Peng's ride on Investment

2006-09-22T11:38:00.000-07:00

Home sweet pricey home

Your equity has gone through the roof, but can you cash in -- and still have a place to live?


Susan Down
National Post

Thursday, September 21, 2006

Terror isn't a feeling normally associated with real estate sales, but that's what Tod Clarke is feeling. The Abbotsford, B.C., real estate agent listed a house for a couple who have seen the price almost double in the past three years on their home in Clearbrook -- a rural Fraser Valley community an hour's drive from Vancouver. They are hoping to find something even better for the more than $400,000 they are expecting to reap.

"I don't know where to put them," he said, concerned their house will be sold out from under them before they find something they like. "I'm terrified I'm going to put them out on the street."

For a homeowner enticed into selling a principal residence by the promise of dramatic, mortgage-shrinking profit, the dilemma is: Where do I live now? How can I take my cash and find the equivalent of the original house -- or something even cheaper -- without sacrificing my lifestyle?

But in a rising market, the lateral move -- where you try to pocket some of that equity and still buy a suitable house nearby -- is trickier than a quarterback's screen pass at the five-yard line. Unless you consider other options, says Rick Valouche, president of the Real Estate Board of Greater Vancouver.

"If you have a $300,000 house in Vancouver and it's gone up to $800,000, then to take that $800,000 and find a home they would probably have to move to Burnaby or Coquitlam. That's where you'd get something nice in the $800,000 range."

The terror, the dilemmas, the offhand way of discussing $800,000 suburban houses is all a result of the superheated real estate market gripping western Canadian cities.

By midsummer, the average house price in Calgary was 46% higher than last year, according to MLS reports from the Canadian Real Estate Association. Vancouver house prices, already the most expensive in the country, rose 20% and average Edmonton prices rose 31% during the same period to more than $250,000. In the sizzling spring, bidding wars were frequent: 65% of the home sales in Calgary were above list price, reported the Calgary Real Estate Board. In a calmer market, it is usually less than 9%.

So, what's a homeowner to do? Real estate agents in all three cities offered strategies on what and where to buy.

LOOK FOR CONDOS AND TOWNHOUSES With low supply and high demand, you'll have to move quickly for the best buys in most cities. While it's not exactly a buyer's market, the intense pressure at the more affordable levels will keep prices strong. Entry-level housing such as condos can be a good investment, says Calgary real estate agent Dan Welyk.

"The first-time buyer is what really drives our market," Welyk says.

LOOK FOR PRICE CORRECTIONS Buyers can see which way the market is moving by watching the inventory statistics, says Calgary Real Estate Board president Kevin Clark. As of mid-September, Calgary's attached housing had lower inventories than detached homes, resulting in fewer listing price reductions. "Certainly some buyers may want to cast a glance toward the detached market again," says Mr. Clark, adding that in August more than a third of the detached homes in Calgary had reduced prices to remain competitive.

SEEK OUT AREAS THAT HAVEN'T EXPERIENCED HIGH GROWTH Mr. Clark suggests investing in solid and balanced neighbourhoods such as Spruce Cliff, Christie Park Estates and Palliser in Calgary's southeast sector, Rutland Park in the southwest and Varsity Village in the northwest. Prices in these areas rose less than 20% in the past year. "For some reason they haven't received broad enough attention," he says.

BUY NEW "With new stratas taking 10 to 14 months to complete, people are making a profit before moving in," says Edmonton agent Taras Chmil. "People make $50,000 on their existing home, and then they make $50,000 by the time they move into the new home. It's something I've never seen in 30 years in real estate."

New developments in South Edmonton communities are going to increase in value over the next few years, says Edmonton Real Estate Board President Madeline Sarafinchan, who likes Riverbend -- a south-central Edmonton neighbourhood close to the University of Alberta.

Ms. Sarafinchan recommends communities with a recreational feature such as Summerside with its lake access.

BUY OLD Look for potential redevelopment lots, says Mr. Welyk. "A lot of the homes you would normally move into are becoming tear-downs because of the increased lot value."

Areas with traditionally lower property values (such as Calgary's northeast communities of Whitehorn, Falconridge and Penbrooke) have reached, and in some cases surpassed, those of southwest communities, Mr. Welyk says.

"These were always fairly weak compared to other parts of the city. Now that has done a complete 180." Hot spots in the city core are urban areas such as Bridgeland and Mount Royal.

"The smartest buy would be the biggest possible piece of land you can afford," says Vancouver real estate agent Lorne Goldman. "If it's the worst house on the best street, so be it." His pick: South Granville, where he believes prices have not caught up with rises in other neighbourhoods.

COMMUTE Transit improvements can fuel home price increases. Once completed, B.C.'s $3-billion Gateway program of bridge, highway and transit expansion will shorten commutes to Vancouver's outlying communities such as Maple Ridge, Pitt Meadows, North Langley and Abbotsford. As a result of improved transportation to downtown, says the Real Estate Investment Network, the house prices in those areas could rise 10% to 20%. In Edmonton, expansion of the city's light rail transit system has created new home development interest in areas such as Clareview.

BUY A RECREATIONAL PROPERTY Split the proceeds from your sale and buy a house further outside the city with one half and buy a vacation home with the other, recommends Douglas Gray, Vancouver author of the bestselling Making Money in Real Estate.

A low turnover -- properties often get passed down to other family members -- and high demand make recreational properties attractive. "Everyone wants to have a piece of heaven," he says, adding that a cottage can qualify for a high ratio mortgage and can be deemed your principal residence for tax purposes.

THINK ABOUT THE DISRUPTION AS WELL AS THE CASH If you're in a community that's done well, stay put and borrow against your equity for other real estate investments, advises Mr. Clark in Calgary. "You sacrifice the amenities of one community to make money in another community," he says. "Boy, that's a fast track for divorce."

Borrowing against equity is the strategy that Carolyn Hind has decided on. "I'm not prepared to sell where I am," says Ms. Hind, who owns a condo in Windsor Park, a convenient area close to Calgary's city centre.

"I could get $130,000 more than I bought it for five years ago, but where would I go?"

Ms. Hind and her boyfriend, Peter Donahoe, bought a 500-square-foot condo this year in the downtown Connaught area as a renovation project. "It was a calculated risk," she says. "We wanted to see if we could do it. The conditions were so favourable that we just jumped in."

The couple added their own sweat equity after work -- she's an ESL instructor and he's a flooring contractor -- by gutting the kitchen and bathroom and redecorating. They sold it less than three months later for 30% more. In August, they bought again, this time a three- bedroom townhouse in the older Bowness area.

Although the frenzied real estate market has cooled off, the couple isn't worried: First, they bought below market value from an owner whose tenant had trashed the place, leaving filthy carpets and holes in the walls.

Second, they know it's a safe investment: The rental market is almost as hot as the real estate one. Now they leave the door open while they are renovating and, says Ms. Hind, "People knock on the door every day asking if it is for rent."

housing market cool off?

2006-08-01T14:01:00.000-07:00

Calgary house prices take a breather in July
Sales average $10,000 below previous month

Is Calgary's scorching resale housing market starting to cool off a tad?

Preliminary data from the Calgary Real Estate Board suggest the average combined residential sale price in July may have dropped from June, representing the first time this year that the average price has been less than the previous month.

According to the Calgary Real Estate Board website as of late Monday afternoon, the average combined residential sale price of a Calgary home in July was $358,103, which is just under $10,000 less than the price in June ($367,033). Also in June a record 3,388 homes sold on the MLS system. As of Monday afternoon, 2,498 homes sold in July. And the 30-day median sale price is $330,000 compared to $334,500 in June.

There were also 3,804 active listings as of Monday on the MLS market in the Calgary area.

Final official results for July will be released this week by the real estate board.

Kevin Clark, president of the Calgary Real Estate Board, said the sale of higher priced homes has an impact both ways on the overall average price.

"I was doing a little bit of a study of properties over a million dollars and there were 175 at the time and they were taking longer to sell. That's going to have an impact on the average price," said Clark. "We've also got nearly 30 per cent of the inventory now over 30 days on the market. That's going to have an impact on it.

"So in the one sense, there's a change in the marketplace. It's interesting because some properties are still going incredibly quickly and over list (price). We're still selling about 40 per cent above list price. On the one side, I think there's people who are overpricing their properties and (they) are sitting . . . then on the other side, there are properties coming on well priced and selling very, very quickly."

Richard Corriveau, regional economist for the Prairies and Territories for Canada Mortgage and Housing Corporation, said average sale prices dropped on a month-to-month basis for homes listed on MLS three times in 2005. It also occurred five times in 2004.

"A lot of it just has to do with the distribution and the fact you might see some very severely high sales in the upper price ranges that inflate one month's price and if they don't occur in the following month, we just don't see that as a result," said Corriveau.

And while the average sale price may have dipped or remained relatively the same on a month-to-month basis, the July number is still much higher than the average sale price of $245,704 for July 2005.

Corriveau said the residential market has been very strong this year as average combined residential sale prices have jumped from $289,130 in January to the current number.

"Last year the market really took off over the summer and second half of the year," said Corriveau. "With that we're competing with comparatively stronger numbers over the second half of 2005 and you won't see as pronounced gains like we did the first part of this year. The year to date increase will diminish as the year progresses."

Don't come to Calgary if you don't have a place to stay

2006-07-14T10:25:00.000-07:00

This has become a vicious cycle in Calgary. Labour shortage->More migrations into Calgary->skyrocketing housing price, low vacancy rates and rising rents->high inflation and living cost->less people coming in town->worse labour woe

Don't come to Calgary, shelter warns families
Last Updated: Friday, July 7, 2006 | 2:44 PM MT
CBC News

An organization that gives food and shelter to the homeless is warning families not to come to Calgary without a place to stay.

Inn from the Cold is dealing with a record number of families needing shelter and may soon have to turn people away, executive director Diana Segboer said Thursday.

Volunteers have started telling callers from across the country not to move to Calgary unless they have friends to stay with or money for a hotel room.

"They are coming because work is here and, unfortunately, what is happening is there is no place for them, other than the emergency shelters, to stay," she said. "We're having a hard time taking care of the ones that we already have in our system."

Inn from the Cold is a network of more than 67 churches and organizations that provides meals and shelter for 30 to 60 homeless people each night, giving priority to families.

Rents rising, vacancy falling

Compounding the problem are swiftly rising house prices and a falling rental vacancy rate, Segboer said.

Two years ago, landlords complained they couldn't find enough renters to fill their buildings. Today, a flood of people moving to the city has dropped the vacancy rate to less than 1.6 per cent.

