There’s been some chatter around Calgary about potential home buyers deciding to wait on property ownership (or forgo it altogether) deciding to rent instead. Newspaper articles report on Calgary’s “cult of home ownership” and that more than 80% of those surveyed wouldn’t purchase a home now.

I admit there are those better suited to renting but the majority of Calgarians who are building careers and growing their families are kidding themselves if they believe they’re better off renting than buying.

Alberta is the most affordable housing market in Canada (RBC Economics Research:  http://www.rbc.com/newsroom/pdf/HA-1125-2011.pdf). Strong employment and high income levels in this province combined with incredibly low interest rates means that owning a home in this province is one of the best financial moves you can make.

On a $350,000 house that you own for just 3 years, you will make approx $15,000 (with an average increase of 3%/yr after commissions). To save that you would have to bank about $420/mo in addition to paying your rent.

Add this $15,000 to the $17,500 that was your initial down payment (based on 5% down on original purchase of $350,000) and you now have $32,500 equity to pull out of your house. That would take $900/mo savings on top of paying rent.

These numbers are based on staying in that house for 3 years, the average is 6 years.

The best way to ‘save’ for a down payment is by owning the home you live in and building equity in it.

This will mean that your first home isn’t likely going to be everything you want but let’s face it your first job wasn’t likely what you wanted to do for the rest of your life; you build and move up. Home ownership takes the same path..

If you have questions or comments about anything in this blog be sure to contact me.

Calgary’s real estate market poised to turn the corner in 2012: CREB

BY MARIO TONEGUZZI, CALGARY HERALD JANUARY 4, 2012 8:05 PM

CALGARY — Calgary’s residential real estate market is poised to turn the corner as 2012 will signal increasing demand for housing in the city, says the president of the Calgary Real Estate Board.

“I believe it’s imminent that we’ll start to see the result of all those economic indicators come to fruition and hit the ground, get traction this coming year. It’s got to happen,” said Sano Stante in a year-end 2011 interview.

All those positive economic indicators include strong economic growth, increased net migration and continued employment growth for both the city and the province.

But two reports in mid-December suggested some dark clouds could be on the horizon for the overall Canadian real estate market this year.

Scotia Economics, in its Global Real Estate Trends report, said Canada’s ongoing housing boom is in its 13th year but showing some signs of cooling. It said increased economic uncertainty combined with some recent slowing in the pace of hiring could dampen demand in the new year.

And a report by Bank of America Merrill Lynch said Canadian home prices are now showing many of the signs of a “classic bubble” with prices nationwide overvalued by about 10 per cent.

Also a report by TD Economics forecast residential sales in Calgary to increase by 0.1 per cent in 2012 to 22,600 units but drop by 3.3 per cent in 2013 to 21,900. The report is predicting the average price to grow by 0.5 per cent in 2012 to $404,100 but dip by 1.6 per cent in 2013 to $397,800.

“Calgary will not be immune from the impacts of higher interest rates and in turn, we have incorporated modest price and sales declines in 2013. Relative to the national story, however, the region is expected to out-perform most others over our forecast period,” said TD Economics.

Don Campbell, president of the Real Estate Investment Network, said the past year’s market has been a year of recovery as the market adjusted to the job and population slowdown of 2010.

“Any job and population changes aren’t reflected in the real estate market until 18 months after they occur. Confusing signals from the market numbers were expected and that is what we experienced,” he said.

“2012, especially in the second half of the year, we will see upward pressure on demand for resale real estate, which will be a good time for owners to start moving properties.

Average price increases will start to be more consistent in the back half of the year as the population and job growth continues to keep the pressure and increase demand. The big upward pressure on prices will really begin in early 2013.”

Stante said 2011 was more typical than some past years in the local real estate market.

“It’s more typical of what you might expect in this cycle of a normal recovery,” he said.

“In that cycle of a typical recovery you start to have some decreasing supply and we’re starting to see that now. We’re starting to see decreasing supply and the next phase is for demand to pick up.

“All the economic indicators are pointing to that. We’ve been saying all year that we are due for more in-migration which is a leading indicator for real estate, for the housing market. We’ve just started to see it happen. So it’s not a matter of whether it will happen. We see oil companies are filling up space. That tells you that they’re hiring. It tells you that jobs are coming. But what we don’t know is when they’re going to hit the ground in the real estate market. It’s more a matter of when than if.”

