about rising defaults rates and declining property values, which engulfed the home mortgage market at the start of the credit crisis, are spreading to the commercial real estate market, hammering the value of bonds backed by loans made to office building, shopping centers and apartment complexes.
With the slowing economy threatening the health of commercial borrowers, investors are wary of scooping up the bonds, even though some cash-strapped banks, hedge funds and money managers are willing to part with them at steep discounts.
As a result, the market for commercial mortgage backed securities has been sent into a tailspin by the now familiar combination of forced selling and bleak economic forecasts.
Until recently, investor has presumed that commercial mortgage bonds were relatively safe. They avoided taking a direct hit from the subprime meltdown, which derailed the market for bonds backed by residential mortgages, and the bonds’ default rate, while climbing, has stayed below one per cent. But a report this week about delinquent payments on two high profile loans one for a California shopping centre and the other for two Westin resorts in Arizona and South California – stirred fears about whether an era of rosy business projections and loose lending standards will, like the residential market, give way to missed mortgage payments and a tough refinancing environment.
“A lot of very foolish loans were originated between 2005 and 2007, and many of those loans begin to mature in 2010,” said Mike Kirby, director of research at Green Street Advisors a commercial real estate research firm.
“You have a significant amount of debt maturing at that time and yet you don’t have a market to replace that debt.”
Atlanta, Detroit, New York and Tamp are among the markets showing sign of rising defaults on commercial mortgages that have been packaged into bonds.
Skittish investors are demanding higher premiums to hold commercial mortgages bonds. Yields on the safest-rated category of commercial-mortgage-backed debt are now 15 per cent above benchmark interest rates, traders said. At the start of the week, that spread was just 8.5 per cent.
Investors buying at the current yields would have all of their principal protected even if all of the loans pooled into the bonds defaulted and offered only modest recovery values, said Lisa Pendergast, an analyst at RBS Greenwich Capital Markets.
“It’s gotten to the point where I believe it’s more about fear that anything else,” she said. “But at some point if borrowers and real estate (investors) cannot get capital, then you really do start to have fundamental issues.”
Some investors were banking on the U.S. Treasury Department’s financial industry bailout plan to keep the commercial-mortgage-backed securities market propped up. They hoped that cash-strapped banks would either be able to sell those assets to the federal governments or get more breathing room to sit on their holding by off-loading other assets onto the governments.
But late last week, the Treasury Department announced that it wouldn’t buy any assets from banks under its Troubled Asset Relief Program, and instead would use TARP funds to buy stock in banks.
“That was the last hope for a lot of people,” said Sean Kirk, a trader at the Seaport Group in Miami Beach. “After two months of holding out for some sort of miracle bid, the market realized it was not going to be there and now these things are trading at liquidation levels.”
Adding to the panic is a spate of recent bankruptcy filing by high-profile merchants such as Circuit City. Dimming prospects for consumer spending in a slowing economy has stirred concern about the value of commercial-mortgage bonds tied to properties dependent on retail tenants.
General Growth Properties, which owns shopping malls around the country and acquired the developer of Columbia, MD., in 2004, is trying to stave off filing for bankruptcy protection as it struggles to refinance more than $27 billion of debt. The Chicago-based company, which took on debt when it bought the Rouse CO., announced Thursday that it has hired law firm Sidley Austin as a financial adviser.
Friday, November 28, 2008
In my opinion our market has hit the Christmas slow down. So I have included a couple of articles for general intrest. Our city lot draw was this week and about 25% of the lots sold. That is a far cry from other years when everything sold. Our inventory has climbed on the resale side and I believe it will continue to do so. The pricing seams to be softening but I think we will be Spring 2009 before we can get a good reading on the market direction. My opinion is intrest rates still will come down but unemployment will continue to rise which should make for less expensive home construction costs on the labor imput cost side. I think we will see some great opportunities to buy and hold over the next few months but will we recoginize these opportunities, that will depend on our risk tolerance levels. I am looking forward to seeing where sales are this month compared to last year. I should have those numbers posted about the 8th of December.
Wednesday, November 19, 2008
U. S. home builders face even worse year ahead
Cash-strapped companies cutting jobs
Helen Chernikoff, Reuters
Published: Wednesday, November 19, 2008
The U. S. housing slump is set to worsen in 2009, as fallout from this year's plunge in the stock market and consumer confidence continues to cast a pall over potential buyers.
Builders will find themselves increasingly cash-strapped and forced to pull out of more markets and cut more jobs.
"As weak as it's been, it could get weaker," said Fitch Ratings analyst Robert Curran, who has detected a tendency on the part of forecasters to shift their predictions of a 2009 housing market bottom into 2010.
Home builders collectively see that loss of consumer confidence driving the entire industry "another leg down," UBS analyst David Goldberg wrote in a client note.
Such a protracted slump--the market peaked in 2006--could yet force a big builder to fail, Curran said.
So far, Florida-based condo builder WCI Communities Inc.'s filing in August was the biggest among builder bankruptcies, which also included Tousa Inc. and Levitt& Sons, regarded as the builder of the first planned community.
Credit default swaps on Hovnanian Enterprises, Beazer Homes USA Inc. and Standard Pacific Corp. are trading at an upfront cost.
That happens when a company is considered to be distressed and sellers of protection want to be paid more at the outset of the contract due to higher perceived risk of the company defaulting on its debt.
As the lifeblood of any company, cash becomes a crucial gauge of a business' health in tough times, said Georgia Tech College of Management professor Charles Mulford.
Since the slump started, builders have focused on accumulating the shiny stuff by ramping up incentives and selling the land they accumulated at peak prices during boom times, even at a loss.
"They're in deep hibernation trying to live off what they built in the past," Mulford said. Yet next year's cash flow might be weaker than this year's.
"2009 will not look like 2008 from a cash generation perspective in the industry in general because again, the demand continues to fall," Pulte Homes Inc. Chief financial officer Roger Cregg said during the company's third-quarter conference call.
2009 is shaping up to be treacherous from a cash flow perspective in part because of the expiration of a tax provision, the "net operating loss carry-back,"which enables companies to generate a tax refund against operating losses.
Several builders have used this mechanism to bolster cash flow. Of the $192 million in cash flow Hovnanian generated in its third quarter, $95 million was a federal tax refund.
In the absence of such refunds or a renewed flow of cash from home sales, builders might have to turn to their banks for support. The problem is that they have already done so, repeatedly asking their banks to revise their agreements to reflect the weakened state of their business.
Helen Chernikoff, Reuters
Published: Wednesday, November 19, 2008
The U. S. housing slump is set to worsen in 2009, as fallout from this year's plunge in the stock market and consumer confidence continues to cast a pall over potential buyers.
Builders will find themselves increasingly cash-strapped and forced to pull out of more markets and cut more jobs.
"As weak as it's been, it could get weaker," said Fitch Ratings analyst Robert Curran, who has detected a tendency on the part of forecasters to shift their predictions of a 2009 housing market bottom into 2010.
Home builders collectively see that loss of consumer confidence driving the entire industry "another leg down," UBS analyst David Goldberg wrote in a client note.
Such a protracted slump--the market peaked in 2006--could yet force a big builder to fail, Curran said.
So far, Florida-based condo builder WCI Communities Inc.'s filing in August was the biggest among builder bankruptcies, which also included Tousa Inc. and Levitt& Sons, regarded as the builder of the first planned community.
Credit default swaps on Hovnanian Enterprises, Beazer Homes USA Inc. and Standard Pacific Corp. are trading at an upfront cost.
That happens when a company is considered to be distressed and sellers of protection want to be paid more at the outset of the contract due to higher perceived risk of the company defaulting on its debt.
As the lifeblood of any company, cash becomes a crucial gauge of a business' health in tough times, said Georgia Tech College of Management professor Charles Mulford.
Since the slump started, builders have focused on accumulating the shiny stuff by ramping up incentives and selling the land they accumulated at peak prices during boom times, even at a loss.
"They're in deep hibernation trying to live off what they built in the past," Mulford said. Yet next year's cash flow might be weaker than this year's.
"2009 will not look like 2008 from a cash generation perspective in the industry in general because again, the demand continues to fall," Pulte Homes Inc. Chief financial officer Roger Cregg said during the company's third-quarter conference call.
2009 is shaping up to be treacherous from a cash flow perspective in part because of the expiration of a tax provision, the "net operating loss carry-back,"which enables companies to generate a tax refund against operating losses.
Several builders have used this mechanism to bolster cash flow. Of the $192 million in cash flow Hovnanian generated in its third quarter, $95 million was a federal tax refund.
In the absence of such refunds or a renewed flow of cash from home sales, builders might have to turn to their banks for support. The problem is that they have already done so, repeatedly asking their banks to revise their agreements to reflect the weakened state of their business.
CMHC sees stable housing market
Dan Healing, Calgary Herald
Published: Wednesday, November 19, 2008
The Calgary housing market turmoil that has led to layoffs at new home construction companies, abandoned condo projects and a collapsing average resale home price will moderate and stabilize in 2009, according to the latest quarterly forecast by Canada Mortgage and Housing Corp.
One result will be the end of the current buyers' market.
The average resale home price will be $406,000, the federal agency predicts, barely above the anticipated 2008 price of $405,000 and down almost two per cent from $414,000 in 2007. Sales will slide from 32,177 in 2007 to 25,000 this year and 25,700 in 2009, coming back to near the 10-year average level.
In new construction, 4,500 single-family detached homes will be constructed in 2009, up from 4,300thisyearbutoffby42percent from7,777in2007anddown 57 per cent from the 10,482 in 2006.Multi-family starts will slide to 2,500 in 2009 from 6,800 this year.
"We're looking at a slower level of growth," said Lai Sing Louie, a senior market analyst for CMHC, after a presentation to about 500 people at the Roundup Centre.
"Employment is growing by about 1.3 per cent (about 9,100 jobs in Calgary in 2009) so it's a more moderate pace of growth."
He added Calgarians looking to buy homes have the power to negotiate now because of a glut of resale home listings and a shrinking new home order sheet.
"Overall, we are in buyers'market conditions," he said. "But buyers'market conditions do not last forever and, moving into 2009, we're looking for more balanced conditions."
Richard Corriveau, CMHC economist for the Prairies, said Alberta is forecast to post real gross domestic product growth in 2009 of 1.9per cent, after hitting 2.1 per cent this year, 3.3percent in 2007 and 6.6 per cent in 2006.
Employment growth will be 1.3 per cent provincially and net migration will reach about 51,000.The Alberta forecast calls for 15,000 new single-family detached homes, 9,000 new multi-family starts and 61,000 resale home sales at an average price of $356,000 (about the same as the record level in 2007).
Trevor Gloyne, CMHC general manager forthe region, cautioned members of the crowd not to take the CMHC's or any other forecast asgospelbecausethereissomuch uncertainty in the marketplace, especially regarding oil and gas investment.
"The(factors)Iwouldwatchare capital commitments and oil and gasprospects. Thesearechanging on us on a fairly rapid basis," he said, adding consumer spending is also an unknown quantity.
Louie forecast Calgary apartment vacancy rates would rise from 1.5 per cent in 2007 to three per cent next year and 2.5 per cent thisyear, leadingtoaveragerenton atwo-bedroomapartmentof$1,140 this year and $1,150 next year.
Meanwhile, the cost of home ownership will decline thanks to lower housing prices and interest rate cuts, narrowing the cost difference between renting and owning.
He expects new single-family detached home prices will fall by two per cent in 2009, making it easier for homeowners to move up to a new house.
"We'll likely see the cost escalationswe'veexperiencedinthepast come down, so if people are planning a project, probably 2009 is a good time to do it," said Louie.
Dhealing@theherald.CanWest.com
Published: Wednesday, November 19, 2008
The Calgary housing market turmoil that has led to layoffs at new home construction companies, abandoned condo projects and a collapsing average resale home price will moderate and stabilize in 2009, according to the latest quarterly forecast by Canada Mortgage and Housing Corp.
One result will be the end of the current buyers' market.
The average resale home price will be $406,000, the federal agency predicts, barely above the anticipated 2008 price of $405,000 and down almost two per cent from $414,000 in 2007. Sales will slide from 32,177 in 2007 to 25,000 this year and 25,700 in 2009, coming back to near the 10-year average level.
In new construction, 4,500 single-family detached homes will be constructed in 2009, up from 4,300thisyearbutoffby42percent from7,777in2007anddown 57 per cent from the 10,482 in 2006.Multi-family starts will slide to 2,500 in 2009 from 6,800 this year.
"We're looking at a slower level of growth," said Lai Sing Louie, a senior market analyst for CMHC, after a presentation to about 500 people at the Roundup Centre.
"Employment is growing by about 1.3 per cent (about 9,100 jobs in Calgary in 2009) so it's a more moderate pace of growth."
He added Calgarians looking to buy homes have the power to negotiate now because of a glut of resale home listings and a shrinking new home order sheet.
"Overall, we are in buyers'market conditions," he said. "But buyers'market conditions do not last forever and, moving into 2009, we're looking for more balanced conditions."
Richard Corriveau, CMHC economist for the Prairies, said Alberta is forecast to post real gross domestic product growth in 2009 of 1.9per cent, after hitting 2.1 per cent this year, 3.3percent in 2007 and 6.6 per cent in 2006.
Employment growth will be 1.3 per cent provincially and net migration will reach about 51,000.The Alberta forecast calls for 15,000 new single-family detached homes, 9,000 new multi-family starts and 61,000 resale home sales at an average price of $356,000 (about the same as the record level in 2007).
Trevor Gloyne, CMHC general manager forthe region, cautioned members of the crowd not to take the CMHC's or any other forecast asgospelbecausethereissomuch uncertainty in the marketplace, especially regarding oil and gas investment.
"The(factors)Iwouldwatchare capital commitments and oil and gasprospects. Thesearechanging on us on a fairly rapid basis," he said, adding consumer spending is also an unknown quantity.
Louie forecast Calgary apartment vacancy rates would rise from 1.5 per cent in 2007 to three per cent next year and 2.5 per cent thisyear, leadingtoaveragerenton atwo-bedroomapartmentof$1,140 this year and $1,150 next year.
Meanwhile, the cost of home ownership will decline thanks to lower housing prices and interest rate cuts, narrowing the cost difference between renting and owning.
He expects new single-family detached home prices will fall by two per cent in 2009, making it easier for homeowners to move up to a new house.
"We'll likely see the cost escalationswe'veexperiencedinthepast come down, so if people are planning a project, probably 2009 is a good time to do it," said Louie.
Dhealing@theherald.CanWest.com
Tuesday, November 18, 2008
CANADIAN HOME SALES PLUNGE TO SIX-YEAR LOW
Slide suggests major downshift by consumers
Eric Beauchesne Canwest News service OTTAWA
The Canadian economy has taken a sudden sharp turn for the worse, with the housing boom finally turning to bust with the home sales plunging 14 per cent to a six-year low in October the steepest monthly drop in 14 years, and prices tumbling 10 per cent from year earlier.