The Calgary Apartment Association notes that most landlords are raising rents. One company announced this month it was raising the rent on 1,200 apartments across the city by about 35 per cent.

The lack of affordable housing could also add to Calgary's labour woes.

In June, the Conference Board of Canada warned that Alberta could face a labour shortage of 332,000 workers by 2025 if current trends continue.

More mortgage options for Canadians

2006-07-11T11:47:00.000-07:00

Interest only mortgage, 30, 35 years extended mortgage, high-ratio mortgage insurance app fee waiver... CMHC is throwing out a lot of gimmicks to make buying a house more affordable to Canadians. Good or bad? My personal opinion is it will at least postpone the real estate cooling further here in Calgary.

Canada Mortgage and Housing Corporation (CMHC) is helping to make homeownership more affordable and accessible for Canadians by eliminating homeowner high-ratio mortgage insurance application fees, and offering insurance for mortgages with longer amortizations and more flexible repayment options.
"These innovative financial solutions will allow more Canadians to buy homes, and to do so sooner," said Karen Kinsley, President of CMHC. "By reducing costs and increasing flexibility, CMHC continues to help Canadians realize their dreams of homeownership."
Effective immediately, CMHC will eliminate application fees on all high-ratio homeowner mortgage loan insurance products. The typical fee eliminated will be $165, but could be as high as $235 depending on the type of insurance transaction.
"CMHC will continue to look for ways of enhancing its products and services, and reducing the cost of accessing financing for Canadians where it can, " said Ms. Kinsley.
In addition, CMHC will provide mortgage insurance that allows lenders to offer borrowers with a proven history of managing their credit responsibly the option of making interest-only mortgage payments for up to the first 10 years when they purchase or refinance their home. This new option will give borrowers greater flexibility in managing their cash flow.
Earlier this year, CMHC was the first Canadian mortgage insurer to introduce, on a pilot basis, insurance on loans with extended amortization periods of up to 30 years. Building on the success of this pilot, CMHC is now moving to further facilitate homeownership by making this feature on-going, and is also introducing extended amortization periods of up to 35 years.
Extended amortizations allow borrowers to purchase their home and grow equity sooner. The premium surcharge for a 30-year amortization will be 0.20%. For a 35-year amortization product, the premium surcharge will be 0.40%.

no interest change from central bank!

2006-07-11T11:36:00.000-07:00

No change in interest rates: Bank of Canada
Last Updated Tue, 11 Jul 2006 10:58:21 EDT
CBC News

The Bank of Canada left a key interest rate unchanged on Tuesday at 4.25 per cent, and dropped a hint that it sees economic weakness ahead.

While the central bank said the Canadian economy is operating just above its production capacity and that the inflation rate has gone up faster than expected, it believes rates are currently high enough to keep inflation in check.

Prior to Tuesday's pause, the Bank of Canada had boosted the overnight rate — what major banks charge each other for overnight loans — seven times since last fall, when the central bank started edging rates up gently to slow down a red-hot economy and keep inflation in check.

In the commentary accompanying Tuesday's rate decision, the Bank of Canada said that while economic growth in the first half of this year has been higher than expected, its outlook for 2007 and 2008 is now weaker than it initially forecast back in April.

"With some anticipated moderation in U.S. growth, combined with past interest rate and exchange rate increases, the Canadian economy is projected to return to its production capacity by the end of 2008," the bank said.

The bank will provide more details on its outlook for the economy on July 13.

Assessing slowdown

Aron Gampel, Scotiabank's deputy chief economist, told CBC News that the Bank of Canada's governor, David Dodge, is concerned about a slowdown in the U.S. economy and how the strong Canadian dollar has negatively impacted our manufacturing sector.

"[Dodge] wants to see how that plays out longer term," Gampel said. "I think after raising rates seven times, he's just taking a period timeout for an assessment."

"The bank simply believes that its work is done, and needs a lot of convincing to get off the sidelines," said BMO Nesbitt Burns deputy chief economist Douglas Porter.

With the Bank of Canada potentially on hold on interest rates, the Canadian dollar will likely be capped in the lower end of a range between 85 cents US and 90 cents US, Gampel said.

"A lot of manufacturers are going to be breathing a little easier," he said.

In the wake of the bank's decision to hold the line on rates, the Canadian dollar was down 0.53 of a cent at 88.35 cents US on currency markets.

Calgary home price rise 33%

2006-07-05T11:00:00.000-07:00

Calgary home prices rise 55%
RICHARD BLACKWELL

Globe and Mail Update

House prices in western Canada continued to soar in the second quarter, as demand outstripped supplies and rising mortgage rates failed to dampen buyers' enthusiasm.

In Calgary, for example, the price of an average standard two-storey house jumped by almost 55 per cent, compared to a year earlier, to $397,867, according to a new report on house prices from Royal LePage Real Estate Services. The average detached bungalow in that city rose 50.4 per cent year-over-year to $371,200.

The nationwide trend of higher prices is likely to continue for the rest of the year, with house prices forecast to rise an average of 9.2 per cent for all of 2006, the report said. The national average price is expected to hit $272,200 by the end of the year, with the number of transactions rising marginally to 485,000 units.

In the west, what's pushing up prices is a lack of listings, the report suggests. The story in Alberta, and parts of British Columbia, is “extraordinary demand levels far surpassing available inventory,” said Phil Soper, president of Royal LePage Real Estate.

In Vancouver, a standard two-storey house now costs an average of $792,375 — by far the highest level in the country — according to the study. By contrast, the same style house in Moncton costs $126,007.

While the west was hot, Quebec, Ontario and Atlantic Canada showed moderate price increases. A standard two-storey house in Toronto, for example, rose by 4.4 per cent from a year earlier to hit $474,766, Royal Lepage said.

In some areas, particularly in the West, some buyers are being priced out of the market, or they are looking at “less established areas” or reconsidering the kind of house they want to buy, the report said. Overall, rising mortgage rates are “having little or no effect on buyers entering the market.”

Labour shortage might put brakes on sizzling economy

2006-07-04T15:59:00.000-07:00

Lack of staff shuts shops
Worker crunch hitting businesses hard
By SHAWN LOGAN AND TARINA WHITE, CALGARY SUN

A dwindling pool of workers is forcing some Calgary merchants to shutter their shops -- and more closings could come as the crunch gets worse, says a local business advocate.

The latest example came Friday as the Abbeydale Esso at 220 68 St. N.E. closed its doors, leaving only a cardboard sign in the window reading: "Closed for undetermined time due to labour shortage."

The store's owner/operator, Penny Badder, declined to comment on the closure yesterday, but Dan Kelly of the Canadian Federation for Independent Business said this case will likely be repeated as merchants clamour for staff in Alberta's scorching economy.

"Shortage of labour is becoming a bit of an epidemic," he said.

Kelly said small businesses operating with three or four employees are often forced to close down early for the day, and sometimes permanently, because they lack staff.

That depressing script has become familiar to the owner of a city sportswear outlet.

Unable to obtain staff, Robin Masciangelo was forced to close her store, She Athletic Wear, on the same day Esso shut down.

"No one goes into business predicting it's going to be that hard to hire people," she said yesterday.

"It's making it really difficult to be an entrepreneur."

Masciangelo said she wrestled with shutting down the store for months before realizing she had little other choice.

"It was a three to four month process of bitter tears and anger," she said.

Masciangelo described the potential employees she interviewed as "unmotivated" and "pampered," unwilling to accept the $10 an hour pay, as well as a 25% in-store discount.

"As a small business we can't afford to pay the $15 or $16 an hour that people are expecting," she said.

The lack of staff is like a brake that's keeping the economy from reaching full momentum, said Calgary Economic Development spokesman Adam Legge.

"We're not going to come to a grinding halt ... but our growth will be slowed and, in some ways, our long-term future prosperity will be affected if we aren't proactive now," he said.

"Labour force shortages are our number-one challenge in the community ... the unemployment rate is essentially non-existent and the labour force is being fully utilized.

"Every industry, every occupation is being affected and some are having to hold off in certain projects or are closing their doors because they can't get the staff."

Calgary is No.1 in Canada now!

2006-06-21T10:04:00.000-07:00

well, No.1 for inflation.

Inflation by city

Canadian Press

The annual inflation rate was 2.8 per cent in May, says Statistics Canada. The agency also released rates for major cities but cautioned that figures may fluctuate widely because they are based on small statistical samples. (Previous month in brackets.)

—St. John's, N.L., 2.8 (1.9)

—Charlottetown-Summerside, 3.3 (3.1)

—Halifax, 3.1 (3.0)

—Saint John, N.B. 2.9 (2.8)

—Quebec, 2.7 (2.6)

—Montreal, 2.5 (2.5)

—Ottawa, 2.8 (2.4)

—Toronto, 2.3 (2.3)

—Thunder Bay, Ont., 2.6 (2.1)

—Winnipeg, 2.4 (2.1)

—Regina, 2.6 (1.9)

—Saskatoon, 3.1 (2.1)

—Edmonton, 3.9 (3.2)

—Calgary, 4.9 (3.9)

—Vancouver, 2.3 (1.8)

—Victoria, 2.2 (1.8)

City office market world's tightest

2006-06-20T15:36:00.000-07:00

City office market world's tightest
Demand for high-end space 'unprecedented,' says report

Mario Toneguzzi
Calgary Herald

Tuesday, June 20, 2006

Calgary has become the toughest place in the world to find Class A downtown office space, according to a national report released Monday by C.B. Richard Ellis.

The company reported that there is an "unprecedented demand for space in Calgary" and that demand has also boosted rents in the market to the highest in the country.

Mike Gigliuk, director of research-Alberta for C.B. Richard Ellis, said there is only 29,700 square feet of Class A downtown office space available in an inventory of 16.9 million square feet of high-end space -- representing about a floor and a half.

He said the vacant space is scattered throughout downtown Calgary with a sub-lease pocket of 22,000 square feet and the "rest is just change."

"We're all shaking our heads wondering what's next," said Gigliuk. "We're still a ways away from having new product added (to the downtown)."

The C.B. Richard Ellis national office market report for the second quarter of 2006 said that at 1.5 per cent overall, Calgary had the lowest office vacancy rate in the nation and likely the lowest in North America.

"Based on a study of vacancy rates around the world, Calgary's downtown area with a Class A vacancy rate of only 0.2 per cent is the lowest in the world, even lower than Tokyo, which traditionally has the lowest vacancy rate of any major city," said the report.