In 2011, there were 13,186 single-family MLS sales in Calgary, up 9.06 per cent from the previous year while the average sale price increased by 1.14 per cent to $466,402. There were 5,382 condo sales, up 3.98 per cent, but the average price dipped by 0.94 per cent to $287,172.

Dan Sumner, economist with ATB Financial in Calgary, described the local housing market in 2011 as “slightly disappointing.”

“We definitely saw a rise in sales from 2010 but sales still remain quite slow compared to 10-year averages ... Prices have been flat for now 2 years and it really continued along in 2011,” he said.

Sumner said he’s cautiously optimistic for 2012.

“Overall the Canadian housing market in general I wouldn’t say it’s in a place where I’d want to put a lot of money right now if I had to bet on it,” he said. “But as far as housing markets in Canada go, I think the ones in Alberta are probably the best — Edmonton and Calgary. That’s just because the economy here is really growing quite strongly and because prices have been a little bit slower to rise over the last couple of years.

“The Alberta economy is performing beautifully. It continues to perform beautifully. As long as oil prices remain up where they are, it’s never a certainty, but given the fact they’ve been very resilient thus far ... then the Alberta economy is going to continue to hum along.”

He also said there is no indication there will be much upward movement in interest rates in 2012 which will help fuel sales in the real estate sector.

Canada Mortgage and Housing Corp., in its Housing Market Outlook report in the fall, forecast MLS sales in the Calgary census metropolitan area to increase by 2.3 per cent in 2012 and the average sale price to jump by 2.2 per cent to $411,000.

“Many factors that support resale housing demand have become or remained favourable this year, including growth in full-time employment, low mortgage rates, and improved net migration,” said the agency. “However, competing factors such as uncertainty in the global economy has kept some prospective buyers on the fence and will continue to temper any large increases in sales.”

The Calgary Herald

Creb.com

Most major cities to see housing 'correction;' Alberta cities to come out as winners

BY KIM COVERT, POSTMEDIA NEWS   DECEMBER 22, 2011

OTTAWA — The Canadian housing market in 2012 will be a "tug-of-war," with low interest rates hauling hard on one end of the rope, and economic uncertainty joining forces with slow income and employment growth to pull back on the other, according to a report from TD Economics.

The suggests Calgary and Edmonton will come out on the winning side, while price corrections will sap the strength of the powerhouse markets in Toronto and Vancouver.

Housing sales grew in 2011 by 2.2 per cent, according to the report by economist Sonya Gulati, and prices rose by an estimated 7.5 per cent — though once the overheated condo markets in Vancouver and Toronto were removed from the equation the overall price gains were much more muted.

"Looking ahead, we anticipate a tug-of-war action to take hold in the Canadian real estate market," Gulati said in the report. "At one end of the rope is the magnetism of low interest rates; at the other are subdued prospects for economic, income and employment growth. Ultimately, we expect the economic side of the equation to win out over the near-term."

Economic factors will be influenced in the first half of 2012 at least by continuing global financial turbulence, and while that's expected to die down in the second half of the year, renewed economic strength in 2013 will likely come with higher interest rates, which will reduce housing affordability.

Accordingly, sales are expected to fall by 2.4 per cent next year and 3.5 per cent in 2013, while prices will suffer average declines of 1.9 per cent in 2012 and 3.6 per cent in 2013, Gulati says.

TD estimates prices are over-valued 10 to 15 per cent, though that is expected to drop over the forecast period.

"Economic, income and employment drivers no longer support the pace of activity and price gains we witnessed in the early phases of the recovery," the report said. "Our current forecast points to a gradual unwinding of over-valuation, but more turbulence in Europe, the U.S., or even here at home, may speed up the period over which the excesses are evaporated."

The report breaks down the housing price, sales and starts forecasts for 12 cities across the country.

"Among the 12 major markets profiled in this report, Calgary and Edmonton ought to lead the pack," Gulati writes. "Solid economic fundamentals and the absence of a recent run-up in prices support our call. Toronto and Vancouver do not appear to be as lucky — we have them experiencing a greater-than-average correction in both sales and prices over the next two years."

Surprisingly, Saint John, which will record its fourth consecutive year of sales declines in 2011, is expected to see the best overall outcome for the period.

"Slightly better lumber prices and an increase in U.S. consumer demand support an improved job climate," Gulati said. "As a result, the employment growth rebound on tap for 2012 and 2013 within Saint John, and the unemployment rate once again dropping as a result, should allow the region to be the only one on our short list to avoid a correction over our forecast period" with sales increases of 2.3 per cent in 2012 and 1.1 per cent in 2013.