The fall in sales from September left them down more than 25 per cent from a year earlier, the Canadian Real Estate Association reported Friday.
The surprisingly weak housing report was released Friday afternoon as North American stock markets were retreating and oil prices and the Canadian dollar were failing in the wake of a much steeper than expected retreat in U.S. consumer spending last month.
One bay Street, the disappointing U.S. news overshadowed strong economic reports on Canadian factory shipments and auto sales.
Bay Street’s benchmarks S&P/TSX dropped nearly three hundred points, wiping much of the previous day’s gains, while on Wall Street, the blue chip Dow Jones industrial average slumped nearly 338 points, also erasing most the previous day’s gains. Oil fell by more than $1US barrel to $57.04, helping knock the loonie down by nearly a cent to a close of 81.60 cents US.
“Many homebuyers across Canada battened down the hatches in October as they were concerned with dire headlines about stock market volatility and a global economic downturn,” said Gregory Klump, chief economist at the Canadian Real Estate Association.
“The breadth and depth of the drop in … activity suggest a major downshift in consumer psychology” he said, adding that has moved many people to the sidelines until the economy starts to improve.
The federal government’s tightening up of the mortgage eligibility rules, aimed ironically at avoiding a U.S.-style housing bust, likely also had an impact, he added.
“Elimination of mortgage default insurance availability for purchases with less than a five per cent down payment and for amortizations beyond 35 years also likely payed a lesser role in the decline in sales activity,” he said.
“These figures, on the surface, would suggest the bust has begun,” said BMO Capital Markets economist Douglas Porter, adding that while the sharp drop may overstate the current weakness in the Canadian housing market, Canadians should expect even further declines in sales and prices in the months and year ahead.
National sales were down 27 per cent from year-ago levels, while some of the larger cities in the country, notably Vancouver and Toronto, posted even steeper drops, he noted. Further, nine of 10 provinces reported double digit sales declines in the month, with Newfoundland and Labrador bucking the trend with sales there up 15 per cent from a year earlier.
Even before the release of the home sale report, North American stock markets were posting triple-digit retreats, after the U.S. reported retail sales last month fell 2.8 per cent, the steepest drop in 11 years, which followed a 1.3 per cent drop in September.
“The drop was much worse than the 2.1 per cent decline expected by the markets, and was the fourth consecutive monthly drop in the indicator,” said TD Securities analyst Millan Mulraine, nothing that sales there were also down 4.1 per cent from a year earlier, the worst performance on records dating back 40 years.
“The details of the report were simply dismal,” Mulraine said. “The general tone of the report was very dire as it clearly indicating that U.S. consumers may have finally thrown in the towel.”
Eric Beauchesne Canwest News service OTTAWA
The Canadian economy has taken a sudden sharp turn for the worse, with the housing boom finally turning to bust with the home sales plunging 14 per cent to a six-year low in October the steepest monthly drop in 14 years, and prices tumbling 10 per cent from year earlier.
The fall in sales from September left them down more than 25 per cent from a year earlier, the Canadian Real Estate Association reported Friday.
The surprisingly weak housing report was released Friday afternoon as North American stock markets were retreating and oil prices and the Canadian dollar were failing in the wake of a much steeper than expected retreat in U.S. consumer spending last month.
One bay Street, the disappointing U.S. news overshadowed strong economic reports on Canadian factory shipments and auto sales.
Bay Street’s benchmarks S&P/TSX dropped nearly three hundred points, wiping much of the previous day’s gains, while on Wall Street, the blue chip Dow Jones industrial average slumped nearly 338 points, also erasing most the previous day’s gains. Oil fell by more than $1US barrel to $57.04, helping knock the loonie down by nearly a cent to a close of 81.60 cents US.
“Many homebuyers across Canada battened down the hatches in October as they were concerned with dire headlines about stock market volatility and a global economic downturn,” said Gregory Klump, chief economist at the Canadian Real Estate Association.
“The breadth and depth of the drop in … activity suggest a major downshift in consumer psychology” he said, adding that has moved many people to the sidelines until the economy starts to improve.
The federal government’s tightening up of the mortgage eligibility rules, aimed ironically at avoiding a U.S.-style housing bust, likely also had an impact, he added.
“Elimination of mortgage default insurance availability for purchases with less than a five per cent down payment and for amortizations beyond 35 years also likely payed a lesser role in the decline in sales activity,” he said.
“These figures, on the surface, would suggest the bust has begun,” said BMO Capital Markets economist Douglas Porter, adding that while the sharp drop may overstate the current weakness in the Canadian housing market, Canadians should expect even further declines in sales and prices in the months and year ahead.
National sales were down 27 per cent from year-ago levels, while some of the larger cities in the country, notably Vancouver and Toronto, posted even steeper drops, he noted. Further, nine of 10 provinces reported double digit sales declines in the month, with Newfoundland and Labrador bucking the trend with sales there up 15 per cent from a year earlier.
Even before the release of the home sale report, North American stock markets were posting triple-digit retreats, after the U.S. reported retail sales last month fell 2.8 per cent, the steepest drop in 11 years, which followed a 1.3 per cent drop in September.
“The drop was much worse than the 2.1 per cent decline expected by the markets, and was the fourth consecutive monthly drop in the indicator,” said TD Securities analyst Millan Mulraine, nothing that sales there were also down 4.1 per cent from a year earlier, the worst performance on records dating back 40 years.
“The details of the report were simply dismal,” Mulraine said. “The general tone of the report was very dire as it clearly indicating that U.S. consumers may have finally thrown in the towel.”
Friday, November 14, 2008
HOUSING SLOWDOWN EXPECTED TO WORSEN
Consulting firm forecasts starts to decline further
Eric Beauchesne Canwest News Service Ottawa
The slump in housing construction starts in Canada next year will be widespread and will be deeper than what is now being forecast by the federal housing agency, according to a real-estate industry consulting firm.
Starts will plunge more than 20 per cent to 165,000 units, Altus Group said Tuesday in a forecast that expects to see the pace of construction falling in every region and in all major cities.
The forecast pace of construction next year is also seven per cent less than the 178,000 projected by Canada Mortgage and Housing Corp., while the Altus Group projection for this year, at 208,700 is also somewhat less than the 212,000, now projected by CMCH.
“The acceleration in the international financial crisis in recent weeks is quickly taking a toll on the Canadian economy in the form of decimated consumer confidence, tighter lending standards and plummeting prices for energy and commodity prices,” it noted in its forecasts. “A strong likelihood of an economic recession has emerged from the crisis and along with it dramatically weaker housing demand.”
“Expect sharply lower housing markets in 2009 as Canadian housing markets get pummeled by these forces,” it warned, adding there’s a risk the economic down-turn could also be sharper and more prolonged that is assumed in making the forecast, and the housing slump could be similar to those of the early 1980s and 1990s rather than the shallower housing recessions of the 1950s and 1960s.
Home resale have now been waning for five quarters and inventories of unsold new and existing homes is rising, it said, adding it survey results show that while buying intentions held steady last month, they are down from their peaks.
It projects there will be no growth in jobs next year and only weak gains in incomes, which will dampen demand for housing.
On the bright side, it noted there was less speculative home construction than in the U.S. and that inventories are nowhere near the levels that exist south of the boarder. At the recent pace of sales activity in Canada there is only a one month supply of unsold homes on the market, it said. That compares with 10 months in the U.S.
Meanwhile, a survey of real estate firms by consulting firm PricewaterhouseCoopers and the Urban Land Institute found that 58,2 per cent of respondents felt they had “very good” or “excellent” prospects for profitability, down only moderately from the 62,3 per cent who felt that way last year about 2007.
Eric Beauchesne Canwest News Service Ottawa
The slump in housing construction starts in Canada next year will be widespread and will be deeper than what is now being forecast by the federal housing agency, according to a real-estate industry consulting firm.
Starts will plunge more than 20 per cent to 165,000 units, Altus Group said Tuesday in a forecast that expects to see the pace of construction falling in every region and in all major cities.
The forecast pace of construction next year is also seven per cent less than the 178,000 projected by Canada Mortgage and Housing Corp., while the Altus Group projection for this year, at 208,700 is also somewhat less than the 212,000, now projected by CMCH.
“The acceleration in the international financial crisis in recent weeks is quickly taking a toll on the Canadian economy in the form of decimated consumer confidence, tighter lending standards and plummeting prices for energy and commodity prices,” it noted in its forecasts. “A strong likelihood of an economic recession has emerged from the crisis and along with it dramatically weaker housing demand.”
“Expect sharply lower housing markets in 2009 as Canadian housing markets get pummeled by these forces,” it warned, adding there’s a risk the economic down-turn could also be sharper and more prolonged that is assumed in making the forecast, and the housing slump could be similar to those of the early 1980s and 1990s rather than the shallower housing recessions of the 1950s and 1960s.
Home resale have now been waning for five quarters and inventories of unsold new and existing homes is rising, it said, adding it survey results show that while buying intentions held steady last month, they are down from their peaks.
It projects there will be no growth in jobs next year and only weak gains in incomes, which will dampen demand for housing.
On the bright side, it noted there was less speculative home construction than in the U.S. and that inventories are nowhere near the levels that exist south of the boarder. At the recent pace of sales activity in Canada there is only a one month supply of unsold homes on the market, it said. That compares with 10 months in the U.S.
Meanwhile, a survey of real estate firms by consulting firm PricewaterhouseCoopers and the Urban Land Institute found that 58,2 per cent of respondents felt they had “very good” or “excellent” prospects for profitability, down only moderately from the 62,3 per cent who felt that way last year about 2007.
HOUSE PRICES EXPECTED TO FALL FOR AT LEAST A YEAR
Garry Marr
Canwest News Service Toronto
The average price of a home sold in Canada will fall this year for the first time in a decade and might not even recover by 2010, the Canadian Real Estate Association said Monday.
The Ottawa-based group, which represents 100 boards across the country, updated its forecast in light of new economic conditions and now expects home prices to drop 0,6 per cent this year and 2,1 per cent next year. Three months ago the group was forecasting price increases for this year and next year.
“Canadian economic growth is being side-swiped by financial market turmoil, slowing world economic growth and weaker commodity prices,” says Gregory Klump, chief economist with CREA. “The question of whether Canada will avoid a technical recession is moot, growth will be slow enough that it will feel like a recession.”
The forecast comes on the same day Canada Mortgage and Housing Corp. said new home construction remains strong, but economists cast doubt on the strength of that market, too.
“While new home construction in Canada has been holding up quite well thus far, we expect starts to weaken considerably over the next year,” said Dina Cover, an economist with TD Bank Financial Group.
She expects a decline in the part of the market that includes condominiums.
“We expect this month’s drop in multiple-family units to continue and to put a major dent in the headline figure.”
CMHC said there were 211,800 units constructed in October on a seasonally adjusted annualizes basis, down three per cent from month earlier. The crown corporation said last month that for the first time in seven years it expects housing starts to dip below 200,000 in 2009. It is forecasting a 16,1 per cent decline in new home construction next year.
Klump said despite the fact Canada is still building more homes than are required based on demographics, existing home sales have not been affected.
CREA expects housing sales will decline by 12 per cen this year from 2007 and then fall another three per cent next year. It expects improving conditions in 2010.
“The pricing environment will be more firm than it is now”, said Klump adding it’s too early to say whether prices will rise in 2010.
CREA president Calvin Lindberg also repeated his position Monday that the U.S. housing market is much different, most notably because the Canadian market does not have the same oversupply of homes.
Canwest News Service Toronto
The average price of a home sold in Canada will fall this year for the first time in a decade and might not even recover by 2010, the Canadian Real Estate Association said Monday.
The Ottawa-based group, which represents 100 boards across the country, updated its forecast in light of new economic conditions and now expects home prices to drop 0,6 per cent this year and 2,1 per cent next year. Three months ago the group was forecasting price increases for this year and next year.
“Canadian economic growth is being side-swiped by financial market turmoil, slowing world economic growth and weaker commodity prices,” says Gregory Klump, chief economist with CREA. “The question of whether Canada will avoid a technical recession is moot, growth will be slow enough that it will feel like a recession.”
The forecast comes on the same day Canada Mortgage and Housing Corp. said new home construction remains strong, but economists cast doubt on the strength of that market, too.
“While new home construction in Canada has been holding up quite well thus far, we expect starts to weaken considerably over the next year,” said Dina Cover, an economist with TD Bank Financial Group.
She expects a decline in the part of the market that includes condominiums.
“We expect this month’s drop in multiple-family units to continue and to put a major dent in the headline figure.”
CMHC said there were 211,800 units constructed in October on a seasonally adjusted annualizes basis, down three per cent from month earlier. The crown corporation said last month that for the first time in seven years it expects housing starts to dip below 200,000 in 2009. It is forecasting a 16,1 per cent decline in new home construction next year.
Klump said despite the fact Canada is still building more homes than are required based on demographics, existing home sales have not been affected.
CREA expects housing sales will decline by 12 per cen this year from 2007 and then fall another three per cent next year. It expects improving conditions in 2010.
“The pricing environment will be more firm than it is now”, said Klump adding it’s too early to say whether prices will rise in 2010.
CREA president Calvin Lindberg also repeated his position Monday that the U.S. housing market is much different, most notably because the Canadian market does not have the same oversupply of homes.
Thursday, November 13, 2008
Housing starts still lagging
By Advocate staff
Published: November 10, 2008 9:17 PM
With two months remaining in 2008, housing starts in Red Deer are down nearly two-thirds from 2007.
Canada Mortgage and Housing Corp. reported on Monday that from January to October, work had commenced on 298 single-detached dwellings and 170 units in multi-family buildings, for a total of 468 starts.
During the same period last year, the numbers were 873 for single-detached homes and 485 for multi-family units, for a combined 1,358.
This decline of 65.5 per cent was the greatest among Alberta’s seven major urban centres.
The Edmonton metropolitan area had the second-biggest drop at 54.5 per cent, Medicine Hat was down 44.1 per cent, Grande Prairie experienced a 41.6 per cent slide, Lethbridge was off 26.3 per cent, and the Regional Municipality of Wood Buffalo fell 24.1 per cent. The Calgary metropolitan area recorded the smallest decline, at 13.8 per cent.
During the month of October, there were 42 construction starts on single-detached homes in Red Deer, as compared with 61 in October 2007.
No starts on multi-family units were reported in the city this October or last.
Total housing starts across the seven urban centres during October decreased 43 per cent from last year, to 1,682 from 2,931.
Nationally, CMHC said housing starts during the month were six per cent lower than for the same period in 2007.
