Canada’s Housing Market Hints at a Cooling Trend

Wednesday February 15th, 2012

According to the Canadian Real Estate Association, the housing market in Canada is stabilizing. This past January saw the largest decrease in sales since July of 2010, a 4.5 percent drop over December of 2011. Prices were still up two percent over January of 2011, at an average of $348,178, but that is still the smallest increase seen in the past two years.

Depending on who you talk to, you will most likely get a different reason for the slow down. Some market gurus believe that Canada’s housing market is headed for a correction. The “bubble” word has even been bandied about. But, then again, more Canadians have gotten into the real estate market because of the enticingly low interest rates.

The Canada Housing & Mortgage Corporation does predict stability for the next two years, while some bank economists disagree. They believe that in some markets, particularly Vancouver and Toronto, prices may decrease by as much as ten percent. CREA did note that sales activity slowed considerably in many of Canada’s major metropolitan markets. Montreal and Greater Toronto saw the most declines, followed by a softening in Greater Vancouver, the Fraser Valley, Ottawa, Winnipeg, Edmonton and Calgary.

Saskatoon Takes Top Honors in Metropolitan Outlook Survey

Tuesday February 7th, 2012

It is becoming more and more apparent that Canada’s national economy is going to be spearheaded by the western part of the country. Edmonton, Calgary, Regina and Saskatoon are coming in at the top of the list of places set to become economic leaders.

All of this is due to the fact that both provinces, Alberta and Saskatchewan, are rich in energy resources and despite how the global economy drifts up and down, minerals and oil are still needed commodities. Mario Lefebvre, who is the director of the Conference Board of Canada’s Centre for Municipal Studies, makes note of this fact, as well as pointing out that the eastern and central parts of Canada will not be as lucky. These areas will be governed by slow growth in the manufacturing industries as well as the ending of certain government stimulus programs.

A report called the Metropolitan Outlook Winter 2011 looked at 27 different municipalities. Saskatoon took first place, with a four percent growth in domestic product. This was followed by Calgary at 3.6 percent, Edmonton at 3.4 percent, Regina coming in at 2.9 percent and Oshawa at 2.7 percent.

Saskatoon’s rating was helped by the 10.6 percent increase in construction activity both in commercial and residential areas. It is expected that the city will see a six percent increase during 2012. One big ticket on the books is the River Landing project, a mixture of residential and commercial space, due to start in mid 2012.

Some People Are Exceptions to the Canadian Migratory Trend

Monday January 30th, 2012

To truly judge the value of a home, one must live in it for a long time. Antoinette Grenier has lived in her family home for 87 years. In 1925 her father bought it for $1,400. Needless to say the value is considerably higher these days. But Grenier has no interest in selling, nor much interest in the dollar value. It is, after all, home.

She is close to McCauley’s city centre and can walk to do her shopping or to visit the bank. When home, she is surrounded by old growth trees, including a giant spruce in the front yard. There have been offers to buy, but Grenier so far has refused. Nor is she impressed with the high dollar value of the property.

Grenier is one of the exceptions in the McCauley area. The number of people who move out of this older neighborhood is 50 percent higher than the Edmonton average. Canadians are migratory for the most part, with more than four million moving from one place to another every year. Not Grenier. She’s happy where she is.

Edmonton’s Property Assessments in Line with Last Year’s Figures

Monday January 23rd, 2012

The city of Edmonton mailed out its property assessments this past Tuesday, and noted that values for single family homes throughout the city are tending to hold steady. The average assessment for a single family home went down 1.7 percent, based on July 1st 2011 figures, the basis for the assessments.

That compares to the nine percent price increase seen in assessments for 2010 and the two years prior to that which both saw ten percent decreases in valuation. The city noted that having prices stay steady makes it easier to budget for that inevitable tax bill. Tax bills are determined by the setting of the mill rate in April. The value of each home determines how much of the city’s tax bill that home owner is responsible for.

In December, city fathers approved a 5.4 percent budget increase. Edmonton expects to collect $1.01 billion in business and residential property tax in 2012. For the current assessment, the average value of a single family home in Edmonton is $357,000, just slightly lower than the 2010 value of $363,000.

If homeowners disagree with their assessment, they are encouraged to call the city’s 311 line or the tax line 780 496 6388 to make an inquiry. The deadline for inquiries is March 12th.

Edmonton Passes 2012 Budget – 5.4 Percent Tax Increase for Next Year

Saturday December 17th, 2011

Residents of Edmonton will be seeing a higher property tax next year than what was originally planned. But the recently passed budget, approved this past Tuesday, does manage to keep costs low and still provide people with the services they want.

The hike will be 5.4 percent for 2012, averaging out to $93 for the average homeowner.
That means a 3.9 percent increase for operations and a 1.5 percent increase for the funding needed to keep lights, curbs, sidewalks and streets in older areas in good repair.

Originally council was aiming towards a 4.5 percent increase, which meant that $10.5 million in spending cuts would be needed. This would have targeted replacing burnt out street lights, collecting litter, public bus service and flower planting in spring. Most of these were reversed by council, considering keeping Edmonton neat and clean more important than keeping taxes at their lowest.