Postmedia News

Link

Td.com/economics PDF page 8  Link CALGARY – NOT IMMUNE TO VOLATILITY, BUT SET TO OUTPERFORM

Calgary Luxury home market booming Increase in upper-end condo, single-family sales

mtoneguzzi@calgaryherald.com

DECEMBER 9, 2011

CALGARY — Calgary’s luxury home market has seen a spike in demand this year with sales in the upper-end approaching the record levels of 2007.

Brendan Hughes, a realtor with RE/MAX Real Estate (Central) in Calgary, said sales in the upper-end market are a sign of a good economy in the city.

“It’s vibrant and it’s growing. Jobs are being created. People are moving here,” said Hughes.

According to the Calgary Real Estate Board, so far this year from January to November there have been 25 MLS condo sales over $1 million compared with 19 for the same period in 2010.

Year-to-date, there have been 406 single-family sales at that price point, up from 326 a year ago.

The record number of luxury home sales in the Calgary market took place in 2007 with 431 single-family sales over $1 million and 30 condo sales in that price bracket.

Sano Stante, president of the Calgary Real Estate Board, said there is a lot of confidence in the local real estate market these days.

He said many oilpatch executives are showing confidence because of what they see coming up for the future with projects in the energy sector.

“Those are the people that are buying these properties. So there’s confidence in that realm,” said Stante.

“There’s a fair bit of inventory out there available in that upper range as well. The people who are buying them now are being selective in the upper-end, in the luxury market. There’s a lot of good product to choose from and they’re selecting only the best deals. So homes in the luxury range have to be priced right to sell in a reasonable amount of time.”

According to CREB, the top sale prices for single-family homes in Calgary this year have been $4.525 million in Rideau Park, $3.995 million in Elbow Park-Glencoe and $3.8 million in Aspen Woods.

Top selling condos this year have been $4.1 million in Eau Claire, $2.935 million in Eau Claire and $2.05 million in Victoria Park.

Hughes said one factor in the demand for upper-end product is executives who have been relocated to Calgary.

“They like the high-end condo market,” said Hughes. “We’re also seeing these young professionals — the investment bankers, the lawyers, whatever they might be doing — they work really hard ... They’re looking at that high end.

“And then there’s that investment side of it too. Some people shudder when you mention a million-dollar condo but compared to a lot of other markets what you get here for $1 million, $2 million, is a lot more than you’re getting in some of the other markets. And people see that.”

Hughes said there are people who are also buying these upper-end condos and renting them out to executives in the oilpatch.

Link

© Copyright (c) The Calgary Herald

Bus-only lanes coming to Inglewood’s 9th Ave.

The city is creating bus-only lanes on Inglewood’s 9th Avenue S.E., one of the city’s busiest transit corridors.

Later this month, parking will be banned on the westbound side of the avenue during the morning peak, and in the eastbound lane during the afternoon peak. During those times, only buses and bicycles will be permitted in those curbside lanes.

The transit-friendly rule change through Inglewood’s core is part of a long-term plan to create a rapid-transit corridor towards Forest Lawn. Ninth Avenue S.E. handles many of Calgary’s busiest bus routes — 1, 302 and 305.

The rules will change within a few weeks, depending on when the weather permits sign installation, a city spokeswoman said.

Link

BY JASON MARKUSOFF

DECEMBER 1, 2011

jmarkusoff@calgaryherald.com

City council passes $2.9B budget after deliberating 7 days

The average homeowner in Calgary will pay $78 more in municipal taxes in 2012, city council has decided.

After nearly seven days of debate, council passed a $2.9-billion spending plan for next year.

Councillors voted 13-2 in favour of the budget. Aldermen Andre Chabot and Peter Demong voted against it, saying a six per cent hike — $6.60 more per month — was too high.

"That's an increase beyond what council had already kind of set expectations for and I'm just trying to keep in line with what council had approved and the indicative tax rate that we had directed administration to bring forward and trying to keep it with what Calgarians had expected from council," said Chabot.

The budget was drawn up with tens of millions of dollars in spending cuts as departments searched for efficiencies. The biggest change was adding $10 million to the police budget.

The boost to police service is the only part of the budget Mayor Naheed Nenshi doesn't like. He pointed out that police services was the only department not to make cuts.

