ON GUARD FOR THEE?

Canada stands ready to tighten mortgage rules: Flaherty
By Randall Palmer
Reuters Mar 22, 2012

STITTSVILLE, Ontario – The Canadian government, dealing with signs of an overheated property market, is ready to tighten mortgage insurance rules again if necessary, Finance Minister Jim Flaherty said on Thursday.

Mr. Flaherty also chided bank executives for asking the government to impose more restrictions, noting that the banks are the entities that offer mortgages.

Canada’s banking regulator, trying to curb risks posed by record-high levels of household debt, said this week it wanted lenders to be more transparent about their mortgage businesses.

Mr. Flaherty has imposed tougher requirements for government-backed mortgages three times since 2008.

“With respect to tightening up the mortgage insurance market we’ve done it three times … and we watch, we monitor the market, and if we have to tighten it some more we will,” he told reporters in Stittsville, Ontario.

“The new housing market produces a lot of jobs in Canada so there’s a balance that needs to be addressed. I’d like the market to correct itself, quite frankly, if it can.”

Mr. Flaherty said he had noted indications of softening in the Toronto condominium market, which he said was a good sign.

Canada’s household debt-to-income ratio hit a record high of 151.9% last year, largely the result of mortgage borrowing. The ratio dipped slightly in the fourth quarter but at 150.6% was not far off the record.

Mr. Flaherty said “it was a bit odd” that some banks were pressing him for tighter rules.

“We have bank executives in Canada saying ’You know, really the rules on insured mortgages should be tightened up’. They must forget that they are actually the ones that issue the mortgages — it’s their market, it’s not my market,” he said.

Since 2008, Mr. Flaherty has lowered the maximum amortization period for new mortgages to 30 years from 40 years, raised minimum down payments required to qualify for government insurance, and required all borrowers to qualify for a five-year fixed-rate mortgage to get insurance.

If he decided to act again, Mr. Flaherty could announce new measures in his March 29 budget.

Mr. Flaherty, who has promised to cut spending to eliminate the federal government’s budget deficit by the 2015-16 fiscal year, said he would be proposing moderate cutbacks in the budget.

“This is not an austerity program,” he said, adding the focus would be on long-term growth, prosperity, innovation and sustainable social programs.

OIL SANDS OUTPUT PROJECTIONS!

Canada oil sands output to triple by 2035: report
Reuters
Nov 23, 2011

Production from the oil sands will more than triple over the next quarter century, to 5.1 million barrels per day, Canada’s national energy regulator said in a report released on Tuesday.

In a look at energy production and consumption through 2035, the National Energy Board said output from the oil sands, the largest source of U.S. oil imports, will continue to expand from around 1.5 million bpd currently as new mining and thermal projects tap the resources.

The oil sands of northern Alberta are the world’s third biggest crude reserves, behind only Saudi Arabia and Venezuela, but the largest open to private investment.

The NEB said its forecast also assumes oil prices will rise slowly through to 2035, reaching $115 a barrel in 2010 dollars, a level that provides a reasonable profit even for expensive new mining and upgrading projects such as those operated by Suncor Energy Inc, Royal Dutch Shell and Canadian Natural Resources Ltd.

The board also estimates that Canadian oil exports will rise to 5 million bpd by 2035 from about 2 million currently, with most of the additional supply coming from oil sands projects.

However the board cautioned that its forecast assumes markets and infrastructure will be available to handle the additional production. That outlook comes despite a U.S. decision delaying the approval of TransCanada Corp’s Keystone XL pipeline from Alberta to Texas by as much as 18 months.

The NEB said total production of Canadian crude oil would rise to 6 million barrels a day by 2035, double current levels. Though most will come from the oil sands, output from oil shale reserves like the Bakken field in Saskatchewan will also help bolster the total.

Photo by: Luuk van Beek

BULLISH CONSUMERS

Canadian consumers remain bullish on real estate market
October sales highest since beginning of year
By Garry Marr
Financial Post November 16, 2011

The Canadian housing market continues to defy those who have long predicted its collapse.

It was just another set of numbers, but if anything the market seemed to pick up steam with October sales across the country the best they have been since January.

The upward push caused the Canadian Real Estate Association to slightly revise its predictions for 2011. The group now says sales will be up 1.4 per cent from a year ago, instead of 0.9 per cent.

"The continuing strength of home sales activity in the face of ongoing financial volatility speaks volumes about the confidence of Canadians in our housing market," said Gary Morse, president of CREA.

Even going into 2012, CREA doesn't see much changing in the marketplace with interest rates near record lows. It's calling for a relatively minor 0.5 per cent reduction in sales next year.

The industry continues to have plenty to gloat about as annual sales have held steady in the $450,000 range for the past three years. Prices have also shown a steady upward trajectory and are now forecast to reached an average of $362,700 in 2011, which would be a seven per cent jump from the year before. Next year, prices are expected to remain flat - something most people in the real estate industry see as an accomplishment in the present economic environment.

"Home sales activity over the past couple of months suggests buyers are confident that the Canadian economy will remain relatively unscathed by global economic risks, since every home purchase is a homebuyer's vote of confidence in the future," said Gregory Klump, chief economist with CREA, adding there is strong feeling the government's fiscal policy would be coordinated to give housing any support it should need in the event of a pullback.

So far, the industry seems to be getting all the support it needs from a low interest rate environment that has kept people in the market. Variablerate mortgages tied to prime are still available as low as 2.7 per cent while a five-year fixed rate closed mortgage is now being discounted down to 3.19 per cent.

Toronto continued to carry the national market in October with sales up 14.3 per cent from a year ago. The activity in Canada's largest city helped boost overall sales activity, which rose 8.5 per cent from a year earlier. Prices across the country continue to be moderate with the 5.5 per cent year-over-year increase the smallest it has been since January.

The consensus among economists is that the housing industry might not have much more to give in terms of price increases or sales but they also are not predicting a massive decline either. "The fact that prices are overvalued today does not necessarily mean they will crash tomorrow," said Benjamin Tal, deputy economist with CIBC World Markets.

He thinks a "violent market meltdown" would need a catalyst like the a sub-prime crisis or a jump in interest rates like the industry saw in 1991. "We do believe the housing market in Canada will stagnate in the coming year or two," Tal said.