Published: November 10, 2008 9:17 PM
With two months remaining in 2008, housing starts in Red Deer are down nearly two-thirds from 2007.
Canada Mortgage and Housing Corp. reported on Monday that from January to October, work had commenced on 298 single-detached dwellings and 170 units in multi-family buildings, for a total of 468 starts.
During the same period last year, the numbers were 873 for single-detached homes and 485 for multi-family units, for a combined 1,358.
This decline of 65.5 per cent was the greatest among Alberta’s seven major urban centres.
The Edmonton metropolitan area had the second-biggest drop at 54.5 per cent, Medicine Hat was down 44.1 per cent, Grande Prairie experienced a 41.6 per cent slide, Lethbridge was off 26.3 per cent, and the Regional Municipality of Wood Buffalo fell 24.1 per cent. The Calgary metropolitan area recorded the smallest decline, at 13.8 per cent.
During the month of October, there were 42 construction starts on single-detached homes in Red Deer, as compared with 61 in October 2007.
No starts on multi-family units were reported in the city this October or last.
Total housing starts across the seven urban centres during October decreased 43 per cent from last year, to 1,682 from 2,931.
Nationally, CMHC said housing starts during the month were six per cent lower than for the same period in 2007.
Wednesday, November 5, 2008
MLS® STATISTICS FOR THE MONTH OF OCTOBER 2008
MLS® STATISTICS FOR THE MONTH OF OCTOBER 2008
Prepared for the members of the Central Alberta Realtors® Association
City Residential Sales
October 2008 128
October 2007 152
January 01, 2008 to October 30, 2008 1,809
January 01, 2007 to October 30, 2007 2,026
Value of City Residential Sales
October 2008 $38,073,800
October 2007 $46,818,150
January 01, 2008 to October 30, 2008 $559,155,595
January 01, 2007 to October 30, 2007 $624,756,465
Selling to Listing Ratio (CITY)
October 2008 35,37%
February 2008 55.16%
Prepared for the members of the Central Alberta Realtors® Association
City Residential Sales
October 2008 128
October 2007 152
January 01, 2008 to October 30, 2008 1,809
January 01, 2007 to October 30, 2007 2,026
Value of City Residential Sales
October 2008 $38,073,800
October 2007 $46,818,150
January 01, 2008 to October 30, 2008 $559,155,595
January 01, 2007 to October 30, 2007 $624,756,465
Selling to Listing Ratio (CITY)
October 2008 35,37%
February 2008 55.16%
Monday, October 20, 2008
Are you confused about our market?? I think if you talk to 10 different people you will get 10 different answers or opinions on our real estate market. Here is my opinion on our market. Up until a month ago I was very positive about our market as many of you know, I was of the opinion that our inventory levels were going to bottom out in November and stabilize until spring. My opinion was that we would see a slight increase in pricing next year and my guess was about 5%. Over the last 3 weeks my opinion has changed drastically!! I now have huge concerns about our financial system not only here but on a global perspective and secondly on our economy both here at home and abroad. I am of the opinion that our market is still driven by the oil industry and if you agree with me then our slide in oil prices should be of a concern. In the last few days oil prices have traded in a range of $68.00 to $72.00 and many experts are suggesting we could see prices in the $50.00 to $55.00 price range. Even if the prices stay where they are currently or decrease slightly more I believe our conventional oil is still okay, but what about natural gas which is our largest percentage of production not oil. Our natural gas prices need to increase to keep drilling. But here is the big question can the junior oil companies get the financing they need to operate drilling programs this year?? If not in my opinion we have a problem. What about the heavy oil at about $85.00 a barrel my guess is you are at about break even. How long do the major oil companies wait before they moth ball the expansions. I think that our commodities and the dollar have a direct correlation and as commodities drop so will our dollar. With United States and Europe in a recession we will have trouble shipping our products to the rest of the world. If the Bank of Canada lowers it's interest rates by say another 1% will it really help I think not. I am seeing our real estate inventories increase. In the last 2 weeks our increases have been way more than I ever thought and my opinion is this is going to continue. So get you helmets on and buckle up, as I think we are in for a interesting ride over the next 18 months. I am of the opinion that we will be hit less here than the rest of Canada but will the banks pull there horns in? Did I need to ask that last question it has already happened. If I am right you will need a realtor that has a vision and ideas to see you through these turbulent times. I have a plan to help you get through these times. I believe it will be sucessfull as the way my marketing plan has been. If I am right there will be a lot of money made and a lot of money lost in real estate over the next 18 months. Where do you want to be? Give me a call to discuss your real estate needs.
Thursday, October 16, 2008
Home construction slides
By Harley Richards
There are a variety of words that could be used to describe the slowdown in Red Deer’s residential construction sector.
Regine Durand chooses “correction”.
A market analyst with Canada Mortgage and Housing Corp. In Calgary, Durand acknowledges that the decline in housing starts this year has been substantial.
The 426 single-detached and multi-family units started during the first nine months of 2008 represent a 67 per cent drop from the 1297 units started during the same period last year.
The figure is 58 per cent lower than Red Deer’s five-year average of 1004 starts and down 51 per cent from the 10 year average of 874 starts.
But Durand sees reason for optimism.
She pointed out that the inventory of new, single-detached homes in the city awaiting buyers at the end of September numbered 85 – down from 107 the preceding month.
Meanwhile, the number of listings on Red Deer’s resale market in September was 268, as compared with the 598 active listings a year earlier.
“its good news,” said Durand. ‘It means that the market is absorbing more units”.
By 2009, she continued, the surplus inventory of new and used homes on the market should disappear and demand for new construction will rise.
Encouraging this will be the moderation of house prices.
Members of the local homebuilding industry agree that business has slowed, but they also characterize the situation as a “correction”.
“It looks like things will pick up again in 2009,” said Scott Boyd, executive officer with the Canadian Home Builders’ Association, Central Alberta branch.
Gord Bontje, president of Laebon Homes, is also anticipating better times.
He notices improved sales in August and said that trand has continued.
“Two weeks ago was our best sales week in a couple of years,” Bontje said.
Thare have been cutbacks in staffing, said Boyd and Bontje, but they think this reflects the fact many companies boosted their payrolls in 2006 and 2007 to keep pace with demand.
“Thas was the abnormal piece,” said Bontje, describing how his company sent its human resources manager to the Maritimes and looked into bringing foreign workers to Canada in its efforts to add people.
“I think today is kind of the way it should be”.
Laebon’s current payroll – about 110 – is about the same as it was before the building boom hit, he said.
Jonas Neidert, president of the local branch of the Canadian Home Builders’ Association, agreed with Bontje’s assessment.
There are a variety of words that could be used to describe the slowdown in Red Deer’s residential construction sector.
Regine Durand chooses “correction”.
A market analyst with Canada Mortgage and Housing Corp. In Calgary, Durand acknowledges that the decline in housing starts this year has been substantial.
The 426 single-detached and multi-family units started during the first nine months of 2008 represent a 67 per cent drop from the 1297 units started during the same period last year.
The figure is 58 per cent lower than Red Deer’s five-year average of 1004 starts and down 51 per cent from the 10 year average of 874 starts.
But Durand sees reason for optimism.
She pointed out that the inventory of new, single-detached homes in the city awaiting buyers at the end of September numbered 85 – down from 107 the preceding month.
Meanwhile, the number of listings on Red Deer’s resale market in September was 268, as compared with the 598 active listings a year earlier.
“its good news,” said Durand. ‘It means that the market is absorbing more units”.
By 2009, she continued, the surplus inventory of new and used homes on the market should disappear and demand for new construction will rise.
Encouraging this will be the moderation of house prices.
Members of the local homebuilding industry agree that business has slowed, but they also characterize the situation as a “correction”.
“It looks like things will pick up again in 2009,” said Scott Boyd, executive officer with the Canadian Home Builders’ Association, Central Alberta branch.
Gord Bontje, president of Laebon Homes, is also anticipating better times.
He notices improved sales in August and said that trand has continued.
“Two weeks ago was our best sales week in a couple of years,” Bontje said.
Thare have been cutbacks in staffing, said Boyd and Bontje, but they think this reflects the fact many companies boosted their payrolls in 2006 and 2007 to keep pace with demand.
“Thas was the abnormal piece,” said Bontje, describing how his company sent its human resources manager to the Maritimes and looked into bringing foreign workers to Canada in its efforts to add people.
“I think today is kind of the way it should be”.
Laebon’s current payroll – about 110 – is about the same as it was before the building boom hit, he said.
Jonas Neidert, president of the local branch of the Canadian Home Builders’ Association, agreed with Bontje’s assessment.
Wednesday, October 15, 2008
Construction: Commercial sector still humming
“A lot of guys have expanded over the last year or two years. Even with layoffs, they’re probably returning a little bit more to normal”
He added that his own company, Avalon Central Alberta, has been getting a lot of phone calls from trades’ people looking for work.
But many of these people have been able to find places in the commercial construction sector, which continues to hum along.
As for the global financial meltdown, Durand downplayed its likely impact on the local housing market.
“Just looking at Red Deer, the economic fundamentals are still strong there,” she said, citing continued job creation and the migration of people to Alberta from other provinces. In fact, added Bontje, though times in other parts of the country – such as Central Canada where the manufacturing sector is struggling – could stimulate demand for housing here.
“What’s the first thing you need when you move to Alberta?
“Well, you need a place to live and then you need a job – or vice versa.”
He added that his own company, Avalon Central Alberta, has been getting a lot of phone calls from trades’ people looking for work.
But many of these people have been able to find places in the commercial construction sector, which continues to hum along.
As for the global financial meltdown, Durand downplayed its likely impact on the local housing market.
“Just looking at Red Deer, the economic fundamentals are still strong there,” she said, citing continued job creation and the migration of people to Alberta from other provinces. In fact, added Bontje, though times in other parts of the country – such as Central Canada where the manufacturing sector is struggling – could stimulate demand for housing here.
“What’s the first thing you need when you move to Alberta?
“Well, you need a place to live and then you need a job – or vice versa.”
Tuesday, October 14, 2008
Housing demand
Marty Hope, Calgary HeraldPublished: Saturday, October 11, 2008
Despite a diversified economy, net migration into Red Deer is weakening -- and that could impact the pace of new home construction, says a federal agency.
A growing agriculture, expanding retail, wholesale, distribution and manufacturing industries, booming construction and a strong oil and gas market continue to drive the economy of the central Alberta city.
In May, major construction projects proposed, completed or under construction in the region stood at $2.9 billion, up 70 per cent from May 2007.
"However, net migration, one of the key drivers of household formation and housing demand, is weakening," says Richard Corriveau, Prairie region economist for Canada Mortgage and Housing Corp. "Moving into the forecast period, the weakening net migration will likely put a brake on the demand for housing."
After dropping by 11 per cent in 2007, single-detached starts are expected to drop another 59 per cent this year to 400 units. To the end of June, single starts fell by 69 per cent as builders prudently responded to rising inventories and huge selection in the competing resale market.
After reaching their second highest level in 21 years in 2007, multi-family starts will drop 40 per cent this year.
At the end of June, year-to-date multi-family starts were down 47 per cent. To reduce inventories in the face of a well-supplied competing resale market, builders will restrain the number of multi-family starts to 350 units this year.
Following five consecutive years of increases, resale activity should fall to 4,500 units in 2008, down 11 per cent from 2007. Year-to-date transactions fell by 22 per cent to the end of June 2008. A potential up tick in demand in the spring buying season of 2009 should also draw supply levels lower, and bring it back to balanced conditions. Expect sales to rebound to 4,650 units in 2009, up 3.3 per cent from 2008.
In the wake of a 32 per cent gain in 2007, the total average resale price is expected to rise by 5.4 per cent in 2008 to $285,000. Price pressure will ease further in 2009 with price growth being strongly held back by excess inventories. Look for prices to hit $295,000 in 2009, up 3.5 per cent from 2008, the weakest gain in 13 years.
The following is a look at some other areas in Alberta:
Grande Prairie
Currently the natural gas sector is a major driver of the Grande Prairie economy, but the industry slowed as inventory levels in North America reached a five-year high, causing gas prices to decline. In addition, the new royalty framework also introduced some uncertainty in the market.
The slowdown in the natural gas industry affected the economy in Grande Prairie and would eventually put a damper on housing demand.
The natural gas industry appears poised to recover in the latter half of 2008. However, the increased activity in the economy is not expected to make any major impacts to housing demand until 2009.
The city's forestry manufacturing industry has slowed with the downturn in the United States housing market, falling lumber prices, increased costs, and the rising Canadian dollar.
Inventory of lumber is also at elevated levels.
In 2007, single-detached starts in Grande Prairie ended the year with 784 units, down 26 per cent from 2006. The demand for housing has slowed from 2007, and inventories are currently at record levels.
Builders are pulling back starts in 2008 to allow the current inventory to be drawn down. Starts in 2008 are anticipated to fall to 400 units, down 49 per cent from a year earlier.
Multi-family starts reached a new record in 2007 at 839 units, up 49 per cent from 2006. Over the forecast period, multiple starts are expected to decline in response to the growing inventory on the market.
In 2008, starts are anticipated to drop by 79 per cent to 175 units.
The economic slowdown has also dampened activity on the MLS market. Sales fell from 3,017 in 2006 to 2,550 sales in 2007, representing a 15 per cent decline. In 2008, sales are expected to decrease by nearly nine per cent to 2,325 and rise by 3.2 per cent to 2,400 in 2009.
Following price growth of over 11 per cent in 2007, gains in the average resale price are expected to be minimal over the forecast period.
In 2008, the average price is expected to remain unchanged at $265,000, while in 2009 the average price is expected to increase by four per cent to $275,000. Price growth will improve next year in the face of more balanced conditions.
Lethbridge
Housing demand in this southern Alberta city is expected to be lower throughout the forecast period due largely to weaker population growth from net migration which is expected to decline in 2008 by more than half those record levels seen in 2006. Despite this, however, employment growth and economic trends remain favourable for the Lethbridge region.
Economic growth in Lethbridge will occur in agriculture as most grain prices are up this year and producers face a promising crop yield.
Furthermore, the region will benefit from the manufacturing and commercial/retail sectors.
Following a record year in 2007, single-detached starts are forecast to decline by nearly 16 per cent to 775 in 2008. A further decline of ten per cent is expected in 2009 to 700 starts. Builders continue to pull-back production in the face of rising supply and with lower demand.
To the end of June, 422 single-detached foundations were poured, a decline of 13 per cent over the previous year. The amount of units under construction hit a record high in April of this year of 750 units.
Inventories have remained at or near record levels throughout the year, with 64 units completed and unabsorbed at the end of May 2008 up from 22 in May 2007.