Regardless, Nenshi said Calgarians still enjoy low taxes compared to other cities and said the budget maintains improved snow clearing and that, overall, transit is still growing.

He said council has approved "modest investments in improvements in transit, and that preserves the snow-clearing budget as well as making capital investments in long-delayed things like a redevelopment of Bowness Park, Laycock Park and a lot of work on community facilities around the city."

Ald. Gord Lowe voted in support of the budget, but said there were things he doesn't like — such as no new transit service for new communities.

"I think we've done a disservice to Calgarians by cutting transit. I think we've done a disservice to Calgarians by not ensuring that the potholes in the roads are fixed. Beyond that, I think there are some rather imaginative solutions to some of the issues that were raised in the budget, using reserves and other revenue streams rather than going to the mill rate. I was extremely pleased we restored the police funding," he said.

To prevent larger tax increases in the years ahead, Lowe was pushing for a tax hike of eight per cent this year.

Lowe said a six per cent hike now only means bigger increases down the road.

The provincial education tax, which makes up the rest of the property tax bill, will be set next spring.

Council also voted for a budget increase of 5.7 per cent for 2013 and 6.1 per cent for 2014.

Link

CBC News  Posted: Nov 29, 2011 7:46 PM MT

City of Calgary Business plans and Budget 2012- 2014

What would it Cost to own?

With now being such a perfect time to purchase a home in Calgary I thought it might be helpful to give an example of the costs and down payment required to get your foot on the property ladder. Current low interest rates and the large inventory of condos on the Calgary market mean there's tremendous opportunity to get into your first home and stop paying rent.

This example shows the costs and what your on-going payments would be if you purchased a $349,000 home in Calgary, AB. 

Purchase price of $ 349,000

Condo fees of $65.00 / month

Amortization: 30 years

Term: 5 Years

Interest Rate:3.74% (APR 3.74%)

Down Payment                                        5%                     10%                   15%                        20%

Down Payment                                 $17,495                $34,990               $52,485                  $69,980

Mortgage                                        $332,405              $314,910             $297,415                $279,920

Default insurance premium                  2.95%                   2.20%                  1.95%                    0.00%

Default insurance premium                $9,806                   $6,928                 $5,800                        $0

Total Financing                               $342,211              $321,838             $303,215               $279,920

Principal & Interest                              $1,532                   $1,483                 $1,398                  $1,290

Heating Costs( Estimated)                       $100                      $100                    $100                     $100

Condo Fees                                              $65                        $65                      $65                       $65

Property Taxes (Estimated)                      $117                      $117                   $117                     $117

Total Monthly Payment                        $1,814                   $1,765                $1,679                  $1,572

Estimated Closing Costs                                               Payable on or before closing

Legal Fees ( approximate: including disbursement & fees)            $2,000

This chart is for Illustration purposes only. Interst rates are effective as of November 18, 2011

Rates change without notice. Interest is calculated semi-annually, not in advance.

This chart shows that it might be easier than you think. The Default Insurance Premium is the insurance that the bank requires when you put less than a 20% down payment. You've probably heard of CMHC or Genworth, these are two companies in Canada that provide this mortgage default insurance.

Please contact me today and we can get you on the path to home ownership. I have a team of experts that include home inspectors, mortgage brokers and real estate lawyers who will help make your Calgary real estate buying experience a great one.

Link 

Full PDF article from RBC Economics Nov 2011

Ottawa, November 25, 2011 – After posting modest economic growth in 2011, most provinces can expect their outlooks to improve in 2012 and 2013, according to The Conference Board of Canada’s Provincial Outlook – Autumn 2011. 

“Private sector activity will pick up in 2012, helping to offset sharp declines in federal and provincial infrastructure spending,” said Marie-Christine Bernard, Associate Director, Provincial Forecast. “But despite little direct exposure to European markets, provincial economies would be affected if the EU sovereign debt crisis spread globally. As a result, risks to the forecast remain elevated.” 

Central and Atlantic Canada will be hampered by sluggish growth in the United States, weak consumer spending, and fiscal austerity measures. The Western provinces will once again be the growth leaders in Canada, thanks to high commodity prices and robust investment in the energy sector. 

Saskatchewan’s economy is being fuelled by the continued development of the potash industry, and steady expansion in oil and gas extraction. Real gross domestic product (GDP) is expected to rise by a brisk 5.1 per cent in 2011, and Saskatchewan will have the fastest growing provincial economy. Growth is forecast to ease to a still-impressive 2.8 per cent in 2012. 