The report said downtown Class A office rent in Calgary has soared to $37.38 per square foot, up from $34.85 at the end of the first quarter of 2006. Vancouver rents were $24.58 followed by Ottawa at $24.10 and Toronto at $20.28.

"Demand substantially exceeded supply in Calgary and the demand could not be met because of a shortage of available space," said the report.

The report said Calgary has about 3.8 million square feet of new office space on the boards and another two million square feet planned to be up by 2010.

"Clearly, the situation today where Calgary has such an extremely tight market is not desirable or sustainable and the addition of new office space will be better for both tenants and landlords," said the report.

"However, until the new space comes on stream, Calgary tenants and landlords will have no choice but to do the best they can in a time of an acute shortage of space, the tightest ever seen in Canada."

Tanya Colasurdo, agent and principal with Calgary's Barclay Street Real Estate Ltd., said it is extremely difficult to find downtown office space these days and the situation requires creative solutions.

"Companies are looking at alternative strategies now," said Colasurdo.

"Companies that have primarily been in downtown markets before now are starting to consider outlying markets like the Beltline or the suburbs and there's new construction in those markets that's going to be delivered before the next wave that's coming downtown.

"There's two waves. That first wave is 100 per cent pre-leased and there's going to be a second wave coming that will be completed in about a year and a half to two years later. That hasn't seen the same activity, yet, and I think that's because there is an intermediate solution as you look to the suburbs. So there's a lot of buildings in the suburbs that can be built in a shorter time frame. They're not the highrises."

The Herald reported in March that five downtown office tower developments -- totalling about 1.5 million square feet of space -- are pre-leased.

The south and west towers of Livingston Place, Centrium Place, Opus 8 and one phase of Homburg-Harris Centre are 100 per cent spoken for as Calgary's downtown hunt for office space continued to intensify.

And delivery dates ranged from early 2007 to mid-2008 for these buildings.

In 1996, the downtown office vacancy rate was about 10 per cent and it climbed steadily to about 14 per cent in 2003, but it has been on a decline ever since.

The C.B. Richard Ellis national report said the national vacancy rate at the end of the second quarter rose modestly to 8.4 per cent from 8.1 per cent at the end of the first quarter.

Of the 10 cities surveyed, seven saw their combined downtown and suburban vacancy rates decline, two saw them rise and one was relatively flat.

Calgary City Expansion

2006-06-13T10:52:00.000-07:00

Tony Seskus, with files from Kim Guttormson, Calgary Herald, Calgary Herald
Published: Tuesday, June 13, 2006

Calgary has struck a tentative, $17.8-million deal with the Municipal District of Rocky View that could provide the city with enough land to grow for the next 40 years.

After nearly four years of contentious negotiations, both councils voted for an agreement in principle that would give the city 103 square kilometres of additional space, or enough to accommodate up to 400,000 residents.

But the potential arrangement is still notably smaller than the 150 square kilometres the city was seeking.

And it's far from a done deal, with an exhaustive public process providing just one of the potential stumbling blocks.

"This agreement is far from perfect, and it's certainly not the one that I would have ideally wanted," said Mayor Dave Bronconnier, who supported the plan in a 11-to-4 council vote Monday.

"Having said that, though . . . I think the overall package meets most of what the city needs."

Rocky View Coun. Earl Solberg, who sat on the M.D.'s mediation committee, told reporters "no stone was left unturned" in forging an agreement he called "as close to a win-win as one could expect."

But Calgary opponents raised concerns about the cost of the deal and the potential for it to limit future options.

"The city will have to agree to growth corridors, which I am very concerned will close the door on future options for the City of Calgary," Ald. Bob Hawkesworth told council.

"As well, we endorse and encourage, in my view, unsustainable, low-density, country-residential urban sprawl."

Monday's agreement provides Calgary with growth areas on the north, northwest, east and southeast sides of the city.

The city is seeking the annexation to maintain its policy of having at least a 30-year supply of developable land within its boundaries. Calgary has reached the point where it has an overall supply of about 24 years of land left.

If the proposed deal comes to fruition, it will enable the city to maintain its long-term land supply, including a 38-year residential land supply and a 37-year industrial land supply in the southeast industrial corridor.

"It puts Calgary as a city in a position to plan for the future," said Ald. Ric McIver, who sits on the city's mediation committee.

He said the potential agreement also removes the uncertainty for those living on either side of the city's edges, who were upset the negotiations dragged on for so many years.

The $17.8-million price tag essentially represents the lost tax revenue for the M.D. over the next 10 years, Solberg added.

He said a key aspect of the agreement is the property tax mitigation program for landowners whose land is annexed.

The program would allow Rocky View tax rates to continue to apply for landowners for the next 15 years, unless they become connected to city services, while farm exemptions would continue for 30 years.

Several officials cautioned that the deal is far from concluded, however.

There will be open houses for the public, tentatively planned for July. Each council will then hold public hearings, which will be followed by another vote.

The agreement will also have to go to the Municipal Government Board and finally to the provincial minister in charge.

"I think it's very positive for both sides, but, again, it's far from being a concluded agreement. This is now a mediated agreement we're now both prepared to take out to the public," Bronconnier said.

Value of housing permits plummets in April compared to March

2006-06-07T19:05:00.000-07:00

Building permits chalk up 15% gain

Mario Toneguzzi
Calgary Herald

Wednesday, June 07, 2006

The scorching pace of construction activity in Calgary isn't cooling off as the total value of building permits in May soared to $351.4 million, boosting year-to-date figures to $1.74 billion.

David Price, the City of Calgary's manager of building regulations, told the Herald on Tuesday the May total is eight per cent higher than May 2005 ($325 million) and the year-to-date number is an increase of 15 per cent from the same five-month period in 2005 ($1.52 billion).

"And last year was one of our busiest years on record," said Price.

While the City of Calgary reported a strong increase in the value of building permits, Statistics Canada figures released Tuesday showed that permit values in the census metropolitan area of Calgary -- which includes the Municipal District of Rocky View, Chestermere, Cochrane, Airdrie, Irricana, Beiseker and Crossfield -- plunged by 36.9 per cent. The value fell from $576.6 million in April to $363.9 million in March.

Despite the drop, commercial activity drove gains in May.

"The prime driver of that has been non-residential permits, which most people would consider sort of the larger commercial-type projects," Price said. "It's gone up quite substantially."

Price said non-residential permits in May skyrocketed by 105 per cent from a year ago, jumping to $194 million compared with $95 million in May 2005.

However, single-family home building permits dropped by about 28 per cent in May to $85 million.

The permits were valued at $117 million in May 2005.

The total value of building permits issued in April was $333.4 million.

"It's been a fairly warm year right from January to now," said Price.

"There hasn't been the brutal winter temperatures. So that may indicate the industry has been able to build easier for the first few months of the year. You're not getting a winter delay where they're trying to play catch up in May and June.

"Another factor has been there's been a bit of a challenge in availability of trained and experienced workers. Some builders -- not all -- but some builders have sort of moved into a strategy of more or less only selling what you can reasonably deliver. So I think some of the builders have eased off on that. Some of the other builders are still fairly assertive in their sales and marketing. But some of the bigger builders have slowed down so they don't end up promising to sell what they can't even start," said price.

Michael Brown, vice-president of business development and retention for Calgary Economic Development, said the numbers so far this year show consistency.

"And we're not seeing an end to that any time soon," he said. "It reflects what we're seeing in our office. We're getting a significant amount of industrial users looking at Calgary as well as office users."

The Statistics Canada report pointed to a steep drop from April to March, but the Calgary area has experienced an extremely strong first four months of this year with overall building permit value soaring by 26.6 per cent to $1.7 billion compared with $1.3 billion during the same period last year.

At a national level, Statistics Canada reported Tuesday that builders took out $5 billion in building permits -- down 10.6 per cent from March. It was the lowest level for permits since November 2005 and 1.5 per cent below the average monthly level for last year as a whole.

In the housing sector, municipalities issued $3.2 billion in permits, down 5.7 per cent from March. In the non-residential sector, builders took out $1.8 billion in permits in April, down 18.4 per cent compared with March.

In Alberta, the total building permit value dropped by 23.5 per cent in April to $938.8 million compared to $1.2 billion in March. However, Alberta is up by 26.2 per cent in the first four months of this year compared to the same period in 2005 -- $4.1 billion this year, $3.3 billion last year. Building permits for residential construction in the province for the first four months in 2006 have increased by 45.2 per cent from a year ago to $2.7 billion compared to $1.9 billion in 2005.

Carolyn Kwan, an economist with Scotia Capital Inc., in a review of the Statistics Canada data said Tuesday's report is "generally weak."

"(But) the fundamentals for the housing sector remain strong, given the generally low mortgage rates and good job growth," she said.

mtoneguzzi@theherald.canwest.com

- - -

Value of building permits

March April %: 2006 2006 change

Calgary CMA

$576.6 million $363.9 million -36.9%

Edmonton

$272.2 million $254.1 million -6.7%

Alberta

$1.2 billion $938.8 million -23.5%

Canada

$5.6 billion $5 billion -10.6%

Source: Statistics Canada

Note: Census Metropolitan Area (CMA) includes the Municipal District of Rocky View, Chestermere, Cochrane, Airdrie, Irricana, Beiseker and Crossfield

just a test

2006-06-06T22:55:00.000-07:00

Peng's ride on Investment

Calgary single house price keeps rising

2006-06-05T11:25:00.000-07:00

House prices soar toward $400,000
Hot real estate market jumps 'beyond anyone's wildest dreams'
Mario Toneguzzi, Calgary Herald
Published: Saturday, June 03, 2006

In a red-hot housing market being called "a dream or a nightmare," the average price of a single-family home in Calgary is about to cross the $400,000 threshold.

Family homes jumped an unprecedented $120,000 over last year, according to May statistics released by the Calgary Real Estate Board on Friday.

The startling 42.79 per cent increase has single-family homes selling for an average of $396,694.

Richard Corriveau, regional economist in Calgary for the Prairies and territories for Canada Mortgage and Housing Corp., said the Calgary real estate market is "operating beyond anyone's wildest dreams."

"I don't think anybody could have envisioned that price growth would be pushing 40 per cent.

"Even with the realization of how hot the market is, 40 per cent is unprecedented," Corriveau said.

"It's either a dream or a nightmare depending on what side of the coin you're on. It totally blows me away."

The average price in May sales for all types of homes rose by 43.45 per cent -- or nearly $110,000 -- over last year to hit $358,214, the highest on MLS record.

Condominium sales also exploded in the month, with 1,001 properties changing hands.