The only councillor that voted against the budget was Kerry Diotte, citing too many non-essential items in the final package. Diotte wanted to cut more from the approved $1.8 billion budget. Mayor Stephen Mandel and others disagreed, noting that some things just can’t be sacrificed.

Housing Starts Down in November, But Not Seen as Big Concern

Monday December 12th, 2011

Even though new housing starts did decrease by 13 percent in November when compared to the prior month, the Canada Mortgage and Housing Corporation is seeing no signs of fallout. There were 181,000 housing starts in November, compared to the 208,800 in October.

Economists were expected a smaller decrease, but when you look at the entire picture, it becomes evident that the slow down is due to a stable inventory. After all housing starts, particularly in the multi family category in places like Vancouver and Toronto have been booming. That housing sector did see a 23 percent drop, but the single family home market saw a 3.5 percent increase.

Also of note is the fact that more Canadians are opting to rent because of the high prices of real estate at present, and perhaps to get a handle on their debt loads. First time buyers will no doubt be looking at the condo sector when the time comes, simply because that is a more affordable option.

Douglas Porter, a Bank of Montreal economist, doesn’t see a big crash, but rather a slow cooling in sales, with prices holding fairly steady. Housing starts will most likely level out through both 2012 and 2013. Nationwide the economy in Canada is still healthy. The Bank of Canada has also elected to leave the low interest rates intact, at least for now.

Some Issues and Decisions May Take You by Surprise

Monday December 5th, 2011

Sometimes people unknowingly get themselves into situations that end up costing them time, money and heartache. This is particularly true when dealing with real estate issues, and not fully understanding those issues. These concerns can be anything from miss-understanding insurance exclusions to contract and/or sales problems. Two examples are as follows:

One insurance issue that came up recently was a homeowner whose property was damaged by fire. It was rented to a woman whose son was into marijuana, specifically the production of resin from the raw product. The machine he used exploded and the house was destroyed. The insurance claim was denied because there was an exception clause in the policy known as the Marijuana Exclusion. The decision was upheld by the courts.

Another case is a bit more complicated. A brokerage firm had a bookkeeper that had a habit of changing the payee names on checks to her own name. Over the years she acquired more than $400,000. The checks were supposed to have two signatures, but the bookkeeper only got one signature. All were deposited in the bookkeepers account and the bank paid the checks.

When the brokerage sued the bank for accepting the checks with only one signature, the bank came back with the policy that all errors had to be reported within 30 days of the brokerages monthly statements. The bank won, and they were made liable for only the checks reported within that window.

CMHC Expects Alberta, Edmonton to see Moderate 2012 Housing Growth

Monday November 28th, 2011

The Canadian Mortgage Housing Corporation released a report this past Thursday stating that both Edmonton and Alberta will experience a modest growth in their respective housing markets for 2012. Richard Goatcher, who is a Crown corporation senior marketing analyst, echoed this finding.

Goatcher then noted that 2011 was an improvement year, a recovery of sorts after the dismal slowdown in 2008 and 2009, caused by the recession. He expects the improvement trend to continue. This report was presented to a number of real estate professionals at a meeting at the Delta Edmonton South Hotel.

The prediction from CMHC is for a three percent increase in the resale market, an 11 percent increase in housing starts and an average increase of 2.4 percent in housing prices for Edmonton. At the same time, the report anticipates the number of homes listed to decrease by a 4.6 percent average.

Regional CMHC economist Lai Sing Louie expects Alberta’s economy to see a GDP increase of 3.1 percent during 2012. That is one full percentage point higher than the prediction for Canada as a whole. More people will be moving to Alberta because of the improved economy and resulting job possibilities. That means more people needing a place to live, a good thing for the real estate world.

Colliers Survey Show Canadian Investors Increasingly Active

Tuesday October 19th, 2011

Canadian investors are taking a second look at the historically low interest rates and diving into the investment market. Colliers International just released a survey outlining the real estate trends in the North American market, specifically the United States and Canada. Both countries have low interest rates, but it is Canada, where the more favorable economic picture is creating a real estate market that is flourishing.

Colliers also noted that people buying into real estate simply to invest tended to be more aggressive, and more prone to risk taking. Milton Lamb, a Senior Vice President with the firm’s Investment Services, focused on the Canadian market. In the survey, debt was not considered a key issue when there was an opportunity to increase their investment portfolios. The primary factor was having a good supply of “for sale” real estate out there. Some 64 percent of respondents agreed.

Lamb also noted an increase in investment risk in 2011, compared to last year. Investors are also buying outside of major urban centers because that is where most of the available inventory lies. Investors are also buying in the United States where prices in the distressed market are even lower. It is truly a buyer’s market south of the border. Some 68 percent of investors considered Canada’s economy to be on an upswing, while only 14 percent believe the economy/property cycle had already peaked.

Canadian Housing Market Sees National Gains in Third Quarter

Tuesday October 11th, 2011

A survey released by Royal LePage this past Wednesday showed that average home prices throughout Canada were higher in 2011’s third quarter than during the same period last year. They averaged a gain between 5.7 percent and 7.8 percent. To break it down into housing categories, a single-family bungalow averaged $349,974 per unit, a standard style two storey single-family home came in at $388,218 on average and condos in the standard category averaged $329,300 per unit.