Alberta is poised to enter another period of prolonged economic expansion. Growing demand for energy from emerging markets is expected to keep oil prices elevated. The construction sector and service industries will also reap the benefits of expected investment in the energy sector. Real GDP growth will accelerate from 3.1 per cent in 2011 to 3.6 per cent in 2012. 

British Columbia’s economy will grow at a more moderate pace of 2.6 per cent this year and 2.5 per cent in 2012, due a decline in government expenditure in infrastructure, and modest growth in consumer spending. 

In spite of the setbacks in Manitoba’s agriculture sector this year, growth in the other goods-producing industries, along with gains in wholesale trade and transportation, supported growth of 2.1 per cent in 2011. Continued demand for buses and aerospace products will keep the province’s manufacturing sector performing strongly next year. Manitoba’s real GDP is expected to advance by 2.6 per cent in 2012. 

The focus in Ontario and Quebec over the next few years will be on reducing public deficits. In addition to budgetary restraint, more moderate growth in private investment and consumer spending will limit overall growth in both provinces. Ontario’s real GDP is expected to rise by 1.8 per cent in 2011 and by 2.2 per cent in 2012. Quebec’s economy is expected to grow by 1.8 per cent in 2012, a slight improvement from the 1.5 per cent gain forecast for 2011. 

Nova Scotia can look to the future with optimism, in spite of limited private investment growth and the provincial government’s austere fiscal measures. Natural gas production is expected to commence at EnCana’s Deep Panuke offshore field early next year and will help lift real GDP growth from 1.5 per cent in 2011 to 1.8 per cent in 2012. The multi-year $25 billion shipbuilding contract that was awarded to the Halifax Shipyard is expected to bring economic benefits starting in 2013, as work gets progressively underway. 

Newfoundland and Labrador’s economy will slow in 2012 as the expansion in the mining industry reaches a more mature phase and oil production declines. Following an increase of 4.5 per cent in 2011, Newfoundland and Labrador’s real GDP growth will be limited to 0.4 per cent in 2012. 

A lull in construction along with weak growth in manufacturing and fiscal austerity measures will weigh down New Brunswick’s economic growth. After a gain of just 0.7 per cent this year, New Brunswick economy is forecast to grow by a modest 1.5 per cent in 2012. 

A rebound in Prince Edward Island’s manufacturing sector will offset lower public investment, keeping the province’s economy growing at a steady pace of 1.6 per cent in 2011 and 1.9 per cent in 2012.

Link

CALGARY — Alberta is poised to be Canada’s economic growth leader in the next two years, according to the Conference Board of Canada’s Provincial Outlook – Autumn 2011.

The board forecasts Alberta to have the highest year-over-year real gross domestic product growth in the country at 3.6 per cent in 2012 and 4.5 per cent in 2013, up from 3.1 per cent this year.

“Alberta is poised to enter another period of prolonged economic expansion. Growing demand for energy from emerging markets is expected to keep oil prices elevated. The construction sector and service industries will also reap the benefits of expected investment in the energy sector,” says the conference board.

“With investment totalling billions of dollars, the construction industry will average annual growth of 5.2 per cent over the next two years — an extremely strong performance given the large drawback in public infrastructure spending in 2012,” adds the report.

It says 81,000 new jobs are forecast for this year, putting increased pressure on an already-tight labour market and keeping employee compensation growing at one of the fastest rates in the country.

The province will create another 52,000 net jobs in 2013, and the unemployment rate will fall below five per cent by the end of the year (down from 6.6 per cent in October 2011), predicts the conference board.

 Link

mtoneguzzi@calgaryherald.com

Four future Calgary rec centres dealt setback as Ottawa denies funding

An angry array of community organizations and city council members are castigating the Harper government, accusing it of political interference after it refused to help fund four new recreation centres in Calgary, leaving the projects in tatters.

The city has been banking on between $82 million and $100 million worth of help from PPP Canada, a brainchild of the Conservative government, which funds up to one-quarter of major infrastructure projects that use the public-private partnership model.

In an extraordinary press conference Thursday, Mayor Naheed Nenshi said even though the board of the independent Crown corporation unanimously approved the funding in the spring, the federal government is now refusing to hand over any money.

He brandished a three-paragraph letter received Thursday morning from PPP Canada, which stated funding has been declined for Calgary.

“Obviously this comes as a surprise to all of us, as a shock to all of us, and we think Calgarians deserve a better response than this,” Nenshi said.