In 2007, Lethbridge multi-family starts more than doubled the performance in 2006. The forecast calls for starts to weaken in 2008 to 175, and then strengthen to 225 units in 2009.
Due to a record number of single-detached starts in 2007 and continued elevated levels so far this year, sales on the existing home market are expected to decline in 2008.
New listings have increased as buyers of new homes have put their existing home up for sale.
However, with lower demand in the market, supply levels have increased over the first six months of this year. the forecast is for 2,300 sales at the end of 2008, while in 2009 sales are forecast to increase by three per cent to 2,375.
In 2007, the resale market in Lethbridge experienced record price growth. At the end of June, the average resale price reached $244,727, up nearly 11 per cent over the corresponding period last year.
The average selling price for this year calls for slower with an increase in the average resale price of eight per cent to $247,500.
In 2009, average price growth is expected to near four per cent with the average resale price ending the year at $256,500.
Despite a diversified economy, net migration into Red Deer is weakening -- and that could impact the pace of new home construction, says a federal agency.
A growing agriculture, expanding retail, wholesale, distribution and manufacturing industries, booming construction and a strong oil and gas market continue to drive the economy of the central Alberta city.
In May, major construction projects proposed, completed or under construction in the region stood at $2.9 billion, up 70 per cent from May 2007.
"However, net migration, one of the key drivers of household formation and housing demand, is weakening," says Richard Corriveau, Prairie region economist for Canada Mortgage and Housing Corp. "Moving into the forecast period, the weakening net migration will likely put a brake on the demand for housing."
After dropping by 11 per cent in 2007, single-detached starts are expected to drop another 59 per cent this year to 400 units. To the end of June, single starts fell by 69 per cent as builders prudently responded to rising inventories and huge selection in the competing resale market.
After reaching their second highest level in 21 years in 2007, multi-family starts will drop 40 per cent this year.
At the end of June, year-to-date multi-family starts were down 47 per cent. To reduce inventories in the face of a well-supplied competing resale market, builders will restrain the number of multi-family starts to 350 units this year.
Following five consecutive years of increases, resale activity should fall to 4,500 units in 2008, down 11 per cent from 2007. Year-to-date transactions fell by 22 per cent to the end of June 2008. A potential up tick in demand in the spring buying season of 2009 should also draw supply levels lower, and bring it back to balanced conditions. Expect sales to rebound to 4,650 units in 2009, up 3.3 per cent from 2008.
In the wake of a 32 per cent gain in 2007, the total average resale price is expected to rise by 5.4 per cent in 2008 to $285,000. Price pressure will ease further in 2009 with price growth being strongly held back by excess inventories. Look for prices to hit $295,000 in 2009, up 3.5 per cent from 2008, the weakest gain in 13 years.
The following is a look at some other areas in Alberta:
Grande Prairie
Currently the natural gas sector is a major driver of the Grande Prairie economy, but the industry slowed as inventory levels in North America reached a five-year high, causing gas prices to decline. In addition, the new royalty framework also introduced some uncertainty in the market.
The slowdown in the natural gas industry affected the economy in Grande Prairie and would eventually put a damper on housing demand.
The natural gas industry appears poised to recover in the latter half of 2008. However, the increased activity in the economy is not expected to make any major impacts to housing demand until 2009.
The city's forestry manufacturing industry has slowed with the downturn in the United States housing market, falling lumber prices, increased costs, and the rising Canadian dollar.
Inventory of lumber is also at elevated levels.
In 2007, single-detached starts in Grande Prairie ended the year with 784 units, down 26 per cent from 2006. The demand for housing has slowed from 2007, and inventories are currently at record levels.
Builders are pulling back starts in 2008 to allow the current inventory to be drawn down. Starts in 2008 are anticipated to fall to 400 units, down 49 per cent from a year earlier.
Multi-family starts reached a new record in 2007 at 839 units, up 49 per cent from 2006. Over the forecast period, multiple starts are expected to decline in response to the growing inventory on the market.
In 2008, starts are anticipated to drop by 79 per cent to 175 units.
The economic slowdown has also dampened activity on the MLS market. Sales fell from 3,017 in 2006 to 2,550 sales in 2007, representing a 15 per cent decline. In 2008, sales are expected to decrease by nearly nine per cent to 2,325 and rise by 3.2 per cent to 2,400 in 2009.
Following price growth of over 11 per cent in 2007, gains in the average resale price are expected to be minimal over the forecast period.
In 2008, the average price is expected to remain unchanged at $265,000, while in 2009 the average price is expected to increase by four per cent to $275,000. Price growth will improve next year in the face of more balanced conditions.
Lethbridge
Housing demand in this southern Alberta city is expected to be lower throughout the forecast period due largely to weaker population growth from net migration which is expected to decline in 2008 by more than half those record levels seen in 2006. Despite this, however, employment growth and economic trends remain favourable for the Lethbridge region.
Economic growth in Lethbridge will occur in agriculture as most grain prices are up this year and producers face a promising crop yield.
Furthermore, the region will benefit from the manufacturing and commercial/retail sectors.
Following a record year in 2007, single-detached starts are forecast to decline by nearly 16 per cent to 775 in 2008. A further decline of ten per cent is expected in 2009 to 700 starts. Builders continue to pull-back production in the face of rising supply and with lower demand.
To the end of June, 422 single-detached foundations were poured, a decline of 13 per cent over the previous year. The amount of units under construction hit a record high in April of this year of 750 units.
Inventories have remained at or near record levels throughout the year, with 64 units completed and unabsorbed at the end of May 2008 up from 22 in May 2007.
In 2007, Lethbridge multi-family starts more than doubled the performance in 2006. The forecast calls for starts to weaken in 2008 to 175, and then strengthen to 225 units in 2009.
Due to a record number of single-detached starts in 2007 and continued elevated levels so far this year, sales on the existing home market are expected to decline in 2008.
New listings have increased as buyers of new homes have put their existing home up for sale.
However, with lower demand in the market, supply levels have increased over the first six months of this year. the forecast is for 2,300 sales at the end of 2008, while in 2009 sales are forecast to increase by three per cent to 2,375.
In 2007, the resale market in Lethbridge experienced record price growth. At the end of June, the average resale price reached $244,727, up nearly 11 per cent over the corresponding period last year.
The average selling price for this year calls for slower with an increase in the average resale price of eight per cent to $247,500.
In 2009, average price growth is expected to near four per cent with the average resale price ending the year at $256,500.
Thursday, October 9, 2008
Region remains buyers’ market
By Harley Richards - Red Deer AdvocatePublished: October 03, 2008 7:49 AM
The Red Deer region remains a buyers’ market, says the president of the Central Alberta Realtors Association.
Plenty of listings, stable prices and steady mortgage rates has created a situation that’s “about as good as it gets” for home shoppers, said Randy Weins in a news release issued by the association on Thursday.
Weins’ assessment was based on Multiple Listing Service statistics for the third quarter of 2008.
It indicated that 400 single-family homes were sold in Red Deer from July to September, up from 344 during the same period in 2007.
The median price of those 400 homes was $324,000, down from $330,000 for the corresponding quarter last year.
In the case of townhomes, there were 76 sales with a median price of $233,000 during the past quarter in Red Deer.
That compares with 52 deals and a mid-point price of $239,000 for the July-to-September period of 2007.
In the case of half-duplexes, 55 sales with a median price of $266,000 were recorded in the most recent quarter. During the corresponding period in 2007, the figures were 53 and $275,000.
The news release said that Weins considers single-family sales to be the market benchmark.
Elsewhere in the region, the Central Alberta Realtors Association recorded 90 single-family home sales in Sylvan Lake during the third quarter, with the median price of these $325,000. That compares with 85 sales and a median price of $347,000 a year earlier.
In Lacombe, 38 single-family homes were sold, with the median price of these $316,000. That was down from 51 sales for the same period in 2007, when the median price was $307,000.
In Blackfalds, there were 29 single-family homes sold at a median price of $284,000 from July to September.
During those months in 2007, the figures were 31 and $296,000.
The association reported 28 MLS sales of single-family homes in Stettler in the last quarter, with these attracting a median price of $218,000.
The number of sales was unchanged from 2007, but the price a year ago was $236,000.
Ponoka had 25 sales of single-family homes during the past quarter, with $255,000 the median price. A year earlier there were 31 deals in this category, with the median price $243,000.
There were also 25 single-family homes sold in Rocky Mountain House between July 1 and Sept. 30. The median price of these was $290,000.
Last year, Rocky generated 32 sales of this home type, with the median price $291,000.
Innisfail produced 23 single-family sales with a median price of $269,000 during the same period this year. For 2007, the numbers were 33 and $302,000.
Weins suggested that sellers looking to close a deal on apartment condominiums or homes priced in the top 20 per cent of the market are probably having the toughest time.
“If your property is listed in the top end of your competitive price range then you can likely bring out the Christmas tree and put it up,” he said.
The inventory of homes are declining in most communities, added Weins. And he warned that prospective buyers should act before credit tightens and mortgage rates rise.
The Central Alberta Realtors Association has cautioned that general price information can help identify trends and provide comparisons over time, but may not reflect the actual price of a specific home.
The Red Deer region remains a buyers’ market, says the president of the Central Alberta Realtors Association.
Plenty of listings, stable prices and steady mortgage rates has created a situation that’s “about as good as it gets” for home shoppers, said Randy Weins in a news release issued by the association on Thursday.
Weins’ assessment was based on Multiple Listing Service statistics for the third quarter of 2008.
It indicated that 400 single-family homes were sold in Red Deer from July to September, up from 344 during the same period in 2007.
The median price of those 400 homes was $324,000, down from $330,000 for the corresponding quarter last year.
In the case of townhomes, there were 76 sales with a median price of $233,000 during the past quarter in Red Deer.
That compares with 52 deals and a mid-point price of $239,000 for the July-to-September period of 2007.
In the case of half-duplexes, 55 sales with a median price of $266,000 were recorded in the most recent quarter. During the corresponding period in 2007, the figures were 53 and $275,000.
The news release said that Weins considers single-family sales to be the market benchmark.
Elsewhere in the region, the Central Alberta Realtors Association recorded 90 single-family home sales in Sylvan Lake during the third quarter, with the median price of these $325,000. That compares with 85 sales and a median price of $347,000 a year earlier.
In Lacombe, 38 single-family homes were sold, with the median price of these $316,000. That was down from 51 sales for the same period in 2007, when the median price was $307,000.
In Blackfalds, there were 29 single-family homes sold at a median price of $284,000 from July to September.
During those months in 2007, the figures were 31 and $296,000.
The association reported 28 MLS sales of single-family homes in Stettler in the last quarter, with these attracting a median price of $218,000.
The number of sales was unchanged from 2007, but the price a year ago was $236,000.
Ponoka had 25 sales of single-family homes during the past quarter, with $255,000 the median price. A year earlier there were 31 deals in this category, with the median price $243,000.
There were also 25 single-family homes sold in Rocky Mountain House between July 1 and Sept. 30. The median price of these was $290,000.
Last year, Rocky generated 32 sales of this home type, with the median price $291,000.
Innisfail produced 23 single-family sales with a median price of $269,000 during the same period this year. For 2007, the numbers were 33 and $302,000.
Weins suggested that sellers looking to close a deal on apartment condominiums or homes priced in the top 20 per cent of the market are probably having the toughest time.
“If your property is listed in the top end of your competitive price range then you can likely bring out the Christmas tree and put it up,” he said.
The inventory of homes are declining in most communities, added Weins. And he warned that prospective buyers should act before credit tightens and mortgage rates rise.
The Central Alberta Realtors Association has cautioned that general price information can help identify trends and provide comparisons over time, but may not reflect the actual price of a specific home.
MLS® STATISTICS FOR THE MONTH OF SEPTEMBER 2008
MLS® STATISTICS FOR THE MONTH OF SEPTEMBER 2008
Prepared for the members of the Central Alberta Realtors® Association
City Residential Sales
September 2008 185
September 2007 158
January 01, 2008 to September 30, 2008 $1,681
January 01, 2007 to September 30, 2007 $1,874
Value of City Residential Sales
September 2008 $57,131,828
September 2007 $50,490,982
January 01, 2008 to September 30, 2008 $521,081,795
January 01, 2007 to September 30, 2007 $577,939,315
Selling to Listing Ratio (CITY)
September 2008 69.03%
February 2008 55.16%
Prepared for the members of the Central Alberta Realtors® Association
City Residential Sales
September 2008 185
September 2007 158
January 01, 2008 to September 30, 2008 $1,681
January 01, 2007 to September 30, 2007 $1,874
Value of City Residential Sales
September 2008 $57,131,828
September 2007 $50,490,982
January 01, 2008 to September 30, 2008 $521,081,795
January 01, 2007 to September 30, 2007 $577,939,315
Selling to Listing Ratio (CITY)
September 2008 69.03%
February 2008 55.16%
Wednesday, October 1, 2008
Alberta leads slide in housing
Mario Toneguzzi, Calgary HeraldPublished: Wednesday, October 01, 2008
Alberta led all provinces in Canada with the biggest decrease in the average sale price for an existing home in August compared with a year ago, according to the Canadian Real Estate Association.
Statistics released Tuesday by the association show the average MLS sale price in Alberta dipped by 5.2 per cent to $343,148. The only other province experiencing a year-over-year price decline was British Columbia at 4.1 per cent to $421,685. At the national level, prices in August dropped by 4.6 per cent from a year ago to $290,347.
The association numbers also showed sales in Alberta were down 8.4 per cent from a year ago while new listings have dropped by 18.4 per cent.
Nationally, sales were down 21 per cent and new listings were off by 3.4 per cent. British Columbia saw a sales decline of 47.4 per cent.
"Slower activity in some of Canada's pricier housing markets compared to year-ago levels will continue weighing on the national average price," said Gregory Klump, the association's chief economist.
On a year-to-date basis until the end of August, Alberta MLS sales are down 22.7 per cent but new listings were up 9.9 per cent. The average sale price has increased by 0.2 per cent to $357,145.
Across the country, sales are down 14 per cent year-to-date compared with the same period in 2007 and new listings increased by 8.7 per cent. The average sale price has increased by 1.9 per cent to $309,698.
Every drop in the value of Canadian real estate elevates the level of anxiety about a U.S.-style housing meltdown in Canada, said CIBC World Markets economist Benjamin Tal in a research note.
"To be sure, house prices in Canada will continue to ease in the coming months. But the triggers that led to a free fall in Canadian real estate markets in the early 1990s and today in U.S. markets are nowhere to be found," wrote Tal.
"At this rate of growth in unit sales and new listings, by early next year the Canadian housing market will turn, for the first time since 1995, to a buyer's market."
Tal also said Calgary and Edmonton, where until recently homeowners doubled the value of their real estate "during the course of breakfast," are now seeing close to two and a half new house listings for every unit sold.
