SIGNS OF STRENGTH

Signs of strength in Canada's housing market
Updated Thu. Jul. 9 2009 10:05 PM ET
CTV.ca News Staff

New data suggests the Canadian housing market has already bottomed out as there was an 8 per cent rise in housing starts in June, the first consecutive monthly increase this year.

While new home construction remains about a third lower than last year, a report from TD Economics says the new numbers are encouraging.

The figures "provide more evidence that the Canadian economy has certainly passed the worst of what can be expected in terms of residential investment contraction," TD said in a report released Thursday.

Sales have picked up dramatically in a number of cities, including Edmonton and Toronto.

The Edmonton Real Estate Board said June's sales were third highest ever for the month.

Regionally, there was a 59.4 per cent increase in urban housing starts in the Prairie regions, a 25 per cent gain in B.C. and a slight 3.1 per cent increase in Ontario.

Analysts point to lower price and better interest rates for the spike in home sales.

However, it wasn't good news straight across the country as housing starts in Quebec fell 6.3 per cent and 3.1 per cent in Atlantic Canada.

Immigrants fuelling market

A new report from Scotiabank says that recent immigrants have been driving housing demand in the country.

The reports says census Data shows what 72 per cent of immigrants lived in home owned by someone in their family in 2006, up from 68 per cent in 2001.

Canadians born in the country only saw an increase of 2 per cent of those living in a home owned by a family member, from 73 to 75 per cent.

"Given Canada's aging population and relatively low fertility rates, longer-term household formation and housing needs will be largely determined by immigration," Scotiabank senior economist Adrienne Warren said.

Warren said immigration could account for 75 per cent of growth for Canada's population in a decade.

PROJECTED PROJECTS

Calgary leads jump in building permit values
South Health Campus fattens value in May
By Lisa Schmidt

Calgary Herald

With Files From Canwest News Service

July 8, 2009

Calgary led a surge in building permits across the country, with the value doubling in May, Statistics Canada reported Tuesday.

But the pace still lags 2008 levels, with the value of construction projects at $1.5 billion, down about one-third from the same time last year.

Construction permits worth $626 million were issued in Calgary in May, twice the amount handed out in April.

Most of the increase came from institutional and commercial permits, as the value of non-residential applications jumped fivefold. That was due in most part to the South Health Campus, with permits totalling about $388 million.

"We got a huge boost from that hospital," said Lai Sing Louie, market analyst with Canadian Mortgage and Housing Corp.

The value of residential permits fell about 40 per cent to $101 million, largely due to a virtual standstill in condominium construction.

"There were 58 in May taken out -- it wasn't a lot in terms of units overall," said Louie.

In Alberta, the value of construction permits jumped nearly 50 per cent to $1.1 billion in May. So far this year, permits are down more than 40 per cent to $3.6 billion.

The monthly gain in building permits is encouraging, said one economist, suggesting this echoes other signs the worst of the recession may have passed.

"However, the good news should be tempered with a liberal dose of caution," Todd Hirsch, senior economist with ATB Financial, said in a release.

All of the gains were concentrated in a few large projects in Calgary, he noted.

"Since it is just one month's worth of permits, it's hard to argue that this is the beginning of a trend. Outside of Calgary, building permits remain rather weak, particularly for residential construction."

Across Canada, the number of building permits issued in Canadian municipalities "soared" in May, but economists warned the flurry of activity won't last.

Statistics Canada said the value of building permits issued in May surpassed the $5-billion mark for the first time since October.

That represents a "whopping" 14.8 per cent hike over April, according to Charmaine Buskas, senior economics strategist with TD Securities.

"This report is at odds with expectations, but can be mostly explained by the massive increases in two main sub-components--multi-family units and institutional permits," Buskas said Monday. "Clearly, builders were not scared off by the weak macroeconomic backdrop, and in fact were helped by government spending."

However, she also cautioned, "This pace of rising activity is unlikely to continue."

Municipalities approved 13,087 new dwellings in May, an increase of 22.1 per cent.

Statistics Canada says that reflects a 40.5 per cent increase, or 7,948 multi-family units. The number of single-family units approved rose 1.5 per cent to 5,139.

"All provinces, except for Nova Scotia, reported increases in multifamily construction intentions," Statistics Canada said. "Intentions nearly doubled in Ontario compared with April."

It's the third consecutive month of increases in the value of permits in the residential sector.

Residential building intentions rose 14.4 per cent to $2.6 billion.

In the non-residential sector, the value of permits rose 15.3 per cent to $2.4 billion following a 12.9 per cent decrease in April.

The building permits survey covers 2,400 municipalities representing 95 per cent of the population and provides an early indication of projected building activity.