Sales for condominiums for the same period last year were 861.

The average condominium price in May rose by nearly $90,000 to $270,861, the highest in MLS history, compared to the $181,495 in May 2005 -- a 49.24 per cent increase and a 5.62 per cent rise from the April average price of $256,455.

The strength of the market is reflected in current MLS listings, with 115 properties for sale at $1 million or more, including one home in the southwest Bel Aire neighbourhood listed at $12 million on just over an acre of land. The house backs onto a ravine.

Rachelle Starnes, a realtor with Royal LePage Foothills, has a house listed in the southwest Patterson neighbourhood for $3.2 million.

"It's very exciting with what's going on with the high-end homes," said Starnes. "I think Calgary has the most beautiful homes in North America per capita just based on the quality of the homes. There's no other city quite like it.

"The educated consumers in Calgary are flying all over the world finding the best of everything and putting them in their homes. Calgary is such an affluent city. You see magazine-quality homes everywhere."

In May, 48 homes in Calgary sold for more than $900,000 compared to 21 sales in that price category in May 2005.

Last year, only 12 per cent of sales in Calgary exceeded $400,000 and so far this year it's pushing 30 per cent, said Corriveau. "We've seen a dramatic shift to the upper end of the market," added Corriveau.

Corriveau said there doesn't seem to be a slowing down of the market on the horizon.

"Obviously everybody's very concerned about where the market will be a year from now. I can't help but reiterate the fact that people are desperately trying to get into the market before mortgage rates rise further and that's what's fuelling a lot of the increase," he said.

Kevin Clark, president of the Calgary Real Estate Board, said May will probably be the peak in terms of unit sales.

"I don't think you'll see us break another record in June," said Clark. "What is impressive about the numbers is the confidence of the marketplace. People are buying. They're buying confidently. They're prepared to pay the prices -- not backing away from the prices.

"The Calgary and regional real estate market continues to unfold with numbers predictable to the strong economic climate. We would anticipate a softening of unit numbers in the summer weeks ahead, but the prices to remain on a positive trajectory."

The average days on the market for a house in Calgary to sell was 17 days in May compared to 38 days a year ago.

May combined residential sales totalled 3,550, the highest May on record, a 12.38 per cent increase over May 2005 when there were 3,159, and an increase of 4.75 per cent from last month's high of 3,389.

The breakdown of the May combined sales was 2,519 single-family residences, 1,001 condominium, and 30 mobile homes. May 2005 sales in the same categories were 2,274, 861, and 24 respectively.

The average combined residential sale price of $358,214 in May (compared to May 2005 at $249,719) was also a 4.79 per cent increase over April's average price of $341,838.

May residential combined listings totalled 4,137, a one per cent decrease from May 2005, when 4,178 listings came to market and showing a 15.82 per cent increase over the 3,572 homes listed in April.

"At the beginning of the year we saw opportunities in some communities and those communities really experienced strong activity," said Clark. "So there's been a levelling which is very typical in a marketplace."

The combined residential median price for May was $325,000 -- up 46.40 per cent from May 2005 when the median price was $222,000 and up 4.17 per cent from the median price in April of $312,000.

Principle residence and tax

2006-06-05T11:18:00.000-07:00

Chinese forum talking about tax strategy of investment property and principle residence.

Peng's ride on Investment

2006-05-31T13:18:00.000-07:00

Calgary office leasing market info:
downtown
suburb

The Canadian Guide to Investing in Residential Property

2006-05-30T15:10:00.000-07:00

I am planning to read the book "Making Money in Real Estate: The Canadian Guide to Investing in Residential Property". There are some excerpts from that book here.

Over 380,000 households in five major centres intend to buy a home in 2006 CMHC

2006-05-30T14:55:00.000-07:00

Over 380,000 households in Halifax, Montreal, Toronto, Calgary, and Vancouver indicated they were ready to buy a home this year, according to the Consumer Intentions to Buy or Renovate a Home survey released by Canada Mortgage and Housing Corporation (CMHC). This represents an average of eight per cent of all households in those centres.

While eight per cent declared that they have a high chance of buying a home and could be considered as 'ready to buy' within the next 12 months, five per cent indicated that they have a 50/50 chance of buying. The survey is conducted using a sample of approximately 4,000 households in each centre surveyed.

"Consumer intentions across the five major markets surveyed remain strong, with eight per cent of households thinking seriously about buying a home this year", said Bob Dugan, Chief Economist at CMHC. "Intentions to buy are up from 2005 when five per cent of households were ready to buy a home. This year, strong intentions to buy are consistent with continued high levels of housing starts and sales of existing homes. Favourable economic conditions, such as low mortgage rates and a healthy labour market are contributing factors to home buying intentions."
Home buying intentions are strongest in Calgary and Halifax, where 10% of households reported that they are ready to buy a home. Purchase intentions are also strong in Vancouver and Toronto where 8 per cent of households are ready to buy, while the share is slightly lower in Montreal (seven per cent).

"Home renovations will remain strong this year, with 13% of surveyed homeowners reporting they were ready to undertake renovations this year, costing $1,000 or more" said Dugan. "The share of serious renovators is down compared to 2005 when 17% of homeowners were ready to renovate. While the share of homeowners who intend to renovate decreased in 2006, the total dollar amount that will be spent on renovations is expected to increase. "

Intentions to renovate are strongest in Calgary and Halifax where 21 and 20% of consumers, respectively indicated they were ready to renovate this year. The share of serious renovators is lower in the other centres, at 14% of households in Toronto, 13% in Vancouver, and 11% in Montreal.

Housing affordablity eroded in 2006 in Calgary

2006-05-18T11:48:00.000-07:00

See RBC's affordability report. We are in a much worse siutation compared to 2005. However, compared to other major cities, Calgary is still not bad.

Calgary City Planning Link

2006-05-17T13:51:00.000-07:00

A good place to find city planning info
Calgary City Planning

The First Edition 2006 edition of CMHC's Calgary

2006-05-16T13:12:00.000-07:00

The First Edition 2006 edition of CMHC's Calgary

Buyer prudence urged in overheated market

2006-05-15T16:49:00.000-07:00

Buyer prudence urged in overheated market
Prices could rise 20 per cent in 2007, says expert

Kathy McCormick, Calgary Herald
Published: Saturday, May 13, 2006

Don't write the record book for Calgary's housing market in pen and ink -- instead, invest in a large eraser.

Every month is setting new parameters in residential real estate, both in new construction and resale homes.

The situation isn't about to change anytime soon, says Canada Mortgage and Housing Corp in its Spring 2006 Housing Market Outlook for Calgary.

The city's overheated market is continuing to set new benchmarks for sales as well as prices, says regional economist Richard Corriveau of CMHC.

Things could have gone even higher, he says. "The only thing stopping it is the capacity constraints," says Corriveau.

If builders had more tradespeople to do the work, the numbers would be even higher.

Many builders have even had to restrict the number of sales in communities to ensure homes could be built in a timely manner.

The biggest impact will be felt in the pocketbook, Corriveau says, although the brunt won't be seen until next year.

"We can't overlook the fact that the record-breaking numbers are creating additional pressures on the market, but we won't see them filter into the average price of new homes this year," he says. "But in 2007, prices will go up -- and 20 per cent or beyond is not out of the question."

Labour shortages -- and the resulting push on wage increases, land constraints, and material costs -- have had an impact, as has the shortage of resale listings.

"There are a lot of frustrated buyers out there," says Corriveau.

"Some builders are asking for non-refundable deposits and people are not always told the price of the home at the time they buy. People need to be cognizant of the prices, especially if they have qualified for a mortgage.

"They need to be prudent and not buy too much house."

Calgary's surge in activity is an anomaly in most of Canada, where housing construction starts are expected to taper off this year, hitting 222,200 units, down from 225,481 started in 2005.

The prairie provinces will each have higher housing starts this year, says Corriveau. "CMHC expects the prairie provinces to buck the trend nationally and is forecasting higher housing starts in Alberta, Saskatchewan, and Manitoba."

He is calling for 36,000 total residential MLS sales in Calgary this year, up from his original forecast of 31,200 set earlier this year -- more than 19 per cent higher than last year's record numbers.

On the residential construction side, Corriveau predicts 15,000 new home starts, with the single-family housing sector setting a record at 9,750 -- both 1,000 units stronger than originally anticipated.

The heated resale market has set prices afire as well.

Residential MLS prices are expected to average $314,300 by the end of the year, up from $250,789 last year -- and up from Corriveau's original forecast of $272,000.

Leading the way, average prices for single-family homes will hit $348,500 by year-end, an increase of nearly 14 per cent compared to last year, he says.

Resale condos will average $230,000, up from $184,127 in 2005.

The new construction side has already seen large price jumps, which will slow this year only to jump again in 2007, says Corriveau.
"Following a 10.7-per-cent increase in 2005, the average single-family absorbed price in the Calgary CMA (census metropolitan area) is on course for a less pronounced gain this year," he says.

"After climbing more than $30,000 in 2005 to $315,796, the average single-family home has increased less than four per cent in the first three months of 2006, reaching $327,126. By year-end, CMHC expects the average price to reach $345,000 for all absorbed units, nine per cent higher than 2005."

The tight inventory of resale homes has affected both the new and resale sectors of the housing market, and until that changes, supply and demand will continue to escalate prices.

The short supply has created an urgency in the market.

"Inventory of resale homes needs to double before we will see a strong decline in price acceleration," says Corriveau.

"Everybody is in a panic mode. If they don't buy now, what will it look like a year from now?"

A side-effect of the increasing prices is that "the single-family product is becoming a more distant dream for the first-time buyers," he says.

City investors hoping for capital gains

2006-05-15T16:40:00.000-07:00

City investors hoping for capital gains
Aspen targets Edmonton potential

Ron Chalmers, The Edmonton Journal
Published: Monday, May 15, 2006

Calgary investor Scott Hutcheson saw Edmonton office space as seriously underpriced so he bought three buildings -- and led the trend to higher rents.

"We decided that Edmonton was a great opportunity, and we came in and purchased a big piece of the downtown," says Hutcheson, president of Aspen Properties Ltd., which he co-founded with three partners in 1998.

The company bought 16 buildings in downtown Calgary, including the Calgary Tower -- then turned to Edmonton. Aspen bought the ING Building in 2003, a half interest in Scotia Place in 2004 and the Allstream Tower in 2005.

In the three years since Aspen arrived, Edmonton's downtown office vacancy rate has dropped from almost 12 per cent to under six per cent.

