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Job and net migration growth fuel housing demand

CALGARY — Alberta will be the only province next year to buck the national trend for housing starts across the country.

According to an October 2011 Housing Forecast report released Tuesday by Altus Group, only Alberta is expected to see an increase in housing starts in 2012.

Subdued economic growth will take the “sizzle” out of Canadian housing starts in 2012 and deteriorating global economic conditions leading to lower Canadian growth expectations will constrain housing demand across the country, said the report.

“Based on recent data, the Canadian housing sector is performing at a very high level, with elevated housing starts, steady prices, and steady resale markets. Interest rates are also no longer expected to increase over the next year,” said Peter Norman, chief economist, Altus Group. “But at the same time a number of risk factors are emerging, especially deteriorating economic conditions and tighter mortgage rules. Canadians can expect lower levels of housing construction in most areas of the country next year.”

But the report said Alberta has seen job conditions and interprovincial migration rise sharply this year at the expense of Ontario and British Columbia, positively affecting housing demand next year.

Alberta will see housing starts in 2012 rise to 27,800 units from 24,881 this year. In 2010, there were 27,088 housing starts in the province.

Across Canada, housing starts will hit 192,000 units this year and dip to 181,600 units in 2012. There were 189,930 starts in 2010.

The Altus Group report said only Calgary and Edmonton, among major markets in Canada, will see a rise in housing starts next year. Calgary will jump to 9,400 units from 8,400 in 2011 while Edmonton will see a rise to 9,400 units as well from 8,900 this year.

In 2010, Calgary had 9,300 housing starts while Edmonton had 10,000.

mtoneguzzi@calgaryherald.com

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CALGARY — MLS sales in Calgary rose by 22.1 per cent in August compared with a year ago — a greater year-over-year rate of growth than the rest of the country.

The Canadian Real Estate Association said Thursday that Calgary recorded 1,907 MLS sales for all residential properties during the month for an average price of $394,251, up 2.2 per cent from last year.

New listings in Calgary rose by 11.7 per cent in August to 3,819 and the sales as a percentage of new listings jumped by 4.2 per cent to 49.9 per cent.

In Canada, sales of 39,542 were 15.8 per cent higher than August 2010 and the average sale price of $349,916 was up 7.7 per cent.

New listings in Canada rose by 13.4 per cent to 73,125 and the sales as a percentage of new listings jumped by 1.1 per cent to 54.1 per cent.

“The housing market in Canada remained on a firm footing in August when compared to volatile financial markets,” said Gary Morse, president of CREA. “Through their actions, homebuyers are showing that they remain confident about the stability of the Canadian housing market, and recognize that the continuation of low interest rates represents an excellent opportunity to buy their first home or trade up.”

Gregory Klump, CREA’s chief economist, said economic and financial market headwinds outside Canada are keeping interest rates lower for longer.

“Those headwinds will likely persist until, and indeed after, fiscal quagmires in the U.S. and Europe are resolved,” he said. “In the meantime, the Bank of Canada will have ample reason to delay raising interest rates further, which is supportive for the Canadian housing market.”

mtoneguzzi@calgaryherald.com

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CALGARY — Preliminary, unofficial data indicates MLS sales in Calgary in August were up compared with a year ago.

Statistics on the website of realtor Mike Fotiou, of First Place Realty, show single-family sales during the month hit 1,106, up from 865 in August 2010. The average sale price last month was $453,269 compared with $445,814 a year ago. The median price also rose to $402,250 in August from $395,000 last year.

In the condo market, the preliminary data shows 468 sales for an average price of $285,487 in August, up from 362 sales but the average was down from $286,373 in August 2010. The median price in August was $255,000, down from $260,000 a year ago.

Official MLS data for August will be released by the Calgary Real Estate Board today.

Many Calgarians are watching the local real estate market closely these days to determine where it’s headed in the near future for both prospective buyers and sellers.

Alexandria (Ali) Cohen is one of them. She owns a home in Tuxedo, but is considering listing it for sale in the near future, and also looking to purchaser a bigger home.