OWNING A HOME IS NOT A FAIRYTALE FOR SOME ANYMORE

Home ownership getting more affordable: RBC
By Derek Abma

Financial Post

July 8, 2009

OTTAWA — Weaker home prices and lower borrowing costs are attracting buyers back into the housing market, according to a report Wednesday by RBC Economics.

"Declining costs of home ownership during the last year were driven by significant cuts in mortgage rates along with the federal government taking an active role in supporting the mortgage securities market," RBC said. "In the first quarter, monthly payments on a typical detached bungalow in Canada had decreased by close to 17 per cent from a year earlier."

The average cost to own a bungalow in this year's first quarter was $1,350 a month, down from $1,520 in 2008's fourth quarter and $1,620 in last year's first quarter.

RBC's affordability index — the percentage of pre-tax monthly household income needed to maintain a home, including mortgage payments, utilities and property taxes — improved across all housing segments in Canada.

The average affordability for a bungalow in the first quarter was 39.4 per cent, down four points from 2008's fourth quarter. It was 44.7 per cent for a standard two-storey (down five points), and 27.1 per cent for a condominium (down 2.8 points).

The average cost of maintaining a detached bungalow in Vancouver was 62.6 per cent of household income during the first quarter, while in Toronto it was 45.9 per cent, RBC said. Ottawa affordability was 39.1 per cent, Montreal 36.5 per cent, Calgary 35.1 per cent, and Edmonton 34 per cent.

From a provincial standpoint, RBC said housing affordability in British Columbia saw its biggest improvements since 1991, with the percentage of income required for various housing types dropping between 3.4 and 7.4 percentage points during the quarter. In Ontario, RBC said housing sales activity has returned to levels seen in mid-2008, largely as a result of improved affordability.

"With the turmoil in financial markets partially subsiding and the flow of credit increasing, home resale activity has rallied impressively since the late winter," said Robert Hogue, RBC's senior economist. "What's most impressive is how widespread this rebound has been, with all major cities in Canada experiencing a revival.

""With property values stabilizing and the effect of the steep drop in mortgage rates likely behind us, further improvement in affordability will depend on greater gains in family income," Hogue added. "Those gains will be dictated by the speed of the economic recovery expected during the second half of this year."

The RBC's assessment follows a separate report this week from real estate agency Royal LePage that said improved housing-market conditions in this year's second quarter points to a better overall performance in 2009 than previously anticipated.

Also, a number of local markets saw sharp spikes in sales last month, including Toronto, Ottawa and Edmonton, where new sales records were set for June.

Percentage of gross income required to own a standard bungalow in first quarter of 2009 (change from previous quarter):

British Columbia 59.0 (-6.0)
Alberta 33.2 (-4.6)
Saskatchewan 42.0 (-3.3)
Manitoba 35.3 (-2.9)
Ontario 38.6 (-4.2)
Quebec 32.3 (-2.5)
Atlantic 31.3 (-2.9)
Canada 39.4 (-4.0)
Source: RBC Economics

YOU ALWAYS HAVE CHOICES...

Top five tips to getting best mortgage
Expert has advice on avoiding pitfalls

By Barb Livingstone
Calgary Herald

July 4, 2009

The following are answers by Valerie Rasmussen, assistant vice-president, credit services, for First Calgary Savings, to questions by New Homes editor Barb Livingstone:

Question: What are your top five tips for people thinking of getting a mortgage and buying a house/condo in this market?

Answer: Buying your first home can be an overwhelming and daunting process.

Getting the right information before you begin can alleviate stress and increase confidence as you go through the process.

Here are some tips:

-Evaluate your financial situation. Understand your current credit history, and your monthly debt obligations.

This will help you plan a budget with realistic expectations and a comfortable mortgage payment that you can live with.

-Get pre-approved. Let the personal banking representative do all the work for you and don't hesitate to ask questions.

Educating yourself on the variety of mortgage loan options and how the application and approval process works can equip you with the knowledge you need to chose the right product.

-Get all your figures and approvals in order before you get to far into the buying process. Then you can be sure to be looking at homes within your means of affordability.

-With your figures in mind, don't push your finances to the max of your ability to pay, this could become overwhelming later.

Everyone has heard the term, "house poor." This can be avoided with the right planning and information prior to choosing your home.

-Wait until the time is right for you. If you plan to live in the home, you do not need to look at a home as a speculator or investor would.

Market predictions can be wrong and should not prevent you from purchasing your first home.

However, once you have reviewed your budget, and perhaps met with a personal banker, you may make the decision that for example one more year of saving could get you a better down payment and lower mortgage payments.

Do what will work for you.

Question: What is the biggest mistake homebuyers can make in relation to getting a mortgage?

Answer: Borrowing too much can be the biggest mistake new home buyers can make.

Many people will hear that they are approved up to a maximum limit of X dollars and immediately begin looking for the maximum priced homes they can afford.