“Calgarians deserve a rationale to what has happened here.

“The question in our minds and in everyone’s minds: why did the government of Canada change its mind so drastically?”

It is a major setback for the three proposed rec centres in the southeast and one in the northwest, and Nenshi is demanding an explanation from Prime Minister Stephen Harper.

Groups that have been pushing for new rec centres in the desperately underserved city were apoplectic.

They, along with local aldermen, vented Thursday, accusing the federal Tories of taking Calgary votes for granted, adding this latest decision appears to show they don’t care about the city.

With tears in his eyes, Paul Sinclair, the head of the northwest community advisory group, said he arrived at city hall Thursday believing there would be good news.

“This is a slap in the face of all Calgarians,” he said.

Ald. Shane Keating, whose ward would take three of the rec centres, went even further accusing federal Tory politicians of taking Calgary votes for granted, adding he believes it was political interference that scuttled the deal.

He pointed out the federal government has set aside $2 billion for P3 projects, but has spent less than $200 million so far.

Tens of thousands of Calgary children, he said, will now suffer because of the decision.

“Along the line, somewhere, somehow, someone had a different opinion or different vie of what P3 Canada supposed to be. And unfortunately that individual opinion has surpassed whatever is written and whatever is intended with the whole project,” he said.

The city is proposing to build three of the rec centres in the underserved southeast, and one in the northwest – with a total price tag of roughly $430 million.

For weeks, speculation has been swirling the funding would not come through. It was confirmed on Thursday.

It is a significant development, and particularly hits the southeast, where local aldermen have lobbied hard for one mega-complex and two smaller ones.

The large facilities are planned for Seton, near the new south hospital, and just north of the northwest’s Royal Oak community. The other two southeast rec centres are planned for Quarry Park and the Great Plains industrial area.

Reaction from the city and community leaders is expected to be furious, and it got its start early on Twitter.

"Is this another Portrait Gallery? After two years of planning and $2 million investment, refusal at eleventh hour," Ald. Druh Farrell wrote, referring to Ottawa's move to cancel a possible western location for a national portrait gallery.

"Great nothing for the NW again!" realtor Paul Walsh wrote on the social-networking website.

Link

rcuthbertson@calgaryherald.com

 Re/Max says since 2000, the average value of a Canadian home has doubled, rising from $163,951 to $339,030 in 2010.

A report from the real estate organization says that billions spent in new construction, renovation and renewal have pushed up the average residential price in the country's major centres.
Re/Max also says condominiums also have changed the urban landscape over the past decade, especially in British Columbia and Alberta, where they comprise 25 to 50 per cent of residential sales.
The real estate group says the value of residential building permits issued nationally between 2000 and 2010 was $340-billion and an estimated $450-billion was spent on renovations.
Re/Max says the impact of this has fuelled the Canadian residential real estate market — as well as the construction industry — for more than a decade.
Canada's population growth also has been a key factor in the growth of the housing market with Re/Max saying since 2000, Canada's population has experienced double-digit growth of 11 per cent.

KELOWNA, B.C.— The Canadian Press
Published Monday, Nov. 07, 2011 9:38AM EST
Last updated Monday, Nov. 07, 2011 9:40AM EST

Link

Multi-family home market draws investors

Volatile stock markets and minuscule returns from fixed income have investors looking at global real estate. But rather than single-family residential property, the hot ticket these days is multiplefamily dwellings.

At a luncheon for financial analysts with the Edmonton CFA Society, Eric Bonnor, senior vice-president with Brookfield Asset Management in Toronto, quoted from the publication Emerging Trends in Real Estate 2012, a survey of 950 real estate executives by the accounting firm PricewaterhouseCoopers and the Urban Land Institute.

"Canadian real estate remains the most stable in North America," Bonner said. "Canadian investors fed up with disappointing stocks and low-yielding bonds sit on lots of funds, looking for long-term cash flowing assets like real estate, and are having trouble placing the funds that they have. Investors condition themselves to accept lower domestic returns, or go outside the country and chase higher yields."

The booklet lists Toronto and Vancouver as the most attractive real estate markets in Canada, being 24-hour destination points for businessmen and other visitors. Calgary is rated third and Edmonton fourth.

It is written that Edmonton and Calgary are oilsands markets, but Edmonton "quietly prospers in less of a see-saw mode, historically cushioned by the presence of the provincial government." And the commercial tenancies differ, in that Edmonton features "more stable engineering companies and not so many wildcatters."