“I’m a little conscious that the market’s low. However, the interest rates are holding and that should be relatively good for the near term for sellers and buyers. So that’s a good thing,” said Cohen.

With sales up in August from a year ago, that could be a boost for real estate locally.

“It should be but typically the summer months are definitely more active than the winter months. So if I don’t list in September, I’m not going to list until next year sort of thing,” added Cohen, who will be keeping a close eye on the market in the coming weeks.

mtoneguzzi@calgaryherald.com

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Read more: http://www.calgaryherald.com/business/Calgary+sales+rise+August/5339212/story.html#ixzz1WhsVg4tv

By Kim Guttormson, Calgary Herald August 3, 2011

CALGARY — Calgary’s housing market continues to gradually strengthen, with sales for July and the year-until-now up over last year.

Sales of single-family homes and condos neared 12,000 for the first seven months of 2011, a five per cent increase over 2010, but still 17 per cent below the 10-year average, the Calgary Real Estate Board reported Tuesday.

“I would underline the improvement is gradual and measured,” CREB president Sano Stante said. “We’re getting a good balance of listings and buyers. We’re not seeing too many buyers and no listings or too many listings and no buyers.”

“It’s more of a healthy recovery.”

For Jen Hosie, who will be moving into first home next month with husband Danny, the foray into the real estate market was smooth.

“It was very, very fast,” she said of a process that ended with the possession of a three-bedroom home in New Brighton. “I looked at 15 houses in one day and by the end of the day picked one I loved.”

After her husband had checked it out and also approved, they stopped looking.

“There were lots and lots to choose from,” she said of the housing selection. “And tons within our price range.”

The Hosies spent less than the average price of a single family home in July, which was just over $455,000.

Condo sales averaged just over $286,000.

Stante said prices remained relatively consistent with where they were last year, but he cautioned that some sellers, viewing the market a little too optimistically, were pricing their homes too high.

“Stuff that’s priced accordingly sells relatively quickly. There seems to be a good bit of product that’s not priced according to the current market that seems to be sitting,” he said.

Cody Battershill, with Re/Max House of Real Estate, said last month was his busiest July in about three years.

“It’s the craziest July I’ve had in years, even though in summer things slow down,” he said. “I think there’s optimism in the business community, in job growth.

“I think more people are buying, but the listing still has to be priced well to sell.”

According to the real estate board numbers, there were 11,798 sales in the first seven months of the year, up five per cent over the same period in 2010. If single-family homes are broken out, they rose eight per cent, while condo sales dropped by three per cent.

While the July numbers jumped over last year — condo sales were 14 per cent higher — Stante cautioned that last year was very slow for that month, as well as June.

He also pointed out that listings so far this year are lower than last year, leading to smaller inventories. That has dropped the condo inventory from a more than six-month supply last year just above four months this year.

kguttormson@calgaryherald.com

© Copyright (c) The Calgary Herald

Read more: http://www.calgaryherald.com/business/Calgary+housing+sales+over+last+year/5194965/story.html#ixzz1UAMju2rm

Transactions up over 30% from a year ago

CALGARY — Calgary’s residential real estate market experienced a significant upswing in sales in June compared with a year ago.

Single-family MLS sales during the month were 1,398, up 32.01 per cent from June 2010’s 1,059 transactions, according to data released by the Calgary Real Estate Board on Monday.

And for the first time since April 2010, condo sales were up year-over-year, increasing by 30.56 per cent in June to 581 transactions. In June 2010, there were 445 condo sales.

The average sale price for a single-family home in June dropped by 0.33 per cent year-over-year falling to $479,580 from $481,960.

But the condo average rose by 0.79 per cent to $296,501 from $292,182 a year ago.

June’s condo average condo price was the highest since May 2010.

According to CREB, June’s year-over-year increase in single-family home sales was the highest since January 2010’s 38.50 per cent while for the condo market it was the highest since March 2010’s 36.26 per cent.