First-time homebuyers need to understand just how expensive home ownership can be -- and many bills and fees are not planned for.

There are lawyers fees (closing costs), insurance set up, utilities, taxes and moving costs, and for condos, such things as condo fees and so on.

Adhering to a realistic budget can help new home buyers avoid the stress of being overextended.

Question: What is different this year that people should keep in mind in terms of buying a house and getting a mortgage?

Answer: There are many differences this year as opposed to last

when first-time homeowners are looking for a mortgage.

They will now have to come up with a minimum of five per cent down as Canada Mortgage and Housing Corp. has discontinued the 100 per cent mortgage.

In addition, the longest amortization has been decreased from 40 years to 35.

Some of these changes will make it harder for people to get into the home owners market.

But with that said, the housing market currently is a buyers market, meaning decreased home prices.

Low prices of homes, coupled with historically low mortgage rates, are making it much easier for first-time homebuyers to get into the market -- and with plenty of choice.

Question: How long have you been a mortgage broker and how do you compare the current market for buying a house to past years?

Answer: I have been in lending for over 20 years. I am currently the AVP of credit services for First Calgary Savings.

With the low rates, the vast variety of mortgage products and options, and the prices of homes with plenty to choose from, I believe there hasn't been a better time to buy.

First-time homebuyers are now getting in at phenomenal rates compared to years ago, when first time homebuyers would sign up for rates of 18 per cent.

This is incredible value makes it easier to pay down mortgages faster than ever if a proactive approach was taken.

Question: If you had one piece of advice for first-time homebuyers, what would it be?

Answer: Get the right assistance working for you--from realtors, to your banker.

The more educated and prepared you are, the better decisions can be made and the sooner you can be enjoying living in your new home.

SOMEWHERE IN THE MIDDLE

Is Canada's housing market tanking or taking off?
Alia McMullen, Financial Post
Published: Wednesday, June 24, 2009

The Canadian housing market is beginning to look like a large jumbled puzzle. A week after a report showed the price of an average house had soared to a record high, an alternate report suggested Wednesday prices have in fact declined for five consecutive months.

Both sources are respectable, and their data accurate. But different methodology has led to a discrepancy between the figures. So where does the Canadian housing market stand?

Economists and those in the real estate industry believe conditions fall somewhere in the middle.
The price of a Canadian home was down 6.7% in April from a year earlier, the relatively new Teranet–National Bank House Price Index showed Wednesday. It was the fifth consecutive month of yearly decrease and caused the index to be down 8.9% from its peak in August. Home prices in Vancouver were down 10.9% from April last year, while prices dropped 9.8% in Calgary and 7.6% in Toronto. On a positive note, prices were up 2.4% in Montreal, 0.6% in Ottawa and 0.2% in Halifax.

But the data are in strong contrast to Multiple Listing Service figures released by the Canadian Real Estate Association on Monday last week.

The MLS figures showed the average national home price for May was up a robust 16.4% from January, setting a record high of $319,757.

Other indicators have thrown a few spanners in the works. The Organization for Economic Cooperation and Development said Wednesday Canadian house prices fell 11% in the first quarter, while Statistics Canada's index on new home prices, released at the beginning of the month, showed prices in April had fallen 3.2% since hitting a record high in September 2008.

With the economy in recession and unemployment increasing, Millan Mulraine, an economics strategist at TD Securities, said it was hard to justify a rise in house prices, as suggested by the CREA survey. But he was not convinced prices had fallen as sharply as the Teranet-National Bank survey had found.

"I would suspect that somewhere in between is the true state. If anything, I think it would be more on the negative side," Mr. Mulraine said. He said the discrepancy between the two sources was likely due to sampling and methodology differences.

The Teranet-National Bank figure is calculated by using the sale prices of homes that have been sold at least once before, a method designed to smooth volatility in the reading. The CREA figure is the average sale price of all homes sold through the MLS. The figure can be skewed by the mix of homes that were sold with the location, size and type of home all impacting price.

"You can't argue with the accuracy of the number, but you can argue that the number misrepresents what's happening in the marketplace if something out of the ordinary is happening," said Phil Soper, the president and chief executive of Royal LePage Real Estate Services Ltd.

He said home prices had not changed much since January, but seasonal factors skewed the data when comparing it on a monthly basis. For instance, many of the homes sold over the winter were distressed sales as a result of the recession, which artificially lowered the average house price compared with the return to normalized activity over spring and summer. Compared with a year ago, the CREA data showed the average house price was largely flat.

Paul Ferley, an economist at RBC Capital Markets said housing start activity continued to suggest weakness in the market. However, he said the market was close to a trough and poised for improvement.

"Our view is both Canadian and U.S. economies return to positive growth in the second half of this year and with that I think it should provide some relief to housing markets in both economies," Mr. Ferley said.