That housing market has become a key component of the country with a report from TD Economics saying the construction industry was second fastest growing industry in the country and accounts for 10 per cent of GDP. "While the industry's performance over the last decade has been astonishing, some of the recent strength is likely to taper off in the coming years," the bank said.

Photo By: WCampos3

OIL & REAL ESTATE

House prices to get burst of energy
Strengthening oil sector to boost real estate
By Marty Hope
Calgary Herald September 17, 2011

Where oil goes, so goes Calgary.

As much as we like to say the city isn't as dependent on black gold for its health and prosperity, the fact is, we are.

With oil prices regaining strength and with hiring happening in the oilfields, the economy is beginning to strengthen - and it's pulling consumer confidence along with it.

A real estate axiom says that when the economy is good, the pace of home sales at the higher end of the market increases.

People in those income brackets aren't likely to buy if there is an indication the economy is headed south.

"That's probably true," says Norb Park, managing broker with Sotheby's International Realty Canada. "The businessminded are probably saying the economy is heading in the right direction, the oilpatch is in good shape, so this isn't a bad time to deal."

Resale housing statistics from the Calgary Real Estate Board tend to agree.

From the start of the year to the end of August, 948 homes priced at $700,000 and more changed hands, up from 779 for the same eight-month period in 2010.

In August, sales in that price range totalled 104 compared with 67 for the same month a year ago.

"There's a mindset that when oil is doing well, then the economy must be good," says Park. "That, in turn, increases consumer optimism - and right now, people are feeling positive."

But not all of us can afford homes that expensive.

Matter of fact, nearly 50 per cent of single-family homes sold this year and last were priced between $300,000 and $450,000.

"With Calgary's energy sector slated to grow, it is expected to lift the city's employment, income and in-migration - and in turn help contribute to growth in the resale market," says Sano Stante, president of the Calgary Real Estate Board. In-migration refers to the migration of people to the city.

"We expect price growth to improve as we approach the end of 2011 and move into 2012," he says, adding the market is seeing a boost in sales at both ends of the market.

"Improving economic conditions, coupled with affordability and price stability, has given Calgary a boost in buyers for upperend homes and entry-level condos," he says.

CREB also reports the average price for singlefamily resale homes reached $468,051 by the end of August, a one-per-cent increase compared to last year.

Taking a page from the RBC affordability reports, Stante says: "When looking at Canada's major cities, Calgary is one of the most affordable regions for homeownership in the country. Buyers are benefiting from improved selection at all price ranges in the market."

The single-family home market had 1,106 sales in August, an increase of 28 per cent when compared to the same month last year - which, by the way, was the lowest for August since 1994.

Sales of 9,485 for the start of the year to the end of August are 10-per-cent higher than the same period last year.

Condo sales totalled 468 units in August 2011, with a year-to-date total of 3,885 - similar to levels recorded in the first eight months of 2010.

Photo By: Mr. Alejandro Zeta

PERMIT TO SOAR

Calgary building permit values soar in July
Up 43 per cent from a year ago
By Mario Toneguzzi
August 8, 2011

CALGARY — The estimated construction value of building permit applications in Calgary soared in July compared with a year ago.

The City of Calgary says the value ballooned to $328 million for the month, up 43 per cent from July 2010’s $229 million.

It is also up three per cent compared with the five-year average of $318 million and an increase of 15 per cent compared with the 10-year average of $284 million.

In July, residential values were up 41 per cent from a year ago to $189 million while non-residential values were up 47 per cent to $139 million.

“The residential increase for July building permits goes across all sectors – single family, garage, two family, apartment and townhouse,” said David Watson, general manager of planning, development and assessment, said in a news release. “In the non-residential categories, values were highest in the commercial sector whereas there was a marked decrease in the government and institutional sectors for new construction.”

Year-to-date ending July 31, total values across all categories are up 44 per cent over the previous year to $2.7 billion compared with $1.8 billion in 2010, said the city, with the residential category up eight per cent to $1.2 billion and the non-residential category up 96 per cent to $1.5 billion.

The non-residential values are significantly higher than 2010 due to a major airport terminal improvement project valued at $600 million from January.

Major projects for July included three new apartment projects valued over $10 million (St. John’s Tenth Street at $26 million; Mikkelsen House Phase 1 at $14 million; Panorama West at $11 million), a $18 million senior citizen home improvement (Bow view Manor) and two new warehouse/storage facilities (HCP Phase II Building ‘A’ at $18 million; Canada Post at $10 million).

LOOK TO THE SKIES!

Spectacular aurora activity near Calgary

Dr. Robert Berdan, Calgary nature photographer and U of C assistant professor, took these remarkable photos about 2 a.m. on Aug. 6. At about 7 p.m. the evening before, an aurora alert was issued by the University of Alberta indicating there was a 70% chance of auroral activity in the southern prairies including Calgary. Berdan says, "I headed out at 10:30 p.m. to photograph the aurora and local thunderstorms and stopped on Township Road 252 near Cochrane and photographed the aurora until 2 a.m. Getting bright auroras this far south is a relatively rare event. However, the Aurora is nearing its 11 solar max."

Source: Calgary Herald

WANT TO GO STEADY?

Canada property results improve on deals, leasing
Reuters August 5, 2011
By Ka Yan Ng and Amruta Sabnis

TORONTO/BANGALORE — Canada’s biggest office and retail landlords reported strong quarterly results on Friday, boosted by acquisitions and long-term leasing renewals.

Brookfield Office Properties and RioCan Real Estate Investment Trust REI said funds from operations, the most closely watched performance measure for REITs, rose in the three months to the end of June.

Even so, activity for the Canadian companies could slow if a flagging global economy makes it more difficult to raise capital and complete deals. “We’ve had a ton of acquisition activity and capital raising going on over the last two years,” said Karine Macindoe, an analyst at BMO Capital Markets.

“This market environment is probably going to slow some of that down because … share prices are far more volatile and declining.”

Canada’s resilient economy, rising rents and easy borrowing are fueling a buying spree among real estate investment trusts, highlighted last month by the largest office property deal ever by a Canadian REIT.

STEADY EXPANSION

The second quarter revealed few signs of weakness. Brookfield, a major office landlord in Manhattan and other North American cities, reported a 23 percent jump in leasing activity. It leased 1.6 million square feet of space, compared with 1.3 million square feet leased a year earlier.

