The Canadian housing market has seen a stronger and faster rebound from the recession than any other segment of the economy, due in large part to enticingly low mortgage rates.
But rates this low — 5.59 per cent for a five-year fixed-rate mortgage and 2.25 per cent for a five-year variable-rate mortgage at one bank — can’t last forever, and experts are advising borrowers to prepare for higher rates within the next 12 months.
“We have to realize those are emergency interest rates,” said CIBC economist Benjamin Tal.
“Interest rates will rise — it’s just a question of time, it’s not a question of if. And if that’s the case, we have to make sure that when we borrow this money we can afford the same mortgage 200 or 300 basis points higher. That’s the key responsibility now of borrowers and lenders, to make sure that what we do, we do it in a prudent way.”
Depending on whether they are fixed or floating-rate, mortgages are tied to either the bond market or the Bank of Canada’s key lending rate, which are closely related. The central bank’s rate has been sitting at a record low of 0.25 per cent since the spring and it has said it will keep it steady until at least next June to help stimulate the ailing economy.
On Wednesday, three of Canada’s biggest banks — Royal Bank (TSX:RY), Bank of Montreal (TSX:BMO) and TD Bank (TSX:TD) — announced that they will cut posted rates for fixed-rate mortgages by up to 0.25 percentage points. On Thursday, CIBC (TSX:CM), Laurentian Bank (TSX:LB) and Scotiabank (TSX:BNS) followed suit by cutting their five-year mortgages by 0.25 per cent to 5.59 per cent, in the case of CIBC and Scotiabank, and 5.6 per cent at Laurentian.
But mortgage lenders agree that rates are nearing the bottom and will begin to rise again in 2010.
“The only sort of assurance that you hear in the marketplace is the Bank of Canada’s going to try to maintain that rate until June. But past that, there are already warnings that if there need to be adjustments, the adjustments could be a little more abrupt than we’ve been used to in the past,” said Martin Beaudry, vice-president of retail lending at ING Direct.
CIBC’s Tal said that with rates this low, “it’s almost a crime not to take a mortgage out,” but warned that consumers need to be prepared for higher interest rates later on and what this could mean for their personal finances.
For example, a $200,000 mortgage with a term of 25 years and an interest rate of 2.25 per cent has monthly payments of $876.26. For the same mortgage with an interest rate of five per cent, the monthly payments become $1,169.18.
And this doesn’t only apply to variable-rate mortgages, but to fixed-rate mortgages that are coming up for renewal, Tal said.
“It’s not just variable rates, because five years from now the rates will be much higher, so you don’t want to find yourself in a situation five years from now where you can’t afford the house,” he said.
“It’s important to be extremely prudent and not to be totally blinded by those rates.”
Thursday, December 10, 2009
Friday, September 11, 2009
New subdivision a first for the city
In what is believed to be a first for Red Deer, the city’s municipal planning commission has approved a “strata space subdivision.”
The subdivision relates to a 210-suite supportive living complex and restaurant in Oriole Park West. Slated to be called The Gardens at Hwys 2 & 11, the 6845 66th St. project is being developed by a group of joint-venture partners.
The commission heard on Tuesday that strata space subdivision was being sought so that ownership of the residential and commercial components of the building could be separated. The commercial elements would include the restaurant, a hair salon and administrative facilities, with these located on various floors of the four-storey building.
The commission was told that such “three-dimensional” subdivisions have been done in Calgary, but not in Red Deer.
Toby Lampard, one of the partners involved in the development, said previously that the residential units will consist of suites with one bedroom, two bedrooms, and one bedroom with a den. Each will have cooking facilities and a washer and dryer, with shared amenities to include an exercise room, a library area with computers, a lounge and TV rooms.
Residents will be able to access different levels of support, with staff on site 24 hours a day.
Underground and surface parking are planned, and the Perkins Restaurant & Bakery will serve both residents and members of the general public.
The units will be sold as condominiums, said Lampard. Some will be rented to tenants, he added, including under life-lease arrangements.
The commission also approved the subdivision of the land into two bareland condominium units. This will allow the project to be completed in two phases.
Lampard said the first will contain 110 units and the restaurant, with completion anticipated by the spring of 2011. The second, 100-unit phase will be added when demand warrants.
The cost of the project has been estimated at about $23 million for the first phase and $20 million for the second.
The subdivision relates to a 210-suite supportive living complex and restaurant in Oriole Park West. Slated to be called The Gardens at Hwys 2 & 11, the 6845 66th St. project is being developed by a group of joint-venture partners.
The commission heard on Tuesday that strata space subdivision was being sought so that ownership of the residential and commercial components of the building could be separated. The commercial elements would include the restaurant, a hair salon and administrative facilities, with these located on various floors of the four-storey building.
The commission was told that such “three-dimensional” subdivisions have been done in Calgary, but not in Red Deer.
Toby Lampard, one of the partners involved in the development, said previously that the residential units will consist of suites with one bedroom, two bedrooms, and one bedroom with a den. Each will have cooking facilities and a washer and dryer, with shared amenities to include an exercise room, a library area with computers, a lounge and TV rooms.
Residents will be able to access different levels of support, with staff on site 24 hours a day.
Underground and surface parking are planned, and the Perkins Restaurant & Bakery will serve both residents and members of the general public.
The units will be sold as condominiums, said Lampard. Some will be rented to tenants, he added, including under life-lease arrangements.
The commission also approved the subdivision of the land into two bareland condominium units. This will allow the project to be completed in two phases.
Lampard said the first will contain 110 units and the restaurant, with completion anticipated by the spring of 2011. The second, 100-unit phase will be added when demand warrants.
The cost of the project has been estimated at about $23 million for the first phase and $20 million for the second.
Housing stars rebound
Red Deer builders enjoyed a bigger year-over-year increase in housing starts last month than was the case in any of Alberta’s other major cities.
Canada Mortgage and Housing Corp. has reported that work on 43 single-detached homes was initiated in the city last month, up from 21 in August 2008. In the case of starts related to multi-family units, the figure last month was 20, as compared with zero the previous year.
That combined 200 per cent increase in August housing starts topped the figures for Lethbridge, which experienced a 121 per cent jump; Edmonton, which was up 32 per cent jump; and Grande Prairie, which rose 28 per cent. August housing starts in Calgary, Medicine Hat and the Regional Municipality of Wood Buffalo were all down in 2009.
CMHC market analyst Regine Durand commented last week that the Red Deer housing market was rebounding faster than her agency had previously anticipated. That prompted it to modify its forecast for local housing starts in 2009 to 430, from the 425 it was projecting as of May.
Fewer listings on the resale market and a decline in the inventory of unsold new homes were factors affecting the residential construction sector, she said.
So far this year, there have been 266 housing starts in Red Deer: 190 in the single-detached category and 76 multi-family units. That’s well behind the 392 starts accumulated to the same point in 2008, when there were 226 single-detached starts and 166 multi-family units.
Canada Mortgage and Housing Corp. has reported that work on 43 single-detached homes was initiated in the city last month, up from 21 in August 2008. In the case of starts related to multi-family units, the figure last month was 20, as compared with zero the previous year.
That combined 200 per cent increase in August housing starts topped the figures for Lethbridge, which experienced a 121 per cent jump; Edmonton, which was up 32 per cent jump; and Grande Prairie, which rose 28 per cent. August housing starts in Calgary, Medicine Hat and the Regional Municipality of Wood Buffalo were all down in 2009.
CMHC market analyst Regine Durand commented last week that the Red Deer housing market was rebounding faster than her agency had previously anticipated. That prompted it to modify its forecast for local housing starts in 2009 to 430, from the 425 it was projecting as of May.
Fewer listings on the resale market and a decline in the inventory of unsold new homes were factors affecting the residential construction sector, she said.
So far this year, there have been 266 housing starts in Red Deer: 190 in the single-detached category and 76 multi-family units. That’s well behind the 392 starts accumulated to the same point in 2008, when there were 226 single-detached starts and 166 multi-family units.
Building momentum
The declining cost of home ownership has prompted Canada Mortgage and Housing Corp. to adopt a more optimistic view of Central Alberta’s real estate market. And the national housing agency expects local home builders to be much busier next year than their counterparts elsewhere in the country.
In its housing market outlook released on Thursday, CMHC projects that 3,700 Central Alberta homes will be sold through the Multiple Listing Service in 2009. It is anticipated that this number will rise more than five per cent the following year, to 3,900.
An earlier forecast issued in May called for 3,550 MLS sales this year and 3,770 in 2010.
CMHC is also anticipating higher average prices on the local resale market: $269,000 in 2009 and $277,000 in 2010. That compares with its previous forecasts of $264,000 and $271,000 respectively.
“Typically, what we’re seeing is affordability is improving because of the drop in resale prices,” said Regine Durand, a market analyst with CMHC.
Those reduced prices, combined with lower interest rates, have made home ownership more appealing.
“Mortgage payments on average have dropped by 18 per cent from January to July,” said Durand.
“This is boosting MLS sales, and next year we are expecting to see more of that also.”
She added that the cost difference between renting and owning has decreased — narrowing 36 per cent on average from January to July, and luring many tenants into the market.
Although resale prices in Central Alberta next year are expected to increase by about the same percentage as for Alberta as a whole, sales volumes here are projected to climb five per cent, as compared with three per cent for the province.
CMHC has also modified its forecast with respect to new home construction in Red Deer.
As of May, it was projecting 425 housing starts this year and 515 in 2010. Those figures have changed to 430 and 490.
Durand said the increase for 2009 was motivated by signs the new home market is strengthening.
In July, she pointed out, residential construction starts were 16 per cent higher than in the same month of 2008. In the case of single-family starts, the year-over-year jump was 76 per cent.
“We are seeing that the market is picking up a bit faster than what we were expecting.”
One of the factors boosting this demand is fewer options on the local resale market.
“Active listings were down 14 per cent in July,” said Durand.
CMHC’s decision to reduce its 2010 housing start forecast for Red Deer by 25 units was motivated by the surplus of multi-family units still on the market.
“Inventories of singles in July were down 39 per cent, year-over-year, but we still had 111 multis in inventory, which is three times more than last year,” said Durand.
But even with the reduced forecast, Red Deer’s 2010 housing starts would be 14 per cent higher than the figure forecast for 2009, she pointed out. That’s a slightly bigger increase than the 13 per cent residential construction growth expected provincewide, and more than twice the six per cent increase CMHC has pencilled in for Canada.
The numbers are still much lower than in 2008, when there were 4,214 MLS sales in Central Alberta, with an average price of $278,000. The year before that, sales numbered 5,075 with an average selling price of $270,494.
On the construction side, 572 homes were built in Red Deer last year and a record 1,558 in 2007.
Nationally, CMHC pointed to improved resale activity and lower inventory levels in both the new- and existing-home markets as factors that should prompt builders to increase construction.
However, CIBC World Markets economist Benjamin Tal suggested that the recovery in housing starts would be much slower. He believes slower population growth and higher costs for new homes after provincial sales taxes are harmonized with the GST in provinces like Ontario and B.C. next year will soften near-term growth in new home construction.
Scotiabank economist Adrienne Warren also sees a slow recovery in new home building due to oversupply in some major markets, particularly in the condominium sector.
But Warren said the CMHC forecast is yet another sign Canada’s real estate market is on the rebound, and performing better than previously thought.
In its housing market outlook released on Thursday, CMHC projects that 3,700 Central Alberta homes will be sold through the Multiple Listing Service in 2009. It is anticipated that this number will rise more than five per cent the following year, to 3,900.
An earlier forecast issued in May called for 3,550 MLS sales this year and 3,770 in 2010.
CMHC is also anticipating higher average prices on the local resale market: $269,000 in 2009 and $277,000 in 2010. That compares with its previous forecasts of $264,000 and $271,000 respectively.
“Typically, what we’re seeing is affordability is improving because of the drop in resale prices,” said Regine Durand, a market analyst with CMHC.
Those reduced prices, combined with lower interest rates, have made home ownership more appealing.
“Mortgage payments on average have dropped by 18 per cent from January to July,” said Durand.
“This is boosting MLS sales, and next year we are expecting to see more of that also.”
She added that the cost difference between renting and owning has decreased — narrowing 36 per cent on average from January to July, and luring many tenants into the market.
Although resale prices in Central Alberta next year are expected to increase by about the same percentage as for Alberta as a whole, sales volumes here are projected to climb five per cent, as compared with three per cent for the province.
CMHC has also modified its forecast with respect to new home construction in Red Deer.
As of May, it was projecting 425 housing starts this year and 515 in 2010. Those figures have changed to 430 and 490.
Durand said the increase for 2009 was motivated by signs the new home market is strengthening.
In July, she pointed out, residential construction starts were 16 per cent higher than in the same month of 2008. In the case of single-family starts, the year-over-year jump was 76 per cent.
“We are seeing that the market is picking up a bit faster than what we were expecting.”
One of the factors boosting this demand is fewer options on the local resale market.
“Active listings were down 14 per cent in July,” said Durand.
CMHC’s decision to reduce its 2010 housing start forecast for Red Deer by 25 units was motivated by the surplus of multi-family units still on the market.
“Inventories of singles in July were down 39 per cent, year-over-year, but we still had 111 multis in inventory, which is three times more than last year,” said Durand.
But even with the reduced forecast, Red Deer’s 2010 housing starts would be 14 per cent higher than the figure forecast for 2009, she pointed out. That’s a slightly bigger increase than the 13 per cent residential construction growth expected provincewide, and more than twice the six per cent increase CMHC has pencilled in for Canada.
The numbers are still much lower than in 2008, when there were 4,214 MLS sales in Central Alberta, with an average price of $278,000. The year before that, sales numbered 5,075 with an average selling price of $270,494.
On the construction side, 572 homes were built in Red Deer last year and a record 1,558 in 2007.
Nationally, CMHC pointed to improved resale activity and lower inventory levels in both the new- and existing-home markets as factors that should prompt builders to increase construction.
However, CIBC World Markets economist Benjamin Tal suggested that the recovery in housing starts would be much slower. He believes slower population growth and higher costs for new homes after provincial sales taxes are harmonized with the GST in provinces like Ontario and B.C. next year will soften near-term growth in new home construction.
Scotiabank economist Adrienne Warren also sees a slow recovery in new home building due to oversupply in some major markets, particularly in the condominium sector.
But Warren said the CMHC forecast is yet another sign Canada’s real estate market is on the rebound, and performing better than previously thought.
Monday, July 6, 2009
Residemtial building stats show turn of tide in real estate
Midway through 2009, the cumulatiuve value of building approved by the City of Red Deer is about half of what it was at the same point in 2008.
But activity at the city's Inspections and Licensing Department last month suggests the constuction tide might be turning--at least in the case of housing.
Municippal staff issued building permits for $10.2 million in residential work in June. That's up 86% from a year ago, when the residential permit tally was $5.5 million. It marks the first month this year that the 2009 value exceeded the 2008 figure.
Providing a $2.4 million boost were 36 permits to Carolina Homes Inc. for multi-family development at 31 Jamieson Avenue.
Last June, multi-family projects contributed only $580,000 to permit tally, noted Rachelle Trepanier of Inspections and Licensing.
The residential construction jump reflects more than a few big projects, however. Trepanier said 30 permits worth a combined $4.9 million were issued for single-family homes for last month, more than double the 14 permits valued at $2 million that were recorded in June 2008.
"It seems to be picking quite a bit" confirmed Natalie Larkam, co-owner of Larkaun Homes Ltd. and president of the Central Alberta branch of the Canadian Homebuilder's Association.
Larkam said some builders might not be proceeding with homes that they struck deals on this spring.
She added that there is a good supply of residential lots in Red Deer, a situation that didn't exist in early 2008.