"Aspen's timing was impeccable," says Alan Menon, a commercial realtor with CB Richard Ellis.

As leases were renewed, Aspen raised rents -- and inspired other owners.

"They have been very bullish," Menon says. "They started pushing and all the others jumped on board."

Some Calgary offices rent for $40 per square foot per year, so Hutcheson could see that Edmonton was underpriced.

"When we started to purchase, with $7 base rents, it was clear that there would be a shortage within five years," he says.

Vacancies fell steadily until, suddenly, downtown Edmonton was almost full.

"In the last two months, we have seen four or five leases done in excess of $20," says commercial realtor George Dawson of Colliers International.

"Previously, that was unheard of. Six months ago, the benchmark would have been probably less than $14."

Today's rents still are below the $25 to $30 that developers say they would need to start new construction.

Aspen's aggressiveness has helped create "a new mindset" among owners, Menon says.

"It used to be that one would undercut the other, but now it is almost a race to raise rates."

Hutcheson, a member of the Canadian Alpine Ski Team from 1978 to 1982, agrees that his attitude is contagious.

"We were optimists, and when we started to talk about what we saw, a light went on with many others."

Local landlords and tenants had suffered "20 years of lethargy," he says

"We came in with a very different outlook. We started to talk about what we saw, and said, 'Wake up, guys.' "

But in real estate -- as in ski racing -- cheerleading alone doesn't define reality.

"All we did was vocalize what a great place Edmonton was and would be," Hutcheson insists. "I'm not sure that our presence changed the market dynamics. We did not change supply or demand."

The Edmonton economy is spurred by support services to northern oilsands, exploration, diamond mines and pipelines -- but Hutcheson also sees another angle.

"Within the next decade, Calgary will burst at the seams and costs will go up," he predicts.

"Edmonton will become a great alternative for a lot of business and back offices."

Demand for downtown space will soon exceed our small supply.

Compared to Calgary's 30 million square feet of office space, "Edmonton is quite a small downtown market, with only about 13 million square feet, including government," Hutcheson says.

But Edmonton's economy has been growing strongly for five years -- so why have rents escalated only with the recent arrival of a Calgary company?

"Sometimes it may take somebody who is not local to say, 'Look what is happening here,' " Hutcheson says.

New homes to average $345,000

2006-05-11T13:25:00.000-07:00

New homes to average $345,000
Calgary's population to hit one million in 2007

Mario Toneguzzi
Calgary Herald

Thursday, May 11, 2006

CREDIT: Tim Fraser, Calgary Herald
The residential real estate market is booming, thanks to Calgary's rapidly expanding population and employment growth.

March to a million

- Calgary's population to hit one million in 2007

- House prices to rise by record 25% this year

- Most new home starts since 1981

A seemingly insatiable demand for housing from thousands of newcomers, coupled with a severe lack of supply, will push Calgary housing prices -- already at record highs -- to even greater heights by year end, says the Canada Mortgage and Housing Corp.

This year, the average resale price of a local home -- including condos and single-family homes -- should rise to $314,300, the agency predicted Wednesday in its Housing Market Outlook.

That's a 25.3 per cent jump -- the highest on record.

And, by the end of next year, the average price of a resale home will hit $341,000.

The average price of a new single-family home is expected to rise 9.2 per cent to $345,000.

"It's an incredible market and what's so incredible about it is the numbers could be higher," said Richard Corriveau, regional economist for the Prairies and Territories for the housing corporation.

Corriveau said the explosion in the market is being driven by a huge increase in net migration to the city -- 23,000 people in the 12-month period ending in April, a 68.2 per cent jump from a year ago -- and near record employment growth.

Corriveau also cited mortgage rates and a severe shortage of listings for the residential real estate boom.

"There's also huge confidence in the marketplace and its ability to appreciate over time. That impact is also causing a strong sense of urgency to get into the market or at least upgrade because a lot of buyers -- with the huge upward price pressure -- they're concerned what the market could look like if they don't act now.

"Panic mode might be a severe way to characterize it, but a lot of people really have a sense of urgency to get in now or face much higher costs in the future."

The corporation is forecasting resale single-family homes to increase in price by 26 per cent to an average $348,500 this year while condos will increase 24.9 per cent to $230,000.

While the rest of the country is expected to experience a modest decline in new home construction this year, Calgary will buck the trend by posting an impressive 9.8 per cent gain to 15,000 starts -- representing the best performance since 1981 and third-best year on record.

Other report highlights include:

- Construction starts for multiple-family units will increase by 6.1 per cent to 5,250 -- the third best year since 1982;

- A record 36,000 transactions will take place on the MLS residential home market -- an increase of 14 per cent from last year;

- The rental vacancy rate will drop to one per cent from 1.6 per cent in 2005; and Rents are expected to increase by 10 per cent.

"What's interesting is that even though we're forecasting records . . . it's still held back by supply-side constraints," said Corriveau.

"If the market had additional capacity in the single-family market, starts would be higher than that forecast."

He said net migration "will just fuel the demand for overall housing."

Michael Brown, vice-president of business development and retention for Calgary Economic Development, said the city's industries are "moving at a near-record pace in terms of growth."

"Fortunately for us, the 23,000 migrants that are choosing Calgary as a place to live and do business is offsetting some of our labour constraints," said Brown. "Our residential development community as well as the City of Calgary have been able to meet the demands of these new Calgarians.

Also Wednesday, Statistics Canada released its new housing price index for March, showing Calgary led the way -- for the sixth consecutive month -- with a monthly increase of 5.9 per cent.

Calgary beats Toronto for price (single family house)

2006-04-12T09:22:00.000-07:00

Herald News Services
Published: Wednesday, April 12, 2006

Homes - It's something the real estate industry has likely never seen.

The average selling price of a single-family home in March was higher in Calgary than it was in Toronto.

A single-family home here sold for an average of $363,370 in March compared with the average selling price of a single-family dwelling in Toronto at $353,134 for the month.

"I would be very surprised that it would have happened before," said Kevin Clark, president of the Calgary Real Estate Board. "It's a demonstration of the economic strength of Calgary and

Alberta evidencing itself into the real estate marketplace."

But Calgary still has a long way to go to catch Vancouver. The average selling price of a single-family detached home in Vancouver in March was $699,871

Calgary Economics

Number of starts set record agaion

2006-04-11T19:09:00.000-07:00

Housing starts nail all-time record
Calgary-area sees 68% jump in March

Calgary housing starts set a scorching pace in March, establishing an all-time record for the month.

According to statistics released Monday by Canada Mortgage and Housing Corp., total housing starts in the Calgary Census Metropolitan Area hit 1,670 units -- an increase of 68.3 per cent from March 2005.

"We were under the belief that capacity constraints were holding back overall construction, but now it appears that builders have found some of that capacity," said Richard Corriveau, the CMHC's economist for the Prairie and Territories region. "Some of that by way of favourable weather conditions."

Single-detached starts in March were up 18.4 per cent from a year ago and multiple starts increased by 170.8 per cent.

For the first three months of this year, total housing starts in the Calgary area have increased by 32.1 per cent compared with the first three months of 2005.

"With singles up 40 per cent to date, we could easily be looking at a new record for the year," added Corriveau.

In March, builders began work on 790 single-detached units -- a historical high for the month.

And year-to-date, single-detached starts stand at 2,487 units -- 39.8 per cent ahead of the pace seen over the first three months of 2005.

"This is only the second time that single-detached starts in the Calgary CMA have exceeded 2,000 units over the first three months of a year," said Corriveau. "The last time this happened was in 1998 when 2,089 homes were started over the January to March period.

Allan Klassen, president of the Canadian Home Builders Association-Alberta and president of Albi Homes, said housing starts are a reflection of a very strong market in place since last June. "I think you're going to continue to see this kind of activity for a couple of months yet," said Klassen. "You're seeing the results of strong sales in the last quarter of last year finally hitting the ground right now." The lack of inventory in the city for resale homes is also creating a "very serious demand."

Despite the record pace of activity, Klassen said the industry is not building and delivering homes in the same period of time it was a year ago because of a labour crunch. The average time between a sale and possession date is about eight to 12 months depending on the complexity of the home.

"I'm not sure how long the pace can continue because the industry, our trade partners, our employees have been working at full-out throttle for six, seven eight months," said Klassen. "It's taking its toll already just in the length of time."

Corriveau said a large number of multi-family projects broke ground in March. Multi-family starts, which include semi-detached, row and apartment units, surged to 880 units -- a high for the month of March. That activity brought the number of multi-family starts for the first three months of this year to 1,357 units which represented a 19.9 per cent increase from the first three months of 2005.

Corriveau said that represented the fifth strongest January to March total on record.

"With several large volume projects in the pipeline, multi-family starts are expected to show continued vigour over the coming months," he said.

Across the province, housing starts in Alberta's seven largest centres totalled 3,284 units in March, representing a 40 per cent increase from the previous year. Nationally, urban starts last month were 19 per cent higher than the previous year, reaching 12,921 units.

Real Estate Market

Richest province in Canada

2006-04-01T18:33:00.000-08:00

Guess what? Alberta is the richest province in Canada in terms of median family income:
By the Numbers

Average family income, after taxes (Canadian average is $54,100):

Alberta $61,800

Ontario 59,700

British Columbia 53,700

Manitoba 50,600

Saskatchewan 48,400

Quebec 47,700

Nova Scotia 47,100

New Brunswick 46,400

P.E.I. 44,800

Nfld./Lab. 40,700

The data above is for 2004. Man, I seriously didn't know ppl in this province are this rich. :)
Calgary Economy

Easy access to Fort McMurrary from the Prince Edward Island

2006-03-28T17:02:00.000-08:00

Air Canada's new Oil Express Pass will soon make it easier for Islanders working the oil patch in Fort McMurray to visit home. Starting in April Air Canada will start direct flights between Charlottetown and Fort McMurray, with one stop along the way. The Oil Pass Express will include six one-way trips for $2,300, just over $380 each. The flights will go twice weekly. Daily flights are planned for this summer. Isabelle Artur of Air Canada says the company is just responding to a need of their clients. "We offer this type of service that it will meet our customers' demands and they'll find it easy and convenient for them to go back and forth," says Artur. "But if you see also, in the pass that we're offering, we also notice that from Fort McMurray the workers have a tendency also to go down south at certain times of the year, so this pass includes also some sun destinations." West Jet also flies to Fort McMurray, but passengers have to make three stops along the way. A one-way trip between Fort McMurray and Charlottetown is about $560.