FFO rose to $166 million, or 30 Canadian cents a unit, from $156 million, or 30 Canadian cents, a year earlier. FFO strips out the effects of depreciation and other factors from the earnings of property companies, giving a more telling quarterly reading. RioCan REIT, Canada’s largest landlord of retail space, also turned in a strong performance.

FFO rose 12 percent to $93-million, or 36 Canadian cents a unit, from $83-million, or 34 Canadian cents, a year earlier. RioCan has steadily expanded its portfolio in Canada, while looking for opportunities for growth in the United States for more than a year. “RioCan’s acquisition platform remains on track to meet our objectives for the year,” Chief Executive Edward Sonshine said in a statement.

“RioCan has been able to take advantage of historically low interest rates to generate solid growth through acquisitions, development, and increased occupancy and rents.” It renewed 1 million square feet during the quarter at an average rent increase of 13.9 percent, or $1.99-per square foot. It also added five properties in the quarter. In July, Dundee Real Estate Investment Trust said it is buying 29 properties from U.S. private equity giant Blackstone Group for $831.8-million. It was the largest deal ever for a Canadian REIT.

RioCan’s units were up 0.6 percent at $25.05 on the Toronto Stock Exchange. Brookfield shares were off 0.3 percent at $16.80 on the Toronto Stock Exchange, but its New York-listed shares were up 1.35 percent to $17.26.

Photo By: mb17chung

MARKET BLOOMS

City's housing market blooms in June
Condo market posts first gain of the year
By Mario Toneguzzi, Calgary Herald
July 5, 2011

Calgary's residential real estate market experienced a significant late spring upswing.

Single-family MLS sales last month finished up 32 per cent, to 1,398 homes, from June 2010's 1,059 transactions, according to data released Monday by the Calgary Real Estate Board.

Condo sales -up almost 31 per cent -were up year-overyear for the first time since April 2010. The real estate board recorded 581 sales last month, compared to 445 in June 2010.

While sale prices continue to lag and 2011 sales are up only two per cent over the first six months of 2010, the late spring swoon has brought tempered optimism of a continued turnaround.

"We had a late spring maret this year. It's all starting to come together in June," said Sano Stante, president of the Calgary Real Estate Board.

"Last year we had an exuberant market early on and it died in June.

"So to draw comparisons year-to-year for that month shows an exaggeration of the trend."

The average sale price for a single-family home in June remained almost flat, falling to $479,580 from $481,960 a year ago.

Condominium prices, on average, rose to $296,501, the highest since May 2010, from $292,182.

On a year-to-date basis, single-family home sales for the first six months are up more than 5.5 per cent, while condo sales are down almost five per cent.

"Strong monthly increases does not imply a housing boom, as it is important to put into perspective that sales activity remains below longterm averages," the real estate board said in a statement.

However, there are signs the local housing market is starting to find its footing, said Stante.

"This gradual levelling has been fuelled by growth in employment, and in particular growth in full-time jobs," he said.

Improved job prospects, combined with an increase in the number of people moving to Calgary, will give lift to our housing market for the remainder of this year and into the next."

Dan Sumner, an economist with ATB Financial in Calgary, said a year-over-year comparison may be misleading as to the strength of the Calgary housing market given that June is often one of the busiest months for sales, even though the same month last year was abnormally slow.

"Fuelling sales is a stronger economy specifically in Alberta, which feeds through into consumer confidence and that's making Albertans more comfortable with home purchases again," he said, adding low interest rates are also luring buyers.

ALOHA CANUCKS!

Hawaii's house prices grab Canadians' attention
Foreclosures driving the market
By Grania Litwin, Postmedia News
July 2, 2011

Snorkelling, swimming, surfing and suntanning aren't the only reasons Canadians visit Hawaii these days.

They're saying aloha to condos and homes that have plummeted in price as much as 60 per cent since January 2008, while the Canuck buck soars. Why buy a cottage on a lake in B.C. or Alberta, when you can laze on a beach with gardenia breezes?

"What's really driving the market is foreclosures," says Re/Max Resort Realty's Howard Dinits, who lives on Maui.

"Many island properties here were bought as second homes by speculators in the States. In the economic downturn people used revenue from these holiday rentals to make payments on their main homes -then defaulted on the island properties. "In some areas prices have dropped 40 to 60 per cent and it's as bad as Phoenix."

He gets calls and emails from Canadians daily. "Some are waiting for a bell to ring that says we have hit absolute bottom," he jokes. "Others have pulled the trigger because in Maui we're having a half-off sale."

The loonie, valued at 62 cents US almost a decade ago, hit $1.05 in April. That means a million-dollar property in Hawaii, that would have cost a Canadian about $1.6 million in 2002, is now under a million.

The best values are on the big island. "In Maui, you need two wallets -on Hawaii you can survive on one," Dinits says. "You can get a nice house on Hawaii today, six blocks from the ocean, for $66,000. That would be a bank owned foreclosure, or REO (Real Estate Owned) deal."

The Hawaiian capital, Honolulu, is on Oahu, where property values declined only 7.1 per cent in the last year thanks to a more stable population and U.S. military base.

While cheaper homes sell fastest, on Maui more than 250 homes sold for over $1.8 million last year. A typical condo now sells for about $250,000, while a typical house is $480,000.

Dinits sold Ottawa businessman David Renfroe, 38, a two-bed, two-bath condo in the Maui town of Lahaina last year for his growing family. "We went over looking for a bank foreclosure," Renfroe says. "With our strong dollar it seemed like a no-brainer."

After doing his due diligence, he made a lowball offer and was shocked when he got it. "We paid $245,000 for a condo previously priced at $550,000. We were thrilled."

He has reserved several months for family and friends and rents it the rest of the time.

"Everybody here is looking at Florida, but there's hurricanes and 20 per cent unemployment there. I think the Hawaii market will come back quicker."

Dinits recently sold two oceanfront condos to a Lillooet couple: a one-bedroom for $250,000 and a two-bedroom for $300,000. Both are available for vacation rental, which is important, as strata fees can be $800 a month.

Another young Canadian family recently bought a vacation home in Lahaina for $245,000. "It's managed by a company that rents it, cleans it and had it 90 to 100 per cent rented all winter at $195 a night." The unit was worth $500,000 in 2005.

The best deal he has seen most recently was a $123,900 condo previously valued at $289,000. Located at the north end of Kihei, a block from the beach, it had a recent $40,000 renovation and features two bedrooms, two baths and two parking stalls.