On a year-to-date basis, single-family home sales for the first six months of this year are up 5.64 per cent from a year ago to 7,231 transactions while condo sales are down 4.91 per cent to 2,965 units.

“Strong monthly increases does not imply a housing boom, as it is important to put into perspective that sales activity remains below long-term averages,” said CREB in a statement.

Sano Stante, president of the Calgary Real Estate Board, said the housing market in Calgary has gradually improved throughout the year as anticipated.

“We had a late spring market this year,” he said. “It’s all starting to come together in June. And last year we had an exuberant market early on and it died in June. So to draw comparisons year-to-year for that month shows an exaggeration of the trend.”

After the first half of the year, it appears the recovery in the housing market is starting to find its footing, he added.

“This gradual levelling has been fuelled by growth in employment, and in particular growth in full-time jobs. Improved job prospects, combined with an increase in the number of people moving to Calgary, will give lift to our housing market for the remainder of this year and into the next.”

Stante said homes that are value-priced are selling and they’re moving relatively quickly. Homes that are over-priced are sitting on the market, he added.

Dan Sumner, economist with ATB Financial in Calgary, said a year-over-year comparison may be a little misleading as to the strength of the Calgary housing market in June specifically. June is often one of the busiest months for sales volumes but sales last June were abnormally slow, he explained.

“Fuelling sales is a stronger economy specifically in Alberta, which feeds through into consumer confidence and that’s making Albertans more comfortable with home purchases again. Very accommodative interest rates are also helping as well,” added Sumner.

He said prices have been stable for quite some time now, despite a fairly strong economy over the past year. Because housing prices have risen so much over the past 10 years in Alberta, they are about as high as they can be, he said.

“However, with the economy fairly strong in Alberta and rates increasing affordability, for the time being at least, that is preventing prices from moving any lower. What you end up with is resistance for prices to move in either direction, and flatness ensues,” said Sumner.

The key economic contributors to the current housing market include a strong energy sector and resource prices as well as an improving labour market and strong wage growth. Also interprovincial migration to Alberta has picked up, said Sumner.

“With economic conditions in Alberta strong and looking up, sales during the second half of 2011 should be higher than last year,” he said.

Richard Cho, senior market analyst for Calgary for Canada Mortgage and Housing Corp., said that although demand for housing has been gradually improving, resale activity this time last year was also moderating.

mtoneguzzi@calgaryherald.com

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MONTREAL – The risk that the economic slowdown in the United States will turn into another North American recession is not high, Canada’s finance minister said Tuesday as he cautioned that too many people nevertheless remain jobless in this country.

“I do not think the risk is great,” Jim Flaherty said in response to a reporter’s question at the International Economic Forum of the Americas taking place in Montreal. “There are risk indicators with respect to which we are concerned which we reviewed in the budget [Monday] and which I reviewed with the private sector economists with whom I met last week. The nature of the risks have not changed. We are concerned about debts and deficit in the United States and the need for a convincing longer term plan in the United States” to deal with those problems.

Ottawa is also concerned about some evidence of continuing slowness in the U.S. real estate market which puts a damper on consumer confidence in that country, Mr. Flaherty said. As well, it is worried about the sovereign debt situation among some eurozone countries, including Greece.
“These are all risk factors but they are known risk factors,” Mr. Flaherty said, adding that to address the risk in the latest budget, federal finance officials discounted private sector growth assumptions by $10-billion in nominal GDP each year, equalling a revenue markdown of $1.5-billion annually.

The U.S. economy grew at a 1.8% annual rate in the first quarter but job growth remains anemic, prompting U.S. Federal Reserve Chairman Ben Bernanke to say Tuesday that the central bank should maintain monetary stimulus to boost a “frustratingly slow” recovery. U.S. employers hired 54,000 more people in April, well below the 165,000 expected by economists.

“Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established,” Mr. Bernanke said in a speech in Altanta.

The U.S. economy is growing above “stall speed,” Deutsche Bank AG foreign exchange analyst Alan Ruskin told Bloomberg in an interview Tuesday.