"We have to remember that last year was a bit slower because of the inventory issue we were having."
At $13.5 million the combined value of building permits issued last month in all categories was still behind the June 2008 total of $28.4 million.
Work on public projects including $1.2 million for interior renovation to the Red Deer Museum and Art Gallery, generated $2.8 million. That compares with $20 million in the public category in June 2008.
Permits issued last month for commercial work, which were valued at $456,000, was also down from the 2008 number of $2.8 million. As for industrial work, there was $33,000 worthof projects approved last month, a year-over-year drop from $70,000.
For the year to date, total permit values are %59.1 million, as compared with $116.9 million for the first half of 2008.
Residential approvals this year are $33.1 million, down from $63.9 million; commercial permits are up to $9.1 million, as compared with $26.2 million versus $3.9 million dollars in 2008; and public construction and renovation are up to $16.2 million, a decline from $23 million.
In 2007, $174.6 million worth of permits had been issued by the end of June. That year ended with a record $421.1 million in building approvals.
But activity at the city's Inspections and Licensing Department last month suggests the constuction tide might be turning--at least in the case of housing.
Municippal staff issued building permits for $10.2 million in residential work in June. That's up 86% from a year ago, when the residential permit tally was $5.5 million. It marks the first month this year that the 2009 value exceeded the 2008 figure.
Providing a $2.4 million boost were 36 permits to Carolina Homes Inc. for multi-family development at 31 Jamieson Avenue.
Last June, multi-family projects contributed only $580,000 to permit tally, noted Rachelle Trepanier of Inspections and Licensing.
The residential construction jump reflects more than a few big projects, however. Trepanier said 30 permits worth a combined $4.9 million were issued for single-family homes for last month, more than double the 14 permits valued at $2 million that were recorded in June 2008.
"It seems to be picking quite a bit" confirmed Natalie Larkam, co-owner of Larkaun Homes Ltd. and president of the Central Alberta branch of the Canadian Homebuilder's Association.
Larkam said some builders might not be proceeding with homes that they struck deals on this spring.
She added that there is a good supply of residential lots in Red Deer, a situation that didn't exist in early 2008.
"We have to remember that last year was a bit slower because of the inventory issue we were having."
At $13.5 million the combined value of building permits issued last month in all categories was still behind the June 2008 total of $28.4 million.
Work on public projects including $1.2 million for interior renovation to the Red Deer Museum and Art Gallery, generated $2.8 million. That compares with $20 million in the public category in June 2008.
Permits issued last month for commercial work, which were valued at $456,000, was also down from the 2008 number of $2.8 million. As for industrial work, there was $33,000 worthof projects approved last month, a year-over-year drop from $70,000.
For the year to date, total permit values are %59.1 million, as compared with $116.9 million for the first half of 2008.
Residential approvals this year are $33.1 million, down from $63.9 million; commercial permits are up to $9.1 million, as compared with $26.2 million versus $3.9 million dollars in 2008; and public construction and renovation are up to $16.2 million, a decline from $23 million.
In 2007, $174.6 million worth of permits had been issued by the end of June. That year ended with a record $421.1 million in building approvals.
Cottage market showing signs of revival
The economic downturn has not diminished people’s appetite for a piece of Sylvan Lake waterfront, says a national report issued on Thursday.
But waterfront properties, particularly those in higher price ranges, are taking longer to sell.
Royal LePage’s 2009 Recreational Property Report collected data from Realtors in resort communities across the country said the recreational market is showing signs of revival following a slowdown in the latter half of 2008 and into the winter.
“There has been some uncertainty due to the economy, but we still have an active market that is fairly comparable to last year in terms of the level of interest from buyers,” Al Hughes of Royal LePage Network Realty Corp. is quoted as saying.
He added that listed properties, particularly those in higher price ranges, are taking longer to sell.
The report said the average price of land-access property between 1,000 and 3,000 square feet on Sylvan Lake is $691,666. Water-access homes in the same size range average $1,125,000, and residential properties 1,000 square feet or smaller that are not on the water average $285,000.
Most of the sales at Sylvan Lake last year involved homes priced between $350,000 and $450,000, said Hughes. This year, he added, properties valued from $250,000 to $350,000 have been the most popular.
The Royal LePage report said waterfront properties near the Town of Sylvan Lake are popular with professionals and other high-income buyers, while less expensive homes near other lake-front communities like Jarvis Bay and Sunbreaker Cove appeal to younger families.
Hughes said the attraction of Sylvan is the fact it offers year-round activities.
“People want properties they can use in the winter,” he said, adding that for many, boat access is also very important.
Hughes noted that fewer cottages and vacation homes in Sylvan Lake are available for rent.
“People seem to be using the cottages themselves,” he said. “A lot of older cottages that were revenue properties are being torn down and the owners are putting in new homes.”
Across Canada, the average price of a standard waterfront cottage with three bedrooms and measuring 1,000 square feet in size was $370,000 to $600,000, according to the report.
These range from lower-end properties selling for $100,000 or less in the Atlantic provinces, to between $530,000 and $880,000 in British Columbia. The range in Alberta is $400,000 to $460,000.
Royal LePage’s 2009 Recreational Property Report came less than a month after Re/Max issued its own recreational property report.
The Re/Max report estimated the starting price of a three-bedroom, winterized home on a standard-sized lot on Sylvan Lake at $1,125,000. That was the third-highest figure among the more than 50 resort areas considered, with only Vernon and Lake Windermere, B.C., topping it. Both came in at $1.2 million.
But waterfront properties, particularly those in higher price ranges, are taking longer to sell.
Royal LePage’s 2009 Recreational Property Report collected data from Realtors in resort communities across the country said the recreational market is showing signs of revival following a slowdown in the latter half of 2008 and into the winter.
“There has been some uncertainty due to the economy, but we still have an active market that is fairly comparable to last year in terms of the level of interest from buyers,” Al Hughes of Royal LePage Network Realty Corp. is quoted as saying.
He added that listed properties, particularly those in higher price ranges, are taking longer to sell.
The report said the average price of land-access property between 1,000 and 3,000 square feet on Sylvan Lake is $691,666. Water-access homes in the same size range average $1,125,000, and residential properties 1,000 square feet or smaller that are not on the water average $285,000.
Most of the sales at Sylvan Lake last year involved homes priced between $350,000 and $450,000, said Hughes. This year, he added, properties valued from $250,000 to $350,000 have been the most popular.
The Royal LePage report said waterfront properties near the Town of Sylvan Lake are popular with professionals and other high-income buyers, while less expensive homes near other lake-front communities like Jarvis Bay and Sunbreaker Cove appeal to younger families.
Hughes said the attraction of Sylvan is the fact it offers year-round activities.
“People want properties they can use in the winter,” he said, adding that for many, boat access is also very important.
Hughes noted that fewer cottages and vacation homes in Sylvan Lake are available for rent.
“People seem to be using the cottages themselves,” he said. “A lot of older cottages that were revenue properties are being torn down and the owners are putting in new homes.”
Across Canada, the average price of a standard waterfront cottage with three bedrooms and measuring 1,000 square feet in size was $370,000 to $600,000, according to the report.
These range from lower-end properties selling for $100,000 or less in the Atlantic provinces, to between $530,000 and $880,000 in British Columbia. The range in Alberta is $400,000 to $460,000.
Royal LePage’s 2009 Recreational Property Report came less than a month after Re/Max issued its own recreational property report.
The Re/Max report estimated the starting price of a three-bedroom, winterized home on a standard-sized lot on Sylvan Lake at $1,125,000. That was the third-highest figure among the more than 50 resort areas considered, with only Vernon and Lake Windermere, B.C., topping it. Both came in at $1.2 million.
Market stabilizing
The past-president of the Central Alberta Realtors Association thinks residential sales activity in the last quarter is reason for optimism.
Randy Weins of Weins World Real Estate Inc. said the median prices of single-family dwellings sold in Red Deer, Lacombe, Rocky Mountain House and Sylvan Lake from April to June were all above the medians for the preceding three months.
In Red Deer, 387 single-family homes sold through the Multiple Listing Service system with a median price of $315,000. That compares with 210 sales at a median price of $305,000 in the first quarter.
In Lacombe, 41 single-family homes sold for a median price of $312,000, up from 23 sales at a median price of $289,000.
Single-family home sales in Rocky reached 30, with a median price of $284,000. That was a jump from the 20 sales and median of $280,000.
In Sylvan Lake, sales of single-family homes tallied 76, with a median selling price of $328,000. That was up from 43 sales and a median of $318,000.
Weins suggested these communities provide a good indication of what’s happening in the market.
“That’s the best bird’s-eye view, is firstly look at Red Deer and then look at Sylvan,” he said, adding that Rocky serves as a barometer for the West Country.
The median prices of single-family homes sold in Blackfalds, Innisfail, Ponoka and Stettler during the last quarter were all down from the previous three-month period.
Blackfalds had 32 sales at a median price of $271,000, as compared with 22 deals at $278,000 to start 2009.
Sales of single-family dwellings in Innisfail numbered 28 with a median price of $255,000. By contrast, there were 24 sales and a median price of $263,000 in the first quarter.
Single-family home sales in Ponoka reached 33, with a median price of $224,000. In the preceding quarter, there were 20 sales and a median price of $247,000.
In Stettler, sales numbered 21 with a median price of $220,000. There were three fewer sales in the first quarter but the median price was $254,000.
“Innisfail, Ponoka and Stettler I can understand because they’re further from the city,” said Weins of the price declines.
The economic downturn has hit small rural towns particularly hard, he explained.
Blackfalds, added Weins, experienced a big increase in home construction when the selection in Red Deer was scarce.
“Their inventory levels are still fairly high for a town of its size.”
Blackfalds also saw house prices approach, and in some cases surpass, Red Deer’s, he noted.
“There’s probably just an adjustment there.”
Although single-family home sales increased in all eight Central Alberta communities, Weins said this reflects a seasonal fluctuation.
“The fourth and the first quarters are the slowest half of the year, so you’ve got to be realistic whey you look at the numbers.”
Still, he added, the second quarter was stronger that he’d predicted. Weins forecast in January that there would be an eight per cent drop in single-family home values from the second quarter of 2008 to the same period this year. The change in the median figure turned out to be about 2 1/2 per cent.
In Red Deer, the second quarter of 2008 produced 445 single-family sales at a median price of $323,000; in Lacombe, the Q2 figures in 2008 were 55 and $313,000; in Rocky they were 29 and $291,000; in Sylvan Lake, 98 and $376,000; at Blackfalds, 43 and $312,000; in Innisfail, 37 and $275,000; in Ponoka, 26 and $254,000; and in Stettler, 29 and $215,000.
Weins thinks the Central Alberta market has stabilized.
“I don’t see prices going down any further; I don’t see them skyrocketing.
“I think we’ll have a stable market the rest of the year.”
Government stimulus packages have yet to make an impact, he added, and oil prices have strengthened, interest rates are at historic lows, mortgage money remains available and the stock market has enjoyed an extended period of stability.
One worry is the agricultural sector, he said, with government debt at the federal and provincial levels also a concern.
Randy Weins of Weins World Real Estate Inc. said the median prices of single-family dwellings sold in Red Deer, Lacombe, Rocky Mountain House and Sylvan Lake from April to June were all above the medians for the preceding three months.
In Red Deer, 387 single-family homes sold through the Multiple Listing Service system with a median price of $315,000. That compares with 210 sales at a median price of $305,000 in the first quarter.
In Lacombe, 41 single-family homes sold for a median price of $312,000, up from 23 sales at a median price of $289,000.
Single-family home sales in Rocky reached 30, with a median price of $284,000. That was a jump from the 20 sales and median of $280,000.
In Sylvan Lake, sales of single-family homes tallied 76, with a median selling price of $328,000. That was up from 43 sales and a median of $318,000.
Weins suggested these communities provide a good indication of what’s happening in the market.
“That’s the best bird’s-eye view, is firstly look at Red Deer and then look at Sylvan,” he said, adding that Rocky serves as a barometer for the West Country.
The median prices of single-family homes sold in Blackfalds, Innisfail, Ponoka and Stettler during the last quarter were all down from the previous three-month period.
Blackfalds had 32 sales at a median price of $271,000, as compared with 22 deals at $278,000 to start 2009.
Sales of single-family dwellings in Innisfail numbered 28 with a median price of $255,000. By contrast, there were 24 sales and a median price of $263,000 in the first quarter.
Single-family home sales in Ponoka reached 33, with a median price of $224,000. In the preceding quarter, there were 20 sales and a median price of $247,000.
In Stettler, sales numbered 21 with a median price of $220,000. There were three fewer sales in the first quarter but the median price was $254,000.
“Innisfail, Ponoka and Stettler I can understand because they’re further from the city,” said Weins of the price declines.
The economic downturn has hit small rural towns particularly hard, he explained.
Blackfalds, added Weins, experienced a big increase in home construction when the selection in Red Deer was scarce.
“Their inventory levels are still fairly high for a town of its size.”
Blackfalds also saw house prices approach, and in some cases surpass, Red Deer’s, he noted.
“There’s probably just an adjustment there.”
Although single-family home sales increased in all eight Central Alberta communities, Weins said this reflects a seasonal fluctuation.
“The fourth and the first quarters are the slowest half of the year, so you’ve got to be realistic whey you look at the numbers.”
Still, he added, the second quarter was stronger that he’d predicted. Weins forecast in January that there would be an eight per cent drop in single-family home values from the second quarter of 2008 to the same period this year. The change in the median figure turned out to be about 2 1/2 per cent.
In Red Deer, the second quarter of 2008 produced 445 single-family sales at a median price of $323,000; in Lacombe, the Q2 figures in 2008 were 55 and $313,000; in Rocky they were 29 and $291,000; in Sylvan Lake, 98 and $376,000; at Blackfalds, 43 and $312,000; in Innisfail, 37 and $275,000; in Ponoka, 26 and $254,000; and in Stettler, 29 and $215,000.
Weins thinks the Central Alberta market has stabilized.
“I don’t see prices going down any further; I don’t see them skyrocketing.
“I think we’ll have a stable market the rest of the year.”
Government stimulus packages have yet to make an impact, he added, and oil prices have strengthened, interest rates are at historic lows, mortgage money remains available and the stock market has enjoyed an extended period of stability.
One worry is the agricultural sector, he said, with government debt at the federal and provincial levels also a concern.
Monday, June 15, 2009
New cycle in '10
A market analyst with Canada Mortgage and Housing Corp. says the clouds hanging over Red Deer’s residential real estate market are dispersing.
Regine Durand recently presented a local market outlook to housing industry officials in Red Deer.
Speaking to the Advocate this week, she said a theme of her message was that conditions will improve in 2010.
“We’re going to enter into a new cycle, starting next year.”
Red Deer, said Durand, has undergone three economic cycles since 1988: from 1988 to 1995, 1996 to 2000 and 2001 to 2007. Each brought growth in employment and residential construction starts.
She produced a graph that showed the inventory of new, single-detached homes in Red Deer is declining, with the current count of approximately 66 such homes likely to be absorbed in about 49 days. In the case of new, semi-detached homes, the inventory was down to seven in May — a year-over-year decline of 73 per cent.
This should spur builders to increase construction activity.
“They’re going to want to start replenishing their stock next year.”
Durand also foresees increased volumes on the resale market.
“Next year, we’re going to see higher sales because prices have stopped going up on the resale market, and with lower mortgage rates, mortgage payments have dropped.”
She pointed out that from 1998 to 2005, the cost of home ownership was comparable to the cost of renting similar accommodation. But that situation started to change in 2006, and by 2007 the annual carrying cost of a condominium was $542 more than rent for a two-bedroom apartment.
This gap decreased to $445 last year, and continues to narrow. That should draw more people onto the housing market and increase sales.