"There's no pool, but it's a block from the 'big' pool. And strata fees are under $400 because of that," says Dinits, who closed 67 deals last year.

The most affordable living is in Hilo or Puna, on the lush (rainy) side of Hawaii. Here a three-bedroom, two-bath, 1,200-square-foot home, built five years ago goes for $125,000 to $175,000. Not all neighbourhoods allow vacation rentals, however.

"Raw land sold for $75,000 an acre in Puna in 2008. Today I just sold some for $19,000."

There are deals at the top end, too. A Lahaina house was just listed for $1.25 million. Completely remodelled, it has a pool, ocean views, four bedrooms and 2,600 square feet; it was $1.88 million three years ago.

Hawaii has a 10 per cent federal and five per cent state withholding tax, to force people to pay the 15 per cent tax on capital gains. It does not apply if a person sells for a loss, or reinvests in more U.S. property.

Dinits doesn't see prices strengthening any time soon.

"I don't think we'll see irrational appreciation in the next five years, although Americans do have amnesia."

Oahu real estate agent Kalama Kim agrees. Kim is with Coldwell Banker and specializes in Waikiki, where the median price for a condo is $296,000.

"Canadians now make up 15 per cent of the traffic at open houses and there's lots of inventory," says Kim, noting there are 487 condos for sale in Waikiki.

Jay MacMillan, of the MacMillan Team in Edmonton, is doing brisk business in Maui these days.

He has made three sales this year, in addition to his father, who bought a condo six months ago, and his brother, who bought two.

"All of them are cash flowing." Strata fees are steep because pools, barbecue areas and lush landscaping are expensive to maintain, "but there is money to be made.

"Prices have dropped while the rental market is still extremely good -and it is so easy to hop on WestJet and get there.

"Instead of buying recreational properties on lakes here or in B.C., people are getting places in Maui for the same price."

Photo by: Altus

EVERYBODY'S WELCOME

Low rates to keep house party going
Eric Lam
Financial Post  May 30, 2011

With the Bank of Canada now widely expected to hold off on a rate hike until the end of summer, house prices in Canada are likely going to stay hot for a few months longer.

The central bank will again leave its benchmark lending rate unchanged at 1% at its regular policy announcement on Tuesday, according to the unanimous result of 22 economists surveyed by Bloomberg News.

With signs the U.S. and global economies have entered a soft patch and the European debt crisis continuing to roil, most economists do not expect the bank to raise its overnight target rate until at least September. That would mark a full year on hold for the bank, which last raised rates in September 2010.

The upshot is, these ultralow lending rates will continue to a fuel a Canadian housing market that appears in full spring bloom. Average prices hit $372,544 in April, up 8% year over year for the third straight month, led by a supercharged Vancouver market.

"It will lead to more strength in housing in the near term than anticipated, and the slowdown in housing will be more of a 2012 story," said Derek Burleton, deputy chief economist at TorontoDominion Bank, in an interview.

TD and economists at Royal Bank of Canada and Bank of Montreal have recently pushed their expectations for a hike back to September. TD and Royal forecast the rate to settle at 1.75% by the end of the year, while BMO does not expect it to rise past 1.50%.

Mr. Burleton figures homes are at least 10% overpriced. Extending a low-borrowing environment into the prime sum-mer shopping season would encourage more prospective buyers to take the plunge, creating even better pricing opportunities for sellers.

However, Phil Soper, chief executive of Royal LePage Real Estate Services, said recent price increases have been driven by intense foreign investment in Vancouver, especially from newly cash-rich investors from China, and not low interest rates.

"Much of it is concentrated in a few neighbourhoods, which have attracted Asian investors who use largely cash," Mr. Soper said. "Also, there just aren't enough homes for sale in Canada right now. An increase in the cost of buying would not impact the supply side at all. In general, the pent-up demand for housing that grew during the recession has been exhausted."

Data from Re/Max Canada showed that 747 homes in the Greater Vancouver Area sold for $2-million or more between January and April 2011, a 118% increase on 2010, the biggest increase by far. To compare, 435 homes sold for $1.5-million or more in the Greater Toronto Area in the same time period, a 9% increase on 2010.

"When you take Vancouver out of the equation, the rate of house price appreciation is cut in half," Mr. Soper said.

Doug Porter, deputy chief economist at BMO Capital Markets, agreed that Vancouver has skewed averages.

"We aren't calling for a massive correction on the market, but Vancouver is a market unto itself, and it's certainly at risk of a full-fledged correction in the years ahead," he said. "But most other major markets don't seem to have broken from fundamentals. The likely outcome is a long period of subpar increases or flatness for prices."

Mr. Burleton said even the small rate hikes forecast for the end of the year are unlikely to have much of a material impact on the economy.

"I don't see the impact being dramatic. We're really talking about a quarter difference here, and part of the Bank of Canada's job is being done by the high Canadian dollar, so there's some wiggle room," Mr. Burleton said. "There's a good likelihood the increase next year will be accelerated to some extent to make up for some of the lost ground this year. Most of the action on the interestrate front will happen in 2012."

EV, COME HOME... TO A NEW URBAN VILLAGE!

East Village

Calgary Herald April 28, 2011
After years of planning, the time has come for East Village to fly.

Envisioned as an amenity-rich, mixed-use, mid-rise urban neighbourhood a stone’s throw from the downtown core, once complete the more than 19-hectare EV will be home to an estimated 11,500 Calgarians, all of whom will have one thing in common: they’ll be living in one of the most unique inner-city redevelopments ever attempted in Canada.

“The future is unfolding in East Village,” says Susan Veres, senior manager of marketing communications for Calgary Municipal Land Corp. “From 2007 to the end of last year, the focus has been on putting in place the critical utilities, services and roads for this new urban village.”

Now, with the revised road network nearing completion and land use bylaws squared away, comes the exciting process of development. Already, more than $600 million of development investment has been committed to the EV, with 50 per cent of available land east of 3rd Street S.E., north of 9th Avenue and west of Fort Calgary already sold.

Bosa Development Corp. and Embassy Development were the first to commit to the urban village vision of the EV, partnering on a deal to build 700,000 square feet of multi-family residential and retail.

In February, Ontario-based Fram+Slokker Real Estate Group signed a deal to build another 750,000 square feet of mixed-use residential and retail, including approximately 650 condominium units.