Calgary Economics

High rent in Fort McMurray

2006-03-28T16:57:00.000-08:00

A controversial proposal to set up temporary work camps in the Alberta city of Fort McMurray to solve a housing crunch has been put on hold.

Municipal councillors in the boom town decided Tuesday night to collect further input from the public before going ahead with the idea. A meeting to gather opinions has been set for March 13.

Some residents fear that setting up work camps in and around Fort McMurray to accommodate a burgeoning population of oilpatch employees will lead to a rise in crime.

FROM FEB. 28, 2006: Booming Alberta city debates temporary housing

Paul Walzack, a spokesman for the Alberta Building Trades Council, said he's optimistic that residents will approve of the idea once they've been consulted.

"The council is trying to do a very measured and calculated solution to what is in essence a very well-known housing crunch in the entire Wood Buffalo region," he added.

Rampant development in Alberta's oilsands has created severe infrastructure pressures in Fort McMurray, including a scarcity of housing.

The rental vacancy rate is less than one per cent. Apartments are often jammed with numerous workers sharing tight spaces, and hotel vacancies are rare.

In December, the Canada Mortgage and Housing Corp. found rents in Fort McMurray were the highest in Canada, up 20 per cent over 2004. A two-bedroom apartment rents now for an average of $1,478 a month.

Calgary Economics

More and more people are moving in...

2006-03-28T16:55:00.000-08:00

Canadians flocking to Alberta, StatsCan says

Last Updated Tue, 28 Mar 2006 15:24:46 EST

CBC News

Alberta's population grew by more than 25,000 in the final three months of last year, Statistics Canada reported Tuesday.

"Record numbers of people flocked to the booming province from other regions of Canada," the agency said. "Only during the oil boom period of 1979-1980 was there similar growth."

Two-thirds of the new arrivals came from other provinces.

The population is growing faster than builders can finish homes in some areas, and is pushing real estate prices through the roof.

FROM MARCH 1, 2006: No work camps in Fort McMurray, for now

FROM MARCH 27, 2006: Going once, going twice, this house sold for...

Owners have turned to auctions in Calgary to get top dollar, and oilsands boomtown Fort McMurray considered setting up work camps to handle the influx of incoming workers.

As people move to Alberta, the population in other provinces and territories fell.

"Seven of Canada's 13 provinces and territories experienced a decline in their population during the fourth quarter," StatsCan said.

It's only the second time in 35 years that so many regions reported a drop in population during the same quarter.

Aside from Alberta, only British Columbia and Nunavut reported growth above the national average. Ontario, Quebec and Manitoba also grew.

Newfoundland and Labrador lost 2,300 people to about 514,400.

With the new arrivals, Alberta's total population is more than 3.3 million.

In some provinces, immigrants helped offset the population loss to Alberta.

Canada took in 55,400 immigrants in the quarter, the second-largest quarterly gain since 2000.

Calgary Economics

Hot economy stalls influx

2006-03-19T21:42:00.000-08:00

Calgary's economy is getting redhot but the surging housing price might make people think twice on moving to this city:

Soaring house prices, a dire lack of listings and a tight rental market are combining to present a stiff challenge in Calgary's efforts to recruit people to alleviate a critical labour shortage in the city.

Those factors may already be a deterrent for people contemplating a move to Calgary -- the seeming land of endless economic opportunities.

Harry Hiller, professor of urban sociology at the University of Calgary and director of the Alberta in-migration study, said Calgary is losing its competitive advantage.

"It will shrink the pool of people who will view Calgary as a desirable place especially entry-level people but in the other option companies might start looking at the Calgary-Edmonton urban corridor which hasn't filled in much yet," said Hiller. "The largest pool of people that we draw here in this migration pattern are what I call unsponsored migrants. They're coming here without a corporate transfer. Nobody else is paying their way. It's the independent migrant who is unsponsored in the move who has the problem . . . When the word gets out about how housing prices have increased and how vacancy rates are so low, it discourages people."

Resources

2006-03-17T22:42:00.000-08:00

I am going to use this post as the place to put all kinds of resources related to investment.
Canadian Money Saver
Calgary Mortgage
Money Sense
Larry McDonald's Blog
Tax basics
Term life Insurance comparison

Tax
Tax Tips

Ernst & Young Canada Tax Calculators page offers personal tax calculators (though not for 2006 so far), RRSP Savings calculator and a handy one page summary of the tax brackets (which includes marginal tax rates on dividends and capital gains across all tax brackets) for all provinces and territories.
The Ernst & Young website also has a handy 68-page guide Managing Your Personal Taxes that is worth checking out. Also, check out their Top Ten Tax-Filing Tips article.
KPMG Canada offers a one-page summary of federal and provincial tax rates and brackets. Other useful information such as the personal non-refundable tax credit rates and amounts and RRSP contribution limits are also available here.
Of course, the Canada Revenue Agency has a page on the income tax rates in Canada (including provincial tax rates except for Quebec).

Demand surpasses what builders can keep up with

2006-03-16T11:39:00.000-08:00

Detached housing construction starts from March 2005 to the end of Feb 2006 totalled 9,304 while 10,227 building permits approved by the city during the same period. This means builders are backlogged and this means more strain on the trade people market and potentially higer price for new homes.
Real Estate Market

The current real estate market in Calgary is "Asking-and-Getting"

2006-03-16T11:36:00.000-08:00

Let's just put things into perspetive. Calgary has 1 million people but in Feb the total number of active listings for residentials was 1721 (we have 4900 real estate agents here). Some other interesting stats:

1. there were 3,060 sales in Feb up from 2,223 for Feb 2005

2. Sales climbed more than 42% for the first two months of 2006 compared to 2007

3. More than 99% of homes listed for sale in Jan were sold

I guess if you are seeking a house right now in Calgary, you'd better be prepared mentally and physically for the ferocious biddign war in a lot of communities.

If I didn't't witness this madness myself, I would've never had believed that this could be true...
Real Estate Market

How much a 100 dolloars in 1999 worth in 2006?

2006-03-16T11:15:00.000-08:00

This is an interesting inflation calculator. I came to Canada in 1999. I ran the calculator for 1999 and found that you need to pay 117.87 to buy the same "basket" of goods that you can buy with 100 dollars in 1999.

Inflation rate in Feb 2006

2006-03-16T11:11:00.000-08:00

The Feb inflation rate is down to 2.2.% from 2.8% in Jan. This will help to reduce the risk of central bank hiking the interest rate higher (combined with the strong loonie). Most likely due to the housing price surge, Alberta's inflation rate (3.3%) scored No. 2 across Canada (Prince Edward Island is No.1 with 3.8%).

Calgary Economics
interest rates

Is the current hot real estate market a bubble?

2006-03-14T23:05:00.000-08:00

Check out this article from TD.

Real Estate Market
Real Estate Investment

Advice for begginer investor

2006-03-14T19:28:00.000-08:00

I bumped into a good article that tells things a real estate investment beginner should keep a watchful eye on:

"What Advice Would You Give A First Time Investor?"

10 POWER RULES FOR SAFER REAL ESTATE INVESTING

1. Treat it (The Game of Real Estate) as a business .. because it is!

If you have a business mindset with all your dealings, you will automatically
have a ‘professional hat on’ as it were. It will also remind you to keep
your emotions in check when making decisions with respect to your real estate
dealings.

2. Build a strong support team!

Seek out good council and stick with them. Like a tenant you will need to
screen their credentials to ensure that they are familiar with the nuances and
details of real estate in their particular field. Pay for talented experts; as
the CEO or GM of your real estate hockey team you deserve to be well informed
and protected to make sound decisions. Real estate lawyers, accountants,
trainers, appraisers, and if you must ..real estate agents.

3. Take time to learn your marketplace!

You need to know what the RETAIL price of bungalows, two stories, and condos
are in your area with respect to age and condition. If you know the retail
price, you will know when you come across a bargain. A real estate agent will
help with this one, but your own driving around and calling on signs works too.
Talk to some For Sale By Owner’ (a.k.a. FSBO’s or fizzbo’s) properties
too. Learn what the market rents are in each category, visit a few so you have
an idea as to what condition of place draws the best rent, and proceed with your
product to market accordingly.

4. Consider and account for ALL your upfront purchase costs!

These get missed a lot. Get to know what all your costs will be to close on
the property as in addition to any cash downpayment, these little ones can add
up and leave you with requiring more than you expected to take to the closing.
Legal costs and disbursements, tax credit adjustments, insurance (to be paid and
arranged before closing)condo fees costs, any outstanding municipal or condo
board levies, etc. These can reach the thousand dollar or so range so find it
all out beforehand. (your lawyer can assist with this if you ask him/her)

5. Analyze the deal but, be mindful of Analysis/Paralysis!

Look at all the numbers, the down payment, expected rental income, repairs to
be made, maintenance costs, property management costs, condo fees, insurance,
vacancy allowance, extra cash for an "Emergency fund" (for those
nigglety figgelty unexpected things – budget 2 to 3 months of mortgage payment
as a rule of thumb) and then decide if it is for you. Be careful not to let your
fear of getting going stand in your way of proceeding with a good deal. Bounce
it off your investing peers to ease your comfort level and understanding.

6. Screen your tenants!

It is better to leave your rental unit vacant than to settle for a
questionable tenant. Getting a trouble tenant out that outright snubs and
stick-it-in-your-face refuses to leave is a time consuming process. There are
also additional costs involved to physically chuck a tenant out if you have to
and some Pepto bismol action may also be required to keep your sanity. If you
find yourself with one of these "beasts", bite the bullet and take a
proactive stance. Immediate and swift action is what you need to minimize your
losses. Check references, personal and financial; interview previous landlords
(particularly the landlord before their current one if possible); get all their
contact information, including next of kin with addresses and phone numbers,
banking information, work information, and have them give signed consent to a
credit check. Meet with them personally to get a gut read as this will come into
play too. Check ALL information, don’t be rushed, or let yourself be rushed by
the applicants. Then, select your tenant, remembering Rule#1. Remember, better
to leave it vacant ……

7. When you make mistakes, learn from it and keep feeding your education!

Mistakes do happen and will happen. It’s part of any worthwhile growth in
this game it is no different. Learn what you need to learn up front to try to
avoid mistakes, but learn from what the street has to teach you. Learning from
mentors and peers will minimize but not eliminate them. Don’t let the fear of
making mistakes squash your dreams of becoming a successful investor. I made
mistakes, my peers have made mistakes, and will continue to do so. It is an
inevitable price for rising to the top 5% of the players. Even Wayne Gretzky or
Michael Jorden didn’t hit the net every time. Why should you expect any
different. Keep learning new things, new ideas and strategies, share them with
your peers and they’ll return the favor. This is not a ‘lone wolf’ kind of
business. Use your network to your mutual benefit.