The research adds that Edmonton has a tight industrial real estate market with low vacancy rates, that retail building is strong as people "earn big bucks in the oilsands country and spend in local malls and power centres, including one of the world's largest in west Edmonton." Homebuilders do well due to appetites from people with ample salaries. And local governments hike development assessments because "it's good political optics versus raising property taxes."

But there are problems with residential real estate in North America. The S&P Case-Shiller index shows house prices in 20 U.S. cities are down 3.8 per cent in the 12 months ending Aug. 31, and have fallen 31 per cent since their 2006 peak. With three or four years of unsold inventory in the country, there are no signs of immediate reversal in prices. In Canada, there are concerns that a housing bubble in certain parts of the country could cause homes in those areas to fall 20 per cent in value.

To avoid the risk of buying additional residential homes, people are looking at investing in commercial and industrial properties. And presenters at the luncheon said multiple-family dwellings have become treasures, filled by people leaving their homes because they can't keep up mortgage payments, plus those unable to afford buying a house at all.

Seamus Foran, a senior vice-president with Brookfield Asset Management, said the U.S. real estate market has $180 billion of known distressed assets, and that "the shining star for U.S. real estate today has been the multi-family market; as U.S. home ownership continues to decline, the multi-family market has been there to reap the benefits. However we need to be cautious as new development has started in this sector."

He noted that in most U.S. apartment buildings, the turnover ratio of tenants on a year-to-year basis is at least 50 per cent, considerably higher than in Canada.

"There's a reluctance to make a long-term commitment to buy residential houses" in the U.S., Foran said. "And the multi-family market really benefits from short-term leases, because it gives the owners opportunities to bring rents up, each time those leases fold."

As for Canada, the Emerging Trends booklet says:

"The multi-family residential sector will stay tight as continuing immigrant flows sustain demand in the major cities. Even if job growth declines and home-buying cools, apartments should be 'a safe haven.' When people have less, they rent.

An increasing number of younger adults delay buying houses; they simply cannot afford them after recent price spikes. Aging demographics also favour more apartment demand; empty nesters and seniors move out of suburban homes into smaller, easier-to-maintain units with urban conveniences."

In summary: "Investors can never get their hands on enough apartments. And everybody has the same idea. When you get some, hold onto them."

David Glicksman, a partner with PwC, said that foreign investors in U.S. property should be aware of whether they have to file U.S. income tax returns, or whether it's done through a firm or fund. They also need to know how to declare income or losses on their Canadian tax returns, if there are withholding taxes, if there are U.S. taxes on the sale of the investment, and whether you get a foreign tax credit in Canada.

© Copyright (c) The Calgary Herald

BY RAY TURCHANSKY, FOR POSTMEDIA NEWS NOVEMBER 20, 2011 11:29 AM

Link

A Canadian real estate expert says the best way to predict housing sales and price gains is to track population and job growth numbers.
Don Campbell with the Canadian Real Estate Investment Network tells 660News, Calgary leads the country in those two categories which
usually produces a bit of a housing boom 18 months later.
Campbell says, actually, between now and 2016, Calgary and Edmonton will become the country's real estate hotbeds.
He predicts house prices in Alberta's two biggest cities will rise by 5 to 7 per cent in 2012, and post gains of 7 to 10 per cent in 2013.
Campbell says national real estate numbers don't tell the real story because they truly reflect regional conditions.
He adds, using Canadian housing starts and sales numbers to plan for the future is like looking in the rearview mirror.

Kevin Usselman
2011/11/15

 Link

CALGARY - Alberta officially became the most affordable province in the country for home ownership in the fourth quarter of 2010 and affordability in Calgary is now the best it's been in almost six years, says a new report released Thursday by RBC.

The Housing Trends and Affordability report said a gradual but steady recovery in housing demand in the past half-year has just begun to bolster market conditions in the Calgary area by drawing the prolonged slump since 2007 closer to an end.

In Calgary on a seasonally-adjusted basis, home resales increased appreciably since the June 2010 lows, and this "helped to reduce the market slack significantly by the end of last year that kept buyers in the driver's seat.

"Nonetheless, the return to more balanced market conditions in Calgary did not succeed in reversing the tide in the fourth quarter of 2010, because home prices continued to weaken for the most part," said the report by senior economist Robert Hogue.