“The most exciting thing is there will be residential product for sale here starting in late 2011 or early 2012,” says Veres, adding a sales centre for condos could be up and running this year.

This is a major milestone for the EV, which is envisioned as a vibrant inner-city community linking downtown with historic Inglewood to the east and the expanded Stampede to the south.

A new road link south of 9th Avenue is under construction and will increase road and pedestrian access to the EV, which will also be home to a new 110,000-square-feet National Music Centre.

“We’ve turned a corner for private investment and the vision for this urban village is resonating with many developers and community partners,” says Veres. “The whole focus in the East Village is on it being pedestrian-oriented, and it is coming to life right now. We’re looking at some of the most-prime riverside parcels in the city, with 40 acres of protected land to the east at Fort Calgary.”

With Phase 1 of the RiverWalk promenade and pathway now open, a master plan on the way for the future of nearby St. Patrick’s Island, and more development announcements expected in the near future, “this is a great time for people to become familiar with the East Village master plan,” says Veres.

CALGARY MARKET SNAPSHOT

Calgary house prices decline from last year
Prices up at the national level
By Mario Toneguzzi
Calgary Herald April 12, 2011

CALGARY — Calgary house prices have declined from a year ago, according to the Royal LePage House Price Survey released Tuesday.

Standard condominiums saw the largest decrease, declining 3.3 per cent to $254,856 while standard two-storey homes declined 2.1 per cent to $423,122 with detached bungalows declining one per cent to $415,167.

“Overall, prices are down slightly from where they were a year ago due to a healthy supply of homes for sale,” said Ted Zaharko, broker and owner, Royal LePage Foothills. “This increase in inventory coupled with low interest rates has presented some attractive opportunities for buyers.

“Towards the end of March, we started to see a decrease in inventory levels compared to the start of the quarter with sales activity beginning to increase slightly especially for condominiums. This shift in the market can be attributed to the seasonal real estate cycle, which picks up activity in the spring.”

Zaharko said single-family homes at the $400,000 price point were in demand throughout the quarter.

Nationally, Royal LePage said low interest rates and a recovering economy continued to fuel activity in Canada’s housing markets over the past year, which has led to countrywide increases in average home prices. In the first quarter of 2011, the national average price of a detached bungalow rose 4.3 per cent year-over-year to $341,355, while standard two-storey homes rose 3.5 per cent to $379,388 and standard condominiums rose four per cent to $237,919.

HOT REAL ESTATE MARKETS

The 10 real estate markets wealthy investors are going gaga for

Gus Lubin, Business Insider
Apr. 7, 2011

The most favored investment type of rich people around the world is property, according to the Citi Private Bank and Knight Frank Wealth Report.

True high rollers consider real estate of all kinds in all countries. Like distribution and industrials in the UAE. Or development land in Zambia.

The Wealth Report picked out 10 great international real estate investments.
1 means low risk, poor yield, low potential; 10 means high risk, high yield, high potential.

#1 Commercial real estate in emerging Asia
Risk Factor: 8
Yield Factor: 8
Capital Appreciation: 8

"We like emerging Asia for one simple reason – real-estate returns are driven by economic growth and very favourable demographics, rather than leverage and yield compression. Greater trade and industrialisation drives demand for logistics facilities; growing incomes swell the middle class, which creates opportunities in retail and leisure; an expanding services sector opens up opportunities for offices; while a young, growing population needs modern residential accommodation."

#2 Development land around Lusaka, Zambia
Risk Factor: 7
Yield Factor: 8
Capital Appreciation: 7

"Zambia has a serious housing shortage – it needs to build at least 150,000 housing units a year. Construction is a major contributor to the country’s economic expansion. Growth in the sector is expected to have reached 10% in 2010, driven by strong demand for residential and commercial developments, energy, mining and transport infrastructure."

#3 Secondary UK residential investments
Risk Factor: 5
Yield Factor: 7
Capital Appreciation: 7

"First, go for secondary stock in good locations in central London. Headline figures demonstrate the strength of the recovery in the London market, but they also mask that secondary properties, even in good residential areas, are trading at a deep discount to the best stock. They offer some of the best rental returns and improvement can often add value. Second is development stock in good regional cities, such as Manchester, Birmingham and Bristol..."

#4 Commercial property in Poland
Risk Factor: 5
Yield Factor: 7
Capital Appreciation: 6

"The Warsaw office market has avoided the overdevelopment that it experienced during previous market cycles, keeping the vacancy rate well below those of other CEE capitals, at 9% at the end of 2010. Warsaw’s rental growth prospects are among the best in Europe – forecasts say that prime office rents will increase by 3.2% in 2011 and 4.7% in 2012."

#5 Distribution and industrials in the UAE
Risk Factor: 6
Yield Factor: 8
Capital Appreciation: 5

"In some sectors values have fallen by as much as 60%, but away from high-profile offices, glittering shopping malls and alluring waterside residential schemes, the understated “shed” sector can provide robust income returns. Values have fallen along with other property assets, meaning that now could be the time to take advantage of a sector that looks undervalued, yet is supported by strong market fundamentals."

#6 Luxury new homes in prime European cities
Risk Factor: 1
Yield Factor: 2
Capital Appreciation: 5

"The smart money going into the European residential market is likely to keep a clear focus on property that offers both the very best quality, and for which there is a marked scarcity. A beautiful private home in a sought-after location will always attract interest. The appeal is to owner-occupiers and the commitment is long term. The enjoyment of ownership is equal to the performance of the investment."

#7 Education real estate in Asia
Risk Factor: 5
Yield Factor: 0
Capital Appreciation: 8

"Investments in education real estate demand the same selection discipline and risk appetite by investors as with any other residential real-estate investments in developing countries. For longterm visions of such projects, investors should choose to work with developers who are not only locally rooted, but also understand the education needs of the community."

#8 Residential development in eastern Mumbai
Risk Factor: 6
Yield Factor: 4
Capital Appreciation: 8

"The coming decade will see most infrastructure spend and development in Mumbai to the east of the city and on enhancing connectivity with the west. Infrastructure projects, such as enhancements to the Eastern Express highway, the Versova-Andheri- Ghatkopar Metro rail project and the proposed new airport at Panvel are expected to benefit the eastern corridor more than the west. This is likely to accelerate change in residential and commercial markets in eastern Mumbai."