And with house prices in Alberta doubling since 2004, housing affordability has deteriorated to levels not seen since the early 1990s, added Tal.
Alberta led all provinces in Canada with the biggest decrease in the average sale price for an existing home in August compared with a year ago, according to the Canadian Real Estate Association.
Statistics released Tuesday by the association show the average MLS sale price in Alberta dipped by 5.2 per cent to $343,148. The only other province experiencing a year-over-year price decline was British Columbia at 4.1 per cent to $421,685. At the national level, prices in August dropped by 4.6 per cent from a year ago to $290,347.
The association numbers also showed sales in Alberta were down 8.4 per cent from a year ago while new listings have dropped by 18.4 per cent.
Nationally, sales were down 21 per cent and new listings were off by 3.4 per cent. British Columbia saw a sales decline of 47.4 per cent.
"Slower activity in some of Canada's pricier housing markets compared to year-ago levels will continue weighing on the national average price," said Gregory Klump, the association's chief economist.
On a year-to-date basis until the end of August, Alberta MLS sales are down 22.7 per cent but new listings were up 9.9 per cent. The average sale price has increased by 0.2 per cent to $357,145.
Across the country, sales are down 14 per cent year-to-date compared with the same period in 2007 and new listings increased by 8.7 per cent. The average sale price has increased by 1.9 per cent to $309,698.
Every drop in the value of Canadian real estate elevates the level of anxiety about a U.S.-style housing meltdown in Canada, said CIBC World Markets economist Benjamin Tal in a research note.
"To be sure, house prices in Canada will continue to ease in the coming months. But the triggers that led to a free fall in Canadian real estate markets in the early 1990s and today in U.S. markets are nowhere to be found," wrote Tal.
"At this rate of growth in unit sales and new listings, by early next year the Canadian housing market will turn, for the first time since 1995, to a buyer's market."
Tal also said Calgary and Edmonton, where until recently homeowners doubled the value of their real estate "during the course of breakfast," are now seeing close to two and a half new house listings for every unit sold.
And with house prices in Alberta doubling since 2004, housing affordability has deteriorated to levels not seen since the early 1990s, added Tal.
Thursday, September 25, 2008
Old listings seen piling up
Mario Toneguzzi, Calgary HeraldPublished: Thursday, September 25, 2008
The number of residential MLS listings in the Calgary area that have expired without a sale soared in the month of August to nearly double what it was a year ago.
According to the Calgary Real Estate Board, there were 2,550 MLS listings that expired in August comprising single-family homes and condominiums in Calgary metro, as well as residential properties in CREB's market area, which includes acreages as well as town and country.
In August 2007, there were 1,368 listings that expired.
There are more listings expiring each month, said Ron Esch, executive vice-president of the local real estate board.
For many sellers, the expectation of a sale is not being met probably due to pricing, he said.
In August, MLS sales were down compared with a year ago throughout CREB's market area in four categories -- single-family homes in Calgary metro (10.96 per cent), condominiums in Calgary metro (17.2 per cent), towns outside Calgary (30.3 per cent) and country residential or acreages (20.3 per cent).
People need to know that condos now average 58 days to sell, compared with 35 days last year, while single-family homes were averaging 52 days in August, compared with 39 days a year ago, said Lai Sing Louie, senior market analyst in Calgary for the Canada Mortgage and Housing Corp.
"So it is taking longer to sell right now and people have to be in touch with the current market conditions," said Louie. "If you price it above, there's likely another house that's selling maybe a little below and that will go first."
He said people selling a home these days have to price their property according to product that's very similar.
Active listings are coming down in the Calgary market, but remain high.
"In terms of August, over 11,000 units were for sale. It's the highest August on record that we have going back to 1981," said Louie. "Even though it's peaked, the peak appears to have happened in May this year at over 13,000, it is coming down and the trend line is also down, but historically comparing the number, it's still high. We expect it to come down."
In August, average sale prices in the Calgary market dropped in four different areas compared with last year -- single-family homes in Calgary metro (down 9.3 per cent), condominiums in Calgary metro (10.3 per cent), towns outside Calgary (six per cent) and country residential including acreages (0.8 per cent).
Esch said MLS listings expire in two ways -- a listing contract runs out after 60 or 90 days with the property not selling or sometimes listings are terminated in advance of the expiration date. He said the majority of expirations are because they've run the course of the listing period and did not sell.
Data supplied by realtor Mike Fotiou of First Place Realty show that expirations in single-family homes in Calgary metro hit a high of 1,332 in December 2007 and have been over 1,200 in each of the months of August, July and June. Over the past year, expirations in the Calgary metro condo market hit a high of 614 in July.
On his web blog, Fotiou writes that the days-on-the-market (DOM) tatistic is not accurate these days.
"In the past few years, when properties were actually selling in 60 days or less, the DOM stat was quite accurate," he said.
But now with close to five months of supply for the inventory, "homes are expiring and getting relisted frequently, skewing the DOM stat."
He said the days-on-market clock resets back to zero when a property expires and is relisted.
mtoneguzzi@theherald.canwest.com
The number of residential MLS listings in the Calgary area that have expired without a sale soared in the month of August to nearly double what it was a year ago.
According to the Calgary Real Estate Board, there were 2,550 MLS listings that expired in August comprising single-family homes and condominiums in Calgary metro, as well as residential properties in CREB's market area, which includes acreages as well as town and country.
In August 2007, there were 1,368 listings that expired.
There are more listings expiring each month, said Ron Esch, executive vice-president of the local real estate board.
For many sellers, the expectation of a sale is not being met probably due to pricing, he said.
In August, MLS sales were down compared with a year ago throughout CREB's market area in four categories -- single-family homes in Calgary metro (10.96 per cent), condominiums in Calgary metro (17.2 per cent), towns outside Calgary (30.3 per cent) and country residential or acreages (20.3 per cent).
People need to know that condos now average 58 days to sell, compared with 35 days last year, while single-family homes were averaging 52 days in August, compared with 39 days a year ago, said Lai Sing Louie, senior market analyst in Calgary for the Canada Mortgage and Housing Corp.
"So it is taking longer to sell right now and people have to be in touch with the current market conditions," said Louie. "If you price it above, there's likely another house that's selling maybe a little below and that will go first."
He said people selling a home these days have to price their property according to product that's very similar.
Active listings are coming down in the Calgary market, but remain high.
"In terms of August, over 11,000 units were for sale. It's the highest August on record that we have going back to 1981," said Louie. "Even though it's peaked, the peak appears to have happened in May this year at over 13,000, it is coming down and the trend line is also down, but historically comparing the number, it's still high. We expect it to come down."
In August, average sale prices in the Calgary market dropped in four different areas compared with last year -- single-family homes in Calgary metro (down 9.3 per cent), condominiums in Calgary metro (10.3 per cent), towns outside Calgary (six per cent) and country residential including acreages (0.8 per cent).
Esch said MLS listings expire in two ways -- a listing contract runs out after 60 or 90 days with the property not selling or sometimes listings are terminated in advance of the expiration date. He said the majority of expirations are because they've run the course of the listing period and did not sell.
Data supplied by realtor Mike Fotiou of First Place Realty show that expirations in single-family homes in Calgary metro hit a high of 1,332 in December 2007 and have been over 1,200 in each of the months of August, July and June. Over the past year, expirations in the Calgary metro condo market hit a high of 614 in July.
On his web blog, Fotiou writes that the days-on-the-market (DOM) tatistic is not accurate these days.
"In the past few years, when properties were actually selling in 60 days or less, the DOM stat was quite accurate," he said.
But now with close to five months of supply for the inventory, "homes are expiring and getting relisted frequently, skewing the DOM stat."
He said the days-on-market clock resets back to zero when a property expires and is relisted.
mtoneguzzi@theherald.canwest.com
Housing market feels fall chill
Canada warned it may follow U.S. meltdown
Geoffrey Scotton, Calgary HeraldPublished: Thursday, September 25, 2008
Two prominent economists warned Wednesday Canada's housing market is at a tipping point and could trigger a financial meltdown that would mirror the unprecedented crisis gripping our neighbour to the south.
"We fear . . . it may simply be a matter of time (before) . . . housing and credit markets in Canada crack," said Merrill Lynch Canada Inc. analysts David Wolf and Carolyn Kwan in a note to clients. "Markets remain overly sanguine with respect to the prospects for the Canadian housing market, the financial sector and the overall economy."
Locally, some real estate players are carefully watching stretched household finances coinciding with falling real estate values, worried the squeeze could steepen the descent of a falling market -- or worse.
"There's definitely some concern -- prices in Calgary have been on a downward trend for well over a year and inventories are high," said realtor Gary MacLean of Re/Max Real Estate Central Calgary. "If there's a downswing, Albertans will get hurt the most. The fact that people are over-extended and leveraged to the max should be of concern to everyone."
Prime Minister Stephen Harper dismissed the Merrill Lynch report, saying both the housing and consumer markets and financial institutions in Canada are "much stronger" than in the U.S.
"I do not accept this conclusion, not at all," Harper said.
The two economists -- who ironically work for the Canadian arm of investment bank Merrill Lynch & Co. Inc., a casualty of the financial shakeout in the U.S. that is pounding global markets -- argue household finances here are as over-extended as those in the U.S. and the U.K. were before falling house prices caused the bubble to burst.
"These data imply the Canadian household sector is now overextending itself as much as the U.S. or U.K. ever did, challenging the consensus view that Canadian lenders and borrowers have been far more conservative through the cycle," said Wolf and Kwan.
"The absence of a Canadian credit crunch to date may be cause for concern, not comfort. How can it be that mortgage debt is growing at a double-digit pace against an asset class now seeing deflation?" said Wolf and Kwan.
Other economists believe worrisome parallels between the U.S. and U.K. housing markets, and Canada's, are limited.
"We don't see the same factors," RBC Financial Group assistant chief economist Dawn Desjardins told the Herald, citing modest Canadian mortgage delinquency and foreclosure rates, a smaller housing market inventory overhang than south of the border, and a lack of subprime mortgages. "From the fundamental structural backdrop, we just don't see the same situation that we saw in the U.S."
Calgary Economic Development chief economist Adam Legge was adamant Calgary's housing fundamentals remain strong. "Is the housing market in trouble? No. Will the bottom drop out? No," said Legge. "We should not fear a collapse."
Nonetheless, house price deflation was clear in Canadian Real Estate Association statistics showing the average Canadian house sales price in August was down 5.1 per cent from a year earlier. The association noted sales volume dropped almost 20 per cent.
Nowhere in Canada is the softness in real estate more pronounced than in Calgary, where association figures showed the average price for a house in August was eight per cent lower than a year earlier, while sales volume plunged nearly 17 per cent and new listings dropped 16.3 per cent.
"I think there's a credit problem," said MacLean. "I don't think it's going to cause us to crash, but I do agree that the world is too overextended and too leveraged and something has to happen. There are going to be people that lose a bundle."
Canada Mortgage and Housing Corp. declined to be interviewed on questions about Canada's housing market fundamentals and the Merrill Lynch report.
gscotton@theherald.canwest.com
Geoffrey Scotton, Calgary HeraldPublished: Thursday, September 25, 2008
Two prominent economists warned Wednesday Canada's housing market is at a tipping point and could trigger a financial meltdown that would mirror the unprecedented crisis gripping our neighbour to the south.
"We fear . . . it may simply be a matter of time (before) . . . housing and credit markets in Canada crack," said Merrill Lynch Canada Inc. analysts David Wolf and Carolyn Kwan in a note to clients. "Markets remain overly sanguine with respect to the prospects for the Canadian housing market, the financial sector and the overall economy."
Locally, some real estate players are carefully watching stretched household finances coinciding with falling real estate values, worried the squeeze could steepen the descent of a falling market -- or worse.
"There's definitely some concern -- prices in Calgary have been on a downward trend for well over a year and inventories are high," said realtor Gary MacLean of Re/Max Real Estate Central Calgary. "If there's a downswing, Albertans will get hurt the most. The fact that people are over-extended and leveraged to the max should be of concern to everyone."
Prime Minister Stephen Harper dismissed the Merrill Lynch report, saying both the housing and consumer markets and financial institutions in Canada are "much stronger" than in the U.S.
"I do not accept this conclusion, not at all," Harper said.
The two economists -- who ironically work for the Canadian arm of investment bank Merrill Lynch & Co. Inc., a casualty of the financial shakeout in the U.S. that is pounding global markets -- argue household finances here are as over-extended as those in the U.S. and the U.K. were before falling house prices caused the bubble to burst.
"These data imply the Canadian household sector is now overextending itself as much as the U.S. or U.K. ever did, challenging the consensus view that Canadian lenders and borrowers have been far more conservative through the cycle," said Wolf and Kwan.
"The absence of a Canadian credit crunch to date may be cause for concern, not comfort. How can it be that mortgage debt is growing at a double-digit pace against an asset class now seeing deflation?" said Wolf and Kwan.
Other economists believe worrisome parallels between the U.S. and U.K. housing markets, and Canada's, are limited.
"We don't see the same factors," RBC Financial Group assistant chief economist Dawn Desjardins told the Herald, citing modest Canadian mortgage delinquency and foreclosure rates, a smaller housing market inventory overhang than south of the border, and a lack of subprime mortgages. "From the fundamental structural backdrop, we just don't see the same situation that we saw in the U.S."
Calgary Economic Development chief economist Adam Legge was adamant Calgary's housing fundamentals remain strong. "Is the housing market in trouble? No. Will the bottom drop out? No," said Legge. "We should not fear a collapse."
Nonetheless, house price deflation was clear in Canadian Real Estate Association statistics showing the average Canadian house sales price in August was down 5.1 per cent from a year earlier. The association noted sales volume dropped almost 20 per cent.
Nowhere in Canada is the softness in real estate more pronounced than in Calgary, where association figures showed the average price for a house in August was eight per cent lower than a year earlier, while sales volume plunged nearly 17 per cent and new listings dropped 16.3 per cent.
"I think there's a credit problem," said MacLean. "I don't think it's going to cause us to crash, but I do agree that the world is too overextended and too leveraged and something has to happen. There are going to be people that lose a bundle."
Canada Mortgage and Housing Corp. declined to be interviewed on questions about Canada's housing market fundamentals and the Merrill Lynch report.
gscotton@theherald.canwest.com
Friday, September 19, 2008
Rising costs squeeze builders
Mario Toneguzzi, Calgary HeraldPublished: Friday, September 19, 2008
Rising labour and material costs as well as a continued cooling in the housing sector will rip into profits of Canadian home builders for a second consecutive year, according to a report released Thursday by the Conference Board of Canada.