“They’re going to make the jump to owning.”
In fact, if the latest CMHC forecast of 3,770 home resales in Central Alberta in 2010 holds true, it will be the fifth busiest year ever in the region (behind 2007, 2006, 2008 and 2005).
Durand also described a change in the ratio of high-priced to low-priced homes in recent years.
Single-detached homes selling for more than $250,000 on the Red Deer market have increased from 46 per cent in 2006, to 80 per cent in 2007 and 97 per cent in 2008. The demand for those higher-priced homes helped pull up the average selling price.
Durand noted that this year more lower-priced homes, selling for $100,000 to $174,000, are being offered by builders.
“These products are available again.”
Durand also described a change in the ratio of high-priced to low-priced homes in recent years.
Single-detached homes selling for more than $250,000 on the Red Deer market have increased from 46 per cent in 2006, to 80 per cent in 2007 and 97 per cent in 2008. The demand for those higher-priced homes helped pull up the average selling price.
Durand noted that this year more lower-priced homes, selling for $100,000 to $174,000, are being offered by builders.
“These products are available again.”
Durand also presented Statistics Canada figures that indicate the number of people employed in Red Deer during the first quarter of 2009 compares favourably to the peaks of 2007 and 2008 — topping the 50,000 mark.
In April, she added, the city’s labour market participation rate for employable residents exceeded 81 per cent. That’s seven percentage points above the provincial rate and 14 percentage points over the Canadian figure.
“There’s a greater proportion of the labour force in Red Deer being employed, compared to Alberta and Canada.
“It’s definitely a positive factor.”
However, Durand said the 2010 market rebound will occur across Alberta.
“I think it’s fairly consistent,” she said, explaining that decreasing inventories of new homes and low mortgage rates, combined with improving market indicators like a strengthening stock market and rising consumer confidence, will have a broad, positive effect.
Regine Durand recently presented a local market outlook to housing industry officials in Red Deer.
Speaking to the Advocate this week, she said a theme of her message was that conditions will improve in 2010.
“We’re going to enter into a new cycle, starting next year.”
Red Deer, said Durand, has undergone three economic cycles since 1988: from 1988 to 1995, 1996 to 2000 and 2001 to 2007. Each brought growth in employment and residential construction starts.
She produced a graph that showed the inventory of new, single-detached homes in Red Deer is declining, with the current count of approximately 66 such homes likely to be absorbed in about 49 days. In the case of new, semi-detached homes, the inventory was down to seven in May — a year-over-year decline of 73 per cent.
This should spur builders to increase construction activity.
“They’re going to want to start replenishing their stock next year.”
Durand also foresees increased volumes on the resale market.
“Next year, we’re going to see higher sales because prices have stopped going up on the resale market, and with lower mortgage rates, mortgage payments have dropped.”
She pointed out that from 1998 to 2005, the cost of home ownership was comparable to the cost of renting similar accommodation. But that situation started to change in 2006, and by 2007 the annual carrying cost of a condominium was $542 more than rent for a two-bedroom apartment.
This gap decreased to $445 last year, and continues to narrow. That should draw more people onto the housing market and increase sales.
“They’re going to make the jump to owning.”
In fact, if the latest CMHC forecast of 3,770 home resales in Central Alberta in 2010 holds true, it will be the fifth busiest year ever in the region (behind 2007, 2006, 2008 and 2005).
Durand also described a change in the ratio of high-priced to low-priced homes in recent years.
Single-detached homes selling for more than $250,000 on the Red Deer market have increased from 46 per cent in 2006, to 80 per cent in 2007 and 97 per cent in 2008. The demand for those higher-priced homes helped pull up the average selling price.
Durand noted that this year more lower-priced homes, selling for $100,000 to $174,000, are being offered by builders.
“These products are available again.”
Durand also described a change in the ratio of high-priced to low-priced homes in recent years.
Single-detached homes selling for more than $250,000 on the Red Deer market have increased from 46 per cent in 2006, to 80 per cent in 2007 and 97 per cent in 2008. The demand for those higher-priced homes helped pull up the average selling price.
Durand noted that this year more lower-priced homes, selling for $100,000 to $174,000, are being offered by builders.
“These products are available again.”
Durand also presented Statistics Canada figures that indicate the number of people employed in Red Deer during the first quarter of 2009 compares favourably to the peaks of 2007 and 2008 — topping the 50,000 mark.
In April, she added, the city’s labour market participation rate for employable residents exceeded 81 per cent. That’s seven percentage points above the provincial rate and 14 percentage points over the Canadian figure.
“There’s a greater proportion of the labour force in Red Deer being employed, compared to Alberta and Canada.
“It’s definitely a positive factor.”
However, Durand said the 2010 market rebound will occur across Alberta.
“I think it’s fairly consistent,” she said, explaining that decreasing inventories of new homes and low mortgage rates, combined with improving market indicators like a strengthening stock market and rising consumer confidence, will have a broad, positive effect.
Thursday, June 11, 2009
News getting better in real estate
After a steady diet of bad news, the Canadian real estate market got some favourable stats to chew on last month.
The Canadian Real Estate Association reported that April home sales across the country were up 11.2 per cent from March, on a seasonally adjusted bases. That marked the biggest jump in five years and the third consecutive month that both residential sales and their average price had increased.
This positive trend is one that Derek Austin, president of the Central Alberta Realtors Association, has observed locally.
“There are more things selling, more interest and more inquiries, more people going to the banks trying to get pre-qualified,” the owner of Innisfail’s Century 21 Your Realty said recently.
“There’s more confidence out there as to the future.”
In April, the number of homes sold through the Multiple Listing Service in Central Alberta numbered 341 — the highest figure since last fall.
Even on a seasonally adjusted basis, residential sales have climbed sharply since December, said the Central Alberta Realtors Association.
The 2009 numbers are still down from the corresponding months in 2008, but the gap is narrowing, said the association. April’s sales figure was 25 per cent lower than the 456 homes sold in April 2008, but four months earlier, the year-over-year difference was 40 per cent.
Canada Mortgage and Housing Corp. isn’t declaring the real estate slowdown over, however.
The Canadian Real Estate Association reported that April home sales across the country were up 11.2 per cent from March, on a seasonally adjusted bases. That marked the biggest jump in five years and the third consecutive month that both residential sales and their average price had increased.
This positive trend is one that Derek Austin, president of the Central Alberta Realtors Association, has observed locally.
“There are more things selling, more interest and more inquiries, more people going to the banks trying to get pre-qualified,” the owner of Innisfail’s Century 21 Your Realty said recently.
“There’s more confidence out there as to the future.”
In April, the number of homes sold through the Multiple Listing Service in Central Alberta numbered 341 — the highest figure since last fall.
Even on a seasonally adjusted basis, residential sales have climbed sharply since December, said the Central Alberta Realtors Association.
The 2009 numbers are still down from the corresponding months in 2008, but the gap is narrowing, said the association. April’s sales figure was 25 per cent lower than the 456 homes sold in April 2008, but four months earlier, the year-over-year difference was 40 per cent.
Canada Mortgage and Housing Corp. isn’t declaring the real estate slowdown over, however.
Monday, May 25, 2009
Home sales climb
Central Alberta’s residential real estate sector continues to show signs of improving health.
Home sales in the region last month climbed to their highest level since last fall, with 178 Multiple Listing Service sales in Red Deer and 163 in the surrounding region. Although the total was 25 per cent lower than the 456 homes sold in April 2008, the year-over-year difference has narrowed considerably since December, when the gap was 40 per cent.
Last month’s residential sales marked a 17 per cent increase over March, and the Central Alberta Realtors Association said in a news release that even on a seasonally adjusted basis, month-to-month sales rose 2.5 per cent.
With seasonally adjusted increases of 16 per cent in January and 10 per cent in February, total gains since December have been 28 per cent, said the association.
“The bridge between buyer demand and housing supply is continuing to narrow, which helps bring stability to housing prices, said Derek Austin, president of the Central Alberta Realtors Association.
Meanwhile, new residential listings declined on a year-over-year basis for the fourth consecutive month.
The 852 units added to the MLS system in April were 14 per cent fewer than a year earlier.
That reduced the number of active listings as of the end of April to 2,271 — down 13 per cent from the same point in 2008 and the biggest drop in more than two years, according to the Central Alberta Realtors Association.
The median price of residential MLS properties sold in Central Alberta last month was $263,000, down seven per cent from the $284,0000 median last April, said the association.
In March of 2009, the median price was $260,000.
Home sales in the region last month climbed to their highest level since last fall, with 178 Multiple Listing Service sales in Red Deer and 163 in the surrounding region. Although the total was 25 per cent lower than the 456 homes sold in April 2008, the year-over-year difference has narrowed considerably since December, when the gap was 40 per cent.
Last month’s residential sales marked a 17 per cent increase over March, and the Central Alberta Realtors Association said in a news release that even on a seasonally adjusted basis, month-to-month sales rose 2.5 per cent.
With seasonally adjusted increases of 16 per cent in January and 10 per cent in February, total gains since December have been 28 per cent, said the association.
“The bridge between buyer demand and housing supply is continuing to narrow, which helps bring stability to housing prices, said Derek Austin, president of the Central Alberta Realtors Association.
Meanwhile, new residential listings declined on a year-over-year basis for the fourth consecutive month.
The 852 units added to the MLS system in April were 14 per cent fewer than a year earlier.
That reduced the number of active listings as of the end of April to 2,271 — down 13 per cent from the same point in 2008 and the biggest drop in more than two years, according to the Central Alberta Realtors Association.
The median price of residential MLS properties sold in Central Alberta last month was $263,000, down seven per cent from the $284,0000 median last April, said the association.
In March of 2009, the median price was $260,000.
Market may yet surprise: realtor
The president of the Central Alberta Realtors Association is questioning some of the assumptions Canada Mortgage and Housing Corp. made when arriving at a pessimistic forecast for the region.
In an update of its housing market outlook released on Tuesday, CMHC projected that 3,550 homes will be sold through the Multiple Listing Service in Central Alberta in 2009, down from 4,214 in 2008. It expects that number to jump to 3,770 sales in 2010.
An earlier forecast released by the national housing agency in February said home sales in Central Alberta would reach 3,750 this year, with the number swelling to 4,000 in 2010.
Derek Austin wondered if the late arrival of spring might have made real estate activity in Central Alberta appear more depressed than it really is.
He also thinks CMHC could have underestimated the positive influences that low interest rates and government stimulus programs will have on the market as the year progresses.
“It’s taken longer for that turn-around.”
Austin pointed to the recent strengthening of energy prices as another reason the local real estate market could prove more robust than some expect.
“Oil prices are up and the guys should be going back to work when (spring) break-up ends.”
Austin believes the market is improving, and said he and other Realtors have noticed greater interest from buyers as the weather improves.
Regine Durand, a market analyst with CMHC, said the forecast in part reflects the fact that much of the local demand for homes was absorbed during the frenzied buying period leading up to 2008. She added that there has also been a decline in the number of people migrating into this region.
Rather than demand having been absorbed, Austin believes a big reason many people aren’t buying now is the tighter lending practices of banks.
“I think they’re slowly starting to turn around, but stuff that they would have just put through no problem before, they’re holding back on.”
Many people want to buy real estate, he added, but can’t get the money.
Durand also said that some people are reluctant to buy real estate following the run-up in prices in 2006 and 2007.
“There is still that buyer’s resistance, that aversion to price growth,” she suggested.
Austin disagreed.
He thinks people’s reluctance to buy has more to do with speculation that prices could come down further. With interest rates lower now than they were previously, the monthly cost of owning a home is, in many cases, actually less than it was when prices were cheaper.
CMHC also downgraded its outlook for the local residential construction sector.
It said housing starts in the city of Red Deer would number 425 this year and 515 in 2010. Last year the tally was 572.
The updated numbers are both down from CMHC’s February predictions, when it said starts would hit 550 this year and 675 in 2010.
Durand said the lower housing start estimates for Red Deer reflects the high inventory of unsold homes and an increasing gap between the price of new homes and the price of existing homes, which is pushing some buyers onto the resale market.
In an update of its housing market outlook released on Tuesday, CMHC projected that 3,550 homes will be sold through the Multiple Listing Service in Central Alberta in 2009, down from 4,214 in 2008. It expects that number to jump to 3,770 sales in 2010.
An earlier forecast released by the national housing agency in February said home sales in Central Alberta would reach 3,750 this year, with the number swelling to 4,000 in 2010.
Derek Austin wondered if the late arrival of spring might have made real estate activity in Central Alberta appear more depressed than it really is.
He also thinks CMHC could have underestimated the positive influences that low interest rates and government stimulus programs will have on the market as the year progresses.
“It’s taken longer for that turn-around.”
Austin pointed to the recent strengthening of energy prices as another reason the local real estate market could prove more robust than some expect.
“Oil prices are up and the guys should be going back to work when (spring) break-up ends.”
Austin believes the market is improving, and said he and other Realtors have noticed greater interest from buyers as the weather improves.
Regine Durand, a market analyst with CMHC, said the forecast in part reflects the fact that much of the local demand for homes was absorbed during the frenzied buying period leading up to 2008. She added that there has also been a decline in the number of people migrating into this region.
Rather than demand having been absorbed, Austin believes a big reason many people aren’t buying now is the tighter lending practices of banks.
“I think they’re slowly starting to turn around, but stuff that they would have just put through no problem before, they’re holding back on.”
Many people want to buy real estate, he added, but can’t get the money.
Durand also said that some people are reluctant to buy real estate following the run-up in prices in 2006 and 2007.
“There is still that buyer’s resistance, that aversion to price growth,” she suggested.
Austin disagreed.
He thinks people’s reluctance to buy has more to do with speculation that prices could come down further. With interest rates lower now than they were previously, the monthly cost of owning a home is, in many cases, actually less than it was when prices were cheaper.
CMHC also downgraded its outlook for the local residential construction sector.
It said housing starts in the city of Red Deer would number 425 this year and 515 in 2010. Last year the tally was 572.
The updated numbers are both down from CMHC’s February predictions, when it said starts would hit 550 this year and 675 in 2010.
Durand said the lower housing start estimates for Red Deer reflects the high inventory of unsold homes and an increasing gap between the price of new homes and the price of existing homes, which is pushing some buyers onto the resale market.
Housing slowdown expected to worsen
Canada’s national housing agency has become significantly more pessimistic about the outlook for residential real estate in Red Deer, and beyond.
A forecast issued by Canada Mortgage and Housing Corp. on Tuesday projects that housing starts in Red Deer will fall to 425 this year. That’s down nearly 26 per cent from the 572 starts recorded in 2008.
In 2007, the tally was a record 1,558.
The CMHC forecast also anticipates that the local resale market will continue to slide. It expects 3,550 home sales to be processed through the Multiple Listing Service in Central Alberta this year, which would be down almost 16 per cent from 2008, when 4,214 MLS sales occurred in the region.
The average resale price in 2009 will be $264,000, according to the forecast, which is five per cent lower than the $278,040 average in 2008.
In 2007, there were 5,075 MLS sales in Central Alberta with an average selling price of $270,494.
CMHC is anticipating improved numbers in 2010, with 515 housing starts in Red Deer and 3,770 home resales across Central Alberta. But all of the numbers are lower than those in an earlier forecast published by CMHC in February.
At that time, the agency was predicting 550 housing starts in Red Deer for 2009, and 3,750 home resales in Central Alberta at an average price of $271,000.
For 2010, CMHC was anticipating 675 housing starts in the city and 4,000 transactions on the Central Alberta resale market, with these selling for an average price of $280,000.
Regine Durand, a market analyst with CMHC, said the lower housing start estimates for Red Deer reflects the high inventory of unsold homes. She added that an “increasing gap” between the price of new homes and the price of existing homes is pushing many buyers onto the resale market.