Royal LePage attributed the increases to the stability of the Canadian economy and the still incredibly low interest rates. In fact the price rise completely went against the expectations of business analysts. But, LePage also noted that 2010’s third quarter was on the weak side as far as housing prices went. That may temper the results somewhat. The national figures may also mask tendencies in specific parts of the country.

An example is Vancouver, notably with the most expensive housing prices in Canada. An average single family home, bungalow or two-story, went for over $1 million. Ottawa, Saint John N.B., Toronto, Montreal and Halifax all saw prices increasing from 4.4 percent and 10.4 percent.

Alberta’s home prices saw minimal gains. Calgary actually saw a one percent decrease during the third quarter of 2011. Edmonton saw a 3.9 percent increase in condo prices, averaging $207,833 per unit and in the two-storey housing category, the increase was 3.8 percent, or an average of $351,429 per home. Single-family bungalows were virtually flat, with a 0.2 percent gain. Average prices in this category were $312,000 per unit.

Resale Real Estate Market in Edmonton Sees Healthy, Steady Sales in August

Monday September 19th, 2011

The difference in resale housing prices in Edmonton, between this August and that of 2010 was negligible. This year the average single family home price was $370,438, and last August was just 0.2 percent more, at $371,187. This August saw 969 sales, while August of 2010 had 813, noted a report from the Realtor’s Association of Edmonton.

As far as condos, the average sales price in August of 2010 was $236,521 compared with the average of $231,735 seen this past month. Prices went down about two percent. As far as sales, August of 2010 saw 378 and that same month in 2011 had 428 units change hands.

Chris Mooney, who is president of that same organization, noted that Edmonton’s market remains stable. While much of the rest of Canada has been going through obvious high and low sales periods, Alberta’s capital city is quietly holding its own. Residential real estate is continuing to hold its value, and with the resurgence in the energy industry and supporting companies, this bodes well for the economic stability of the area.

Another realtor, Yuriy Fleysher, who is with Dynateam Realty, notes that buyers and sellers in Edmonton are somewhat careful. He noted that if a property is priced well, it will sell quite quickly. But, if that same property is overpriced, the realtors won’t get so much as a nibble.

Distracted Driving Law Begins September 1st in Alberta

Wednesday September 7th, 2011

Believe it or not, people try and do some really crazy things while they are driving. Granted most of the time it is texting or making phone calls, but some have found a way to put on lipstick, give their choppers the once over with dental floss and even follow the pages of a novel. This is one place where multi-tasking is not such a good idea.

Starting September 1st, drivers in Alberta will no longer have to rely on their common sense, or lack of, when deciding whether to read that newspaper when driving down the road. On that day, a law banning the use of cell phones and other distracting behaviours while driving goes into effect. The fine for being caught texting, reading or doing anything else besides driving, will be $172.

RCMP and other Alberta police agencies will begin cracking down during the Labour Day weekend, enforcing the new law along with the usual problems of speeding, drunk driving and the like. James Stiles, who is with the traffic division of RCMP, is hoping that they won’t have to write too many tickets before drivers comply with the new law.

Electronic items that will get you a ticket, besides the cell phones, are GPS, MP3 players, video games and laptops. In dash stereos are fine, as are hands-free cell phones. Tickets will also be issued for personal grooming, writing and reading while driving.

Since the new law has been widely publicized throughout the province, there will be no grace period. Officers in the field do have the option to issue warnings during the rollout period. According to a study from Transport Canada, Alberta’s drivers tend to use hand-held cell phones more often than drivers in any other province.

Modern Suburban Means Smaller Lots, Closer Neighbors

Tuesday August 16th, 2011

Suburbia once meant sprawling front and backyards with equally sprawling single-level ranch style homes in neighborhoods with a surfeit of open green space. As the price of land around Edmonton increases, along with the population, a new suburbia is taking over. This is the land of the townhome, with postage sized front yards and equally diminutive backyards. Double thick walls still ensure privacy, but your next door neighbor just got a whole lot closer.

This is one way to create affordable entry level housing so needed by Edmonton’s expanding population. In the older neighborhoods, there is an average of 22 homes per residential hectare. The city recently increased the mandatory density per residential hectare to between 30 and 45 homes. The newer developments are easily topping those requirements.

One developer, MLC Land, is trying to get a variance to allow the building of two-storey, 1,500 square feet homes on lots only 25 feet wide. That is roughly half the lot width of many of Edmonton’s older neighborhoods. The other way to increase the density is by the building of secondary suites in new homes. This helps not only the homeowner, who may rent out the suite to help defray mortgage costs, but renters who are finding it sometimes difficult to find space. The secondary suites also work well for extended families, such as housing elderly parents or adult children.

Class Action Suit Filed Against CSA for Certifying Sub-standard Modular Homes

Thursday August 4th, 2011

A class action lawsuit has been filed against the Canadian Standards Association by owners of some modular homes that were not property inspected before sale. The suit is seeking $8 million in compensation. Modular homes are ready to move into homes that are built offsite and then assembled on the property. But homes built between 2002 and 2010 in a Colorado, USA plant ended up being substandard, even though they passed inspection and were given the CSA sticker.