As demand for new home construction weakens, profits this year are expected to dip by three per cent compared with a year ago to $3.6 billion. This follows a 16.4 per cent year-over-year plunge in 2007.
The Conference Board's Canadian Industrial Outlook: Canada's Residential Construction Industry -- Summer 2008 said profits will drop another 6.6 per cent to $3.3 billion in 2009 before swinging upwards in 2010-2012.
The Conference Board's forecast says year-over-year increases in 2010, 2011 and 2012 will be 6.7 per cent, 4.1 per cent and 2.3 per cent respectively and peak at $3.8 billion at the end of the forecast cycle. "Costs escalating at frenzied paces ripped a strip off profits last year," said the report.
"It was the first time in recent years that cost growth outpaced revenue growth. Despite a much slower pace of cost growth, industry profits will fall again this year and in 2009 as slowing construction activity and input price appreciation take their toll on the industry."
Profits for the home building industry peaked at $4.4 billion at the height of the housing boom in 2006.
The report said the heated housing markets in Western Canada have been doused with cold water this year. Housing prices have hit an affordability ceiling in both British Columbia and Alberta and there has been an oversaturation of supply in many local markets. Because of that, construction activity will moderate over the next few years in a correction.
In Alberta, housing starts will shrink by a whopping 23.7 per cent this year and another three per cent in 2009, predicted the Conference Board.
"High costs will continue to plague the industry," added the report. "Labour is scarce and expensive, and although lumber prices remain weak, other materials (such as steel and concrete) are expensive and costly to transport."
Rising labour and material costs as well as a continued cooling in the housing sector will rip into profits of Canadian home builders for a second consecutive year, according to a report released Thursday by the Conference Board of Canada.
As demand for new home construction weakens, profits this year are expected to dip by three per cent compared with a year ago to $3.6 billion. This follows a 16.4 per cent year-over-year plunge in 2007.
The Conference Board's Canadian Industrial Outlook: Canada's Residential Construction Industry -- Summer 2008 said profits will drop another 6.6 per cent to $3.3 billion in 2009 before swinging upwards in 2010-2012.
The Conference Board's forecast says year-over-year increases in 2010, 2011 and 2012 will be 6.7 per cent, 4.1 per cent and 2.3 per cent respectively and peak at $3.8 billion at the end of the forecast cycle. "Costs escalating at frenzied paces ripped a strip off profits last year," said the report.
"It was the first time in recent years that cost growth outpaced revenue growth. Despite a much slower pace of cost growth, industry profits will fall again this year and in 2009 as slowing construction activity and input price appreciation take their toll on the industry."
Profits for the home building industry peaked at $4.4 billion at the height of the housing boom in 2006.
The report said the heated housing markets in Western Canada have been doused with cold water this year. Housing prices have hit an affordability ceiling in both British Columbia and Alberta and there has been an oversaturation of supply in many local markets. Because of that, construction activity will moderate over the next few years in a correction.
In Alberta, housing starts will shrink by a whopping 23.7 per cent this year and another three per cent in 2009, predicted the Conference Board.
"High costs will continue to plague the industry," added the report. "Labour is scarce and expensive, and although lumber prices remain weak, other materials (such as steel and concrete) are expensive and costly to transport."
Get set for $200 oil, says CIBC economist
Geoffrey Scotton, Calgary HeraldPublished: Friday, September 19, 2008
The fundamentals for oil are enormously strong, outspoken analyst Jeff Rubin told international business leaders Thursday -- warning those fundamentals may in fact be too strong as high energy prices spark inflation globally and a reordering of the world economy.
Speaking to the Global Business Forum in Banff, Rubin also argued indicators show the underlying cause of the crisis gripping U.S. and world financial markets linked to the credit crunch -- weakening U.S. home prices -- is close to an end.
"The underlying problem is about to be remedied," said Rubin, chief economist and strategist of the Canadian Imperial Bank of Commerce. He warned that amid global financial uncertainty, investors and corporate leaders need to be careful not to make poor decisions based on what he believes are fleeting conditions. He forecasts U.S. house prices will bottom and begin to rebound by the beginning of 2009, while oil prices could hit $200 in four or five years.
"What's happening out there is a giant head fake . . . that could easily put you running in the wrong direction," Rubin told about 200 senior corporate and government leaders at an invitation-only gathering at the Fairmont Banff Springs.
Rubin's comments came as central bankers pumped or promised $180 billion US of injections Thursday into world financial markets to ensure liquidity amid continued fears about the solvency among major U.S. investment banks and the repercussions of a potential failure.
Nonetheless, while the financial market turmoil will work itself out over time as home prices begin to regain lost ground, there are other spectres on the horizon as the global economy begins to revive, said Rubin.
"By the first quarter of next year the word's really going to change, because instead of deflation and Wall Street we're going to be talking about inflation and energy," Rubin said.
He predicts the world oil price will hit $200 in four or five years, but that will just be a signpost marking a longer ascent.
Other analysts and experts at the Banff event warned the global economy is about to slip into as long as three years of recession.
"We're taking the froth off, but it's going to hurt," U.K.-based Institute of Directors chief economist Graeme Leach said, referring to a downturn in the wake of credit tightening worldwide.
"You ain't seen nothing yet. The economy is going to get significantly worse before it gets better. (We're going to have) much weaker economic growth, much weaker employment growth," he said.
"The bigger the party, the worse the hangover," noted James Bond, chief operating officer at World Bank Multilateral Investment Guarantee Agency. "I think we're in the hangover phase right now. This may be Wall Street, but Main Street is going to hurt."
Rubin argued oil supply has effectively not risen over the past three years and existing, low-cost conventional supply is being replaced with uncertain, high-cost non-conventional supply -- either deepwater or oilsands. Deepwater sources, such as the Gulf of Mexico, face dramatic and substantial rates of decline.
"Every year the marginal cost of the new barrel of oil goes higher and higher," Rubin said. "The U.S. is going to be facing an enormous oil crunch."
At the same time, Rubin explained that due to consumer and industry prices that are far below world market prices for oil in many countries in the Middle East and the Third World, demand there is soaring. He noted for the first time, demand and consumption from countries outside the Organization for Economic Co-operation and Development is about to overtake OECD demand and overall demand will inevitably ratchet higher.
In the wake of dramatically higher energy costs, sharply heightened transportation charges are set to remake the world economic order, Rubin said.
"We're going back to a world where distance costs money," said Rubin, noting the phenomenon has already been seen in the return to competitiveness of U.S.-produced steel, which for many years could not stand up to Chinese imports.
In turn, returned competitiveness is likely to spark wage inflation as workers demand some of the returning profit in industries where transportation costs have made them newly competitive.
In that type of environment, Rubin said, policy-makers will be forced to react.
"That's the world where interest rates are going up, not down -- and it doesn't matter what happens to Goldman Sachs in the next three months because there's nothing the Federal Reserve can do to change that world."
The fundamentals for oil are enormously strong, outspoken analyst Jeff Rubin told international business leaders Thursday -- warning those fundamentals may in fact be too strong as high energy prices spark inflation globally and a reordering of the world economy.
Speaking to the Global Business Forum in Banff, Rubin also argued indicators show the underlying cause of the crisis gripping U.S. and world financial markets linked to the credit crunch -- weakening U.S. home prices -- is close to an end.
"The underlying problem is about to be remedied," said Rubin, chief economist and strategist of the Canadian Imperial Bank of Commerce. He warned that amid global financial uncertainty, investors and corporate leaders need to be careful not to make poor decisions based on what he believes are fleeting conditions. He forecasts U.S. house prices will bottom and begin to rebound by the beginning of 2009, while oil prices could hit $200 in four or five years.
"What's happening out there is a giant head fake . . . that could easily put you running in the wrong direction," Rubin told about 200 senior corporate and government leaders at an invitation-only gathering at the Fairmont Banff Springs.
Rubin's comments came as central bankers pumped or promised $180 billion US of injections Thursday into world financial markets to ensure liquidity amid continued fears about the solvency among major U.S. investment banks and the repercussions of a potential failure.
Nonetheless, while the financial market turmoil will work itself out over time as home prices begin to regain lost ground, there are other spectres on the horizon as the global economy begins to revive, said Rubin.
"By the first quarter of next year the word's really going to change, because instead of deflation and Wall Street we're going to be talking about inflation and energy," Rubin said.
He predicts the world oil price will hit $200 in four or five years, but that will just be a signpost marking a longer ascent.
Other analysts and experts at the Banff event warned the global economy is about to slip into as long as three years of recession.
"We're taking the froth off, but it's going to hurt," U.K.-based Institute of Directors chief economist Graeme Leach said, referring to a downturn in the wake of credit tightening worldwide.
"You ain't seen nothing yet. The economy is going to get significantly worse before it gets better. (We're going to have) much weaker economic growth, much weaker employment growth," he said.
"The bigger the party, the worse the hangover," noted James Bond, chief operating officer at World Bank Multilateral Investment Guarantee Agency. "I think we're in the hangover phase right now. This may be Wall Street, but Main Street is going to hurt."
Rubin argued oil supply has effectively not risen over the past three years and existing, low-cost conventional supply is being replaced with uncertain, high-cost non-conventional supply -- either deepwater or oilsands. Deepwater sources, such as the Gulf of Mexico, face dramatic and substantial rates of decline.
"Every year the marginal cost of the new barrel of oil goes higher and higher," Rubin said. "The U.S. is going to be facing an enormous oil crunch."
At the same time, Rubin explained that due to consumer and industry prices that are far below world market prices for oil in many countries in the Middle East and the Third World, demand there is soaring. He noted for the first time, demand and consumption from countries outside the Organization for Economic Co-operation and Development is about to overtake OECD demand and overall demand will inevitably ratchet higher.
In the wake of dramatically higher energy costs, sharply heightened transportation charges are set to remake the world economic order, Rubin said.
"We're going back to a world where distance costs money," said Rubin, noting the phenomenon has already been seen in the return to competitiveness of U.S.-produced steel, which for many years could not stand up to Chinese imports.
In turn, returned competitiveness is likely to spark wage inflation as workers demand some of the returning profit in industries where transportation costs have made them newly competitive.
In that type of environment, Rubin said, policy-makers will be forced to react.
"That's the world where interest rates are going up, not down -- and it doesn't matter what happens to Goldman Sachs in the next three months because there's nothing the Federal Reserve can do to change that world."
Wednesday, September 17, 2008
Calgary house price drop largest in Canada
Sales activity plunges 28% from last year
Mario Toneguzzi, Calgary HeraldPublished: Tuesday, September 16, 2008
The average MLS sale price for a Calgary residential property in August was eight per cent less compared with a year ago -- the biggest decline in the country, according to statistics released Monday by the Canadian Real Estate Association.
The association's major market survey for August showed Calgary's average price for single-family homes and condominiums was $390,091 during the month. Sales for the month were also off 16.7 per cent, at 1,990, and new listings dropped by 16.3 per cent to 4,103.
Nationally, house sales plummeted by 19.3 per cent in August compared with August 2007 while the average sale price dropped by 5.1 per cent to $316,052.
"Price declines in the pricier major markets are pulling down the overall average price," said Gregory Klump, the association's chief economist. "Significantly lower sales activity in Greater Vancouver compared to a year ago means that the most expensive market in Canada now has less weight in the overall average price calculation.
"Sales activity is down in a number of resale housing markets in Western Canada that earlier posted hefty price increases. Prices continue rising in other markets where price gains have been more modest."
Sales in Vancouver were a whopping 53.9 per cent off from a year ago while Victoria saw a 37.5 per cent plunge.
The real estate association said new listings have eased in many major centres across the country, and now stand at their lowest level this year.
"This trend has been most evident in Calgary and Edmonton," said the association.
On a year-to-date basis, until the end of August, the average MLS residential sale price in Calgary is down 0.9 per cent to $411,510 compared with the same time period last year while the national average price is up 1.5 per cent to $336,225.
But sales activity in Calgary has plunged by 28.8 per cent while new listings have increased by 9.6 per cent. Across the country, sales have slipped by 13.7 per cent so far this year compared with a year ago for the first eight months while new listings have increased by seven per cent.
Calgary's residential real estate market is currently in buyers' conditions, said Lai Sing Louie, senior market analyst in Calgary for Canada Mortgage and Housing Corp.
"There's a lot of supply out there relative to demand and that's putting downward pressure on prices."
Nationally, existing home sales year-to-date have experienced the steepest decline since 1998 excluding March's 19.4 per cent year-over-year slide, said Robert Kavcic of BMO Capital Markets Economics in a commentary on the real estate association's numbers.
He said with sales activity "falling steadily" average prices remain under pressure and the annual decline is the steepest one since 1996.
"Canada's housing market continues to face strong headwinds from declining confidence, low affordability and an upward trend in new listings. While we highly doubt that the downturn in Canadian housing will reach U.S. proportions, slower sales activity and softer prices are still ahead," said Kavcic.
Real estate association president Calvin Lindberg said people have to remember that 2007 was a record year for real estate sales in Canada.
"In light of that fact, our current market can certainly be characterized as stable," he said.
"The Canadian market fundamentals are still solid and mortgage rates are still at near record low levels. The challenge is for sellers to price their home to meet the local market realities and for buyers to realize there is no real estate bubble that will burst and send prices to new lows."
Average Prices
Selected housing markets' average sale prices in August and percentage change from a year before
Calgary $390,091 -8
Edmonton $329,207 -4.8
Montreal $261,604 6.2
Ottawa $282,792 5.6
Regina $237,814 36.1
Saskatoon $279,366 10.3
Toronto $364,880 0.8
Vancouver $557,114 -5.2
Victoria $452,205 -1.2
Windsor, Ont. $164,503 -5
Winnipeg $190,979 12.6
National average $316,052 -5.1
Mario Toneguzzi, Calgary HeraldPublished: Tuesday, September 16, 2008
The average MLS sale price for a Calgary residential property in August was eight per cent less compared with a year ago -- the biggest decline in the country, according to statistics released Monday by the Canadian Real Estate Association.
The association's major market survey for August showed Calgary's average price for single-family homes and condominiums was $390,091 during the month. Sales for the month were also off 16.7 per cent, at 1,990, and new listings dropped by 16.3 per cent to 4,103.
Nationally, house sales plummeted by 19.3 per cent in August compared with August 2007 while the average sale price dropped by 5.1 per cent to $316,052.
"Price declines in the pricier major markets are pulling down the overall average price," said Gregory Klump, the association's chief economist. "Significantly lower sales activity in Greater Vancouver compared to a year ago means that the most expensive market in Canada now has less weight in the overall average price calculation.
"Sales activity is down in a number of resale housing markets in Western Canada that earlier posted hefty price increases. Prices continue rising in other markets where price gains have been more modest."
Sales in Vancouver were a whopping 53.9 per cent off from a year ago while Victoria saw a 37.5 per cent plunge.