#9 Distressed US real estate and property debt
Risk Factor: variable
Yield Factor: NA
Capital Appreciation: NA

"The next two years could provide opportunities for investors seeking to exploit the challenges many financial institutions face. These asset dispositions should create attractive investment opportunities in underperforming and nonperforming loans. Non-performing loans can often be purchased at an attractive discount to par value."

#10 Commercial property in Sao Paulo, Brazil
Risk Factor: 6
Yield Factor: 8
Capital Appreciation: 5

"The demand for A+ and A-grade office space has been exceeding supply as newcomers are establishing activity in the country or expanding their operations. Sao Paulo is experiencing a vacancy rate of 2.8% and as of October 2010, about 105,000 sq m have been absorbed in the A+ and A-grade office market. Private equity and real estate funds have been very active, as they expect further increases in lease rates and price per sq m. Cap rates of about 11% have proved attractive to foreigners."

Photo By: PnP

DRAWING CUSTOMERS

First-time buyers back in the market
Housing prices, interest rates draw customers
By Mario Toneguzzi
Calgary Herald April 6, 2011

First-time buyers have re-entered the Calgary resale housing market with "a renewed sense of confidence," says a report released Tuesday by real estate firm Re/Max.

In the first two months of this year, 32 per cent of all sales occurred under $300,000 in Calgary, said the report.

Jennifer Upperton and her sister Helen, an Olympic bobsledder, have been in the market looking for their first home.

"We're looking for inner city for sure," said Jennifer. "We're looking for either a raised bungalow or a house that has more than one suite in it.

"One of the reasons (for entering the market now) is because I've been renting for 10 years. That's probably the biggest one. Another one is we've just finally got enough money for a solid down payment."

Upperton said low interest rates are also a reason for the two embarking on a search for a home.

"We're just excited to get a place," she said. "My sister has been travelling so much that she has never really been able to have a home.

Sano Stante, president of the Calgary Real Estate Board, said the industry is "encouraged" to see first-time buyers moving into the market because it "permeates up market in months to come."

"So it almost assures us of a sustainably slow-growing market," he said.

"Good affordability, low interest rates and lots of inventory (are the reasons why first-time buyers are moving into the market). Until the inventory dwindles perhaps near the end of the year, or prices start to come up, or interest rates start to come up, we've really got a good balanced market right now."

The Re/Max report said the average residential price in the Calgary metro area was about $410,000 at the end of February.

"The strength of the entrylevel segment is good news for the spring market as sales of starter homes are expected to have a domino effect, prompting greater move-up activity in the weeks and months ahead," said the report.

In the overall market, the number of homes sold in Greater Calgary is slightly below 2010 levels, with 3,199 properties changing hands as of Feb. 28 versus the 3,297 sales reported during the same period last year.

Photo By: Susanrudat

MOTIVATING MOVES

Making the switch to condo living
Financial security a major motivator behind the move
By Denise Deveau
For Postmedia News March 30, 2011

For Sara Kinnear, an investment firm lawyer in Winnipeg, moving from her house to a condo was the perfect way to simplify her life.

After three years of owning a detached home, she realized that the maintenance chores were more than this busy professional wanted to handle.

"There weren't any big problems, just the normal stuff around the house," she says.

"But having to arrange time to be at home to have people fix things and getting estimates .. It was too much of a drain on my time."

Condo living suits her lifestyle much better, she says.

"I like the fact everything is on one floor, it's on a better bus route and I don't have to have people look at the roof when it needs fixing," says Kinnear.

"Someone else will do that for me now. And I don't have to shovel snow when it's -40 C or mow the lawn when it's 30 C."

Kinnear is not alone in preferring the maintenance-free lifestyle that condominium living has to offer after experiencing the ups and downs of home ownership.

Jack Courtney, assistant vicepresident of advanced financial planning for Investors Group in Winnipeg, says he's seen the trend happening within many families, including his own.

"My in-laws sold their house to move to a condominium, not because it meant a cost savings but because it could give them more freedom to go to the lake and other things."

They made the move despite the fact they had a home with a pool that overlooked a golf course.

"He liked to golf, but didn't want to have to cut the grass or look after the pool anymore to do it," Courtney says.

Urban centres are seeing a growing influx of people moving back to condominiums after going through the life cycle of home ownership, confirms Andrew Bodnar, a sales representative with Re/Max Condos Plus in Toronto.

"Maintenance is a big reason or they simply kept a house to accommodate a family that has moved out. With condominiums, there's a lot of comfort, less stress and enough room and amenities for people to enjoy themselves."

Financial security is also a major motivator, he adds.

"We see people in different financial stages of savings who want to use the equity in their home to increase their cash flow later in life."

Courtney agrees the transition is often motivated by a need to free up capital for retirement.

If this is the intent however, he advises that prospective buyers make sure they understand all the expenses involved when making the move, from closing costs and commissions, to acquisition and maintenance fees.

A major consideration in making the switch from house to condominium is the nature and extent of the capital repair funding for the property you're considering.

"Sometimes capital repairs on a condominium property can be significant if there isn't a sinking fund in place," Courtney says.

"In fact, if you're looking at a property and the condo fees seem out of whack or too low, I would be suspicious and start asking questions."

Otherwise, you may get hit with a big assessment for a major repair to a parkade, for example.

"I knew of one property that was a converted highrise apartment block, where the tenants were stuck with a huge foundation repair issue and there was no fund put aside," he says.

The best defence for prospective owners is to examine the condominium owner's agreement carefully, Courtney advises.

"I would hope that a real estate agent dealing in condo sales would be familiar with the process," he says.

"A lawyer definitely should be. Have them review the terms and explain them so you have a better understanding of what you are getting into. Don't be afraid to ask, where is that $400 a month fee going and how is it used?"

When it comes to fees, Bodnar says it's relatively easy to manage them based on the available amenities.

"Most recognize there's a correlation between fees and amenities. You might have a couple looking to streamline expenses, so if they are concerned about costs, they may look at properties that have a smaller gym or don't have a pool."

He advises restraint for people on tight budgets who need to secure financing.

"A $100-a-month reduction could be the difference between getting that approval or not."

BALANCE BEAMS

Calgary house prices expected to increase
Local market classified as balanced
By Mario Toneguzzi
Calgary Herald March 23, 2011

CALGARY — Short-term year-over-year price growth is expected to be in the five to seven per cent range for Calgary, according to the Conference Board of Canada.