8. Associate with like-minded and "positive" people! Join a real
estate investment group!

In the interest of maintaining your "spark and enthusiasm" it is
critical that you preserve your confidence at all costs. Traveling with a pack
that moves in the same direction as you and has the same direction in mind with
their investment goals as you have is important to keep you going. Hang out with people like those in the Alberta Real Estate Investment Network. (for Membership details call them at 1-888-824-7346.
I am sure there will be plenty of people with their free advise telling you that you can’t or won’t succeed in this business, because they are either jealous of your aspirations or simply think they know better. Stay away from these characters like the plague, as they will pour cold water all over your plans and dreams.
This can prove quite challenging as sometimes, they live in the same house you
do! Good groups should be investigated as to how they will help support you,
improve and upgrade your education, and keep you up to date on current events of
your area and the world, as they pertain and affect your real estate goals.
Build a significant network of like minded professionals and investors to
strategise and invest with.

9. The use of OPM (Other People’s Money)

If you are limited on your own money, climb over that obstacle. If you are
long on time and are keen to put in the time to educate yourself, find and
prepare a good deal, a joint venture partner with cash to use can help get you
going. Let this be your motto: "If a good deal comes along, the money will
appear!" Get in the game and don’t let anything stop you, even lack of
personal money.

10. Have Fun!

Rule#1 talks about this being a business, but Real Estate for me is truly
fun. I am working on this part time, and it is a lot of fun finding good deals,
putting deals together, and buying, selling and holding property. It is an
absolute gas and I love it. Let me as you, if you don’t have fun with the
things that you are doing then why are you doing them? Investing in real estate
is a fun way of securing a financial future for you and your family. With some
education and support, you can make the experience virtually risk free!

Good Luck and I’ll see you in the trenches!

Valden Palm

Real Estate Investment

Calgary 55 - calgary based oil and gas companies trading on TSX

2006-03-14T11:54:00.000-08:00

Oil and Gas

Company Close Net Chg

Cdn Nat Res 65.57 +1.32

Compton Pete 15.34 +1.35

EnCana 51.12 +1.40

Fst Calgary 9.55 +0.20

Husky Energy 71.75 +0.53

Imperial Oil 114.99 +2.24

Nexen 62.36 +1.47

Niko Res 54.08 +0.16

OPTI Cda 43.95 +1.10

Paramount Res 38.95 +1.05

Petro-Canada 52.90 +1.25

Shell Cda 40.28 +1.20

Suncor Energy 86.79 +1.94

Talisman Enrg 62.20 +1.96

Wstn Oil Sands 32.18 +0.98

Industrials

Company Close Net Chg

ATCO 1 NV 36.00 +0.20

Agrium 29.74 +0.33

Cdn Pac Rail 57.70 -0.11

Enbridge 35.00 +0.03

Enerflex Sys 27.75 +0.18

Ensign Energy 40.00 +1.90

Forzani Grp A 15.72 +0.42

Pason Systems 33.69 +0.94

ShawCommB NV 29.19 +0.06

TransAlta 23.27 -0.18

TransCanada 34.70 +0.25

Trican Well 47.59 +0.59

WestJet Airl 10.99 -0.01

Trusts

Company Close Net Chg

ARC Enrg Tr un 26.28 +0.33

AltaGasIncm 29.54 +0.39

Baytex Enrg un 19.39 +0.58

Big Rock un 17.00 unch

Boardwalk REIT 22.84 +0.14

Bonavista Enrg 36.70 +0.80

CCS Incm Tr un 38.69 +0.98

Cdn Oil Sands 156.50 +1.09

Canetic Res un 22.86 +0.36

Enerplus Res un 57.65 +0.71

Fording Cdn un 48.23 +0.55

Ft Chicago LP 12.17 +0.27

Inter Pplns 10.40 +0.15

Mullen Grp Incm 31.39 +0.22

Newalta Incm un 27.30 unch

Pembina Ppln 17.55 +0.05

PengrowthEnBun 22.34 +0.16

Penn West un 41.65 +0.80

Petrofund un 24.05 +0.50

Peyto Enrg un 25.30 +0.64

Precision Drlng 35.60 +1.55

PrimeWest En 32.68 +0.72

Provident un 12.95 +0.47

SupriorPlus un 17.42 -0.18

Vermilion un 32.25 +0.55

Positions in the Calgary 55 are determined primarily by market capitalization. The listings are reviewed annually and categories are subject to change.

Critical Numbers

Markets

- TSX Composite 73.04 11906.65

- Dow Jones 0.32 11076.02

- Nasdaq 4.99 2267.03

- TSX Venture 20.10 2588.93

Currency

- Cdn dollar 0.29 86.39 US

- New York Gold 6.20 546.10 US

Energy

- West Texas 1.81 61.78 US

- NYMEX gas 0.361 7.007 US

Stock Investment

Employment outlook for second-quarter of 2006

2006-03-14T11:46:00.000-08:00

Just as we all think the job market here at Calgary is getting crazy. Check out these new data:

Employment Outlook Survey

Employers and their second-quarter staffing plans

City Hiring Laying Off No Change

Calgary 62% 2% 19%

Edmonton 50% 3% 44%

Regina 50% 0% 50%

Toronto 30% 5% 57%

Montreal 19% 2% 73%

Source: Manpower Inc.

So we (calgarians) all know how bad the job market is and how hard the employers are striving to get skilled employees. Sounds like the next quarter won't get any better. I believe this will put more strains on the infrastructure and the local housing market.

Calgary Economics

How much does the oil price actually affect the mega oil projects?

2006-03-13T12:07:00.000-08:00

I actually got this question for a while. So now Calgary got tons of jobs and economy is going so well that the whole country is jealous of. But what if tomorrow something happens to India and China and all of a sudden they don't want that much oil any more. Are we doomed? This article provides some insights about it:

Oil-price plunge wouldn't affect northern Alberta oilsands projects
Edmonton Journal, Wed 18 Jan 2006 (via CanWest News Service) Alberta's oilsands development wave will continue even if oil prices tumble by 50 per cent, industry leaders predicted Tuesday as fresh fears of Middle East conflict sent skittish markets above $66 US a barrel.

Alberta's oilsands development wave will continue even if oil prices tumble by 50 per cent, industry leaders predicted Tuesday as fresh fears of Middle East conflict sent skittish markets above $66 US a barrel.
"You need to see, for the life of your project, prices of about $30,'' said Greg Stringham, markets vice-president of the Canadian Association of Petroleum Producers.

"We would never have built this project if we needed $63,'' said Real Doucet, Canadian Natural Resources Ltd.'s vice-president in charge of its $10.8-billion Horizon development.

"At $60, virtually every project someone could conceive of here works,'' said Synenco Energy Inc. executive vice-president Steve Gilliland.

"I'm not counting on $60 or $65'' for Synenco's $5.3-billion Northern Lights oilsands partnership with Chinese oil giant Sinopec, Gilliland said.

"Our project works at $20 or $22'' thanks to new technology that will eliminate the use of costly natural gas from heat processes for separating oil and sand, he said. "At $20 or $22, we could raise the capital we need to build our project.''

Horizon will make a 17 percent return after royalties and taxes if oil only averages $35 a barrel, Doucet's projections show.

The mammoth development is expected to earn returns of 15 per cent if oil slips to $28 and will run in the black even if markets plunge into the $20 to $25 range, according to Canadian Natural's figures.

Alberta projects are built to withstand adversity that has persisted and even worsened behind the scenes of high world prices for premium refinery-ready oil, Stringham told an industry and finance conference held by Insight Information.

"As a rule of thumb, about half the oil produced in Western Canada is getting about half the price that you see quoted in the paper,'' Stringham said.

Oil buyers command deep price discounts for heavy grades, which shave about $27 a barrel off recent prices in the $63 to $66 range for the West Texas Intermediate and Brent benchmarks of international energy commodity trading, he said.

The discounting prompts strict cost controls on oilsands bitumen production and growth in synthetic-oil upgrader projects, especially in the Edmonton area.

Upgrading costs about $6 to $10 a barrel, or at most about one-third of the deep price discounts on heavy crude grades, making upgrading a highly attractive investment, Stringham said.

While the Horizon project is building an upgrader at its site 80 kilometres north of Fort McMurray, Alta., four plants are under development in the Fort Saskatchewan region northeast of Edmonton by BA Energy, Shell Canada, Synenco and North West Upgrading.

Alberta tops even big Asian refining complexes as the most profitable location for upgraders, said Gilliland. Synenco recently picked Sturgeon County for its Northern Lights plant after economic studies convinced 40 percent partner Sinopec that the Edmonton-area site would be better than China, he said.

Government projections anticipate a wave of upgrader construction over the next 15 years, said Alberta Energy oilsands chief Soheil Asgarpour.

By 2020, the province forecasts oilsands production will more than triple to 3.5 million barrels per day. Output of upgraded synthetic crude, fetching prices that roughly match premium refinery-ready grades of conventional oil, is also expected to grow more than threefold to 2.5 million barrels daily, Asgarpour said.

The Canadian Association of Petroleum Producers expects the industry to meet its oilsands forecast of 2.7 million barrels a day by 2015 even if oil drops to between $30 and $40 a barrel, Stringham said.

But the current market peaks generate a psychological lift, as well as attract international attention and investment, Gilliland said. "The magic of $65 oil makes us all feel pretty good.''

-#-

Edmonton Journal
Calgary Economics

New house starts are on the rise

2006-03-13T11:55:00.000-08:00

Builders are trying their best to catch up. After all, they don't have a problem to sell. They got a problem to keep up with the sales. A lot of builders are put limits on their monthly sales to ensure they don't "chew more than they are not biting off more than they care chew.

Total starts in February in Calgary topped four per cent, while the two-month total cleared 13 per cent.

Across the province, housing starts in the seven largest centres totalled 2,856, up 37 per cent from a year ago.

Nationally, urban starts were up 13 per cent to 12,289.

Single-family housing

Single-family Multi-family Total starts

- February 2006 859 229 1,088

- February 2005 617 428 1,045

- Percentage change 39.2 -46.5 4.1

- Year-to-date 2006 1,697 477 2,174

- Year-to-date 2005 1,112 807 1,919

- Percentage change 52.6 -40.9 13.3

Data came from herald.

More and more people are coming...