“A lot of people say that if the U.S. economy slows below 2% in year-over-year gross domestic product historically, we’ve slipped in to recession. The key is that we stay above that line, otherwise that is perceived as stall speed and other issues kick in.”

The pace of economic recovery in the United States is crucial for Canada because America is Canada’s largest trading partner, buying 75% of all Canadian exports like oil, wood and cars. Any major slowdown would hurt Canadian businesses and force layoffs here.

Mr. Flaherty maintained that unemployment in Canada also remains too high, even as his government initiates targeted hiring investments. The country’s unemployment rate stood at 7.6% in April as the economy added 58,000 mostly part-time jobs. Employment has grown by 1.7% in the last year.

Asked if the Canadian government has picked a preferred candidate to lead the International Monetary Fund, Mr. Flaherty said not yet. Former IMF chief Dominique Strauss-Kahn resigned last month amid allegations he sexually assaulted a New York City hotel worker. Agustín Carstens, the head of the Mexican central bank, and Christine Lagarde, France’s finance minister, are vying for the job.

In a speech to conference delegates, Mr. Flaherty stressed the importance of sound fiscal management for an elected government, noting no one truly foresaw the credit crisis in the fall of 2008 and subsequent recession. He said “it’s unpredictable” when the next shock might come.

The finance minister on Monday delivered a budget that included a pledge to bring the federal government back into surplus position by 2014-2015. He said he will do that through a combination of $4-billion in annual spending cuts and closing tax loopholes to generate another $4.1-billion.

The cuts mark the most intense attempt to rein in public sector spending in more than a decade. The government is conducting an operational review of the federal service and some departments have begun laying off staff.

Opposition against the cuts is expected to grow in the months ahead.

Canadian Auto Workers union president Ken Lewenza said Monday the government’s  spending will wipe out thousands of jobs and hurt service delivery. “With the economic rebound being so uncertain and anemic private sector investment growth, these billion-dollar cuts are the last thing Canada needs,” Mr. Lewenza said.

But compared to what a private company would do to trim spending, the government’s $4-billion plan is not very ambitious, Mr. Flaherty argued.

Mr. Flaherty’s savings target represents 5% of Ottawa’s $80-billion in annual discretionary spending. The government won’t book the savings until it achieves them and has not provided any details of which programs and departments will be affected.

http://business.financialpost.com/2011/06/07/canada-can-offer-lessons-for-recovery-flaherty/

By Ross Marowits, The Canadian Press

MONTREAL - Nearly half of Canadians would consider selling their homes privately but very few are aware of changes implemented several months ago that make that task easier, a new survey suggests.

While 45 per cent of Canadians would consider bypassing realtors to sell privately with the advice of a real estate lawyer, only 11 per cent were aware of and understood changes to getting on the Multiple Listing Service , according to an Environics poll sponsored by the TitlePlus program.

“What these findings show us is that there is an appetite among Canadians to conduct the sale of their home privately,” says TitlePlus vice-president Ray Leclair.

TitlePlus title insurance is offered by Lawyers’ Professional Indemnity Co. as protection for title matters, survey, fraud, other legal issues and legal services provided by the real estate lawyer when you buy your home. In Quebec, it doesn’t offer coverage for notary work. Coverage is for professional liability or title insurance but not both.

Even though its product is available for homes sold by realtors, Leclair said it is concerned that people won’t do their homework as the interest in private sales grows.

Real Estate agents have historically sold most homes in Canada. But new rules agreed to in October make it easier for homeowners to use a real estate agent only to get their property listed on Canada’s premier real estate portal without paying for a full package of realtor services.

The change was made after Canada’s competition bureau argued that the old rules stifled competition and raised the price of selling a home.

The Canadian Real Estate Association doesn’t tabulate how many more private sale listings have been added in the past few months, but it doubts the easier access will dramatically divert business away from its trained agents.

“I suspect that people really still want to rely on a professional and they want to rely on the resources that a realtor brings to the table,” Wayne Moen, the incoming president of CREA said from Edmonton.

