BC,
Saskatchewan & Alberta Real Estate Boom and Bust Investment
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for sale by owner While the greatest evidence of that spillover is, not surprisingly, in neighbouring provinces, a real estate firm said Monday that it's occurring at the other end of the country as well - specifically in Atlantic Canada. Alberta's red-hot economy is fuelling demand for residential real estate in Nova Scotia, Prince Edward Island, New Brunswick, and Newfoundland and Labrador this year, according to a report from the Ontario-Atlantic division of real estate giant Re/Max. "Strong economic performance in Western Canada continues to spill over into other parts of the country," says Michael Polzler, executive vice-president for Re/Max Ontario-Atlantic Canada. "A serious influx of Western Canadian purchasers has bolstered housing sales in every Atlantic province. "Tremendous job opportunities available in Alberta that allow commuting to and from the East Coast have served to further strengthen home-buying activity in the region," he said. "Last, but certainly not least, after living in Western Canada for many years, more and more Maritimers are returning home." In-migration from Western Canada has played a major role in stimulating home-buying activity in key regional centres, it said. While most purchases were made with retirement in mind, investment in residential real estate was also driving sales. "The wealth effect has also contributed to a bounce back in sales after one of the worst winters on record," it said, noting that the vast majority of housing markets surveyed in Atlantic Canada saw a rebound in sales in April, led by a 27% surge in Newfoundland and Labrador, followed by an 18% increase in Saint John, N.B. Home-buying activity has been especially brisk among first-time buyers for residential properties priced at the $100,000-plus level and at the top-end of the market in the $250,000-$300,000 range. "The upswing in average price has been a boon to existing homeowners across the region," said Polzler. "Most major markets in Atlantic Canada reported an increase in housing values year-over-year." Closer to Alberta, the resources boom has not only spilled over into Saskatchewan, which has replaced Alberta has the country's real estate hot spot, but has boosted exploration activity there and in British Columbia. "The East-West regional economic disparity remains intact in Canada, but there's a noteworthy shift occurring in the Western provinces themselves," said BMOCapital Markets economist Robert Kavcic. British Columbia announced last week that its latest monthly Crown land auction for oil and gas fetched a record $441 million, he said, noting that so far this year that province's land sales have totalled $824 million, or twice the amount generated by Alberta, and easily on pace to set an annual record. Ditto for Saskatchewan, where land sales through May have already surpassed the government's estimate for the year, Kavcic also said. "While soaring prices are now making some unconventional plays economical, the Alberta royalty hike and surging costs in the province have also improved the relative attractiveness of British Columbia and Saskatchewan, which should continue to see a positive spillover effect this year," he said. "This highlights a shift taking place in the West, where Alberta is passing at least part of the baton to its neighbours." The shift in activity is also reflected in more moderate wage growth in Alberta and accelerating wages in Saskatchewan and British Columbia, which in turn is translating into stronger consumer spending and more robust housing markets in those two provinces than in Alberta, he said. "This shift does not mark a coming bust in Alberta - the province will remain among the strongest in the country this year - but rather suggests that the Western Canada commodity boom is no longer just an Alberta story," Kavcic said. Nor does it mark a narrowing in the divide between Western and Central Canada. In fact, Douglas Porter, another BMO Capital Markets economist, has noted that a deeper U.S. downturn and a resurgent loonie would further pound Central Canada's manufacturing sector, driving an even bigger wedge in the economic split between those two regions. And CIBC World Markets Monday predicted that the loonie will go higher, forecasting that by year end it will hit US$1.05, and will remain above parity over this year and next, lifted by even higher commodity prices and an end to interest-rate cuts here as inflation here rises.
May 23, 2008:Housing market slowing down. Bank report
says Saskatchewan to follow Alberta's lead in long-awaited cooling
off Eric Beauchesne, Canwest News Service Published: Friday, Mortgage-market innovation delayed the inevitable but couldn't prevent it, Royal Bank of Canada said in its analysis of major urban real estate markets Thursday. "After yet another blockbuster year for Canada's housing markets in 2007, the much-anticipated housing market slowdown in Canada has arrived," RBC said. "The delayed arrival of softer housing markets can be partly attributed to recent mortgage innovation that has seeped into the Canadian market during the last two years," it said, citing higher loan-to-value ratios and longer amortization periods of up to 40 years, which opened the market to a wider range of buyers and prolonged the housing boom. The mortgage-market innovations, which make housing more affordable in the short term, also heighten the risk of default in the long term, it said. Markets in the West, which have risen the furthest above their underlying values, are the most at risk of an increase in defaults as a result of recent mortgage innovations, the report's author, RBC economist Amy Goldbloom, said in an interview. Get this real estate article here
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May 25 2008 - Saskatoon and Regina Real Estate to
Follow Calgary and Edmonton: RBC .
Goldbloom does make some comments about western markets, and addresses Saskatchewan’s situation head on.
“The slowdown is not shared evenly among cities. The markets that soared well above their underlying economic fundamentals are the very ones with the most downside potential. Calgary and Edmonton have moved from chart-toppers to the bottom-of-the-heap in only a matter of months on a range of key housing market indicators, including house prices and sales.