The real estate association said new listings have eased in many major centres across the country, and now stand at their lowest level this year.
"This trend has been most evident in Calgary and Edmonton," said the association.
On a year-to-date basis, until the end of August, the average MLS residential sale price in Calgary is down 0.9 per cent to $411,510 compared with the same time period last year while the national average price is up 1.5 per cent to $336,225.
But sales activity in Calgary has plunged by 28.8 per cent while new listings have increased by 9.6 per cent. Across the country, sales have slipped by 13.7 per cent so far this year compared with a year ago for the first eight months while new listings have increased by seven per cent.
Calgary's residential real estate market is currently in buyers' conditions, said Lai Sing Louie, senior market analyst in Calgary for Canada Mortgage and Housing Corp.
"There's a lot of supply out there relative to demand and that's putting downward pressure on prices."
Nationally, existing home sales year-to-date have experienced the steepest decline since 1998 excluding March's 19.4 per cent year-over-year slide, said Robert Kavcic of BMO Capital Markets Economics in a commentary on the real estate association's numbers.
He said with sales activity "falling steadily" average prices remain under pressure and the annual decline is the steepest one since 1996.
"Canada's housing market continues to face strong headwinds from declining confidence, low affordability and an upward trend in new listings. While we highly doubt that the downturn in Canadian housing will reach U.S. proportions, slower sales activity and softer prices are still ahead," said Kavcic.
Real estate association president Calvin Lindberg said people have to remember that 2007 was a record year for real estate sales in Canada.
"In light of that fact, our current market can certainly be characterized as stable," he said.
"The Canadian market fundamentals are still solid and mortgage rates are still at near record low levels. The challenge is for sellers to price their home to meet the local market realities and for buyers to realize there is no real estate bubble that will burst and send prices to new lows."
Average Prices
Selected housing markets' average sale prices in August and percentage change from a year before
Calgary $390,091 -8
Edmonton $329,207 -4.8
Montreal $261,604 6.2
Ottawa $282,792 5.6
Regina $237,814 36.1
Saskatoon $279,366 10.3
Toronto $364,880 0.8
Vancouver $557,114 -5.2
Victoria $452,205 -1.2
Windsor, Ont. $164,503 -5
Winnipeg $190,979 12.6
National average $316,052 -5.1
Friday, September 12, 2008
New house prices post worst record in 12 years
Decline of 0.3% comes after years of stunning gains
Mario Toneguzzi, Calgary Herald; with a file from Canwest News ServicePublished: Friday, September 12, 2008
New house prices in the Calgary census metropolitan area decreased in July from the previous year, one of only three markets in the country to see a decline, according to Statistics Canada.
The federal agency, in releasing its New Housing Price Index on Thursday, said the Calgary area saw new house prices drop by 0.3 per cent in July 2008 from July 2007, the worst performance in 12 years.
In Edmonton, the year-over-year change was the worst in 23-years at a negative 5.3 per cent.
"Markets in these cities continue to adjust after experiencing record price increases in the last two and a half years," said Statistics Canada.
Nationally, the rate of increase in new housing prices continued to ease in July for the sixth consecutive month. The growth rate of the index has been on a downward trend since September 2006, mainly due to the softening of the market in Western Canada, said the federal agency.
And a report to be released today by Sal Guatieri, senior economist with BMO Capital Markets Economics, says Canada faces the prospect of lower house prices in the year ahead similar to many other countries -- the United States, Britain, Ireland, Spain, France and Australia.
"After six years of unsustainable growth, prices have run smack into the affordability wall," says the report. "Demand is sagging, listings are at record highs, and prospective first-time buyers are choosing to rent rather than own."
The average house price in major markets rose 78 per cent from early 2002 to late 2007. The report says Canadian prices increased more than twice as fast as income and since peaking in late 2007, the prices have trended moderately lower.
"Canadian house prices will likely decline moderately further to restore better value," says the report. "The brisk housing tailwind of recent years will likely reverse course, damping economic growth in the year ahead."
Across the country, contractors' selling prices for new homes rose 2.7 per cent between July 2007 and July 2008, a slower pace than the year-over-year increase of 3.5 per cent in June.
On a monthly basis, prices rose 0.1 per cent between June and July.
In Calgary and Edmonton, on a monthly basis, prices dropped by 0.2 per cent.
"Housing continues to cool markedly," said Douglas Porter, deputy chief economist with BMO Capital Markets Economics, in a research commentary.
Porter said the annual year-over-year increase in Canada was the slowest pace since 2001 and down from a peak of 12.1 per cent year-over-year just two years ago.
For the Calgary area, the year-over-year price change was 9.8 per cent from July 2006 to July 2007. The annual rate of new house price growth in the Calgary area peaked at 60.6 per cent in August 2006.
The Calgary CMA includes the city, Airdrie, the Municipal District of Rocky View, Chestermere, Cochrane, Irricana, Beiseker and Crossfield.
Regionally, prices rose at the fastest pace in Regina, which led the nation with a year-over-year price increase of 29.6 per cent, down from its record increase of 34 per cent in April of this year. St. John's was next at 24.3 per cent.
Only Calgary, Edmonton and Victoria (0.1 per cent) experienced year-over-year decreases.
Charmaine Buskas, senior economics strategist at TD Securities, said July's national figures are "yet further evidence that the housing market in Canada continues to cool.
"Looking ahead, there is scope for further correction, in line with a normal housing cycle."
Thursday's housing report followed three others so far this month that show how dramatically the Calgary real estate market has cooled. Total housing starts in August plunged by 60.3 per cent compared with a year ago in the Calgary area, according to Canada Mortgage and Housing Corp.
As well, residential building permit value in the City of Calgary is down 35 per cent to $1.2 billion compared with a year ago. And the Calgary Real Estate Board reported the average MLS sale price for a single-family home in Calgary fell by more than nine per cent in August compared with a year ago, while the average condo price dropped by just over 10 per cent.
New Housing Price Index
July 2007 to July 2008 % Change
Canada 2.7
Calgary - 0.3
Regina 29.6
St. John's 24.3
Saskatoon 13.1
Halifax 7.3
Winnipeg 7
Mario Toneguzzi, Calgary Herald; with a file from Canwest News ServicePublished: Friday, September 12, 2008
New house prices in the Calgary census metropolitan area decreased in July from the previous year, one of only three markets in the country to see a decline, according to Statistics Canada.
The federal agency, in releasing its New Housing Price Index on Thursday, said the Calgary area saw new house prices drop by 0.3 per cent in July 2008 from July 2007, the worst performance in 12 years.
In Edmonton, the year-over-year change was the worst in 23-years at a negative 5.3 per cent.
"Markets in these cities continue to adjust after experiencing record price increases in the last two and a half years," said Statistics Canada.
Nationally, the rate of increase in new housing prices continued to ease in July for the sixth consecutive month. The growth rate of the index has been on a downward trend since September 2006, mainly due to the softening of the market in Western Canada, said the federal agency.
And a report to be released today by Sal Guatieri, senior economist with BMO Capital Markets Economics, says Canada faces the prospect of lower house prices in the year ahead similar to many other countries -- the United States, Britain, Ireland, Spain, France and Australia.
"After six years of unsustainable growth, prices have run smack into the affordability wall," says the report. "Demand is sagging, listings are at record highs, and prospective first-time buyers are choosing to rent rather than own."
The average house price in major markets rose 78 per cent from early 2002 to late 2007. The report says Canadian prices increased more than twice as fast as income and since peaking in late 2007, the prices have trended moderately lower.
"Canadian house prices will likely decline moderately further to restore better value," says the report. "The brisk housing tailwind of recent years will likely reverse course, damping economic growth in the year ahead."
Across the country, contractors' selling prices for new homes rose 2.7 per cent between July 2007 and July 2008, a slower pace than the year-over-year increase of 3.5 per cent in June.
On a monthly basis, prices rose 0.1 per cent between June and July.
In Calgary and Edmonton, on a monthly basis, prices dropped by 0.2 per cent.
"Housing continues to cool markedly," said Douglas Porter, deputy chief economist with BMO Capital Markets Economics, in a research commentary.
Porter said the annual year-over-year increase in Canada was the slowest pace since 2001 and down from a peak of 12.1 per cent year-over-year just two years ago.
For the Calgary area, the year-over-year price change was 9.8 per cent from July 2006 to July 2007. The annual rate of new house price growth in the Calgary area peaked at 60.6 per cent in August 2006.
The Calgary CMA includes the city, Airdrie, the Municipal District of Rocky View, Chestermere, Cochrane, Irricana, Beiseker and Crossfield.
Regionally, prices rose at the fastest pace in Regina, which led the nation with a year-over-year price increase of 29.6 per cent, down from its record increase of 34 per cent in April of this year. St. John's was next at 24.3 per cent.
Only Calgary, Edmonton and Victoria (0.1 per cent) experienced year-over-year decreases.
Charmaine Buskas, senior economics strategist at TD Securities, said July's national figures are "yet further evidence that the housing market in Canada continues to cool.
"Looking ahead, there is scope for further correction, in line with a normal housing cycle."
Thursday's housing report followed three others so far this month that show how dramatically the Calgary real estate market has cooled. Total housing starts in August plunged by 60.3 per cent compared with a year ago in the Calgary area, according to Canada Mortgage and Housing Corp.
As well, residential building permit value in the City of Calgary is down 35 per cent to $1.2 billion compared with a year ago. And the Calgary Real Estate Board reported the average MLS sale price for a single-family home in Calgary fell by more than nine per cent in August compared with a year ago, while the average condo price dropped by just over 10 per cent.
New Housing Price Index
July 2007 to July 2008 % Change
Canada 2.7
Calgary - 0.3
Regina 29.6
St. John's 24.3
Saskatoon 13.1
Halifax 7.3
Winnipeg 7
Thursday, September 11, 2008
Canadians stampede into U.S. real estate
Eric Beauchesne, Canwest News ServicePublished: Thursday, September 11, 2008
Canadians have been flooding into the depressed U.S. housing market, purchasing a record number of homes south of the border, and twice as many as a year earlier.
Armed with what until recently was a strong currency, most were also paying cash, according to the 2008 National Association of Realtors annual profile of international home-buying activity in the U.S.
Canadians have replaced Mexicans as the top foreign buyers of U.S. properties, the survey revealed.
The surge in purchases of U.S. properties by Canadians is due to the combination of the stronger dollar, a drop in U.S. house prices, and last winter's record snowfall, John Clinkard, a consulting economist with Reed Construction Data, said in an analysis of the report Wednesday.
The annual report, based on a survey of U.S. realtors, found that in the 12 months ended last May, nearly a quarter of foreign buyers of U.S. properties were from Canada, double the proportion of a year earlier, reflecting both a surge in Canadian buyers to a record high and a drop in purchases by other foreigners.
"Condominiums were most popular among those foreign buyers from Canada," it said, noting that nearly half of all properties purchased by Canadian buyers were condominium apartments.
Florida and Arizona were the most popular states for Canadian buyers, accounting for more than 60 per cent of their purchases.
The amounts Canadians paid for their properties were relatively modest compared with other foreign purchasers. The median price -- with half higher and half lower -- of properties purchased by Canadians was $277,800 US, well below the $450,000 US by buyers from China, and less than the $297,000 US paid by all foreign buyers. Among the six top nationalities of foreign buyers of U.S. properties, only Mexicans paid a lower median price than Canadians.
Only 5.1 per cent of Canadian buyers paid more than $1 million US.
___________________________________________________
I thought this article might be interesting, I am sure I am no different than most other Canadians that think about owning US properties when the snow starts to fly. In the last year I know of or have heard of people that have purchased properties in Phoenix or vicinity. I have been to Phoenix in the last year to look at properties and get educated to the market. I have found it overwhelming.
Canadians have been flooding into the depressed U.S. housing market, purchasing a record number of homes south of the border, and twice as many as a year earlier.
Armed with what until recently was a strong currency, most were also paying cash, according to the 2008 National Association of Realtors annual profile of international home-buying activity in the U.S.
Canadians have replaced Mexicans as the top foreign buyers of U.S. properties, the survey revealed.
The surge in purchases of U.S. properties by Canadians is due to the combination of the stronger dollar, a drop in U.S. house prices, and last winter's record snowfall, John Clinkard, a consulting economist with Reed Construction Data, said in an analysis of the report Wednesday.
The annual report, based on a survey of U.S. realtors, found that in the 12 months ended last May, nearly a quarter of foreign buyers of U.S. properties were from Canada, double the proportion of a year earlier, reflecting both a surge in Canadian buyers to a record high and a drop in purchases by other foreigners.
"Condominiums were most popular among those foreign buyers from Canada," it said, noting that nearly half of all properties purchased by Canadian buyers were condominium apartments.
Florida and Arizona were the most popular states for Canadian buyers, accounting for more than 60 per cent of their purchases.
The amounts Canadians paid for their properties were relatively modest compared with other foreign purchasers. The median price -- with half higher and half lower -- of properties purchased by Canadians was $277,800 US, well below the $450,000 US by buyers from China, and less than the $297,000 US paid by all foreign buyers. Among the six top nationalities of foreign buyers of U.S. properties, only Mexicans paid a lower median price than Canadians.
Only 5.1 per cent of Canadian buyers paid more than $1 million US.
___________________________________________________
I thought this article might be interesting, I am sure I am no different than most other Canadians that think about owning US properties when the snow starts to fly. In the last year I know of or have heard of people that have purchased properties in Phoenix or vicinity. I have been to Phoenix in the last year to look at properties and get educated to the market. I have found it overwhelming.
Thursday, September 4, 2008
Home prices skid nearly 10 per cent
Average single-family home now $440,625 amid sales drop
Mario Toneguzzi, Calgary HeraldPublished: Wednesday, September 03, 2008
The average MLS sale price for a single-family home in Calgary fell by more than nine per cent in August compared with a year ago, while the average condo price dropped by just over 10 per cent, says the Calgary Real Estate Board.
Sales in both markets also declined -- by nearly 11 per cent for single-family homes and more than 17 per cent for condos.
Data released by the board Tuesday showed the average MLS sale price of a single-family home in the Calgary metro area in August was $440,625, down 9.32 per cent from August 2007 when it was $485,914. The average price of a condo in Calgary metro was $287,832, a drop of 10.27 per cent from August 2007 when it was $320,790.
Realtor Lana Wright, with Re/Max Professionals, said August is typically quiet for herself and husband, Steve, but this past month has been busy for her despite what the CREB numbers indicate.
"We're getting a lot more buyers coming in and, in our experience, they're not as pessimistic as other buyers have been," she said. "They're very well-educated. They know what's going on. I think that they're realizing that the market has stabilized and waiting any longer may not do them any justice. So most will take advantage of what's out there in the market."