Robert Granger, an Edmonton resident, is leading the suit, advising that he bought his modular home after noting the CSA certification. But during the six months after purchase, he ended up with several problems concerning heating, ventilation and faulty electrical work. It took more than $10,000 to repair the home.

The allegations have not been proven in court as of yet. The Colorado firm, Champion Home Builders, asked CSA to certify the homes for the Canadian market. But apparently thousands of homes did not meet that requirement, yet passed inspection anyway.

Also named in the suit is the Standards Council of Canada, a corporation owned by the Crown. This organization was formed to protect Canadians against such losses. These homeowners have spent between $200,000 and $400,000 for their homes, which are now considered of no value at all.

TD Prediction: Housing Market Could Be In For Decline Outside Of Alberta

Thursday July 21st, 2011

The Canadian residential real estate market may experience a correction of moderate proportions through 2013, per a new report issued by Toronto-Dominion Bank. Home prices and resales are expected to decline somewhat due to a sluggish growth in household income, as well as higher interest rates.

The report’s co-authors, economists Sonya Gulati and Derek Burleton, said that the number of first-time homebuyers will likely decrease. Tighter rules for insured mortgages will also contribute to some stagnation in the market. Gulati and Burleton said that demand for homes will remain healthy throughout 2011, but it is expected to taper off during the next two years.

Canada’s housing market has bolstered the national economy for the past few years, helping it to weather the global recession to a much higher extent than the U.S., which continues to suffer from a weak housing sector. The market has been so strong that fears have been raised regarding abnormally high levels of household debt.

Per TD, there will be a 7.4-percent decline versus last year in the national average price. The highest average price of $382,292 may hit a low of about $329,000 by 2013. For the two-year period of 2011 to 2013, sales are predicted to be in a range between 416,000 and 435,000 units. Total resale activity may decrease by about 15.2 percent. Prices may drop by some 10.2 percent through 2013.

The overall predictions vary greatly from those on a per-market basis. Edmonton, Calgary and Regina are expected to perform better than pricey markets such as Toronto and Vancouver, where more significant declines may be seen.

Edmonton’s Bank of Montreal Building Slated for Demolition

Tuesday June 28th, 2011

At one time the Bank of Montreal building at 101st Street and Jasper Avenue was the tallest building in that part of town. Opening in 1963, the ten-storey design was the creation of George Lord, a local architect with the company Rule Wynn and Rule. It cost $2.5 million to construct this then modern urban design.

Its grand opening attracted some 300 people, eager to get a look at this sleek, state of the art office tower. The ribbon was cut by then Lt Governor J Percy Page. The bank offered tours for the first three days and the public got its first look at an office space that used climate control and Muzak for soothing background music. Fashioned of teal-glazed brick and a contrasting black and pink stone called Morton Gneiss, the building was made to appeal, and to last. Custom made copper lamps accented the ground level walls.

But now, despite the renewed appeal of 1960s décor, this iconic building is set to be demolished. At only 48 years of age, it is too young to be considered eligible for historic status. The ripe old age of 50 is the target number for that. GE Capital Realty, an American firm, bought the property and considers it economically unfeasible to renovate. In its place will be an overblown LRT entrance and a three-storey underground parking garage.

There is a campaign afoot to save the aging building, and it is just getting started. The goal is go get the city to give the Bank of Montreal building historic status, even though it hasn’t reached the magic number. They are asking GE to hold off on the demolition, despite them already having the permit. The group, called SaveBMO63, would like to see GE retrofit the building, rather than tear it down and build from scratch. We’ll just have to wait and see what happens next.

Fort McMurray Prepares for Second Economic Boom

Friday June 17th, 2011

Fort McMurray is once again becoming a boom town, thanks to its proximity to the Alberta oilsands. It has a mixed reputation. The city itself is in the midst of a boreal forest with rivers that run through the center of town. It actually looks quite appealing from the air. But just a few miles away are the oilsands mining operations, which have brought controversy as well as prosperity to the region.

Part of the reason for the dichotomy of this city is perhaps because it grew so quickly. Fort McMurray has seen an average seven percent increase in population growth per year during the last ten years. Along with this is the annual household income, which at over $177,000 is 95 percent higher than Canada’s national average. Along with this growth came housing shortages, more crime, social inequalities and bad press about the oil industry in general.

The recession slowed things down a bit, but now Fort McMurray and its mining operation are heading in a boom direction once more. The oilsands on average produce 1.5 million barrels of product each day. By 2019, that daily production rate is expected to jump to 3.3 million barrels. The oilsands drive other industries, such as construction, which is seeing an impressive increase in the industrial real estate category.

Plans for the city include a commitment from the province for $1.6 billion to improve the infrastructure in the area. This includes turning Highway 63 into a twinned freeway, doubling the access into and out of Fort McMurray. Another project is the construction of a new water treatment plant. Organizations such as Housing First will deal with the homeless issue in the city. Companies such as Wood Buffalo Housing and Development Corporation are helping secure mortgages for families. This is needed in an area when the lack of available land, and not enough homes, is causing real estate prices, and rents, to skyrocket.