The Internet, cellphones and a more hands-on approach by younger consumers are changing the industry. But he said realtors offer clients valuable experience in negotiating, marketing and access to data to establish the best price and expose the property to the most sellers.

Some realtors fear increasing private sales will impact their livelihoods by reducing commissions. But Moen said he believes any change will take time and not be dramatic.

“Your home is a greater and greater part of personal net worth and I just don’t think people are willing generally to roll the dice and do it on their own. There are just too many factors involved and too many things that could go wrong.”

Realtors currently operate on the principle that selling agents will split the standard five per cent commission with the buyer’s agent. Yuval Fish, an advocate for private home sales, hopes flat fee MLS listings will encourage more Canadians to sell their properties on their own.

“I’m pretty sure that there’s going to be a huge increase in the amount of people who would want to try it and see if they can try and do it themselves,” said the spokesman for PropertySold.ca, an alternative listing service that also provides advice on selling homes privately.

Getting on the MLS requires the participation of a realtor or broker licensed to practice within the province where the property is being sold. It’s simple and can cost as little as $109.

But selling a home privately takes more than just pegging a sign on the front lawn. It requires time, perseverance and a knack for selling.

“There’s a lot of people who don’t know how to negotiate. They are intimidated when somebody calls in and wants to see the home. Those are the kind of people who probably need assistance,” Fish said.

For thousands of others, it’s a doable proposition even though just 25 per cent are successful, he said. The key is obtaining exposure, pricing appropriately and knowing your market.

Fish suggests sellers list on as many websites as possible including the MLS, hire a good real estate lawyer and avoid overpricing.

Don’t be afraid to seek help by hiring experts to conduct an appraisal, title search and competitive market analysis, he adds. Most sellers will have to fork over up to about $1,500 including the listing and advertising, but can save thousands in the process.

The average Canadian home sells for $340,000, which would attract a commission of $17,000.

While sellers would ideally like to avoid all commissions, offering a commission or fee to buyers’ agents could increase traffic by providing an incentive to reluctant realtors, Fish said.

Most agents won’t agree to show the home to their clients if they have no skin in the game. Others may not even notice private sales because they refer to an internal MLS system that doesn’t include private listings. http://ca.finance.yahoo.com/news/Nearly-half-Canadians-capress-2637426243.html;_ylt=ArTa6ryy9lK2RUDF.dbV3WLg2ppG;_ylu=X3oDMTFkNjYxc3RhBHBvcwM4BHNlYwNuZXdzSHViQXJ0aWNsZUxpc3QEc2xrA25lYXJseWhhbGZvZg–?x=0

Brokers are finally seeing a change in consumer appetite for risk after the second chop to fixed rates in two weeks.

“Up until a couple of weeks ago, we were still seeing 50 per cent of our clients coming in looking for fixed and the other 50 per cent looking for variable-rate mortgages,” Dan Mass, owner of Verico Canada First Mortgage, told MortgageBrokerNews.ca. “But that’s now changed, we’re seeing 80 per cent now looking for fixed and only 20 per cent looking for variable since the fixed rates started dropping.”

RBC set off another chain of falling rates last Friday by shaving 0.1 percentage points off its posted five-year fixed, taking it to 5.49 per cent. Over the weekend, TD Bank, Scotiabank, BMO and Laurentian followed suit, with most broker channel lenders having now effecting the changed. Their collective move follows another 10-basis-point chop last week, although the most recent price cut also applies to the posted and special rates on one-, two-, three- and four-year loans.

Lenders are now pointing to falling yields on government bonds across a range of terms as impetus for the rate decrease. The decline actually runs counter to what most economists had predicted for the remainder of 2011. It also comes as consumers react to media speculation about a possible hike in the Central Bank’s key Overnight rate. That move won’t come this week, said Central Bank Governor Mark Carney Tuesday. Still, the narrowing gap between fixed and variable rates is expected to send many homeowners to their lenders looking to lock in and join the more-than-60-per cent of Canadian homeowners who have opted for the security of a fixed-rate mortgage.