Wright added typical buying patterns have been thrown out of whack.
"Historically, (the market) picks up in the fall but I would say the last two years we've not been able to count on anything historically because it's been so odd."
Wright said she's also seeing a little bit of a "surge" in her business because of mortgage changes coming this fall. The federal government announced changes taking effect Oct. 15 which include the requirement for buyers to put down at least five per cent for a down payment.
It is also implementing a reduction of government-backed mortgages from maximum amortization periods of 40 years to 35 years.
"People who are in that situation right now -- those are their options for qualifying -- are out there in the market right now looking," said Wright.
In August, according to the real estate board, single-family home sales were 1,170, a 10.96 per cent decrease from the 1,314 sales in August 2007. In July, it was 1,313 sales.
Condo sales in August were 495, a 17.22 per cent drop from August 2007 when they were 598. Condo sales in July were 535.
As for new listings, in the single-family market, there were 2,270 for August, down 19.99 per cent from a year ago (2,837). In July, there were 2,559 new listings.
Last month, the condo market saw 1,054 new listings, a drop of 11.13 per cent from a year ago (1,186) and down from July's 1,183.
Median sale prices also dropped in August. For single-family homes, it was $398,000, down 7.4 per cent from a year ago ($430,000) and down 2.6 per cent from July ($408,500). For condos, it was $268,500 -- off 10.8 per cent from $301,000 a year ago.
Real estate board president Ed Jensen, in a news release, said the median price for single-family homes is under $400,000 for the first time since January 2007, "which may indicate that properties are being reduced in price and that some sellers have waited too long."
Lai Sing Louie, senior market analyst in Calgary for the Canada Mortgage and Housing Corp., said declining sales in the Calgary market combined with still high listing levels (5,541 for single-family homes and 2,699 for condos at the end of August) are putting downward pressure on prices.
"Right now it's a matter of consumer confidence," he said. "Pricing uncertainty is impacting consumer confidence. People are taking a wait-and-see position. The actual levels of supply are starting to come down, but it's still going to take awhile."
In July, the average sale price for a single-family home was $456,380 while the median price was $408,500. For condos, the average price was $296,338 and the median price was $273,500.
The average price of a single-family home in Calgary peaked at $505,920 in July 2008 while the condo peak was $332,237 in May 2007.
Year-to-date until the end of August, single-family home sales are down 27.57 per cent and the average sale price ($466,677) is off by two per cent compared with the same period a year ago. Meanwhile, condo sales are off by 32 per cent and the average sale price ($307,640) is off by 2.6 per cent.
Mario Toneguzzi, Calgary HeraldPublished: Wednesday, September 03, 2008
The average MLS sale price for a single-family home in Calgary fell by more than nine per cent in August compared with a year ago, while the average condo price dropped by just over 10 per cent, says the Calgary Real Estate Board.
Sales in both markets also declined -- by nearly 11 per cent for single-family homes and more than 17 per cent for condos.
Data released by the board Tuesday showed the average MLS sale price of a single-family home in the Calgary metro area in August was $440,625, down 9.32 per cent from August 2007 when it was $485,914. The average price of a condo in Calgary metro was $287,832, a drop of 10.27 per cent from August 2007 when it was $320,790.
Realtor Lana Wright, with Re/Max Professionals, said August is typically quiet for herself and husband, Steve, but this past month has been busy for her despite what the CREB numbers indicate.
"We're getting a lot more buyers coming in and, in our experience, they're not as pessimistic as other buyers have been," she said. "They're very well-educated. They know what's going on. I think that they're realizing that the market has stabilized and waiting any longer may not do them any justice. So most will take advantage of what's out there in the market."
Wright added typical buying patterns have been thrown out of whack.
"Historically, (the market) picks up in the fall but I would say the last two years we've not been able to count on anything historically because it's been so odd."
Wright said she's also seeing a little bit of a "surge" in her business because of mortgage changes coming this fall. The federal government announced changes taking effect Oct. 15 which include the requirement for buyers to put down at least five per cent for a down payment.
It is also implementing a reduction of government-backed mortgages from maximum amortization periods of 40 years to 35 years.
"People who are in that situation right now -- those are their options for qualifying -- are out there in the market right now looking," said Wright.
In August, according to the real estate board, single-family home sales were 1,170, a 10.96 per cent decrease from the 1,314 sales in August 2007. In July, it was 1,313 sales.
Condo sales in August were 495, a 17.22 per cent drop from August 2007 when they were 598. Condo sales in July were 535.
As for new listings, in the single-family market, there were 2,270 for August, down 19.99 per cent from a year ago (2,837). In July, there were 2,559 new listings.
Last month, the condo market saw 1,054 new listings, a drop of 11.13 per cent from a year ago (1,186) and down from July's 1,183.
Median sale prices also dropped in August. For single-family homes, it was $398,000, down 7.4 per cent from a year ago ($430,000) and down 2.6 per cent from July ($408,500). For condos, it was $268,500 -- off 10.8 per cent from $301,000 a year ago.
Real estate board president Ed Jensen, in a news release, said the median price for single-family homes is under $400,000 for the first time since January 2007, "which may indicate that properties are being reduced in price and that some sellers have waited too long."
Lai Sing Louie, senior market analyst in Calgary for the Canada Mortgage and Housing Corp., said declining sales in the Calgary market combined with still high listing levels (5,541 for single-family homes and 2,699 for condos at the end of August) are putting downward pressure on prices.
"Right now it's a matter of consumer confidence," he said. "Pricing uncertainty is impacting consumer confidence. People are taking a wait-and-see position. The actual levels of supply are starting to come down, but it's still going to take awhile."
In July, the average sale price for a single-family home was $456,380 while the median price was $408,500. For condos, the average price was $296,338 and the median price was $273,500.
The average price of a single-family home in Calgary peaked at $505,920 in July 2008 while the condo peak was $332,237 in May 2007.
Year-to-date until the end of August, single-family home sales are down 27.57 per cent and the average sale price ($466,677) is off by two per cent compared with the same period a year ago. Meanwhile, condo sales are off by 32 per cent and the average sale price ($307,640) is off by 2.6 per cent.
MLS® STATISTICS FOR THE MONTH OF AUGUST 2008
MLS® STATISTICS FOR THE MONTH OF AUGUST 2008
Prepared for the members of the Central Alberta Realtors® Association
City Residential Sales
August 2008 --> 204
August 2007 --> 200
January 01, 2008 to August 31, 2008 $1,496
January 01, 2007 to August 31, 2007 $1,716
Value of City Residential Sales
August 2008 $62,642,250
August 2007 $62,427,893
January 01, 2008 to August 31, 2008 $463,949,967
January 01, 2007 to August 31, 2007 $527,447,333
Selling to Listing Ratio (CITY)
August 2008 74.45%
February 2008 55.16%
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It is my opinion that our market here in Red Deer mirrors the Calgary market in percentages. With CMHC changing its lending guide lines in October I believe that you will see a bump up in sales in September and October because of first time home buyers beating these changes. I think this will also affect sales in the spring of 2009.
Friday, August 29, 2008
Edmonton beats Calgary for real estate investment.
Report blames 'correction' for slide in ranking
Mario Toneguzzi, Calgary HeraldPublished: Thursday, August 28, 2008
Edmonton tops Calgary as the best place to invest in the province's residential real estate market, according to a report by the Real Estate Investment Network.
Alberta's Top Ten Investment Towns report says while Edmonton's market is going to begin performing closer to historic norms, "the good news is that Edmonton's historic norms will be at or near the top of performance for all of Canada, both economically and in the resale and rental housing sectors."
Edmonton leads the list followed by Calgary, Red Deer, St. Albert and Grande Prairie. There are actually 13 locations cited in the report and they also include, in descending order: Lethbridge, Fort McMurray, Airdrie, Cochrane, Sylvan Lake, Lacombe, Devon and Sturgeon and Strathcona Counties.
The report says Calgary has just experienced one of the best economic and real estate periods in Canadian history and ran neck-and-neck with Edmonton for the No. 1 spot on the list.
"In 2008, the (Calgary) market is making a predictable (albeit soft) correction resulting in slightly more affordable housing compared to recent years," says the report.
"It was economically impossible for the market to continue at the pace at which it was heading and now finds itself adjusting to market realities. This adjustment period, as the market searches for its new foundation from which to build, should continue into 2009 when the provincial economy is poised for another growth spurt."
According to a recent report by the Canadian Real Estate Association, falling prices in Calgary and Edmonton are dragging down Canada's housing market. Led by declines of eight per cent in Calgary and five per cent in Edmonton, average house prices in Canada dropped 3.6 per cent overall in July compared with a year ago, according to the association.
The average national MLS residential sale price last month was $327,020, while in Calgary it was $402,788. In Edmonton, it was $335,100.
Don Campbell, president of the Real Estate Investment Network in Canada, said Edmonton's housing market will benefit from the economic ripple of the multibillion-dollar investment in the oilsands, leading to job creation.
"The people in Calgary, if they want to play offence and defence, should be following the ring road and the extension of the LRT and then starting to move into regions such as Forest Lawn, Forest Heights -- regions that have had a more difficult reputation than they should because the demographic has changed, the pride of ownership has changed," said Campbell, the author of two books -- Real Estate Investing in Canada and 51 Success Stories from Canadian Real Estate Investors.
The Real Estate Investment Network's previous top 10 list had Edmonton first, followed by Grande Prairie and Calgary.
A recent outlook by Canada Mortgage and Housing Corp. forecasts existing home sales in Alberta will drop by 20 per cent this year, the sharpest decline since 1982, due to demand being cut by weaker migration and the hefty jump in mortgage carrying costs from earlier years. The average price gains of 31 per cent in 2006 and 25 per cent in 2007 have proven unsustainable as the resale price is expected to advance by only one per cent this year, says the CMHC.
The CMHC is forecasting Calgary's average MLS sale price this year to increase by one per cent from a year ago to $418,000 while Edmonton will see an increase of 0.4 per cent to $340,000. The CMHC says the Wood Buffalo region, which includes Fort McMurray, will lead the province with a 16.6 per cent price hike this year to $540,000.
As for 2009, the CMHC is forecasting a 2.9 per cent jump in Calgary ($430,000), 3.5 per cent in Edmonton ($352,000) and 8.3 per cent in Wood Buffalo ($585,000).
The investment network report says a focus on the reality of the economics behind the Calgary market today is critical at this juncture and it will be important for investors and homeowners to pay close attention to the fundamentals.
Provincially, "Alberta's economy is as good as it gets," said the report, with high energy prices, rapid population growth, low unemployment, an abundance of jobs, and improved infrastructure.
Centres
1. Edmonton
2. Calgary
3. Red Deer
4. St. Albert
5. Grande Prairie
6a. Lethbridge
6b. Fort McMurray
7. Airdrie
8a. Cochrane
8b. Sylvan Lake
9a. Lacombe
9b. Devon
10. Sturgeon and Strathcona Counties
Source: Real Estate
Investment Network
Mario Toneguzzi, Calgary HeraldPublished: Thursday, August 28, 2008
Edmonton tops Calgary as the best place to invest in the province's residential real estate market, according to a report by the Real Estate Investment Network.
Alberta's Top Ten Investment Towns report says while Edmonton's market is going to begin performing closer to historic norms, "the good news is that Edmonton's historic norms will be at or near the top of performance for all of Canada, both economically and in the resale and rental housing sectors."
Edmonton leads the list followed by Calgary, Red Deer, St. Albert and Grande Prairie. There are actually 13 locations cited in the report and they also include, in descending order: Lethbridge, Fort McMurray, Airdrie, Cochrane, Sylvan Lake, Lacombe, Devon and Sturgeon and Strathcona Counties.
The report says Calgary has just experienced one of the best economic and real estate periods in Canadian history and ran neck-and-neck with Edmonton for the No. 1 spot on the list.
"In 2008, the (Calgary) market is making a predictable (albeit soft) correction resulting in slightly more affordable housing compared to recent years," says the report.
"It was economically impossible for the market to continue at the pace at which it was heading and now finds itself adjusting to market realities. This adjustment period, as the market searches for its new foundation from which to build, should continue into 2009 when the provincial economy is poised for another growth spurt."
According to a recent report by the Canadian Real Estate Association, falling prices in Calgary and Edmonton are dragging down Canada's housing market. Led by declines of eight per cent in Calgary and five per cent in Edmonton, average house prices in Canada dropped 3.6 per cent overall in July compared with a year ago, according to the association.
The average national MLS residential sale price last month was $327,020, while in Calgary it was $402,788. In Edmonton, it was $335,100.
Don Campbell, president of the Real Estate Investment Network in Canada, said Edmonton's housing market will benefit from the economic ripple of the multibillion-dollar investment in the oilsands, leading to job creation.
"The people in Calgary, if they want to play offence and defence, should be following the ring road and the extension of the LRT and then starting to move into regions such as Forest Lawn, Forest Heights -- regions that have had a more difficult reputation than they should because the demographic has changed, the pride of ownership has changed," said Campbell, the author of two books -- Real Estate Investing in Canada and 51 Success Stories from Canadian Real Estate Investors.
The Real Estate Investment Network's previous top 10 list had Edmonton first, followed by Grande Prairie and Calgary.
A recent outlook by Canada Mortgage and Housing Corp. forecasts existing home sales in Alberta will drop by 20 per cent this year, the sharpest decline since 1982, due to demand being cut by weaker migration and the hefty jump in mortgage carrying costs from earlier years. The average price gains of 31 per cent in 2006 and 25 per cent in 2007 have proven unsustainable as the resale price is expected to advance by only one per cent this year, says the CMHC.
The CMHC is forecasting Calgary's average MLS sale price this year to increase by one per cent from a year ago to $418,000 while Edmonton will see an increase of 0.4 per cent to $340,000. The CMHC says the Wood Buffalo region, which includes Fort McMurray, will lead the province with a 16.6 per cent price hike this year to $540,000.
As for 2009, the CMHC is forecasting a 2.9 per cent jump in Calgary ($430,000), 3.5 per cent in Edmonton ($352,000) and 8.3 per cent in Wood Buffalo ($585,000).
The investment network report says a focus on the reality of the economics behind the Calgary market today is critical at this juncture and it will be important for investors and homeowners to pay close attention to the fundamentals.
Provincially, "Alberta's economy is as good as it gets," said the report, with high energy prices, rapid population growth, low unemployment, an abundance of jobs, and improved infrastructure.
Centres
1. Edmonton
2. Calgary
3. Red Deer
4. St. Albert
5. Grande Prairie
6a. Lethbridge
6b. Fort McMurray
7. Airdrie
8a. Cochrane
8b. Sylvan Lake
9a. Lacombe
9b. Devon
10. Sturgeon and Strathcona Counties
Source: Real Estate
Investment Network
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