SPRAWL WARS 2009

Calgary growth plan showdown looming
By Jason Markusoff
Calgary Herald

June 23, 2009

CALGARY- Calgary's suburban developers are enlisting tradespeople to help them sway aldermen against the city's blueprint for a denser, more transit-focused future.
And as home builders and developers rally opposition before council's June 23 hearing on Plan It Calgary, a coalition of community activists, academics and some inner-city developers has emerged to lobby in support of the planning strategy.
It's a high-stakes struggle over a complex and sweeping plan that would limit Calgary's sprawl, boost overall population density by 35 per cent and quadruple the size of the transit system in 60 years.
Opponents and supporters expect an emotional debate among a divided city council. The city received 585 public comments aldermen will have to consider, and the hearing may drag on for days.
But the vast majority of Calgarians don't seem to be tuned in, Ald. John Mar said. At one open house for Plan It, he was initially impressed to see dozens of cars parked outside Earl Grey school.
"When I went in, it was nearly empty -- there was actually peewee football outside," Mar said.
"A couple of parents walked in afterwards."
He's heard both support and concern regarding Plan It, but also worries that some residents who back the idea of higher density in existing areas are the same ones who try blocking such developments in their own neighbourhoods.
"Given that this is a 60-70 year plan, I don't know that there's a lot of urgency to move ahead with it at the speed that we are," the inner-city alderman said.
Michael Flynn of Urban Development Institute-Calgary named Mar as one of the swing voters on a council that is largely divided among suburban aldermen who are skeptical about Plan It, and inner-city ones who have voiced favour for the blueprint.
His influential group and the local branch of the Canadian Home Builders Association ramped up advocacy against Plan It's recommendations with a recent "call to action" to get members writing to aldermen and speaking at the June 23 hearing.
The industry is not only lining up business leaders to voice concerns about Plan It's call for less suburban expansion-- a restriction on choice, his sector argues--but also subcontractors and trades workers involved in home building.
"We were helping them understand it's not only going to affect your livelihood, but also where your family might live in the future," Flynn said in an interview.
Several contractors' letters appear in the Plan It package sent to aldermen before Tuesday's hearing, some of them expressing concern of gridlock if the plan builds too much transit at the expense of roads.
Plan It calls for one-third of all new homes to be built in existing communities--not new suburbs--over the next 30 years, a target that rises to half in 60 years. It would also increase the proportion of condos and townhouses in Calgary's residential mix, which critics warn will make single-family houses more expensive.
The target is a broad aspiration and won't be used as a "hammer" to yea or nay specific developments, said David Watson, the city's general manager of planning and development. But it shouldn't be scrapped because a clear target would help give Calgary a proper roadmap to sustainability, he argued.
The pro-Plan It coalition, dubbed CivicCamp, began in April with 165 locals meeting to discuss the Calgary they want. Some have appeared in the group's blue T-shirts at City Hall meetings to support Plan It and the brief summer closure of Memorial Drive to cars.
CivicCamp member Peter Rishaug said there's a false sense that Plan It will mean 40-storey concrete towers everywhere. Much redevelopment will be low-rises or townhouses on more of a "human scale."
"I don't think that's too much of a utopian vision," he said. "I think it's realistically possible. I don't think the city as a corporation would do anything on this scale if they knew they were going to hurt the development industry."
CivicCamp also includes Ken Toews, a developer who helped create Garrison Woods, a model for Plan It-style redeveloped communities.
"We went totally against what the development industry wisdom at that time said, and it was incredibly successful," Toews said. "But I understand the industry point of view. They own a lot of farmland on Calgary outskirts and want to make as much money as they can."
The Calgary Chamber of Commerce praised Plan It's push against sprawl and car dependence in its submission to council, but urged more forewarning of where high-density redevelopment will go, and study of the infrastructure cost savings city planners say will come from building a more compact city.
One suburban developer questioned how effective it will be to lobby council.
"I think for the most part, you're converted or not, unfortunate as it is to say," said David Fishley of Dundee Developments.

BACK TO THE PAST IN COLOUR

I pass by Masters Gallery in Mission on my way into and out of Downtown daily and the above piece caught my eye earlier this week. The artist is David Thauberger. I can see this piece hanging in a great converted warehouse loft. Check it out live in person; the digital viewing is only a partial experience.

The following website was taken from the Masters Gallery Website

David Thauberger R.C.A.
The first thing that catches your eye in a gallery exhibiting the work of David Thauberger is the sheer colour of it. The second thing is its clearness and precision. A closer look is like zooming in to see places usually shown from farther away within the context of the prairie horizon. Thauberger gives us a new perspective of architectural subjects in small prairie towns through his own unique filter of memory and experience. The result is a powerful statement of place, culture and history that dominates not only in its execution, but also in its strength.

Check out more at: http://www.mastersgalleryltd.com/