In 2007, she said, the difference was about $25,000.
“Today, the gap between the resale price and the new price is like $105,000.”
As for CMHC’s downgraded outlook for Central Alberta’s resale market, Durand said this reflects the fact many people are reluctant to buy after the rapid run-up in prices in 2006 and 2007.
“There is still that buyer’s resistance, that aversion to price growth.”
Durand added that high sales volumes in Central Alberta from 2006 to 2008 absorbed much of the demand for homes, and the in-migration of people to the region has slowed.
CMHC expectations for the rest of province are even gloomier.
Housing starts in Alberta are forecast to hit 13,700 this year, down 53 per cent from the 29,164 starts in 2008. Next year, the number is projected to rebound somewhat to 16,200.
On the resale market, MLS sales in the province should reach 44,000 this year, with an average selling price of $322,500, said CMHC. Those deals would represent a 22 per cent decline in numbers from 2008, when 56,399 sales occurred at an average price of $352,857.
Resales in 2010 will recover to 48,000 in Alberta, says the CMHC forecast, with an average price of $329,000.
Nationally, housing starts are expected to hit 141,900 this year, down 33 per cent from 2008, when work was started on 211,056 homes.
The CMHC forecast said Alberta home builders will continue to cut production in response to a rise in the number of unsold units on the market and weak demand. In the case of multi-family construction, many projects have been cancelled, it noted.
The situation should improve next year, as the inventory of unsold units declines.
With respect to the resale market, CMHC noted that MLS transactions have been declining in Alberta since mid-2007. The slide was initially the result of rising prices, but more recently it can be attributed to economic uncertainty, a weakening job market and reduced migration into the province, said CMHC.
Concerns of homeowners that they will have trouble selling their existing property if they buy another has also created a drag, said the agency.
Improved economic conditions, and lower prices and mortgage rates should help boost the resale market later this year and into 2010.
A forecast issued by Canada Mortgage and Housing Corp. on Tuesday projects that housing starts in Red Deer will fall to 425 this year. That’s down nearly 26 per cent from the 572 starts recorded in 2008.
In 2007, the tally was a record 1,558.
The CMHC forecast also anticipates that the local resale market will continue to slide. It expects 3,550 home sales to be processed through the Multiple Listing Service in Central Alberta this year, which would be down almost 16 per cent from 2008, when 4,214 MLS sales occurred in the region.
The average resale price in 2009 will be $264,000, according to the forecast, which is five per cent lower than the $278,040 average in 2008.
In 2007, there were 5,075 MLS sales in Central Alberta with an average selling price of $270,494.
CMHC is anticipating improved numbers in 2010, with 515 housing starts in Red Deer and 3,770 home resales across Central Alberta. But all of the numbers are lower than those in an earlier forecast published by CMHC in February.
At that time, the agency was predicting 550 housing starts in Red Deer for 2009, and 3,750 home resales in Central Alberta at an average price of $271,000.
For 2010, CMHC was anticipating 675 housing starts in the city and 4,000 transactions on the Central Alberta resale market, with these selling for an average price of $280,000.
Regine Durand, a market analyst with CMHC, said the lower housing start estimates for Red Deer reflects the high inventory of unsold homes. She added that an “increasing gap” between the price of new homes and the price of existing homes is pushing many buyers onto the resale market.
In 2007, she said, the difference was about $25,000.
“Today, the gap between the resale price and the new price is like $105,000.”
As for CMHC’s downgraded outlook for Central Alberta’s resale market, Durand said this reflects the fact many people are reluctant to buy after the rapid run-up in prices in 2006 and 2007.
“There is still that buyer’s resistance, that aversion to price growth.”
Durand added that high sales volumes in Central Alberta from 2006 to 2008 absorbed much of the demand for homes, and the in-migration of people to the region has slowed.
CMHC expectations for the rest of province are even gloomier.
Housing starts in Alberta are forecast to hit 13,700 this year, down 53 per cent from the 29,164 starts in 2008. Next year, the number is projected to rebound somewhat to 16,200.
On the resale market, MLS sales in the province should reach 44,000 this year, with an average selling price of $322,500, said CMHC. Those deals would represent a 22 per cent decline in numbers from 2008, when 56,399 sales occurred at an average price of $352,857.
Resales in 2010 will recover to 48,000 in Alberta, says the CMHC forecast, with an average price of $329,000.
Nationally, housing starts are expected to hit 141,900 this year, down 33 per cent from 2008, when work was started on 211,056 homes.
The CMHC forecast said Alberta home builders will continue to cut production in response to a rise in the number of unsold units on the market and weak demand. In the case of multi-family construction, many projects have been cancelled, it noted.
The situation should improve next year, as the inventory of unsold units declines.
With respect to the resale market, CMHC noted that MLS transactions have been declining in Alberta since mid-2007. The slide was initially the result of rising prices, but more recently it can be attributed to economic uncertainty, a weakening job market and reduced migration into the province, said CMHC.
Concerns of homeowners that they will have trouble selling their existing property if they buy another has also created a drag, said the agency.
Improved economic conditions, and lower prices and mortgage rates should help boost the resale market later this year and into 2010.
Tuesday, May 19, 2009
House starts down
Housing starts in Red Deer continue to lag well behind last year’s pace, although the construction drop-off is more pronounced elsewhere in Alberta.
Canada Mortgage and Housing Corp. reported on Friday that work was started on 15 homes in the city in April, with 13 of the projects single-family homes and two of the units in multi-family buildings. A year ago the monthly tally was 27, all of which fell under the single-family category.
This 44 per cent decline in housing starts compares favourably with most other large cities.
Medicine Hat experienced an April-to-April slide of 88 per cent, while in the Calgary metropolitan area the drop was 71 per cent, in Grande Prairie and the Edmonton metropolitan area it was 65 per cent and in Lethbridge it was 59 per cent. Only the Regional Municipality of Wood Buffalo had a better month than Red Deer for year-over-year construction starts, off just two per cent from the 2008 figure.
Canada Mortgage and Housing Corp. reported on Friday that work was started on 15 homes in the city in April, with 13 of the projects single-family homes and two of the units in multi-family buildings. A year ago the monthly tally was 27, all of which fell under the single-family category.
This 44 per cent decline in housing starts compares favourably with most other large cities.
Medicine Hat experienced an April-to-April slide of 88 per cent, while in the Calgary metropolitan area the drop was 71 per cent, in Grande Prairie and the Edmonton metropolitan area it was 65 per cent and in Lethbridge it was 59 per cent. Only the Regional Municipality of Wood Buffalo had a better month than Red Deer for year-over-year construction starts, off just two per cent from the 2008 figure.
Wednesday, April 22, 2009
Interest rates hit floor
OTTAWA — The Bank of Canada has pegged its key policy interest rate to the lowest level practical — probably for more than a year — in expectation of a deepening recession, but the new glum outlook was disputed Tuesday by Finance Minister Jim Flaherty.
“I’m comfortable with our projections. The Bank of Canada has changed theirs, but my projections are the projections we put in the budget,” Flaherty said in rejecting opposition calls for more stimulus spending.
“I’m staying with our budget projection. We’re on track,” he said after the central bank had halved the overnight interest rate to 0.25 per cent.
The apparent divergence of views comes after close co-operation between the Finance Department and the Bank of Canada so far during the current crisis.
It was not clear whether it marked a fundamental difference about the economy or whether the finance minister was attempting to hold off demands that he re-open his budget that only started taking effect at the start of the fiscal year three weeks ago, on April 1.
But the difference — if it exists — is substantial and if the Bank of Canada proves correct, will have profound repercussions for the government’s books.
The new forecast from the central bank of a three per cent economic retreat this year is half a point weaker than what parliamentary budget officer Kevin Page said last month would add at least $19 billion to Ottawa’s deficit over the next two years.
Both the bank and the government had made their calculations in January in expectations the economy would shrink 1.2 per cent, which now looks like boom times by comparison.
Conceding it had miscalculated in January, the central bank said it will almost certainly have to keep its overnight rate at the “the effective lower bound for the rate” until mid-2010.
Such historically cheap money is needed, it said, because the economy will do much worse this year, but also next, growing by 2.5 per cent as opposed to the 3.8 per cent it had earlier envisioned.
Flaherty said Carney’s original expectation for 2010 was “overly optimistic,” but he was sticking to the budget projection for 2009, although most economists see shrinkage of at least double the rate.
“The minister is making a mistake,” NDP finance critic Thomas Mulcair declared as his party called for a second stimulus package beyond the $40 billion introduced in the January budget.
“More is needed to help the Canadian economy now,” Mulcair said. “We’ve simply bled out far too many jobs.”
Prime Minister Stephen Harper left open the possibility of doing more to stimulate the economy.
“I think it’s important to note that our economic action plan did provide a significantly larger stimulus package than the International Monetary Fund was asking for, and one that we think is fairly robust in handling changing economic circumstances,” Harper said during a visit to Jamaica.
“But obviously we will continue to examine the situation, and particularly the employment situation, and we will make adjustments where necessary.”
Flaherty said the stimulus spending only began with the fiscal year starting in April and there will be a clearer view of how it is working in the summer.
Following the Bank of Canada’s rate-cutting decision, the commercial banks quickly lowered their prime lending rate.
They were led by Bank of Montreal (TSX:BMO) which said less than two minutes after the central bank’s announcement that prime, the benchmark for variable-rate mortgages and other loans, was dropping by a quarter-point to 2.25 per cent. Some fixed mortgage rates were also trimmed.
Carney will make a closely watched policy statement Thursday and is widely expected to detail plans for so-called quantitative easing — increasing the money supply through central bank purchases of bonds and other assets from commercial lenders, increasing their reserves.
TD Bank chief economist Don Drummond predicted that this next step will be modest, however, and will bring to a close Ottawa’s attempts to spark the domestic economy.
“Now our fate is cast with the prospects of recovery in the world and U.S. economy,” said Drummond.
According to the Bank of Canada, conditions have deteriorated significantly since the beginning of the year as a result of a global slump that has “intensified” and deteriorating credit conditions “have spread quickly through trade, financial and confidence levels.”
As a result, Carney has basically thrown out the playbook he outlined in January.
Now the bank says the economy won’t stop falling until at least the fourth quarter, in line with projections by the Organization for Economic Co-operation and Development and a growing number of private-sector economists.
It also is more reflective of an economy that has shed 270,000 since January.
Carney remains a relative optimist with his prediction of a bounce-back of 2.5 per cent next year. While lower than his previous prediction of 3.8 per cent growth in 2010, it is still far above the OECD’s forecast of 0.3 per cent.
Economists at the Bank of Nova Scotia termed the central bank’s revised forecast a “significant mid-course correction ... and one that is on the mark across the board.”
Meanwhile, the central bank sees no danger of inflation — in fact, it predicts prices will drop at a 0.8 per cent rate in the third quarter and not return to its two per cent target before the third quarter of 2011.
“I’m comfortable with our projections. The Bank of Canada has changed theirs, but my projections are the projections we put in the budget,” Flaherty said in rejecting opposition calls for more stimulus spending.
“I’m staying with our budget projection. We’re on track,” he said after the central bank had halved the overnight interest rate to 0.25 per cent.
The apparent divergence of views comes after close co-operation between the Finance Department and the Bank of Canada so far during the current crisis.
It was not clear whether it marked a fundamental difference about the economy or whether the finance minister was attempting to hold off demands that he re-open his budget that only started taking effect at the start of the fiscal year three weeks ago, on April 1.
But the difference — if it exists — is substantial and if the Bank of Canada proves correct, will have profound repercussions for the government’s books.
The new forecast from the central bank of a three per cent economic retreat this year is half a point weaker than what parliamentary budget officer Kevin Page said last month would add at least $19 billion to Ottawa’s deficit over the next two years.
Both the bank and the government had made their calculations in January in expectations the economy would shrink 1.2 per cent, which now looks like boom times by comparison.
Conceding it had miscalculated in January, the central bank said it will almost certainly have to keep its overnight rate at the “the effective lower bound for the rate” until mid-2010.
Such historically cheap money is needed, it said, because the economy will do much worse this year, but also next, growing by 2.5 per cent as opposed to the 3.8 per cent it had earlier envisioned.
Flaherty said Carney’s original expectation for 2010 was “overly optimistic,” but he was sticking to the budget projection for 2009, although most economists see shrinkage of at least double the rate.
“The minister is making a mistake,” NDP finance critic Thomas Mulcair declared as his party called for a second stimulus package beyond the $40 billion introduced in the January budget.
“More is needed to help the Canadian economy now,” Mulcair said. “We’ve simply bled out far too many jobs.”
Prime Minister Stephen Harper left open the possibility of doing more to stimulate the economy.
“I think it’s important to note that our economic action plan did provide a significantly larger stimulus package than the International Monetary Fund was asking for, and one that we think is fairly robust in handling changing economic circumstances,” Harper said during a visit to Jamaica.
“But obviously we will continue to examine the situation, and particularly the employment situation, and we will make adjustments where necessary.”
Flaherty said the stimulus spending only began with the fiscal year starting in April and there will be a clearer view of how it is working in the summer.
Following the Bank of Canada’s rate-cutting decision, the commercial banks quickly lowered their prime lending rate.
They were led by Bank of Montreal (TSX:BMO) which said less than two minutes after the central bank’s announcement that prime, the benchmark for variable-rate mortgages and other loans, was dropping by a quarter-point to 2.25 per cent. Some fixed mortgage rates were also trimmed.
Carney will make a closely watched policy statement Thursday and is widely expected to detail plans for so-called quantitative easing — increasing the money supply through central bank purchases of bonds and other assets from commercial lenders, increasing their reserves.
TD Bank chief economist Don Drummond predicted that this next step will be modest, however, and will bring to a close Ottawa’s attempts to spark the domestic economy.
“Now our fate is cast with the prospects of recovery in the world and U.S. economy,” said Drummond.
According to the Bank of Canada, conditions have deteriorated significantly since the beginning of the year as a result of a global slump that has “intensified” and deteriorating credit conditions “have spread quickly through trade, financial and confidence levels.”
As a result, Carney has basically thrown out the playbook he outlined in January.
Now the bank says the economy won’t stop falling until at least the fourth quarter, in line with projections by the Organization for Economic Co-operation and Development and a growing number of private-sector economists.
It also is more reflective of an economy that has shed 270,000 since January.
Carney remains a relative optimist with his prediction of a bounce-back of 2.5 per cent next year. While lower than his previous prediction of 3.8 per cent growth in 2010, it is still far above the OECD’s forecast of 0.3 per cent.
Economists at the Bank of Nova Scotia termed the central bank’s revised forecast a “significant mid-course correction ... and one that is on the mark across the board.”
Meanwhile, the central bank sees no danger of inflation — in fact, it predicts prices will drop at a 0.8 per cent rate in the third quarter and not return to its two per cent target before the third quarter of 2011.
New home sales rise
The frigid market for new homes could be into a spring thaw.
The Central Alberta branch of the Canadian Home Builders’ Association said in a news release on Tuesday that new home sales in Central Alberta during the first quarter of 2009 were up from the previous quarter. It added that members of its builder council have reported an increase in housing starts and sales across the region.
“We’ve all noticed a fairly substantial increase in sales, basically since the snow melted,” said branch president Jonas Neidert.
This was particularly true in March, he said, with the trend continuing this month.
Neidert, who is partner in Avalon Central Alberta, acknowledged that spring has historically been a busy period for home builders. Climactic conditions were particularly harsh this winter, which compounded the economic problems facing his industry.
But he’s still encouraged by renewed activity in recent weeks.
“It seems the traffic to the show homes is quite good. Maybe we’re returning to more the way it was a few years ago when spring was a really busy season.”