CREA Revises Price Forecast for Residential Real Estate Market

Wednesday May 11th, 2011

The number of multi-million dollar homes being sold in Vancouver is forcing the Canadian Real Estate Association (CREA) to revamp its sales forecast for 2011. In February the organization posted a predicted price increase of 1.3 percent. Thanks to Vancouver, the gain is now expected to be four percent nationwide.

In Vancouver, home prices have increased some 30 percent within the last year. This has some in the industry concerned about a considerable price correction. While Douglas Porter, who is a chief economist with BMO Nesbitt Burns, notes that sales across Canada have slowed, a sharp correction in price would most likely be something seen in certain geographical areas, if at all.

This past March, CREA advised that the average resale price across Canada came out to $366,000, the highest it has ever been. If Vancouver is eliminated from the calculations, that average goes down to $327,000. They surveyed 25 cities during March and 22 of them showed price gains. The exceptions were Victoria, Edmonton and Calgary.

The association also believes that the sales in 2011 will be stronger than at first predicted. They now believer 441,000 properties will be sold by years end. That is a 1.3 percent decline from 2010, but still lower than the previous prediction of 1.6 percent. Forecasting, for both price and sales volume, has proven difficult for the CREA this year.

Wealthier and More Educated Retirees Tend To Carry More Debt

Friday April 29th, 2011

Canadian retirees that are wealthier and more educated tend to carry more debt when taking that golden handshake. Statistics Canada just released some data from the year 2009. It shows that for retirees 55 and older, 34 percent still owed on a mortgage or other sort of consumer debt. The average amount owing was $19,000.

Among those retirees, 25 percent carried debt of under $5,000. Another 32 percent carried $5,000 to $24,999 in debt and 26 percent retired owing from $25,000 and $99,999. The remaining 17 percent owned a minimum of $100,000. As far as how education plays into this, retirees that held university degrees owed an average of $20,000 rather than the $13,000 held by those who did not make it through high school.

Retirees that had substantially higher incomes, between $75,000 and $400,000 were apt to carry the most debt.

Perhaps it is because people at higher income levels feel more confident because they have financial security and a high net wealth. The debt they do carry may be a small portion of what they are actually worth. One form of debt often carried by people with high end incomes is a line of credit. This allows them the freedom to invest in property or other items that pay a return. Yet for most people, carrying debt in their later years tends to put a damper on what they plan and do during retirement. Many have decided to keep their jobs a bit longer or even return to the work force because they must have additional income.

Edmonton Housing Starts Increasing

Monday April 18th, 2011

The decreasing amount of housing starts is not an unfamiliar issue to Edmonton, and for the sixth consecutive month, starts fell again in March in the Edmonton region.

In 2010’s first quarter, starts reached 2,032 and in March alone, 813. This year, starts are down by 12 percent to 713, and year-to-date starts are at a quiet 1,565.

Single detached starts only reached 801 n March, a decrease of 43 per cent from 2010’s first quarter. Single detached homes alone fell 54 per cent, at 236 starts, from March 2010.

Alberta’s housing starts didn’t fare much better. Across the province, starts in Alberta’s seven largest centres dropped to 1,297 starts in March, a decrease of 34 per cent over last March’s 1,957 starts.

Richard Goatcher, the Canadian Mortgage and Housing Corporation President, said the agency expects product to increase in the next few months. Resale and new housing inventory is predicted to start a downward trend.

Edmonton itself, though, is already seeing an upward trend in its housing starts. Row housing, apartments and semi-detached starts rose by 59 per cent over March 2010 to 477. Multiple dwelling starts totalled 764 year-to-date, an increase of 20 per cent over 2010’s first quarter.

Nationally, starts increased 2.8 per cent in March 2011, up to 188,800 units from 183,700 units in February.

Local Builders Cheer Federal Pledge for Home Retrofits

Friday March 25th, 2011

A “green home” designer and builder claims that currently built homes will comprise some 85 percent of the homes still standing in 2050. Thus, says, Peter Amerongen, those homes must be retrofitted to be more eco-efficient.

Amerongen applauded the federal Conservatives’ March 22 pledge of $400 million toward the Eco-Energy Retrofit Program. Under the program, homeowners will be reimbursed for a percentage of the funds they spend to improve energy efficiency in their homes.

While Amerongen is delighted with the government’s financial commitment, he said that the retrofit initiative has been inconsistent. For example: The government proclaimed in early 2010 that new homeowners were not permitted to sign up for the reimbursement after a deadline of March 31. This marked the second time that an unsuccessful effort by the government was made to cancel funding to homeowners.

Amerongen expressed empathy for people engaged in the retrofitting business, and the roller-coaster quality of their workloads. One company feeling such effects is Atco EnergySense, which prepares audits showing energy levels before and after retrofitting. Such audits are necessary for consumers to receive their federal subsidies. Atco program manager Mark Antonuk said that demand for the company’s service declined last year due to the prohibition of new customers. He said that in 2010 there was a 50-percent decrease in the number of assessments as compared to the 5,000 that were done in 2009.

Homeowners receive an average subsidy of $1,200 for their retrofits, which include furnace replacement, new windows, as well as attic insulation. Antonuk maintains that since 2001, Atco has provided 49,000+ assessments in Alberta homes. He equates that to a reduction of 46,000+ tonnes’ worth of gas emissions.