2006-03-13T11:51:00.000-08:00

Net migration into Calgary will total 15,000 people this year, about 1,400 more people than last year, predicts Canada Mortgage and Housing Corp. in its forecast for 2006. So what does it say to me? More and more people are coming and this city is expanding like crazy. If nothing catastrophic happnes to the oil and gas industry (I will post somethign realted to this shortly), it's foreseable that the volume of migration will keep fueling the red-hot house sales in Calgary.
Real Estate Market
Real Estate Investment
Calgary Economics

Real estate investing in Canada

2006-03-13T11:23:00.000-08:00

I've been reading Don Campbell's book "Real Estate Investing in Canada". So far I would say this is the most hand-on real estate book I've ever read. It's full of principles that you can pratically apply . My plan is to thoroughly undertand this book and start a project asap. A guy at 华沨 just posted this out (it reiterates a couple of key points Don made in his book):
加国房产投资秘诀：10％规则

很多人在梦想成为一名腰缠万贯的房地产投资商。但是，如果过热的房产市场冷却了怎么办，按揭贷款利率上涨了怎么办，还有，会有租客吗？再加上取暖费，电费，保险费和财产税，这些都可能让投资者血本无归。

并不是每个人都适合投资房地产，但总会有人成功。高科技泡沫破碎后，产权投资市场仍然不稳定，较低的按揭贷款利率推动房屋市场日益火爆。

上周末，40多名多伦多地区欲投资房产者参加了在埃特蒙顿举行的研讨会，组织者Don Campbell称，如果这些投资人能遵循他的建议，他们应该会在房地产市场有一番作为。

埃特蒙顿的Arlen Dahlin 10年前曾参加过这样的研讨会，现在，他已经拥有332处房产，每年的平均纯收入为9－11％。《加拿大房产投资》（Real Estate Investing in Canada）的作者、房产投资网负责人Campbell说：“购买用于投资的房产时，第一条规则是将你的感情放在家里。” Campbell解释说，不能带着个人感情购买房产，只能用冰冷的数字来计算。

Campbell还使用“10％”规则决定是否购买还是放弃一处房产，Campbell 在他所著的书中提到：“如果一处房产每年的租金总额是房屋价格的10％或者更多，那么这处房产就值得进一步投资，并进行更多的细节分析。”底线是你不希望购买一处能吃掉你所有资金的房产。

道理很简单，赚钱是投资房产的主要目的。所收入的租金必须足够支付每月的费用，包括支付贷款和税款，房屋的维护和保险等。如果距离房产很远，不要忘记财产管理费。

Campbell还警告，很多投资者犯了一个错误，他们以对国家房屋市场，甚至各省的房屋市场的分析来决定他们的投资，而房产所在城市的市场是最基本的。

Campbell 称，投资房地产有12个要点，低按揭利率对投资者来说没有益处，低利率只会促使租户去买房，而不是去租房。投资者应当研究所投资的城镇的平均收入，流动人口是否增加等问题。当地的政治环境也要考虑在内，因为那会影响到当地的经济。变迁地区利润空间很大，记住，城市贫民区一旦成为时尚的居住地，当地的房价将会飞涨。投资房产还要考虑的当地的交通，便利的交通能够吸引住通勤者。

安省和亚省的城市是加拿大最值得投资房地产的城市，安省吸引了大量的移民，而亚省的经济一片繁荣。

Campbell指出，亚省Fort McMurray镇的人口两年内从40,000人增加到60,000人，但有10,000人找不到房子，只好住在帐篷里，同时，投资者也难以找到可以投资的房产。

温哥华――加拿大住房最贵的城市，并不适合于投资房地产，因为那儿的房地产不适合现金流转。

卑诗省的Fort St. John， Dawson Creek 和 Abbotsford比较适合投资房地产。

在东海岸（East Coast），Halifax房地产市场有些机会，但需要去发掘。

投资房地产的底线是投资者应当至少在10年内获得稳定收益，“但必须遵循基本的规则”。

同时，不要放弃白天的正常工作，至少要等到房地产的收入等于或大于你的薪水，那需要三年的时间。

安省和亚省最适于投资房地产的城市排行：

安省：

1. Orillia and Barrie
2. Kitchener, Waterloo, Cambridge
3. Brampton, Orangeville
4. Hamilton
5. Markham, Stouffville
6. Pickering, Ajax, Whitby
7. Aurora, Newmarket
8. Oshawa
9. Ottawa
10. Toronto

亚伯塔省：

1. Edmonton
2. Devon
3. Sylvan Lake
4. Calgary
5. Red Deer, Okotoks
6. Lacombe, High River
7. Cochrane
8. Grande Prairie
9. St. Alberta
10. Fort McMurray

Real Estate Investment

Calgary tops for commercial real estate returns

2006-03-13T11:15:00.000-08:00

Investment Returns on Canadian Real Estate 2004-05

2005 - 2004

City - All types - Retail - Office - Industrial - All types - Retail - Office - Industrial

Calgary 26.5 25.2 29.8 21.3 16.7 24.9 15.2 12.2

Edmonton 23.4 21.3 31.7 12.5 10.4 13.4 9.7 12.6

Vancouver 21.4 22.4 21.2 21.2 12.1 16.0 10.0 10.3

Toronto 16.4 23.4 13.5 16.8 11.2 15.8 9.1 17.2

Montreal 15.2 18.7 12.5 13.8 12.1 13.1 11.4 12.8

Source: ICREIM/IPD Canadian Property Index

See a related reports at herald.

Real Estate Market

Outlook 2006 of Canada

2006-03-12T13:54:00.000-08:00

Six of Canada 's brightest economists talk about the economic prospect of Canada in 2006. Very good articles! I just read David Wolf's artilce and he got excellent point about the economic divergence that is deepening in Canada: Middle Canada gets weaker as US economy slows down and West Canada gets stronger for being: hewers of the wood, drawers of the water and tappers of oil wells. I am in Calgary and I literally see how the economy here turns from lukewarm to warm to hot and redhot just in a few years!
Calgary Economics

Will the central bank hike the interest again?

2006-03-11T15:47:00.000-08:00

The central back has hiked interests 5 times in the past 10 months.

Central bank sets rates eight times a year – in late January, early March, mid-April, late May, mid July, early September, mid-October and early December.

So next time will be mid-April. Will Bank of Canada raise the interest again? In my point of view, bank interest probably is the only major factor that can affect the real estate market in Calgary negatively. I remember Duane said when interest rate goes up 2%, the mortgage payment can go up 22%.

Due to the strong loonie, central bank's tone of changing interest rate has changed. Previously it's more like "Given that the Canadian economy now appears to be operating at capacity, some further reduction of monetary stimulus will be required," In Jan, the tone was like "In line with the bank's base-case projection, some modest further increase in the policy interest rate would be required to keep aggregate supply and demand in balance and inflation on target over the medium term." In March, the statement said "Information on the Canadian and global economies . . . has been broadly in line with the bank's expectations, although the Canadian dollar has recently moved above the range that had been assumed in the [bank's most recent update on monetary policy]," And the bank officials have said interest rates "may" move up again. The tone has been softening in the past a few months.

Most economists agreed that the bank will hike rates once more next month and then take a pause. The strong loonie has made central bank less aggressive about hiking the rates!

interest rates

Unemployment rate dips to 30-year low

2006-03-11T09:39:00.000-08:00

Here is a breakdown list of the unemployment rate across Canada in Feb:
------------------------------------------------------------
Alberta 3.1%
Manitoba 4.4%
B.C. 4.8%
Sask. 5.3%
Ontario 6.2%
Quebec 8.2%
N.S. 8.4%
N.B. 9.4%
P.E.I. 10.9%
Nfld. 15.1%
-------------------------------------------------------------

A couple of interesting points from this article on the Saturday issue of CalgaryHerald:
1. Calgary's unemployment rate is around 4% (dropped from 4%)
2. Jobs creation are without any doubt spurred by the gas and oil industry. But particularly jobs are coming from business services, personal services and personal services that "go around providing the input into the oil and gas sector". This translates into any fluctuation in oil price will have serious impact on the local economy
3. Hourly wage grows at a rate of 6.1% over the past 12 months (compared to 3.3% nationalwide).
3. The "Employee tyranny" won't cause the employer to "work for minimum wage as the owner". Instead, the owner will have to "pass it off" to the customers. So we are expecting an increasing CPI (consuer price index).
Calgary Economics

Boom of Calgary real estate market

2006-03-10T23:06:00.000-08:00

Check out this GlobeAndMail article. There is no doubt the recent unprecedented real estate boom in Calgary has drawn attention from the whole nation. Calgary used to be touted as a place that enjoys affordable housing. Now I believe we are almost the 2nd place right after Vancouver in terms of least affordable place for housing.
Real Estate Market

Job market in Calgary looks super good!

2006-03-10T22:36:00.000-08:00

According to this article from GlobeandMail, the unemployment rate (3.1 per cent in FEB) currently in Alberta is far below what econometrics deem as full employment rate (i.e.,6%). We are enjoying the lowest unemployment rate in at least 30 years! So in other words, NO ONE should have problem finding a job here.
Some other interesting data from that article:

The problem is likely to get worse, with the province projecting a shortfall of 100,000 workers over the next decade within the skilled-trades sector alone.
According to the Alberta government, 56.3 per cent of employers said they had trouble finding staff last year, up from 51.5 per cent in 2003.
The drop in unemployment has triggered a bidding war among businesses. The average hourly wage in Alberta jumped to $21.39 in 2005, up from $19.68 in 2003.

It seems that hospitality sector experiences the pain of finding skilled worker the most. As a Calgarian, I've been witnessing this phenomena. I've been seeing ads everwhere looking for workers here. Sadly, I don't see too much that wage inflation thing in my company. :( And I don't see a lot of turnover here as well. Maybe software developers are just easily satisfied. :) Anyway, to me it's hard to believe such a redhot crazy economy can run out of stream fast. It also sends another signal to me: real estate market won't slow down in the foreseable future.

Calgary Economics

Real Estate Market: Boom or Bubble

2006-03-10T21:53:00.000-08:00

A pretty interesting article at smartmoney discussing the potential prospects of real estate market at States.
Real Estate Market

In the beginning...

2006-03-10T21:46:00.000-08:00

So finally I set up this blog just so that I have to put all my thoughts about investment together. Money needs to be managed! I've been procrastinating on this for so long and this is it. This will be the place I collect resources, write down my thoughts and maybe discuss issues with other ppl that have the same interest. Everything has a start. THis is a start of me, Darrian Peng Wang, of trying to learn the tricks of growing my asset!