Neidert also suggested that many of the new homes being sold were built some time ago, and accordingly are not included in current construction stats.
“Permit numbers don’t always indicate the whole sales story.”
The local branch of the Canadian Home Builders’ Association also cited data indicating that the price of existing homes in Red Deer that sold twice between February 2008 and February 2009 increased by an average of 3.6 per cent.
Neidert added that local Realtors he’s talked to have indicated a rise in sales activity.
“It seems to be a general trend.”
The association provided information about the impact the housing industry has on the local economy. For instance, it said 1,570 jobs would likely result from the construction of 600 housing units in the region.
“I don’t think people realize how much it does contribute to the local economy overall,” said Neidert.
He believes federal stimulus programs will help the situation.
“I think it’s having a little bit of an impact.”
hrichards@reddeeradvocate.com
The Central Alberta branch of the Canadian Home Builders’ Association said in a news release on Tuesday that new home sales in Central Alberta during the first quarter of 2009 were up from the previous quarter. It added that members of its builder council have reported an increase in housing starts and sales across the region.
“We’ve all noticed a fairly substantial increase in sales, basically since the snow melted,” said branch president Jonas Neidert.
This was particularly true in March, he said, with the trend continuing this month.
Neidert, who is partner in Avalon Central Alberta, acknowledged that spring has historically been a busy period for home builders. Climactic conditions were particularly harsh this winter, which compounded the economic problems facing his industry.
But he’s still encouraged by renewed activity in recent weeks.
“It seems the traffic to the show homes is quite good. Maybe we’re returning to more the way it was a few years ago when spring was a really busy season.”
Neidert also suggested that many of the new homes being sold were built some time ago, and accordingly are not included in current construction stats.
“Permit numbers don’t always indicate the whole sales story.”
The local branch of the Canadian Home Builders’ Association also cited data indicating that the price of existing homes in Red Deer that sold twice between February 2008 and February 2009 increased by an average of 3.6 per cent.
Neidert added that local Realtors he’s talked to have indicated a rise in sales activity.
“It seems to be a general trend.”
The association provided information about the impact the housing industry has on the local economy. For instance, it said 1,570 jobs would likely result from the construction of 600 housing units in the region.
“I don’t think people realize how much it does contribute to the local economy overall,” said Neidert.
He believes federal stimulus programs will help the situation.
“I think it’s having a little bit of an impact.”
hrichards@reddeeradvocate.com
Monday, April 20, 2009
Quarterly stats boost optimism
Sales statistics for the month of March that suggest an improving real estate market appear to be supported by quarterly figures.
Randy Weins, owner of Weins World Real Estate and past-president of the Central Alberta Realtors Association, has been compiling sales volumes and price numbers for Red Deer and other Central Alberta communities in three-month increments for years.
He concludes that the real estate market has hit bottom.
Looking only at single-family dwellings, which Weins believes is most representative of the overall market, he found that 210 homes were sold through the MLS system in Red Deer between January to March of this year.
That figure was up from 171 sales in the fourth quarter of 2008, but down from 296 a year ago.
There were 43 sales of single-detached homes in Sylvan Lake during the most recent three-month period.
That compares with 38 in the final quarter of 2008 and 69 in the first quarter of last year.
Sales of single-detached homes in Innisfail reached 24 last quarter.
The figure was 21 to end last year and 30 in the first quarter of 2008.
This year started with 23 single-detached sales in Lacombe, up from 20 in the final quarter of 2008 but down from 34 in the first three months of that year, reported Weins.
Single-detached home sales in Blackfalds reached 22 in the most recent quarter, jumping from 14 for the final three months of last year but down from 27 to start 2008.
Ponoka and Rocky Mountain House each recorded 20 sales of single-detached dwellings during the first three months of 2009.
That number compares with eight for Ponoka and 15 for Rocky in the fourth quarter of 2008, and 20 and 18 for the two communities respectively to start 2008.
In the case of Stettler, Weins determined that there have been 18 MLS sales of single-detached homes as of March 31 of this year.
For the preceding quarter the figure was 19, and for January to March 2008 it was 13.
He calculated that the median price of single-detached homes sold in Red Deer during the first quarter was $305,000. The median was $310,000 in the preceding quarter and $327,000 in the first quarter of 2008.
In Sylvan Lake the median price for this type of home to start 2009 was $318,000, with the corresponding figures for the fourth and first quarters last year being $370,000 and $323,000, respectively.
For Lacombe, the median price was $289,000 in the most recent quarter, as compared with $308,000 in the preceding three-month period and $320,000 a year ago.
Single-detached dwellings in Blackfalds have sold for a median price of $278,000 so far this year, said Weins, which is down from $284,000 and $305,000 for the fourth and first quarters of 2008.
The median price in Ponoka was $247,000, up from $231,000 at the end of last year and $207,000 at the beginning of last year.
At Rocky, the median price from January to March was $280,000, this was the same figure as the previous quarter but lower than the $306,000 median of a year ago.
Finally, Stettler experienced a big jump in the median price of single-detached houses sold last quarter.
The $254,000 figure was well above the $185,000 median in the fourth quarter of 2008 and also topped the $228,000 median from the first quarter last year.
Randy Weins, owner of Weins World Real Estate and past-president of the Central Alberta Realtors Association, has been compiling sales volumes and price numbers for Red Deer and other Central Alberta communities in three-month increments for years.
He concludes that the real estate market has hit bottom.
Looking only at single-family dwellings, which Weins believes is most representative of the overall market, he found that 210 homes were sold through the MLS system in Red Deer between January to March of this year.
That figure was up from 171 sales in the fourth quarter of 2008, but down from 296 a year ago.
There were 43 sales of single-detached homes in Sylvan Lake during the most recent three-month period.
That compares with 38 in the final quarter of 2008 and 69 in the first quarter of last year.
Sales of single-detached homes in Innisfail reached 24 last quarter.
The figure was 21 to end last year and 30 in the first quarter of 2008.
This year started with 23 single-detached sales in Lacombe, up from 20 in the final quarter of 2008 but down from 34 in the first three months of that year, reported Weins.
Single-detached home sales in Blackfalds reached 22 in the most recent quarter, jumping from 14 for the final three months of last year but down from 27 to start 2008.
Ponoka and Rocky Mountain House each recorded 20 sales of single-detached dwellings during the first three months of 2009.
That number compares with eight for Ponoka and 15 for Rocky in the fourth quarter of 2008, and 20 and 18 for the two communities respectively to start 2008.
In the case of Stettler, Weins determined that there have been 18 MLS sales of single-detached homes as of March 31 of this year.
For the preceding quarter the figure was 19, and for January to March 2008 it was 13.
He calculated that the median price of single-detached homes sold in Red Deer during the first quarter was $305,000. The median was $310,000 in the preceding quarter and $327,000 in the first quarter of 2008.
In Sylvan Lake the median price for this type of home to start 2009 was $318,000, with the corresponding figures for the fourth and first quarters last year being $370,000 and $323,000, respectively.
For Lacombe, the median price was $289,000 in the most recent quarter, as compared with $308,000 in the preceding three-month period and $320,000 a year ago.
Single-detached dwellings in Blackfalds have sold for a median price of $278,000 so far this year, said Weins, which is down from $284,000 and $305,000 for the fourth and first quarters of 2008.
The median price in Ponoka was $247,000, up from $231,000 at the end of last year and $207,000 at the beginning of last year.
At Rocky, the median price from January to March was $280,000, this was the same figure as the previous quarter but lower than the $306,000 median of a year ago.
Finally, Stettler experienced a big jump in the median price of single-detached houses sold last quarter.
The $254,000 figure was well above the $185,000 median in the fourth quarter of 2008 and also topped the $228,000 median from the first quarter last year.
Real estate recovery
Housing sales hit six-month high in March.
Residential real estate activity in Central Alberta continues to lag behind last year’s pace, but the gap appears to be narrowing.
The Central Alberta Realtors Association reported on Wednesday that home sales in the region hit a six-month high in March, with 123 transactions processed through the Multiple Listing Service in Red Deer and 169 in the surrounding area. The combined total is 23 per cent fewer than the 380 city and rural sales in March 2008, but that difference is smaller than in any of the preceding four months.
“If you want to get in at the bottom, it’s probably around this time,” suggested association president Derek Austin, who owns Century 21 Your Realty in Innisfail.
Austin thinks the real estate market will be busier this month, explaining that buyers and sellers tend to become more active as the weather warms. He also believes people are tired of the negative news and are now realizing that the world is not ending.
There is plenty to be optimistic about in Central Alberta, he added, offering as an example major construction projects like the proposed Holiday Inn in Gasoline Alley.
Austin thinks there is a growing awareness of the record low interest rates and reduced home prices as well. And he doesn’t believe federal and provincial stimulus programs have had an effect yet.
“You add those things together, what better time to get into the market?”
The median price of homes sold in Central Alberta last month was $260,000, according to the Central Alberta Realtors Association. That’s down eight per cent from the $283,000 figure for the same month in 2008.
Austin said a better comparison is 2005, prior to the sharp run-up in prices and sales volumes.
In March of that year, single-family dwellings in Red Deer sold for a median price of $182,000. A year ago, the median price for the same type of property was $335,000, and last month it was $326,230.
Prices and sales figures over the past few years were an “anomaly,” said Austin, and are unlikely to be repeated in the near future.
“That would be unreasonable to think that we’d still have the same number of sales.”
Central Alberta Realtors Association said new MLS residential listings for Central Alberta declined 15 per cent last month, as compared with a year earlier. It marked the third consecutive month that new listings have decreased, and contributed to five per cent drop in total active listings.
In Red Deer alone, new listings slid 29 per cent.
Austin said the forces of supply and demand should exert upward pressure on prices, although listing numbers should increase as spring continues.
Nationally, the number of existing homes sold last month was down from a year ago but continued an upward trend that began in February, said the Canadian Real Estate Association.
The association also reported that the national average price for homes fell again in March, compared with the same month last year.
“Housing markets are starting to show signs of buyer interest because of lower prices and interest rates,” CREA president Dale Ripplinger said in a statement.
The year-over-year decline in March sales was 13.5 per cent, but the smallest 2008-to-2009 decrease in six months.
The average house price in Canada fell to just under $289,000 — down 7.7 per cent from March 2008 — also the smallest year-to-year decline in six months.
Robert Kavcic, of BMO Capital Markets, wrote in a separate analysis saying that “the improvement in recent months is an encouraging sign that the Canadian housing market has crossed the halfway point for this downturn.”
“Despite two months of improved sales activity, buyers are still in control of the Canadian real estate market,” Kavcic wrote.
“Further price declines and low mortgage rates will ultimately help trigger a recovery, but a reversal in the wave of job losses is one major pre-requisite still outstanding.”
hrichards@reddeeradvocate.com
File from The Canadian Press
Residential real estate activity in Central Alberta continues to lag behind last year’s pace, but the gap appears to be narrowing.
The Central Alberta Realtors Association reported on Wednesday that home sales in the region hit a six-month high in March, with 123 transactions processed through the Multiple Listing Service in Red Deer and 169 in the surrounding area. The combined total is 23 per cent fewer than the 380 city and rural sales in March 2008, but that difference is smaller than in any of the preceding four months.
“If you want to get in at the bottom, it’s probably around this time,” suggested association president Derek Austin, who owns Century 21 Your Realty in Innisfail.
Austin thinks the real estate market will be busier this month, explaining that buyers and sellers tend to become more active as the weather warms. He also believes people are tired of the negative news and are now realizing that the world is not ending.
There is plenty to be optimistic about in Central Alberta, he added, offering as an example major construction projects like the proposed Holiday Inn in Gasoline Alley.
Austin thinks there is a growing awareness of the record low interest rates and reduced home prices as well. And he doesn’t believe federal and provincial stimulus programs have had an effect yet.
“You add those things together, what better time to get into the market?”
The median price of homes sold in Central Alberta last month was $260,000, according to the Central Alberta Realtors Association. That’s down eight per cent from the $283,000 figure for the same month in 2008.
Austin said a better comparison is 2005, prior to the sharp run-up in prices and sales volumes.
In March of that year, single-family dwellings in Red Deer sold for a median price of $182,000. A year ago, the median price for the same type of property was $335,000, and last month it was $326,230.
Prices and sales figures over the past few years were an “anomaly,” said Austin, and are unlikely to be repeated in the near future.
“That would be unreasonable to think that we’d still have the same number of sales.”
Central Alberta Realtors Association said new MLS residential listings for Central Alberta declined 15 per cent last month, as compared with a year earlier. It marked the third consecutive month that new listings have decreased, and contributed to five per cent drop in total active listings.
In Red Deer alone, new listings slid 29 per cent.
Austin said the forces of supply and demand should exert upward pressure on prices, although listing numbers should increase as spring continues.
Nationally, the number of existing homes sold last month was down from a year ago but continued an upward trend that began in February, said the Canadian Real Estate Association.
The association also reported that the national average price for homes fell again in March, compared with the same month last year.
“Housing markets are starting to show signs of buyer interest because of lower prices and interest rates,” CREA president Dale Ripplinger said in a statement.
The year-over-year decline in March sales was 13.5 per cent, but the smallest 2008-to-2009 decrease in six months.
The average house price in Canada fell to just under $289,000 — down 7.7 per cent from March 2008 — also the smallest year-to-year decline in six months.
Robert Kavcic, of BMO Capital Markets, wrote in a separate analysis saying that “the improvement in recent months is an encouraging sign that the Canadian housing market has crossed the halfway point for this downturn.”
“Despite two months of improved sales activity, buyers are still in control of the Canadian real estate market,” Kavcic wrote.
“Further price declines and low mortgage rates will ultimately help trigger a recovery, but a reversal in the wave of job losses is one major pre-requisite still outstanding.”
hrichards@reddeeradvocate.com
File from The Canadian Press
Monday, April 13, 2009
Building boom stalls
The first quarter of 2009 was one to forget for Red Deer home builders.
Canada Mortgage and Housing Corp. reported on Wednesday that housing starts in the city during the first three months of the year numbered 58 — down 51 per cent from the first quarter of 2008.
Single-detached homes accounted for 50 of the 2009 total, as compared with 89 the preceding year. The rest of the starts were units in multi-family buildings.
During the month of March, there were 20 housing starts in the city, with 16 of these single-detached projects. Last March, the tally was 29, with all of these single-detached homes.
Despite this 31 per cent decline in construction starts last month, Red Deer’s residential construction sector experienced a smaller percentage drop-off than any of Alberta’s other large cities.
Calgary’s metropolitan area experienced a 90 per cent year-over-year slide in residential starts in March, while in the Rural Municipality of Wood Buffalo the decrease was 78 per cent, in the Edmonton metropolitan area it was 72 per cent, in Lethbridge it was 63 per cent, in Medicine Hat it was 47 per cent and in Grande Prairie it was 39 per cent.
On a quarterly basis, Red Deer’s decline in residential construction was less than all but one of its urban counterparts. The Calgary metropolitan area experienced an 84 per cent drop, in the Edmonton metropolitan area it was 67 per cent, in the Rural Municipality of Wood Buffalo it was 63 per cent, in Lethbridge it was 60 per cent, in Medicine Hat it was 48 per cent and in Grande Prairie it was 20 per cent.
For Alberta municipalities with 10,000 or more people, housing starts during the first three months of 2009 fell a cumulative 73 per cent.
Nationally, CMHC reported that housing starts were up 13.7 per cent in March as compared with February — which marked a nine-year low.
BMO Capital Markets economist Douglas Porter noted that almost all of the gain was in the volatile multiple unit category, which was up 28.3 per cent while urban single-family starts rose just 1.3 per cent.