Edmonton Housing Sales Not Stirred by Upcoming Mortgage Rule Change

Thursday March 10th, 2011

On March 18th the new mortgage laws take affect, but even the tougher rules have not managed to cause much of a stir in Edmonton home sales. The Realtors Association of Edmonton just released their report and the results are best described as lukewarm. In February 1,044 homes were sold through the MLS system. While that is a considerably higher number than January when 735 homes changed hands, it is still 20.6 percent lower than in February of 2010.

Across the rest of Canada, January 2011 home sales were the highest seen since April of 2010, with Victoria, Vancouver and Toronto having the strongest numbers. Gregory Klump, chief economist for the Canadian Real Estate Association believes that these same rule changes are responsible for the rise in sales. Edmonton, it appears is an exception.

Chris Mooney from the Edmonton Realtors Association sees no impact on sales, unlike in 2010 when more restrictive rules went into effect in the spring. Of course the March 18th changes will affect less people than the aggressive changes of 2010. This year’s rules include changing the maximum length of amortization from 35 to 30 years, being able to borrow 85 percent of the value of home rather than 90 percent and the government no longer backing lines of credit secured by a home.

Downtown Edmonton Office Building May Get Facelift

Friday, February 25th, 2011

Mid-way down the block on 102nd Street, just to the north of Jasper Avenue, is a bedraggled building that just might get a much needed facelift. The Alberta Investment Management Corporation has asked the Hines real estate company to spearhead the development of the troubled downtown property.

The building was officially opened in 1988 as part of a revitalization project for the area. It is two storeys with an underground parking garage for 502 cars and 120,000 square feet of space, and there is a connection to Edmonton’s pedway system. Manulife was the original developer and got a sizable concessions package for their hand in the project. The standing building was Phase I. Phase II never got off the ground, which would have added a hotel and office tower to the location.

In 1994 the last shop closed its doors and the building followed suit. After reconfiguring the space two floors were leased to Dynalife DX Diagnostic Laboratory in 2003. They remain the sole tenant and until their lease is up, the project will most likely not go forward. For the time being HIP Architects of Edmonton, Pickard Chilton Architects, AECOM and Read Jones Christoffersen Consulting Engineers have been retained to start planning options for the site.

CREA Takes Second Look At Its Housing Forecast For 2011

Friday, February 11th, 2011

The Canadian Real Estate Association is predicting that the housing picture for 2011 will be more positive than they originally thought. At the end of 2010, CREA predicted a nine percent decline in the number of home sold in 2011. Now they predict that 439,900 resale homes will be sold during the coming year, which is only 1.6 percent less than in 2010. Pricing is also getting a rethink. Instead of home prices falling by 1.3 percent, CREA now believes they will increase by that same 1.3 percent to an average of $343,300 per home.

Part of the reason for the change of heart was the increase in housing starts seen in January from December of 2010. In January there were 170,400 starts compared to 169,000 for those respective months. CREA believes that if that pace continues there will be about ten percent fewer housing starts in 2011 than 2010. This is a good thing because the market isn’t flooded with more homes than it can possibly hope to sell.

CREA also predicts that the first quarter will see more sales because of the new mortgage rules set to take effect on March 18th. Those new rules might temper the market during the rest of the year. It is not expected to be as big of a run on homes as was seen in 2010 because the change in rules affects a smaller percentage of those looking to buy. Mortgage interest rates are expected to rise mid-year as well.

Dinning-Morton Political Rematch In 2011 a Distinct Possibility

Wednesday, February 2nd, 2011

Alberta will have an election sometime during 2011. But it might seem like a “Back to the Future” moment if Ted Morton and Jim Dinning face off in a bid for the leadership spot in the Alberta Progressive Conservative Party. Been there, done that, back in December of 2006. But this time Ed Stelmach won’t be the “almost invisible until the last moment” fly in the ointment.

Ted Morton has already decided to run, announcing that fact this past Thursday. Dinning is still thinking about it. Currently the chancellor for the University of Calgary, the 58 year old former member of cabinet is being very careful in his choice of words. On one hand Dinning indicates he has no interest in the race, on the other, he is letting the door open by intimating his wish that candidates will be mindful of fiscal conservatism. But Dinning isn’t saying what he will do if the candidates don’t meet up with his expectations or worse yet, is a Wildrose Alliance sympathizer.

Other potential candidates include Alison Redford and Doug Horner, both cabinet ministers, Doug Griffiths, one of the back benchers and Gary Mar, representative of Alberta in Washington D.C. But if Dinning’s old rival Ted Morton ends up as the favourite, Alberta may see a rematch between these two men, especially if the conservative nature of the party is at stake.

Federal Mortgage Corporation Ltd. In Edmonton Files Bankruptcy, Owner Missing

Wednesday, January 19th, 2011

Jay Peers has disappeared. That in itself might not be newsworthy. The fact that he is the head of the Federal Mortgage Corporation Ltd (FMC), and that $80 million in company funds appears to have disappeared with him takes things to a whole new level. And there is also the matter that FMC and a related company, Peers Foster Kristiansen Inc (PFK) filed for bankruptcy this past December.