"This, however, contributed to further material improvement in affordability-the RBC Measures for Calgary, again, fell the most among Canada's largest urban markets, by declining by 0.9 to 3.1 percentage points (on a quarterly basis).

"Affordability in the area is now the best in almost six years. We believe that attractive affordability will support further increases in demand as the local economy picks up steam in the year ahead."

The report said the Alberta market is the only provincial market showing year-over-year home price declines, reflecting soft market conditions.

In the fourth quarter of 2010, the RBC measures in Alberta fell once again by 1.0 to 2.4 percentage points in the province, extending their long strings of declines since late 2007, said the report.

"In addition to the lower mortgage rates, the further depreciation of home prices contributed to lowering the cost of home ownership in the fourth quarter. Property values were negatively affected by a substantial downswing in demand in the spring and early summer, which put buyers in the driver's seat," said RBC.

"The significant improvement in affordability is near the end of its line, however. Demand has shown more vigour in recent months-alongside a provincial economy that is gaining more traction-and the Albert market has become better balanced."

The RBC Housing Affordability Measure has been compiled since 1985. The higher the reading, the more costly it is to afford a home. For example, an affordability reading of 50 per cent means that home ownership costs, including mortgage payments, utilities and property taxes, take up 50 per cent of a typical household's monthly pre-tax income.

In Calgary, the affordability measure for a detached bungalow was 34.9 per cent in the fourth quarter of 2010, down 4.8 per cent from the previous year. For a standard two-storey home, it was 37.0 per cent, down 5.0 per cent from last year and for a standard condominium the measure was 22.4 per cent which represented a 2.7 per cent decline from a year ago.

For Alberta, the affordability measures and their year-over-year declines were: detached bungalow, 30.9 per cent (- 3.3 per cent); standard two-storey, 34.4 per cent (- 4.1 per cent); and standard condominium, 20.3 per cent (- 2.6 per cent).

mtoneguzzi@calgaryherald.com
© Copyright (c) The Calgary Herald

Read more:
http://www.calgaryherald.com
Thursday Feb 24th, 2011

RBC Housing trends and affordability research Feb 2011 Pdf Download

Calgary in top 5 world's most livable cities: survey

Calgary made it into the top five list of the world's most livable cities, while Melbourne claimed second place from Vienna and Australian and Canadian cities dominated the list's top 10 spots.

In the annual survey by The Economist Intelligence Unit, the Canadian West Coast city and 2010 Winter Olympics host scored 98 per cent on a combination of stability, health care, culture and environment, education, and infrastructure -a score unchanged from last year.

It has topped the list from 2007. Although Melbourne since the Austrian capital for a silver medal, there was no other major change near the top of the list of 140 cities worldwide. Auckland, N.Z., came in 10th.
"Mid-sized cities in developed countries with relatively low population densities tend to score well by having all the cultural and infrastructural benefits on offer with fewer problems related to crime or congestion," Jon Copestake, editor of the report, said in a statement.

Pittsburgh was the top U.S. city with 29th place -just ahead of Honolulu -while Los Angeles moved up three places to 44th and New York held onto the 56th spot. London moved up one place to 53rd while Paris came in at No. 16.
The top Asian city was Osaka at No. 12, tying Geneva, Switzerland, and beating out the Japanese capital of Tokyo, which came in at 18.
Beijing, capital of the world's most populous nation and No. 2 economy, straggled in at 72.
Harare, capital of Zimbabwe, once again claimed the worst position with a rating of 37.5 per cent, narrowing beating out the Bangladesh capital of Dhaka.

The Economist Intelligence Unit survey ranks cities based on 30 factors such as health care, culture and environment, and education and personal safety.
© Copyright (c) Reuters.

1. Vancouver, Canada
2. Melbourne, Australia
3. Vienna, Austria
4. Toronto, Canada
5. Calgary, Canada
6. Helsinki, Finland
7. Sydney, Australia
8. Perth, Australia
8. Adelaide, Australia
10. Auckland, New Zealand
The bottom 10 cities were:
1. Harare, Zimbabwe
2. Dhaka , Bangladesh
3. Port Moresby, Papua New Guinea
4. Lagos, Nigeria
5. Algiers , Algeria
6. Karachi, Pakistan
7. Douala, Cameroon
8. Tehran, Iran
9. Dakar, Senegal
10. Colombo, Sri Lanka
http://www.reuters.com/article/2011/02/21/us-cities-liveable-idUSTRE71K0NS20110221

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