In releasing its monthly Metro Resale Index on Wednesday, the board said Calgary’s real estate market is currently classified as being under balanced conditions.

In February, the average residential resale price rose to $406,216, up from $401,743 the previous month and $394,850 in February 2010.

The board also said that sales, on a seasonally-adjusted annual basis, were up by 6.1 per cent in Calgary to 23,784 following a 2.2 per cent hike in January to 22,416. But that is still down from 23,820 in February 2010.

“It’s a reasonably balanced market. That’s what we’re seeing,” saids Robin Wiebe, senior economist with the board. “Sales are on the upswing. They rose six per cent in February from January and that builds on a two per cent growth the month before. And that’s starting to eat away at the stock of listings.

“Sales are bouncing back from a bit of a tough spot later in 2010. They’re coming back . . . There seems to be a little bit of momentum building in the Calgary market which is why we are forecasting a decent price outlook.”

The sales to new listings ratio in Calgary increased to 0.558 from 0.547 in January and 0.531 in February 2010.

The board also said that new listings were 46,812 in February on a seasonally-adjusted annual basis compared with 44,748 the previous month and 48,576 a year ago.

“Over the last couple of months, we’ve definitely seen sales pick up,” said Dan Sumner, economist with ATB Financial in Calgary. “I still think all in all sales aren’t really strong. We are seeing kind of a recovery from really low levels.

“In Calgary, it’s been stronger than other areas of the province. The Calgary resale market has been better than most of the rest of Alberta but it’s still nothing to get too excited about.”

Sumner said preliminary data indicates that March “has not been a blockbuster month” for MLS sales in the city.

In its Metro Resale Index, the board classified Saskatoon, Gatineau, Montreal, Quebec, Sherbrooke, Trois-Rivieres and Saguenay as having short-term price growth expectations in the seven per cent and higher range.

Victoria, Vancouver, Fraser Valley, Edmonton, Regina, Winnipeg, Halifax and Newfoundland joined Calgary in the five to seven per cent range followed by Thunder Bay, Sudbury, Hamilton, St. Catharines, Kitchener, Kingston, Ottawa, and Saint John in the three to five per cent range.

Toronto, Oshawa, London and Windsor can expect short-term year-over-year price growth of zero to three per cent.

TRMZ - The Red Mile Zone

How Celebrities Buy And Sell Homes
Morgan Brennan
Forbes

We recently whipped up a list of the most expensive celebrity real estate for sale, with a little help from our friends at online real estate listing platforms, Trulia.com and Realtor.com. If you have millions to throw around, any number of glitterati-inhabited houses could be yours for the taking — and some for drastically reduced prices.

Everyone from Dr. Phil McGraw to Ricky Martin to Uma Thurman is selling right now. Even Michael Jackson’s North Carolwood Drive mansion — yes, the one he was renting when he met his tragic prescription drug-induced death– is on the Los Angeles market for $23.5 million with Coldwell Banker Previews International.

While sifting through property listings of the rich and famous (Nicholas Cage’s former property and Mel Gibson’s current), I stumbled across a juicy tidbit about celeb real estate. Many of show business’ finest purchase and sell real estate through trusts and/or straw buyers.

It’s not surprising celebrities want to be as private as possible, given the incessant deluge of paparazzi they must experience on a daily basis. While researching the Most Expensive Celebrity Real Estate list the common amenity popping up was high-tech security systems and every property had some semblance of seclusion or privacy to its location. But taking the extra time and wallet-consuming step of establishing LLCs to keep the ownership trail buried from public knowledge?

I spoke to the gentlemen at Blockshopper.com to discuss these trusts further. Blockshopper is an online real estate research company notorious for exposing U.S.real estate holdings of the wealthy, as my colleague Stephane Fitch has reported in the past.

Eddie Weinhaus, Blockshopper’s Chief Operating Officer, says it’s common for high profile individuals to hide their real estate holdings behind specially established trusts and straw buyers. That doesn’t, however, stop the curious masses from rooting out who the actual owners are.

“It’s harder and rarer than you think to hide your name from public record on a real estate transaction,” explains Weinhaus. “Either you have to be extremely wealthy or doing a very non-traditional transaction for real estate.”

Blockshopper follows the legal paperwork trail created by tax records, state LLC records and transaction records. If a traditional mortgage loan is involved, forget it — a celebrity’s affiliation with that property is almost instantly known.

For the rich and famous that choose to go down this slightly more private ownership path, here’s how they do it.

First the celebrity buyer finds a non-traditional source of capital other than a mortgage. Copious amounts of cash work but some ultra wealthy buyers choose to borrow their own money from their bank in a bank loan. Then they create an LLC or similar entity that can control the property (“an Illinois Trust as they call it,” says Weinhaus), appointing a trustee to publicly oversee the transaction.

Below are five examples of star-studded trusts and the properties overseen by them, provided by Blockshopper.com

Owner: Hilary Duff
Address: 12092 Summit Circle, Studio City, CA
Buyer: Scott Feinsten and The Maison De Trust

Owner: Kanye West
Address: 7882 Fareholm Dr, Hollywood, CA
Buyer: KW International, LLC

Owner: Britney Spears
Address: 12094 Summit Circle, Studio City, CA
Buyer: Richard Feldstein and the Love Shack Trust

Owner: Mel Gibson
Address: 23333 Palm Canyon Ln, Malibu, CA
Buyer: Bruce Davey and Palm Canyon Trust

Owner: Scarlett Johansson
Address: 7222 Senalda Rd, Hollywood, CA
Buyer: Howard Leitner and the Tupelo Honey Trust/ Sold By: Tupelo Honey Trust and Kevin Yorn

THE RACE IS ON...

Housing crisis 'inevitable' if prices outpace income
Kim Covert, Financial Post
Thursday, Mar. 3, 2011

Canada’s hot housing market should cool down somewhat this year, according to a new report from BMO Capital Markets, which says the kind of correction some observers have been warning about is unlikely — though not impossible, given the right circumstances.

The question of a correction comes down to whether increases in household incomes can keep up with rising home prices. If price rises outpace incomes, said BMO senior economist Sal Guatieri, “a correction would be inevitable.”

While incomes and average home prices kept pace with each other over most of the last three decades, both rising 5.7% a year, Guatieri said in the report that prices more than doubled in the decade to late 2007, and grew twice as fast as incomes from 2002 to 2007.