Peers comes from a highly respected Edmonton family. His grandfather was Harry Marshall Erskine Evans, a wealthy coal baron that was once mayor in Edmonton. His grandson, formally known as Jeremy James Loudon Peers, used his pedigree to open doors in the business world. Earning an MBA from the University of Alberta, he went into the family business of H.M.E. Evans & Company as managing director.

Peers’ evident charm and apparent financial savvy drew a steady stream of clients and investors to FMC. Dr. Joel Wilbush, a 92 year old retired physician placed $2.4 million with Peers’ firm. Now that entire sum is missing, along with the investments of others. The first meeting of creditors, held at the Mayfield Inn this past Wednesday brought more questions than answers from the more than 400 attendees. Peers was at that meeting. Now he has gone off the radar and no one really knows when or if investors will ever see their money again.

Alberta’s Retail Market is Flying High

Wednesday, December 22nd, 2010

This past October retailers in Alberta racked up over $5 billion in sales. That is a 0.7 percent increase over September. It is the hottest retail market in the country, having increased their retail sales by six percent. That is more than double Canada’s national average according to Statistics Canada.

Alberta almost appears to be off in its own little retail world, isolated from the mediocre sales across the rest of the country. Retailers opening stores in Calgary for the first time are finding plenty of customers and are pleased with the experience. The way Michael Kehoe sees it, is that the Alberta retail market and the Canadian retail market almost co-existing as two distinct economies. Kehoe is with Fairfield Commercial Real Estate.

Nationally, retail sales rates are rising but they are slower. In October the rate rose by 0.8 percent over this September, and by 3.3 percent more than in October of 2009. Gas prices at the pump made up a large part of that increase with a 7.4 percent rise in the cost of fuel. Sales at gas stations also increased in October for the fourth straight month.

Alberta’s labor market has improved, with unemployment standing at 5.6 percent. That is almost two percentage points lower than the beginning of 2010. Low interest rates are still making the purchase of big ticket items possible. Even though the economy is still not up to where it was before the recession, analysts are expecting consumer confidence to be high enough to close out the year with a strong holiday shopping season.

November Housing Starts In Edmonton Down, But It Was Still A Good Year

Thursday, December 9th, 2010

After a busy ten months in 2010, housing starts in November saw roughly a 20 percent decrease over the same month last year. But this was a good year in Edmonton. Up until the end of November there were 9,401 starts. Compare this with 5,505 for the same period in 2009.

Single detached homes made up two thirds of that number, coming in at 5,753 starts. Multiple units accounted for 3,648 and actually increased 77 percent over multiple unit starts in 2009. Actually, apartment starts were the only ones to show an increase in November of 2010, with 173 units started, compared to the 63 in November of last year.

Looking province wide, there were 17,600 housing starts this past November, compared with 21,300 in October of this year. The average for the first nine months of the year was 25,000 units plus. Dan Sumner from ATB Financial attributes the slow down to the increased number of listings already on the market. Developers are hesitant to add more inventory. But since mortgage rates are still low, realtors expect the market to revive in 2011 and housing starts will similarly increase.

Canadian Pacific Put Canada on the Map, and the Love Boat on the Water

Thursday, November 25th, 2010

Western and eastern Canada were connected by the pounding in of the last spike of the Canadian Pacific Railway 125 years ago. One could wonder what would have happened to the nation without the railroad, without the means of getting from one diverse coast to another. Would the prairies have played the role of the great divide? Or would our southern neighbors have shown more than passing interest in parts of what would become Canada? Speculation does have its charm, and its pitfalls.

The anniversary of Donald Smith, the future Lord Stathcona, pounding that bit of metal home in Craigellachie, British Columbia was celebrated earlier this week. The completed railway became the Northwest Passage that man created, a means to forge and then change a nation.

Along with the railway, Canadian Pacific also left a legacy of world class hotels, and of steamships that sailed the world long before the Love Boat ever sailed. The latter may have introduced the modern world to the glitz and glamour of recreational cruising, but Canadian Pacific was transporting passengers by necessity, and in style. Canadian Pacific was one of the first, if not the first of the multi-national corporations. All operated as one entity until 1968 when the hotel, shipping and railway divisions, among others, were given their own identities. Thirty years later much of the company’s divisions were sold off, or were held by multiple owners.

The Love Boat does have something in common with Canadian Pacific. The ship Princess Patricia, a Canadian Pacific vessel, was the first to cruise from Los Angeles to Acapulco for just the fun of it. That was in the winter of 1964 and 1965. This was the beginning of Princess Cruises and in some ways, the multi-billion dollar leisure cruise industry.

Edmonton Property Taxes to Go Up Five Percent

Wednesday, November 10th, 2010

Edmonton home owners are looking at about a five percent tax increase for 2011. Two percent of that is earmarked for repairs to roads, streetlights and sidewalks and the other three percent to fund a number of needed items including snow removal. As it works out, the average homeowner will pay an additional $75 for the year.

Council was treading a fine line between residents not wanting a huge increase and the city still having enough money to pay for needed services. While campaigning for this past election, most candidates were hearing people insisting on a low increase, no more than three percent for basic city services.

A few members that were not happy with the suggested tax cap wanted to raise Edmonton Transit fares at a faster rate than what was already scheduled. Jane Batty, one of the councilors noted that council will need to go through the spending records for each department to see if anything can be cut or postponed.