Mass’s observations reflect that change only in part. The boom in business many brokers were looking for as the gap between variable and fixed narrowed hasn’t yet materialized, he said.
Still, another broker is predicting that increase in activity may come this fall as the banks near their year-ends and look to stir up more business.

“I think there’s still more room for lenders to drop their fixed rates before hitting the floor,” said Corey Romyn, an agent and COO for Taurus Mortgages in the Toronto area. “We’ve seen that in the last few years, especially when volumes are down for most lenders, as they are this year.”

But there is a limiting factor at play. The buyers may be attracted by the rates, Romyn told MortgageBrokerNews.ca, but may ultimately find themselves frustrated by the dearth of houses for sale

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CALGARY — A report by Canada Mortgage and Housing Corp. forecasts MLS sales in the Calgary region to increase by nearly five per cent this year compared with a year ago while the average sale price will rise by just over one per cent.

The CMHC’s Spring 2011 Calgary Housing Market Outlook, released Monday, predicted MLS sales in the Calgary census metropolitan area would hit 22,000 this year, up by 4.8 per cent, and increase a further 2.3 per cent in 2012 to 22,500 transactions.

The agency forecast the average sale price to increase by 1.1 per cent this year to $403,000 while it would jump another 2.2 per cent in 2012 to $412,000.

However, the CMHC forecast total housing starts in the region to drop by 8.2 per cent this year to 8,500 units but rebound in 2012 to 9,600 units, a 12.9 per cent annual hike.

Read more: http://www.calgaryherald.com/business/Calgary+region+sales+prices+forecast+rise+CMHC/4861756/story.html#ixzz1Nqiyfbjz

CALGARY — During his career in the homebuilding industry, Tim Logel has seen three recessions in close to 30 years.

And Wednesday he said signs that Calgary is coming out of the recession are present today like they were in past recessions.

“Those signs are very consistent and you can put your finger on them. No. 1 there are buyers out there,” said Logel, president and partner of Cardel Lifestyles, which held a grand opening of four new condo models and launch of Panorama West in Genstar’s Panorama Hills.

Logel said interest in the four-building, 288-unit condo project has been strong.

Cardel Lifestyles is in the process of working on five multi-family developments in the city comprising between 1200 to 1400 units, a mixture of townhouses and condos.

The projects include Panorama West in Panorama Hills, Lighthouse Landing in Country Hills, Cranston Place, Prestwick Place in McKenzie Towne and Riverside Townhomes in Chaparral Valley.

“Some units within those projects are ready for immediate occupancy. We carry standing ready-to-move into inventory in every project,” said Logel.

“Homebuilding success is all about listening to the customers and if you listen they’ll tell you what they want. No. 1 they want a location … Is there an opportunity? You bet there’s an opportunity because customers flock to quality. They focus in on the top locations available within Calgary and they will take the time to find those locations. They’re not in a hurry. They’ve become very educated and wise about their buying decisions.”

In a recession there is always way more fear in the buyer’s buying decision than there is when the market is booming, said Logel.

The interest in the new multi-family market in Calgary is evident by the traffic through showhomes. Logel said at Panorama West in three weeks about 600 groups visited the models “which is amazing.”

“Normal traffic that we’re happy with is 100 groups a month,” he said.

Lai Sing Louie, a regional economist with Canada Mortgage and Housing Corp. in Calgary, said year-to-date until the end of April there have been 921 multi-family starts in the Calgary census metropolitan area, up 2.3 per cent from the 900 for the same period a year ago.

According to a recent Altus Group Housing Report, condominium apartment sales in Calgary from January to March this year were 776 compared with 333 for the same period in 2010.

The economic consulting firm said Calgary has seen “steady” new condominium apartment sales in the suburban markets, “which has eroded the available supply to the point of spurring increased starts activity for 2011.”

“Downtown markets are expected to see relatively fewer starts as developers work through higher levels of unsold inventory,” said the report.

mtoneguzzi@calgaryherald.com

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