“Even after sliding 13% through the recession, prices quickly rebounded and are now 10% above their 2007 peak,” Guatieri said. “The ratio of average resale prices to personal incomes is currently 14% above its long-run mean, suggesting the national market is moderately overvalued.”

BMO expects gains in income to outpace advances in housing prices for the next 18 months — during which time the bank expects interest rates to rise by two percentage points.

“If incomes climb eight per cent and prices stabilize, as we expect, the current over-valuations would fall to 6%, hardly the stuff of corrections.”

Growing incomes are also expected to offset costs associated with rising interest rates.

While new homebuyers are told housing costs — such as mortgage, taxes, insurance and heating — shouldn’t consume more than 32% of household income, Guatieri said the current rate is about 35%, and if incomes and interest rise as expected, affordability would “deteriorate” to 40% of disposable income. That alone would not trigger a correction, Guatieri said, noting that during corrections in 1989 and 2008, affordability exceeded 45%.

“The risk of a correction would increase, however, if prices rose alongside rates and incomes (that is, by eight per cent) — in which case the affordability measure would reach 43% and approach the threshold of prior corrections.”

Currently, the housing market is relatively balanced, according to Guatieri. New-home construction has fallen back and there are about two new listings for every sale. Average resale prices rose five per cent over the past year, but excluding Vancouver that increase would have been less than two per cent, and new home prices rose just two per cent, while land sales are flat, Guatieri added.

Tighter mortgage rules, which come into effect March 18, along with higher interest rates, lower affordability and elevated household debt, “should keep house prices on a tight leash,” Guatieri said.

According to the bank’s calculations, housing markets could be considered pricey in six provinces: Saskatchewan, Newfoundland and Labrador, British Columbia, Manitoba, Quebec andNova Scotia. Guatieri notes that unlike many other regions, Alberta could see an increase in house prices this year “in response to solid economic growth, high oil prices and in-migration.”

STATS ON STARTS

Housing starts jump in February
Ka Yan Ng, Reuters
Tuesday, Mar. 8, 2011

TORONTO - Canadian housing starts rose a better than expected 6.6% in February from January, thanks to a jump in condominium construction, though analysts warned the strength is unlikely to carry into coming months and could be a mild drag on overall economic growth.

Housing starts climbed to a seasonally adjusted annualized rate of 181,900 units in February from a revised 170,600 units in January, Canada Mortgage and Housing Corp said on Tuesday. January starts were revised up slightly from 170,400.

Analysts, on average, had forecast 173,000 starts in February.

“The details reflected somewhat of a lack of breadth, so we discount the strength on volatility concerns and are not convinced this is a sustainable break from a lower trend,” wrote Scotia Capital economists Derek Holt and Gorica Djeric.

Urban starts rose by 9.4% to 161,000 units, CMHC said, driven by a 14.5% rise in construction of multiple-unit buildings, mainly condominiums, accounting for 94,900 units.

Analysts said strength in the condo market may not continue as there has been a recent drop in building permits issued for the sector.

The closely watched single-family homes segment edged 3.0% higher to 66,100 units in February.

Despite the month-to-month swings in the volatile multi-unit group, the underlying trend suggests housing starts are averaging 176,000 units a month.

“Activity appears to be stabilizing around a level consistent with demographic demand,” said Robert Kavcic, economist at BMO Capital Markets.

Compared with global trends in the face of the financial crisis, Canada’s housing market has been resilient, due mainly to a strong banking system and low interest rates. After a brief retreat during the crisis, the residential housing sector was able to post double-digit price gains in late 2009 and early 2010.

But Canada’s economic recovery is now seen depending less on consumer-driven growth and more on business and export growth. Analysts expect that a rise in interest rates later this year and tighter mortgage rules will combine slow the housing sector.

“We continue to expect a softening in overall housing starts, particularly with the anticipated higher interest rates and a slower second half of the year, keeping home prices under wraps,” said Krishen Rangasamy, an economist at CIBC World Markets.

Atlantic Canada saw the biggest decline in urban housing starts in February with a 24.7% drop, CMHC said, while Quebec followed with a 7.1% fall. British Columbia was down 5.9%.

Urban starts increased by 29.3% in Ontario and by 26.1% in the Prairie provinces.

Rural starts were estimated at a seasonally adjusted annual rate of 20,900 units in February.

GOLD FOR GROWTH IN 2012

Calgary economy to lead the country in 2012
3.7% growth this year
By Mario Toneguzzi
Calgary Herald February 22, 2011

CALGARY - Calgary's economy will regain its place as one of the fastest growing census metropolitan areas in Canada over the next two years, says the Conference Board of Canada.

In its Metropolitan Outlook Winter 2011 edition, the board says "the continued recovery in the energy sector will boost economic growth by 3.7 per cent in 2011 and above four per cent the following year, placing Calgary at the top of the growth leaderboard in 2012."

But the board says Canada's slowing economy will weigh on growth in most of the 27 census metropolitan areas across the country. Only Windsor, Calgary, Oshawa, Regina, Saskatoon, London, Sherbrooke, Winnipeg, and Thunder Bay can expect higher real gross domestic product (GDP) growth this year than in 2010.

"Most Canadian cities rebounded well from the recession. This year, however, a weaker domestic economy, winding down of federal and provincial government stimulus measures, and uncertain economic conditions in the United States will result in stable or lower growth in a majority of cities," said Mario Lefebvre, Director, Centre for Municipal Studies, at the conference board.

Windsor is forecast to post the fastest growing metropolitan economy in 2011. Real GDP is forecast to rise 3.9 per cent this year.

The board says Regina's economy will benefit from the provincial resource boom and enjoy growth of 3.5 per cent in 2011. "This growth will support employment increases and, in turn, maintain in-migration and demand for housing."

It says Saskatoon is poised to regain its position as one of Canada's fastest-growing CMAs in 2011, with GDP forecast to rise 3.4 per cent. "Saskatoon's construction sector is expected to grow robustly through the medium term, and residential construction will continue to fuel activity in the finance, insurance, and real estate sector."

And the board says higher oil prices helped boost Edmonton's economy by 3.7 per cent in 2010. While GDP growth will moderate to 2.6 per cent in 2011, the CMA's economy is expected to grow by four per cent in 2012.

Photo By: Daniel MacDonald