“Saskatchewan jumped into the spotlight in 2007 as a commodity-led expansion attracted an influx of migrants and led to a major housing boom. Regina and Saskatoon continue to clock year-over-year price gains that are several multiples above the pace of their local wage growth. This lends evidence that the current momentum is unsustainable, with a similar fate to Alberta’s likely for both of these cities within a years time.”
Goldbloom made similar comments about Saskatoon in October of 2007 when she said Saskatoon homes were overvalued and “out of whack with the underlying fundamentals.”
I’m always happy to answer your Saskatoon real estate questions. Feel free to drop me an email. Norm Fisher Royal LePage Saskatoon Real Estate
May 22, 2008: U of S, Saskatoon feed off each other - Gerry Klein, Special to The StarPhoenix- Published: Thursday, One doesn't have to live in Saskatoon long before the impact of the University of Saskatchewan becomes apparent. The university owns about 30 per cent of the land in Saskatoon's core area, including vast swatches of prime property along the river and next to Circle Drive that are worth a fortune in today's real estate market. Some of this land, such as the parcel east of Circle Drive, south of College and squeezed next to Sutherland, is barely used as a source of feed for the university's livestock. Other parcels, such as those east of Central Avenue, north of Circle and Attridge Drive and along the river amount to more than 290 acres that are now used mostly for beef research, feed production and manure handling. These operations could be moved out of the city easily and the university could capitalize on a massive real estate development to bolster its coffers while giving Saskatoon the chance to grow without having to spread out so much. |
May 29 2008; UK Real Estate Bust Judgment Day. That's the only possible description for the news from the Nationwide Building Society that house prices in the UK fell by 2.5% in May. Any suggestion that Britain's overblown, over-hyped and over-valued property market is set fair for a gentle soft landing after the excesses of recent years has just been exploded. We've had the boom: welcome to the bust. The raw statistics tell only part of the story but
are important nonetheless. House prices have fallen for seven successive
months, the longest run of declines since the Nationwide index was
first published during the property crash of the early 1990s. At an
annual rate, prices are now down by 4.4% - the sharpest fall since
late 1992. Over the past six months, prices have dropped at annual
rate of 11.4% and over the past three months at a whopping 16.1% annualised
rate. Both represent more pronounced drops in selling prices than
were seen in the early 1990s. Get
this real estate bust story now Regional Focus: Western boom boosts real estate in
AtCan MISSISSAUGA -- Alberta’s red-hot economy is fuelling demand for residential real estate in Nova Scotia, PEI, New Brunswick, and Newfoundland this year, according to a report released today by RE/MAX Ontario-Atlantic Canada. “Strong economic performance in Western Canada continues to spillover into other parts of the country,” says Michael Polzler, Executive Vice President and Regional Director, RE/MAX Ontario-Atlantic Canada. “A serious influx of Western Canadian purchasers has bolstered housing sales in every Atlantic province. Tremendous job opportunities available in Alberta that allow commuting to and from the East Coast have served to further strengthen home-buying activity in the region. Last, but certainly not least, after living in Western Canada for many years, more and more Maritimers are returning home.” more here Sat, May 24, 2008 - Alberta real estate still cooling down. By MARKUS ERMISCH, SUN MEDIA Alberta's real estate market showed further signs of cooling as the province's resale market contracted well above the national average in April. Moreover, the average price of housing also dropped last month, the Canadian Real Estate Association reported yesterday. Across the province, the number of unit sales shrank by more than 23% in April, compared to April last year, or from 7,803 units to 5,996, Nationally, unit sales declined by 6.2% to 49,114 No other province reported a contraction anywhere near Alberta's. Runner-up British Columbia reported an average drop in unit sales of just under 11%. |
May 28, 2008; Godzilla Ain't Nothin' on This By Morgan Housel Comments Once upon a time, there was a grand economy, home to businesses the rest of the world envied, a talented labor pool, and booming, almost unstoppable, growth. Its real estate fueled effortless fortunes. At its peak, it didn't look like anything could get in its way. Unfortunately, a real estate bust of unprecedented proportions ended the party, just in time for the central bank to slash interest rates as if its life depended on it, giving those who saved money a slap in the face. I'm not talking about the United States today, although the similarities are uncanny. I'm talking about Japan in the '90s. Get
this real estate boom and bust story here... Saturday, May 24, 2008 Oil hit $135 a barrel this week, and will go higher. Goldman Sachs is thinking $200 / barrel within 2 years. Another Canadian bank, RBC, is proclaiming that the Canadian housing boom is over. We all know Alberta's market is slumping and Canada's is slowing dramatically. There are 17286 properties for sale in Greater Vancouver. There is an 11.2 month supply of homes in the US. Victoria, of course, is no different. Sales have slowed. Inventory doesn't stop rising. Right now, we are at 4522 properties for sale in Greater Victoria. On the MLS, today we have 154 more SFH listed than one month ago, 170 more condos, and actually 5 fewer townhomes. 2 out of 3 ain't bad! |
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