“Home-building reports around this time of year can be as much a weather report as an economic report, and March was generally on the mild side,” Porter wrote in a note to clients.
“The level of residential building permits sagged to just 124,000 units in February, suggesting activity is likely to fade further.”
“March’s level of starts is still down a towering 35 per cent from a year ago,” Porter said.
CMHC said urban housing starts increased by 35 per cent in Ontario and by 23.3 per cent in Quebec, but declined by 17.3 per cent in British Columbia, by 7.9 per cent in Atlantic Canada, and by 7.5 per cent in the Prairies.
TD economist Pascal Gauthier suggested that poor weather conditions in Central Canada during the first two months of the year likely added to the usual winter weakness, with milder than usual March weather helping to boost residential construction.
“There is not enough in this monthly March data to believe it breaks the previously entrenched downtrend,” Gauthier wrote in a note to clients.
“We expect further weakness in the coming quarters, and will be looking for signs of stabilization in home-building activity towards the end of the year in sync with the rest of the economy.”
With files from The Canadian Press
Canada Mortgage and Housing Corp. reported on Wednesday that housing starts in the city during the first three months of the year numbered 58 — down 51 per cent from the first quarter of 2008.
Single-detached homes accounted for 50 of the 2009 total, as compared with 89 the preceding year. The rest of the starts were units in multi-family buildings.
During the month of March, there were 20 housing starts in the city, with 16 of these single-detached projects. Last March, the tally was 29, with all of these single-detached homes.
Despite this 31 per cent decline in construction starts last month, Red Deer’s residential construction sector experienced a smaller percentage drop-off than any of Alberta’s other large cities.
Calgary’s metropolitan area experienced a 90 per cent year-over-year slide in residential starts in March, while in the Rural Municipality of Wood Buffalo the decrease was 78 per cent, in the Edmonton metropolitan area it was 72 per cent, in Lethbridge it was 63 per cent, in Medicine Hat it was 47 per cent and in Grande Prairie it was 39 per cent.
On a quarterly basis, Red Deer’s decline in residential construction was less than all but one of its urban counterparts. The Calgary metropolitan area experienced an 84 per cent drop, in the Edmonton metropolitan area it was 67 per cent, in the Rural Municipality of Wood Buffalo it was 63 per cent, in Lethbridge it was 60 per cent, in Medicine Hat it was 48 per cent and in Grande Prairie it was 20 per cent.
For Alberta municipalities with 10,000 or more people, housing starts during the first three months of 2009 fell a cumulative 73 per cent.
Nationally, CMHC reported that housing starts were up 13.7 per cent in March as compared with February — which marked a nine-year low.
BMO Capital Markets economist Douglas Porter noted that almost all of the gain was in the volatile multiple unit category, which was up 28.3 per cent while urban single-family starts rose just 1.3 per cent.
“Home-building reports around this time of year can be as much a weather report as an economic report, and March was generally on the mild side,” Porter wrote in a note to clients.
“The level of residential building permits sagged to just 124,000 units in February, suggesting activity is likely to fade further.”
“March’s level of starts is still down a towering 35 per cent from a year ago,” Porter said.
CMHC said urban housing starts increased by 35 per cent in Ontario and by 23.3 per cent in Quebec, but declined by 17.3 per cent in British Columbia, by 7.9 per cent in Atlantic Canada, and by 7.5 per cent in the Prairies.
TD economist Pascal Gauthier suggested that poor weather conditions in Central Canada during the first two months of the year likely added to the usual winter weakness, with milder than usual March weather helping to boost residential construction.
“There is not enough in this monthly March data to believe it breaks the previously entrenched downtrend,” Gauthier wrote in a note to clients.
“We expect further weakness in the coming quarters, and will be looking for signs of stabilization in home-building activity towards the end of the year in sync with the rest of the economy.”
With files from The Canadian Press
Thursday, March 5, 2009
Statistics Value of City Residential Sales
February-09 $33,952,600
February-08 $55,008,923
Jan. 1/09 to Feb. 28/09 $49,719,300
Jan. 1/08 to Feb. 29/08 $86,953,423
Decrease in value of city residential sales from:
February 2008 to February 2009 -38.28%
Decrease in value of city residential sales from:
Jan 1-Feb. 29/08 to Jan 1-Feb 28/09 YTD -42.82%
February-08 $55,008,923
Jan. 1/09 to Feb. 28/09 $49,719,300
Jan. 1/08 to Feb. 29/08 $86,953,423
Decrease in value of city residential sales from:
February 2008 to February 2009 -38.28%
Decrease in value of city residential sales from:
Jan 1-Feb. 29/08 to Jan 1-Feb 28/09 YTD -42.82%
Statistics City Residential Sales
February-09 113
February-08 171
Jan. 1/09 to Feb. 28/09 175
Jan. 1/08 to Feb. 29/08 277
Decrease in city residential sales from:
February 2008 to February 2009 -33.92%
Decrease in value of city ressidential sales from:
Jan 1-Feb. 29/08 to Jan 1-Feb 28/09 YTD -36.82%
February-08 171
Jan. 1/09 to Feb. 28/09 175
Jan. 1/08 to Feb. 29/08 277
Decrease in city residential sales from:
February 2008 to February 2009 -33.92%
Decrease in value of city ressidential sales from:
Jan 1-Feb. 29/08 to Jan 1-Feb 28/09 YTD -36.82%
Tuesday, February 24, 2009
Dismal drilling outlook gets worse
CALGARY — A group that represents Canadian oil and gas drillers is revising its already grim 2009 forecast to reflect an even bleaker outlook for the industry.
The Canadian Association of Oilwell Drilling Contractors is predicting 22 per cent fewer wells will be drilled in Western Canada this year than it called for in its October forecast.
“Activity levels have been low enough that we’re not tracking onto a 2009 forecast that was fairly pessimistic to begin with,” association president Don Herring said in an interview Friday.
He said it’s the first time in his 25-year tenure at CAODC that a forecast has been revised in mid-winter, typically the busiest time of year for natural gas drillers.
The group released a report Friday predicting 11,176 wells will be drilled in 2009, well below the 14,325 it forecast in the fall and half 2005 and 2006 levels.
Natural gas prices sunk below US$4 per 1,000 cubic feet on the New York Mercantile Exchange Friday — about half of what most producers would need to make their drilling economically viable.
As well, a freeze in credit markets has taken a big toll on the industry, Herring said.
The Alberta government has moved to mitigate the effects of royalty changes that came into effect Jan. 1 and is in the process of consulting with industry and the financial community about an incentive program for smaller energy firms.
“These are things we expect to bring forward in short order,” said Alberta Energy spokesman Jason Chance.
Herring’s group met with Alberta Energy Minister Mel Knight on Friday to give some input on what should be included in the incentive program.
“You can kind of dress it up any way you want and describe it as some kind of a tax credit, or an incentive.
“But essentially for activity to increase, the royalty take has to go down,” Herring said before the meeting.
BMO Capital Markets analyst Mike Mazar said there’s little the government can do — aside from direct subsidies to natural gas drillers — that would help in any significant way.
“Royalties could be zero and there wouldn’t be any activity,” he said.
Like Herring, Mazar said 2009 is turning out to be far worse than he had expected as recently as the fall — and there’s no reason to believe the gloom will subside in the near future.
Joining the growing list of firms scaling back, Calgary-based oil and gas driller Peak Energy Services Trust (TSX:PES.UN) said Thursday it would reduce its workforce by 15 per cent, cut salaries and force employees to take unpaid days off.
The Petroleum Services Association of Canada predicted last month a 21 per cent decline in drilling activity from 2008 levels — a more severe downturn than the 10 per cent drop it called for in its November outlook.
The group is now pegging the number of wells drilled in Canada this year at 13,500, compared with the final 2008 tally of 17,043.
“The overall well count is falling almost quicker than we can forecast,” said PSAC president Roger Soucy.
The Canadian Association of Oilwell Drilling Contractors is predicting 22 per cent fewer wells will be drilled in Western Canada this year than it called for in its October forecast.
“Activity levels have been low enough that we’re not tracking onto a 2009 forecast that was fairly pessimistic to begin with,” association president Don Herring said in an interview Friday.
He said it’s the first time in his 25-year tenure at CAODC that a forecast has been revised in mid-winter, typically the busiest time of year for natural gas drillers.
The group released a report Friday predicting 11,176 wells will be drilled in 2009, well below the 14,325 it forecast in the fall and half 2005 and 2006 levels.
Natural gas prices sunk below US$4 per 1,000 cubic feet on the New York Mercantile Exchange Friday — about half of what most producers would need to make their drilling economically viable.
As well, a freeze in credit markets has taken a big toll on the industry, Herring said.
The Alberta government has moved to mitigate the effects of royalty changes that came into effect Jan. 1 and is in the process of consulting with industry and the financial community about an incentive program for smaller energy firms.
“These are things we expect to bring forward in short order,” said Alberta Energy spokesman Jason Chance.
Herring’s group met with Alberta Energy Minister Mel Knight on Friday to give some input on what should be included in the incentive program.
“You can kind of dress it up any way you want and describe it as some kind of a tax credit, or an incentive.
“But essentially for activity to increase, the royalty take has to go down,” Herring said before the meeting.
BMO Capital Markets analyst Mike Mazar said there’s little the government can do — aside from direct subsidies to natural gas drillers — that would help in any significant way.
“Royalties could be zero and there wouldn’t be any activity,” he said.
Like Herring, Mazar said 2009 is turning out to be far worse than he had expected as recently as the fall — and there’s no reason to believe the gloom will subside in the near future.
Joining the growing list of firms scaling back, Calgary-based oil and gas driller Peak Energy Services Trust (TSX:PES.UN) said Thursday it would reduce its workforce by 15 per cent, cut salaries and force employees to take unpaid days off.
The Petroleum Services Association of Canada predicted last month a 21 per cent decline in drilling activity from 2008 levels — a more severe downturn than the 10 per cent drop it called for in its November outlook.
The group is now pegging the number of wells drilled in Canada this year at 13,500, compared with the final 2008 tally of 17,043.
“The overall well count is falling almost quicker than we can forecast,” said PSAC president Roger Soucy.
Monday, February 23, 2009
Housing starts, resale prices expected to drop
Despite hopes for a rebound in 2009, the Canada Mortgage and Housing Corp. (CMHC) predicts housing starts and resale prices across the province will drop this year.
A CMHC report released this week said resale prices will drop for the first time since 1982. In Red Deer, the average house will sell for $271,000 this year, compared with a record high of $278,040 in 2008.
The city’s 2.5 per cent decline is still less than half the predicted provincial drop of 5.6 per cent.
“As listings rise and there aren’t as many buyers, it puts a lot of pressure on the market. But by 2010, we forecast prices to rise to another record high of $280,000,” said Lai Sing Louie, a senior analyst with the CMHC.
Louie said property owners in Red Deer have still done well over the past five years. In 2005, the average resale price was in the $160,000 range.
“Annual averages are a bit deceiving, they’re a bit like a roller-coaster. We’re seeing some price erosion now, but long-term homeowners have still done well in real estate in Red Deer,” he said.
The CMHC predicts Alberta’s multi-family housing market will drop by 55 per cent in 2009, citing a slower adjustment to the weakening economy than the single-family market.
It forecasts only 6,500 multi-family housing starts in Alberta in 2009, compared with 14,448 in 2008. Single-family units will fare slightly better, with 12,700 expected in 2009, compared with 14,700 the previous year. In Calgary, multi-family housing starts are forecast to drop a whopping 75.9 per cent.
“A lot of the high-rise condos were planned back in 2005 and 2006. . . . Even though we were in buyers’ market, once you start one of those condos, they take a while to complete so that’s why this market has been slower to adjust,” said Louie.
Red Deer, which saw a 63 per cent decrease in housing starts last year, won’t feel the effects as dramatically as other areas. Multi-family starts will decline to 200 from 205 in 2008, and the city will see 350 single-family housing starts versus 367 in 2008.
The 3.8 per cent decline in housing starts might seem like small beans compared with the 63 per cent drop last year, when only 572 starts were reported after a record 1,558 in 2007.
“What you have to remember is that 2007 was a year of incredible growth,” said Red Deer Mayor Morris Flewwelling.
Flewwelling said a steep drop back to normal numbers is to be expected after an economic boom, and argued that many people are still moving to Red Deer for jobs, even as the province reported it expects to lose 15,000 jobs and fall into recession this year.
Vacancy rates have also increased to 4.5 per cent, up from a record low of 0.5 per cent in 2006.
“My sense is that 2009 is going to be a year we endure and then we will climb back up again. Hopefully, the climb won’t be as dizzying as before,” said Flewwelling.
Gord Bontje, owner of local business Laebon Homes, said the statistics don’t tell the whole story. According to Bontje, sales slowed for his staff in mid-2007 and have just recently picked up again.
“We’re seeing excellent customer response and frankly, that’s in large part a reflection of the fact that first-time homebuyers can get unbelievably low rates. Like a four per cent mortgage — that’s almost breathtaking.”
Growth is expected to improve slightly in 2010 — in Red Deer, 675 housing starts are forecast next year, an increase of 22.7 per cent. Bontje said potential buyers should act now.
“I’ve been around a long time and I’ve seen these cycles come and go. If you’re a teacher or a police officer, somebody that’s not working in the oil business, it’s a phenomenal time to buy because things are so cheap,” he said.
A CMHC report released this week said resale prices will drop for the first time since 1982. In Red Deer, the average house will sell for $271,000 this year, compared with a record high of $278,040 in 2008.
The city’s 2.5 per cent decline is still less than half the predicted provincial drop of 5.6 per cent.
“As listings rise and there aren’t as many buyers, it puts a lot of pressure on the market. But by 2010, we forecast prices to rise to another record high of $280,000,” said Lai Sing Louie, a senior analyst with the CMHC.
Louie said property owners in Red Deer have still done well over the past five years. In 2005, the average resale price was in the $160,000 range.
“Annual averages are a bit deceiving, they’re a bit like a roller-coaster. We’re seeing some price erosion now, but long-term homeowners have still done well in real estate in Red Deer,” he said.
The CMHC predicts Alberta’s multi-family housing market will drop by 55 per cent in 2009, citing a slower adjustment to the weakening economy than the single-family market.
It forecasts only 6,500 multi-family housing starts in Alberta in 2009, compared with 14,448 in 2008. Single-family units will fare slightly better, with 12,700 expected in 2009, compared with 14,700 the previous year. In Calgary, multi-family housing starts are forecast to drop a whopping 75.9 per cent.
“A lot of the high-rise condos were planned back in 2005 and 2006. . . . Even though we were in buyers’ market, once you start one of those condos, they take a while to complete so that’s why this market has been slower to adjust,” said Louie.
Red Deer, which saw a 63 per cent decrease in housing starts last year, won’t feel the effects as dramatically as other areas. Multi-family starts will decline to 200 from 205 in 2008, and the city will see 350 single-family housing starts versus 367 in 2008.
The 3.8 per cent decline in housing starts might seem like small beans compared with the 63 per cent drop last year, when only 572 starts were reported after a record 1,558 in 2007.
“What you have to remember is that 2007 was a year of incredible growth,” said Red Deer Mayor Morris Flewwelling.
Flewwelling said a steep drop back to normal numbers is to be expected after an economic boom, and argued that many people are still moving to Red Deer for jobs, even as the province reported it expects to lose 15,000 jobs and fall into recession this year.
Vacancy rates have also increased to 4.5 per cent, up from a record low of 0.5 per cent in 2006.
“My sense is that 2009 is going to be a year we endure and then we will climb back up again. Hopefully, the climb won’t be as dizzying as before,” said Flewwelling.
Gord Bontje, owner of local business Laebon Homes, said the statistics don’t tell the whole story. According to Bontje, sales slowed for his staff in mid-2007 and have just recently picked up again.