The average homeowner in the City of Edmonton pays roughly $1,500 in taxes per year for property tax. The additional taxes will be discussed at a public hearing November 22nd and then in chambers starting November 29th. The budget is expected to be approved by the middle of December.

C-Line Finally Connects Leduc to Edmonton

Friday, October 29th, 2010

Edmonton is finally connected to Century Park, Leduc, Nisku and the Edmonton International Airport. A new bus service called the C-Line travels from Edmonton to the airport and from the airport to Nisku and through Leduc. The line is a partnership between Leduc County, the City of Leduc and the Capital Region.

The C-Line’s implementation was not an easy journey; the route was almost halted completely when Greyhound Canada challenged it, but after years of effort, passengers are thrilled to finally see the service running.

Leduc resident Pat Ciulka said the line is a great option for younger people or those who want to shop, as the line connects to Century Park—an accessible hub for commuters to travel by LRT and bus across Edmonton.

Tiffany Solila, another Leduc resident, said the line will be great for getting around the city or getting to Edmonton if she can’t afford gas.
Leduc’s manager of public transportation, Koji Miyaji, said bus lines like the C-Line are becoming more common as urban centres deal with environmental and mobility concerns.

While the route will run only during weekday commuter hours, Miyaji said the route will continue to be tracked and adjusted according to usage and feedback. Buses are also equipped with Wi-Fi, enabling commuters to use the internet while they travel.

The C-Line officially starts running on Monday, November 1, 2010.

Larch Park at Magrath Is Focusing On Green Living

Friday, October 22nd, 2010

Larch Park at Magrath, a 28 hectare property development in south Edmonton, is determined to remain nature friendly; unlike many new housing projects that were built on what was once a rural landscape. As people become more environmentally aware, this trend to “go natural” is becoming more and more important, and what home buyers are willing to pay for.

The developer Melcor has teamed up with Arctos & Bird Management Ltd. based in Banff. Together they have approached environmental organizations such as the Sierra Club of Canada and the Edmonton and Area Land Trust for input on how to keep Larch Park’s environmental footprint smaller.

One way is to have higher density, taking up less land space. Larch Park will have 13 to 15 homes per acre, rather than the typical nine. Homes will be no larger than 3,200 square feet, lots will be smaller and some housing will be of the multi-family variety. Streets will also be narrower so more water from storms will soak into the ground and then eventually make its way to the river.

Energy savings will also be a priority with LED fixtures lighting the streets, saving 25 to 30 percent on electricity use. Triple glazed windows and thick walls with more insulation will also reduce energy consumption. A true effort is being made to preserve the beauty and health of what was once a long held family farm.

Canada Pension Plan Investment Board Chooses Sound Investments

Tuesday, September 21st, 2010

Pothash Corporation of Saskatchewan has attracted the interest of BHP Hilton, an Australian firm that wants to take over the company. BHP has gone so far as to submit a $38 billion bid of the hostile variety. China would like very much to team up with the Canada Pension Plan Investment Board (CPPIB) and submit a counter offer. The organization’s director for media relations, Linda Sims, has no comment.

It is anyone’s guess whether that silence means that there is something in the works or not. The secrecy could be a discrete way of pointing out that the deal is just too rich for the coffers of the CPPIB. The Pothash Corporation bid would require an outlay of $5 to $10 billion for Canada’s part of the deal. To date, the largest deal CPPIB has participated in was for an admirable $3.4 billion.

Since the money would come from Canada’s Pension Plan, the CPPIB must be careful in their selection of projects to back. The pension plan is healthy and is expected to remain so through at least 2012, thanks to a revamp of the system in 1997. Wise investment decisions will keep it that way.

Canada wants to make sure their pension plan does not experience the woes that Europe is facing today. The 1997 increase in contributions from employee and employer, now at 9.9 percent and the slight decrease in monthly payments helped to keep the system sound. Knowing when to say “no” to a business proposal also keeps the plan running smoothly.

Edmonton Housing Starts Slow A Bit After Record 14 Month Pace

Friday, September 10th, 2010

The city of Edmonton has been enjoying a 14 month long hot streak as far as housing starts go. The Canada Mortgage and Housing Corporation does expect things to start cooling off though. That is not totally unexpected. Builders have been trying to keep pace with buyer demand and now that sales have slowed a bit, the market is well stocked.

The numbers have been impressive. In August there were 519 single family homes started. Compare this with the 375 homes started in August of 2009. That is a 38 percent increase. Since the beginning of the year there have been 4,318 single family home starts, an increase of 145 percent over the same period in 2009. Total housing starts (condos, town homes, etc.) in the area number 7,018 for the same period in 2010. There were 2,921 starts for the same time in 2009. Multi family starts have also done well. In August there were 2,700 multi-unit starts compared to 1,156 from August of 2009.

New housing starts are affected by the resale market and that market is slowing in Edmonton and across Alberta. The first part of 2010 was an unusually hot market because of the low interest rates and easier mortgage rules. People looking to upgrade their homes, and sell their previous ones made their move sooner rather than later. It is a similar story across the rest of Canada. Housing starts slipped an average of three percent nationwide.

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