“We’re seeing excellent customer response and frankly, that’s in large part a reflection of the fact that first-time homebuyers can get unbelievably low rates. Like a four per cent mortgage — that’s almost breathtaking.”
Growth is expected to improve slightly in 2010 — in Red Deer, 675 housing starts are forecast next year, an increase of 22.7 per cent. Bontje said potential buyers should act now.
“I’ve been around a long time and I’ve seen these cycles come and go. If you’re a teacher or a police officer, somebody that’s not working in the oil business, it’s a phenomenal time to buy because things are so cheap,” he said.
Wednesday, February 11, 2009
Statistics of Value of City Residential Sales
January-09: $15,766,700
Jabuary-08: $31,944,500
Jan. 1/09 to Jan 31/09: $15,766,700
Jan. 1/08 to Jan 31/08: $31,944,500
Decrease in value of city residential sales from:
January 2008 to January 2009: -50.64%
Decrease in value of city residential sales from:
Jan. 1-Jan 31/08 to Jan 1-Jan 31/09: YTD -50.64%
Jabuary-08: $31,944,500
Jan. 1/09 to Jan 31/09: $15,766,700
Jan. 1/08 to Jan 31/08: $31,944,500
Decrease in value of city residential sales from:
January 2008 to January 2009: -50.64%
Decrease in value of city residential sales from:
Jan. 1-Jan 31/08 to Jan 1-Jan 31/09: YTD -50.64%
Statistics of City Residential Sales
January-09: 62
January 08: 106
Jan. 1/09 to Jan 31/09: 62
Jan. 1/08 to Jan 31/08: 106
Decrease in the city residential sales from:
January 2008 to January 2009: -41.51%
Decrease in the city residential sales from:
Jan 1-Jan 31/08 to Jan1-Jan 31/09: YTD -41.51%
January 08: 106
Jan. 1/09 to Jan 31/09: 62
Jan. 1/08 to Jan 31/08: 106
Decrease in the city residential sales from:
January 2008 to January 2009: -41.51%
Decrease in the city residential sales from:
Jan 1-Jan 31/08 to Jan1-Jan 31/09: YTD -41.51%
Tuesday, February 10, 2009
Planners see clouds on horizon
Planning and development officers throughout Central Alberta had reason to be upbeat a year ago.
The 17 towns in the region had issued nearly $500 million worth of building permits during 2007, a figure that topped their combined 2006 tally by 32 per cent.
The officials who oversaw those construction approvals were generally optimistic about what lay ahead, but Rocky Mountain House’s director of planning and development voiced concerns about clouds on the horizon.
“I’m hoping it will be a good year,” said Elly Martin, whose town had just recorded a 57 per cent jump in permit values, to $31.9 million.
“But it’s kind of scary with the lumber industry and the oil industry and the stock market.”
Martin’s reservations haven proven to be well-founded.
Building permit values in Rocky tumbled 37 per cent in 2008, and the West County town was not alone.
After nearly cracking the half-billion-dollar mark in 2007, the building permit tally for Central Alberta’s towns dropped 40 per cent to $300.3 million.
The biggest percentage declines occurred in Innisfail (81 per cent), Ponoka (55 per cent), Sylvan Lake (50 per cent) and Olds (48 per cent).
Bucking the trend were Lacombe and Rimbey, which saw their building permit values rise by 13 and 41 per cent respectively. Stettler’s tally increased slightly.
Carol-Lynn Gilchrist, Lacombe’s planner and development officer, pointed out that her town’s permit numbers declined in 2007 when those in most other communities were moving higher.
“We ran out of residential lots in the summertime, around August,” she explained.
The problem had been rectified by fall, and the pace of construction picked up in 2008.
In Rimbey, a handful of big commercial projects — including a new Best Western Hotel — accounted for $8 million of the community’s construction approvals in 2008, said town manager Russell Wardrope.
Wes Holowachuk, the development officer in Stettler, said a new town office, affordable apartment building and town shop expansion helped maintain construction values in his municipality.
“Our own projects kept those numbers up.”
In Olds, there was a marked decline in institutional work. The town had no permits in this category in 2008, after the two preceding years the figures were $49.6 million and $40.3 million.
However, Olds did experience a jump in residential work last year.
Innisfail also had a banner year on the institutional front in 2007 — with $23.1 million worth of work approved for the likes of the Legacy West Partners assisted living complex and the town water reservoir — which makes 2008 look bad by comparison.
And the new Econolodge Inn and Suites and Best Western hotel helped boost commercial permits in Innisfail to $7.9 million in 2007, a figure it couldn’t match last year.
“There were some big projects in the last two to three years that skewed our numbers somewhat,” said Innisfail development officer Elwin Wiens.
In Blackfalds, building activity wasn’t far behind 2007 if a couple major institutional projects that year worth $7.9 million are removed from the equation.
Nicole Jensen, Blackfalds’ planning and development officer, said permit numbers so far this year are well ahead of the pace from 2007 and 2008.
“Everybody keeps talking about this slowdown. We sure aren’t seeing it.”
Sylvan Lake, which is Central Alberta’s perennial leader when it comes to building, suffered a sharp drop in 2008.
But Tim Schmidt, the town’s director of planning and development, noted that 2007 was an exceptional year with permits issued for the likes of Wal-Mart, Sobeys and Shoppers Drug Mart.
He expects development to rebound this year, with the build-out of the SmartCentres shopping centre and residential activity at Beacon Hill and Sylvan Lake’s waterfront district.
Dean Schweder, Rocky’s tourism and economic development co-ordinator, said residential construction in his town last year was adversely affected by the fact most of the available lots were held by a few builders. But the town enjoyed a jump in commercial activity, with strong activity at Gateway Crossing and a nearby commercial plaza.
Carey Keleman, Ponoka’s economic development officer, thinks the permit slowdown in 2008 was in part a consequence of the frantic pace of development the year before.
“I think it was catch-up time this last year.”
Wiens added that the reduced activity in 2008 might have set the stage for a busier 2009 for his department.
“I think it’s going to rebound somewhat, just because I think demand increases when you do hold back for a year; suddenly your demand kind of builds up, and we’re seeing a bit of that already this spring.”
Wardrope believes the pace of development in 2009 will be determined by broader economic conditions.
“I guess the market will dictate how much people are willing to invest in real property, as opposed to hiding it in their mattress, or whatever.”
The 17 towns in the region had issued nearly $500 million worth of building permits during 2007, a figure that topped their combined 2006 tally by 32 per cent.
The officials who oversaw those construction approvals were generally optimistic about what lay ahead, but Rocky Mountain House’s director of planning and development voiced concerns about clouds on the horizon.
“I’m hoping it will be a good year,” said Elly Martin, whose town had just recorded a 57 per cent jump in permit values, to $31.9 million.
“But it’s kind of scary with the lumber industry and the oil industry and the stock market.”
Martin’s reservations haven proven to be well-founded.
Building permit values in Rocky tumbled 37 per cent in 2008, and the West County town was not alone.
After nearly cracking the half-billion-dollar mark in 2007, the building permit tally for Central Alberta’s towns dropped 40 per cent to $300.3 million.
The biggest percentage declines occurred in Innisfail (81 per cent), Ponoka (55 per cent), Sylvan Lake (50 per cent) and Olds (48 per cent).
Bucking the trend were Lacombe and Rimbey, which saw their building permit values rise by 13 and 41 per cent respectively. Stettler’s tally increased slightly.
Carol-Lynn Gilchrist, Lacombe’s planner and development officer, pointed out that her town’s permit numbers declined in 2007 when those in most other communities were moving higher.
“We ran out of residential lots in the summertime, around August,” she explained.
The problem had been rectified by fall, and the pace of construction picked up in 2008.
In Rimbey, a handful of big commercial projects — including a new Best Western Hotel — accounted for $8 million of the community’s construction approvals in 2008, said town manager Russell Wardrope.
Wes Holowachuk, the development officer in Stettler, said a new town office, affordable apartment building and town shop expansion helped maintain construction values in his municipality.
“Our own projects kept those numbers up.”
In Olds, there was a marked decline in institutional work. The town had no permits in this category in 2008, after the two preceding years the figures were $49.6 million and $40.3 million.
However, Olds did experience a jump in residential work last year.
Innisfail also had a banner year on the institutional front in 2007 — with $23.1 million worth of work approved for the likes of the Legacy West Partners assisted living complex and the town water reservoir — which makes 2008 look bad by comparison.
And the new Econolodge Inn and Suites and Best Western hotel helped boost commercial permits in Innisfail to $7.9 million in 2007, a figure it couldn’t match last year.
“There were some big projects in the last two to three years that skewed our numbers somewhat,” said Innisfail development officer Elwin Wiens.
In Blackfalds, building activity wasn’t far behind 2007 if a couple major institutional projects that year worth $7.9 million are removed from the equation.
Nicole Jensen, Blackfalds’ planning and development officer, said permit numbers so far this year are well ahead of the pace from 2007 and 2008.
“Everybody keeps talking about this slowdown. We sure aren’t seeing it.”
Sylvan Lake, which is Central Alberta’s perennial leader when it comes to building, suffered a sharp drop in 2008.
But Tim Schmidt, the town’s director of planning and development, noted that 2007 was an exceptional year with permits issued for the likes of Wal-Mart, Sobeys and Shoppers Drug Mart.
He expects development to rebound this year, with the build-out of the SmartCentres shopping centre and residential activity at Beacon Hill and Sylvan Lake’s waterfront district.
Dean Schweder, Rocky’s tourism and economic development co-ordinator, said residential construction in his town last year was adversely affected by the fact most of the available lots were held by a few builders. But the town enjoyed a jump in commercial activity, with strong activity at Gateway Crossing and a nearby commercial plaza.
Carey Keleman, Ponoka’s economic development officer, thinks the permit slowdown in 2008 was in part a consequence of the frantic pace of development the year before.
“I think it was catch-up time this last year.”
Wiens added that the reduced activity in 2008 might have set the stage for a busier 2009 for his department.
“I think it’s going to rebound somewhat, just because I think demand increases when you do hold back for a year; suddenly your demand kind of builds up, and we’re seeing a bit of that already this spring.”
Wardrope believes the pace of development in 2009 will be determined by broader economic conditions.
“I guess the market will dictate how much people are willing to invest in real property, as opposed to hiding it in their mattress, or whatever.”
Home-market ‘correction is in full swing’: construction, sales, prices down
As the recession digs in and the unemployment rate rises, economists say nervous consumers are standing still when it comes to buying and selling real estate.
The results are increasing numbers of dwellings on the market, dropping prices and a slowdown in construction.
“The Canadian housing correction is in full swing, having a wide impact across the country,” BMO Capital Markets economist Robert Kavcic commented Monday.
Canada Mortgage and Housing Corp. reported housing starts fell to a seasonally adjusted annual rate of 153,500 units in January, down 10.9 per cent from December in the steepest monthly drop since March 1995.
It was the fifth straight decline and left home construction at its slackest pace since 2001, well below market expectations of 169,000.
Also Monday, the Canadian Real Estate Association predicted house prices nationally will fall eight per cent this year as the number of Multiple Listing Service sales tumbles 16.9 per cent to 360,900 units.
Three months ago, the association was forecasting only a 2.1 per cent price slippage for 2009 on a three per cent decline in the number of sales.
Its latest forecast would represent the smallest national MLS sales volume since 2000, following a 17.1 per cent drop in 2008.
Gregory Klump, chief economist for the association, said that although there were some incentives for home buyers in the recent federal budget, “they won’t take hold until there is an improvement in buyer psychology.”
The Jan. 27 budget included a plan to expand the insured mortgage purchase program by $50 billion to $125 billion, which is meant to encourage banks to increase mortgage lending.
Ottawa also increased the RRSP withdrawal limit for qualified home buyers to $25,000 from $20,000, and introduced up to $750 in tax relief for closing costs for first-time buyers.
The real estate association said sales are expected to fall in every province this year, led by declines of about 19 per cent in British Columbia, Alberta and Ontario.
B.C and Alberta, which have seen the biggest price jumps in recent years, are expected to see home prices fall the most, by 10.6 per cent and 8.9 per cent respectively.
Meantime, the average home price in Newfoundland and Labrador is forecast to rise 4.8 per cent — the only province forecast to see an increase.
CIBC economist Benjamin Tal said he is forecasting a sales drop of about 15 per cent and price decline of about 10 per cent nationwide this year.
Tal said the Canadian housing market is in a “correction, not a free fall.” However, “the recovery will not be very quick.”
Scotiabank economist Adrienne Warren said the home market is in “retrenchment mode.”
“It’s no surprise that home builders are pulling back, facing slowing demand and increasing amounts of unsold inventory,” Warren said.
“What you are also seeing now is that the condo market has finally cooled off.”
Still, Warren said Canada has nowhere near the housing crisis as the United States, where risky lending has made foreclosure sales common.
CMHC said in its report that overall housing starts declined across the country, with a lot of the steam coming off the hot market that had prevailed in most of Western Canada.
“Reduced sales and increased listings in the existing-home market have led to reduced spillover demand in the new-home market,” stated Bob Dugan, the Crown corporation’s chief economist.
On a seasonally adjusted basis, January’s starts were down from December by 30.3 per cent on the Prairies, 29.1 per cent in British Columbia, 14.6 per cent in Ontario, 8.6 per cent in Atlantic Canada and 1.4 per cent in Quebec.
“Western Canada in particular continues to see activity fall off a cliff, with starts in B.C. at the lowest level since 2002, and in Alberta the weakest since 1996,” BMO’s Kavcic wrote in a note. “Both provinces are seeing activity at half year-ago levels.”
And last month’s steep national drop in single-family-unit starts “adds further downside risk to economic growth forecasts,” commented TD Bank economist Pascal Gauthier.
Gauthier said single-unit construction is generally less volatile than multiple-unit starts, and the sharp downturn “bodes poorly for the private residential investment component of real GDP growth.”
The TD commentary added that improved home affordability will likely support starts this year at the pre-boom level of about 150,000, but “if starts continue on this downward momentum without signs of stabilization ... even this prudent forecast could fall by the wayside.”
The results are increasing numbers of dwellings on the market, dropping prices and a slowdown in construction.
“The Canadian housing correction is in full swing, having a wide impact across the country,” BMO Capital Markets economist Robert Kavcic commented Monday.
Canada Mortgage and Housing Corp. reported housing starts fell to a seasonally adjusted annual rate of 153,500 units in January, down 10.9 per cent from December in the steepest monthly drop since March 1995.
It was the fifth straight decline and left home construction at its slackest pace since 2001, well below market expectations of 169,000.
Also Monday, the Canadian Real Estate Association predicted house prices nationally will fall eight per cent this year as the number of Multiple Listing Service sales tumbles 16.9 per cent to 360,900 units.
Three months ago, the association was forecasting only a 2.1 per cent price slippage for 2009 on a three per cent decline in the number of sales.
Its latest forecast would represent the smallest national MLS sales volume since 2000, following a 17.1 per cent drop in 2008.
Gregory Klump, chief economist for the association, said that although there were some incentives for home buyers in the recent federal budget, “they won’t take hold until there is an improvement in buyer psychology.”
The Jan. 27 budget included a plan to expand the insured mortgage purchase program by $50 billion to $125 billion, which is meant to encourage banks to increase mortgage lending.
Ottawa also increased the RRSP withdrawal limit for qualified home buyers to $25,000 from $20,000, and introduced up to $750 in tax relief for closing costs for first-time buyers.
The real estate association said sales are expected to fall in every province this year, led by declines of about 19 per cent in British Columbia, Alberta and Ontario.
B.C and Alberta, which have seen the biggest price jumps in recent years, are expected to see home prices fall the most, by 10.6 per cent and 8.9 per cent respectively.
Meantime, the average home price in Newfoundland and Labrador is forecast to rise 4.8 per cent — the only province forecast to see an increase.
CIBC economist Benjamin Tal said he is forecasting a sales drop of about 15 per cent and price decline of about 10 per cent nationwide this year.
Tal said the Canadian housing market is in a “correction, not a free fall.” However, “the recovery will not be very quick.”
Scotiabank economist Adrienne Warren said the home market is in “retrenchment mode.”
“It’s no surprise that home builders are pulling back, facing slowing demand and increasing amounts of unsold inventory,” Warren said.
“What you are also seeing now is that the condo market has finally cooled off.”
Still, Warren said Canada has nowhere near the housing crisis as the United States, where risky lending has made foreclosure sales common.
CMHC said in its report that overall housing starts declined across the country, with a lot of the steam coming off the hot market that had prevailed in most of Western Canada.
“Reduced sales and increased listings in the existing-home market have led to reduced spillover demand in the new-home market,” stated Bob Dugan, the Crown corporation’s chief economist.
On a seasonally adjusted basis, January’s starts were down from December by 30.3 per cent on the Prairies, 29.1 per cent in British Columbia, 14.6 per cent in Ontario, 8.6 per cent in Atlantic Canada and 1.4 per cent in Quebec.
“Western Canada in particular continues to see activity fall off a cliff, with starts in B.C. at the lowest level since 2002, and in Alberta the weakest since 1996,” BMO’s Kavcic wrote in a note. “Both provinces are seeing activity at half year-ago levels.”
And last month’s steep national drop in single-family-unit starts “adds further downside risk to economic growth forecasts,” commented TD Bank economist Pascal Gauthier.
Gauthier said single-unit construction is generally less volatile than multiple-unit starts, and the sharp downturn “bodes poorly for the private residential investment component of real GDP growth.”
The TD commentary added that improved home affordability will likely support starts this year at the pre-boom level of about 150,000, but “if starts continue on this downward momentum without signs of stabilization ... even this prudent forecast could fall by the wayside.”
Alberta home prices to slip 9% in '09: Crea
Published: Tuesday, February 10, 2009
The Canadian Real Estate Association is forecasting MLS residential sales will fall by 19 per cent this year in Alberta compared with 2008,while the average sale price will drop by nine per cent in the province.
CREA said Monday it expects MLS sales in the province to decline to 45,650 units this year, but increase by 15.2 per cent in 2010 to 52,600 units. It also said the MLS average sale price in Alberta will fall to $321,500 in 2009 and drop another 1.1 per cent in 2010 to $318,000.
"There's caution among prospective buyers," said Richard Corriveau, regional economist for the Prairies and Territories for Canada Mortgage and Housing Corp. "They have a number of factors working in their favour that one would assume would result in additional demand.Those being low mortgage rates. We've already seen some price reductions and there's also a heightened amount of active listings. So the selection is fantastic for prospective buyers."
But Corriveau said the concern and caution people have is the overall economic uncertainty" that's hanging over their heads."
"We saw tremendous job losses nationally. Many within the province as well. If people are concerned about their job security, naturally that will hinder the decision to conduct the most major purchase in their lives," he added.
Corriveau said the CMHC believes the bottom of the market will be in 2009 with the second half of the year stronger than the first half as people start to understand economic conditions are improving. He said prices should eventually stabilize.
"Currently, the expectation is prices will likely moderate somewhat over the first half of the year as well, but we think once demand starts to pick up and the level of active listings do moderate we'll return to a more positive price path and once that occurs that should knock some prospective buyers off the shelf," said Corriveau.
Nationally, CREA said MLS sales will decline by 16.9 per cent this year to 360,900 units, but rise by 9.9 per cent in 2010 to 396,600 units. The 2009 figure would be the lowest level for national sales activity since the year 2000.
Across the country, CREA said the average MLS sale price will fall by eight per cent in 2009 to $279,400, but increase by 1.1 per cent in 2010 to $282,400.
"Increasingly cautious homebuyers and mortgage lenders means that active listings will take longer to sell in 2009 compared to previous years,"said CREA's chief economist Gregory Klump, who developed the forecast. "The national housing market is recalibrating due to weak sales activity. Supply will take time to adjust to lower demand, but sellers unwilling to accept offers below their expectations will remove their home from the market.Fewer active listings reduces buyer choice and in time puts a floor under prices."
In 2008, the association said there were 434,477 MLS sales in Canada, a decline of 17.1 per cent from the previous year while in Alberta there were 56,399 sales, dropping by 21 per cent on an annual basis. Last year, the average MLS sale price dropped by 0.7 per cent nationally from 2007 to $303,594. In Alberta, that price decline was 0.9 per cent to $352,857.
The Canadian Real Estate Association is forecasting MLS residential sales will fall by 19 per cent this year in Alberta compared with 2008,while the average sale price will drop by nine per cent in the province.
CREA said Monday it expects MLS sales in the province to decline to 45,650 units this year, but increase by 15.2 per cent in 2010 to 52,600 units. It also said the MLS average sale price in Alberta will fall to $321,500 in 2009 and drop another 1.1 per cent in 2010 to $318,000.
"There's caution among prospective buyers," said Richard Corriveau, regional economist for the Prairies and Territories for Canada Mortgage and Housing Corp. "They have a number of factors working in their favour that one would assume would result in additional demand.Those being low mortgage rates. We've already seen some price reductions and there's also a heightened amount of active listings. So the selection is fantastic for prospective buyers."
But Corriveau said the concern and caution people have is the overall economic uncertainty" that's hanging over their heads."
"We saw tremendous job losses nationally. Many within the province as well. If people are concerned about their job security, naturally that will hinder the decision to conduct the most major purchase in their lives," he added.
Corriveau said the CMHC believes the bottom of the market will be in 2009 with the second half of the year stronger than the first half as people start to understand economic conditions are improving. He said prices should eventually stabilize.
"Currently, the expectation is prices will likely moderate somewhat over the first half of the year as well, but we think once demand starts to pick up and the level of active listings do moderate we'll return to a more positive price path and once that occurs that should knock some prospective buyers off the shelf," said Corriveau.
Nationally, CREA said MLS sales will decline by 16.9 per cent this year to 360,900 units, but rise by 9.9 per cent in 2010 to 396,600 units. The 2009 figure would be the lowest level for national sales activity since the year 2000.
Across the country, CREA said the average MLS sale price will fall by eight per cent in 2009 to $279,400, but increase by 1.1 per cent in 2010 to $282,400.
"Increasingly cautious homebuyers and mortgage lenders means that active listings will take longer to sell in 2009 compared to previous years,"said CREA's chief economist Gregory Klump, who developed the forecast. "The national housing market is recalibrating due to weak sales activity. Supply will take time to adjust to lower demand, but sellers unwilling to accept offers below their expectations will remove their home from the market.Fewer active listings reduces buyer choice and in time puts a floor under prices."
In 2008, the association said there were 434,477 MLS sales in Canada, a decline of 17.1 per cent from the previous year while in Alberta there were 56,399 sales, dropping by 21 per cent on an annual basis. Last year, the average MLS sale price dropped by 0.7 per cent nationally from 2007 to $303,594. In Alberta, that price decline was 0.9 per cent to $352,857.
Monday, February 9, 2009
Oilpatch faces major job cuts
An oilpatch trade association is warning that deep cuts in the petroleum services industry are imminent.
“Drilling activity in the first quarter is down from last year, and it’s looking like come March or April, things are going to be pretty grim,” said Petroleum Services Association of Canada president Roger Soucy in a news release.
“Without healthy drilling activity, there’s just no work for this segment of the industry, and without work, there are no jobs.
“There are a lot of people in the province of Alberta whose jobs are at stake — not just directly in the industry, but in all cities and towns where industry and workers support hotels, coffee shops, restaurants, stores and countless other businesses.”
PSAC estimates that the petroleum sector, which includes drilling, service and geophysical contractors, employs more than 100,000 Albertans.
Another concern is that skilled workers who are displaced won’t return.
“If we lose these workers, and likely a number of companies as well, it will become very difficult to recruit new people. That means, when the economy is poised for a turn-around, there simply won’t be the manpower and expertise to keep Alberta’s economic engine churning.”
On Thursday, the provincial government announced an incentive program for the industry. Soucy said his organization welcomes the help, but added that the main issue is the economics that currently make exploration and drilling impractical.
“Until commodities recover, the only way to protect jobs, and our economy, is to create an environment where it is economical for producers — big and small — to keep drilling wells.”
PSAC represents more than 270 companies with more than 62,000 employees in the petroleum services industry. Last week, it projected that there will be 21 per cent drop in drilling activity in Canada this year, and a 27 per cent decline in Alberta.
“Drilling activity in the first quarter is down from last year, and it’s looking like come March or April, things are going to be pretty grim,” said Petroleum Services Association of Canada president Roger Soucy in a news release.
“Without healthy drilling activity, there’s just no work for this segment of the industry, and without work, there are no jobs.
“There are a lot of people in the province of Alberta whose jobs are at stake — not just directly in the industry, but in all cities and towns where industry and workers support hotels, coffee shops, restaurants, stores and countless other businesses.”
PSAC estimates that the petroleum sector, which includes drilling, service and geophysical contractors, employs more than 100,000 Albertans.
Another concern is that skilled workers who are displaced won’t return.
“If we lose these workers, and likely a number of companies as well, it will become very difficult to recruit new people. That means, when the economy is poised for a turn-around, there simply won’t be the manpower and expertise to keep Alberta’s economic engine churning.”
On Thursday, the provincial government announced an incentive program for the industry. Soucy said his organization welcomes the help, but added that the main issue is the economics that currently make exploration and drilling impractical.
“Until commodities recover, the only way to protect jobs, and our economy, is to create an environment where it is economical for producers — big and small — to keep drilling wells.”
PSAC represents more than 270 companies with more than 62,000 employees in the petroleum services industry. Last week, it projected that there will be 21 per cent drop in drilling activity in Canada this year, and a 27 per cent decline in Alberta.
Thursday, January 15, 2009
Red Deer housing starts down 63 per cent: CMHC
By Advocate staff
Published: January 09, 2009 11:04 AM
The news is unlikely to surprise anyone who followed Red Deer’s residential construction industry last year.
Housing starts in the city fell 63 per cent from 2007 levels, according to Canada Mortgage and Housing Corp. statistics that were released on Friday.
The 572 projects started during the year consisted of 367 single-detached homes and 205 units in multi-family buildings.
In 2007, Red Deer recorded 1,558 housing starts: 974 single-detached and 584 multi-family homes.
Although 2007 was a record year for residential construction in Red Deer, the 2008 figures are also significantly lower than CMHC’s Red Deer numbers for the previous five years. In 2006, the city had 1,095 single-detached and 334 multi-family starts for a total of 1,429; in 2005, the tallies were 886 and 384 for a total of 1,270; in 2004, they were 789 and 554 for a total of 1,343; in 2003, they were 779 and 345 for a total of 1,124; and in 2002, they were 948 and 537 for a total of 1,485.
Jonas Neidert, president of the Central Alberta branch of the Canadian Home Builders’ Association, said earlier this week that he thinks the outlook for 2009 is better. Concerns about the economy have prompted many people to postpone buying a home, he suggested, which could mean a market rebound this year.
He added that there is also an improved selection of residential lots in the city this year.
In the final month of 2008, there were 42 single-detached and no multi-family starts in Red Deer. That compares with 46 single-detached and two multi-family starts in December 2007.
Of the 14 urban areas in Alberta surveyed by CMHC, 13 had fewer housing starts in 2008 than in 2007, and the decrease for these was at least 15 per cent. But only two, Cold Lake and Okotoks, had a greater decline than Red Deer.
In Cold Lake, housing starts plummeted 77 per cent in 2008. Okotoks experienced a 72 per cent slide, while in the Edmonton metropolitan area the drop was 56 per cent.
Camrose was off 47 per cent, Medicine Hat 42 per cent, Canmore 40 per cent, Grande Prairie 38 per cent, Wetaskiwin 37 per cent, the Regional Municipality of Wood Buffalo (which includes Fort McMurray) 31 per cent, Lethbridge 24 per cent, and the Calgary metropolitan area 15 per cent.
Housing starts on the Alberta side of Lloydminster were up 83 per cent, but on the Saskatchewan side of the community they were down 33 per cent.
The combined housing starts for all 14 communities in 2008 were down 34 per cent from 2007.
CMHC also provided 2008 housing start figures for a number of smaller municipalities, including several in Central Alberta. These revealed that there were 107 single-detached and 216 multi-family starts in Sylvan Lake, 77 single-detached and 49 multi-family starts in the town of Lacombe, 117 single-detached starts in Mountain View County, 85 single-detached starts in Clearwater County, 76 single-detached and four multi-family starts in Red Deer County, and 52 single-detached starts in Lacombe County.
No comparable statistics for 2007 were available.
Published: January 09, 2009 11:04 AM
The news is unlikely to surprise anyone who followed Red Deer’s residential construction industry last year.
Housing starts in the city fell 63 per cent from 2007 levels, according to Canada Mortgage and Housing Corp. statistics that were released on Friday.
The 572 projects started during the year consisted of 367 single-detached homes and 205 units in multi-family buildings.
In 2007, Red Deer recorded 1,558 housing starts: 974 single-detached and 584 multi-family homes.
Although 2007 was a record year for residential construction in Red Deer, the 2008 figures are also significantly lower than CMHC’s Red Deer numbers for the previous five years. In 2006, the city had 1,095 single-detached and 334 multi-family starts for a total of 1,429; in 2005, the tallies were 886 and 384 for a total of 1,270; in 2004, they were 789 and 554 for a total of 1,343; in 2003, they were 779 and 345 for a total of 1,124; and in 2002, they were 948 and 537 for a total of 1,485.
Jonas Neidert, president of the Central Alberta branch of the Canadian Home Builders’ Association, said earlier this week that he thinks the outlook for 2009 is better. Concerns about the economy have prompted many people to postpone buying a home, he suggested, which could mean a market rebound this year.
He added that there is also an improved selection of residential lots in the city this year.
In the final month of 2008, there were 42 single-detached and no multi-family starts in Red Deer. That compares with 46 single-detached and two multi-family starts in December 2007.
Of the 14 urban areas in Alberta surveyed by CMHC, 13 had fewer housing starts in 2008 than in 2007, and the decrease for these was at least 15 per cent. But only two, Cold Lake and Okotoks, had a greater decline than Red Deer.
In Cold Lake, housing starts plummeted 77 per cent in 2008. Okotoks experienced a 72 per cent slide, while in the Edmonton metropolitan area the drop was 56 per cent.
Camrose was off 47 per cent, Medicine Hat 42 per cent, Canmore 40 per cent, Grande Prairie 38 per cent, Wetaskiwin 37 per cent, the Regional Municipality of Wood Buffalo (which includes Fort McMurray) 31 per cent, Lethbridge 24 per cent, and the Calgary metropolitan area 15 per cent.
Housing starts on the Alberta side of Lloydminster were up 83 per cent, but on the Saskatchewan side of the community they were down 33 per cent.
The combined housing starts for all 14 communities in 2008 were down 34 per cent from 2007.
CMHC also provided 2008 housing start figures for a number of smaller municipalities, including several in Central Alberta. These revealed that there were 107 single-detached and 216 multi-family starts in Sylvan Lake, 77 single-detached and 49 multi-family starts in the town of Lacombe, 117 single-detached starts in Mountain View County, 85 single-detached starts in Clearwater County, 76 single-detached and four multi-family starts in Red Deer County, and 52 single-detached starts in Lacombe County.
No comparable statistics for 2007 were available.
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