Self-Employed Income Qualifying Guide

This is a super handy guide for the self-employed to see what they can use for their their income to qualify for a mortgage.

This is not the final option though so ensure you call to discuss your specific situation as everyone is different.


4 Years Track Record


If the client shows 4 consecutive years of positive earnings, then we can use the most recent year’s earnings to qualify the file.


2 Years’ Average NOAs


Fully qualify the client’s last two years’ NOAs.  We can take the average of their last 2 years’ Line 150 income as long as the recent year shows the higher income. 


If the recent year shows the lower income, then we will rely on the recent year’s NOA to qualify the file.


15% Gross-Up


We can take the average of the client’s last two years’ NOAs to qualify and in addition, we can then gross-up the average by 15%.


If recent year shows the lower income, then we may gross-up the recent year’s income by 15%.


Add Backs


IF the 15% gross-up does not qualify the file, then we can include the below add backs.


  • Business use of home (Line 9945)
  • Reasonable motor vehicle expenses (Line 9281)
  • Capital cost allowances (Line 9936)



What Rates Could Do to Affordability

Here is a great article on rates and what is expected for the year ahead.

Remember the 10 year term is at the all time low of 3.69% right now!

What Rates Could Do to Affordability

When it comes to home values, mortgage payment affordability acts like a giant lever.

A meaningful rise in mortgage payments (relative to income), would bear down on home prices, and vice versa.

Given this relationship and today’s towering home values, mortgage affordability is centre stage. That has inspired a stream of articles about whether swarms of people will default when rates “normalize.”

But how worrisome is that threat really? For insights, we turned to BMO Capital Markets Senior Economist Sal Guatieri.

To preface everything, here are some data points to consider…

…On Affordability

  • According to BMO, home ownership is “affordable” (for the median buyer) when mortgage carrying costs—monthly payments, property taxes, heat, etc.—don’t exceed 39% of family income.
  • Nationwide, we’re at about 31.6% today.1

…On Mortgage Payments

  • If we look specifically at mortgage payments, BMO says the average-priced house currently consumes 28% of median household income, based on non-discounted mortgage rates.2
  • That puts us right at the long-term average (see chart below)
  • This 28% falls to 23% for people living outside Vancouver and Toronto.
  • Compare these numbers to the peaks of 44% in 1989 and 36% in 2007.


What if rates normalize?

The first step is to define “normal.” We can be reasonably confident that the new normal is less than the old normal. Reasons for that include the long-term downtrend in our domestic growth rate (see chart) and proactive inflation control by the Bank of Canada.


To pump life into the economy, the BoC has kept Canada’s overnight rate at just 1.00% for 902 straight days. According to Guatieri, “A normalized overnight rate would be closer to 3.50% given the inflation target of about 2.00%.”

This implies that short-term rates should theoretically jump by about 2.5 percentage points…someday. In turn, long-term rates (such as 5-year fixed rates) should rise less, maybe 200 basis points says Guatieri. That would push 5-year fixed mortgages somewhere near 4.99%.

Other things equal, these new “normalized” rates would drive up mortgage carrying costs (assuming 10% down) from 31.6% of gross income today to 37.2%. That would still fall below BMO’s threshold of unaffordability, which is 39%. But keep in mind, these affordability metrics don’t include other personal debt like car payments and credit cards.

How will borrowers be affected? 

RBC Economics writes, “Residential property values are elevated in Canada and, for many households, ownership remains accessible only because of rock-bottom mortgage rates.”

(Higher incomes have also helped affordability, notes BMO.)

But escalating interest rates aren’t necessarily a death knell. Reason being, “the eventual rise in rates will take place at a time when the Canadian economy is on a stronger footing, thereby generating solid household income gains,” says RBC. That, in turn, “would provide some offset to any negative effects from rising rates.”

The key word there is “some.” Guatieri estimates that, “To fully (our emphasis) offset a two percentage point increase in rates, household income would need to rise 19%, which could take six years if average income grows at the 3% average pace of the past decade.”

Incidentally, for major affordability damage to be done, we’d need something equivalent to a rate shock and/or serious unemployment. A rate shock is a fairly rapid increase in mortgage rates of “more than two percentage points,” Guatieri explains.

How far off is the threat?

It’s difficult to estimate the probability of a rate shock, Guatieri acknowledges. “The debt market is even pricing in a small probability of a BoC rate cut later this year.”

RBC notes, “We expect the Bank of Canada to leave its overnight rate unchanged at 1% throughout 2013 and raise it only gradually starting in early 2014—a scenario posing little in the way of imminent threat.”

Take that rate forecast for what it’s worth, but regardless, “affordability is not a major problem and should not become one even when rates normalize,” Guatieri writes in this report.

That’s true even in three of the fastest growing provinces—Newfoundland, Alberta and Saskatchewan.

The affordability exceptions, not surprisingly, are detached homes in Vancouver, Toronto and Victoria. Not coincidentally, these three markets are among the most prone to the one thing that helps affordability the most: a material price correction.


1 Based on a 2.99% 5-year fixed rate, property taxes equalling 1% of home value, $150 per month for heating cost, a 25-year amortization, plus fourth-quarter 2012 data provided by BMO, including: Q4 household income estimated at $75,300, an average seasonally adjusted home price of $361,523 and a down payment equalling half of personal income (i.e., $37,600 or ~10%).

2 Same assumptions as above, save for the mortgage rate. BMO uses an interest rate of 4.1% for its analysis. This higher rate makes comparisons easier over the long-run, since discounts were smaller in the past and since discounted rate data from the 1980’s is scarce.

Rob McLister, CMT

more on the B20!

THE B20!

More on what the B20 is doing:

  • According to simulation, 17% of high ratio mortgages funded in 2010 could not have been funded today.
  • This includes 11% of prospective high ratio homebuyers who can’t qualify for a mortgage under the new 25 year amortization rule.
  • Source: CAAMP Annual State of the Residential Mortgage Market, November 2012.

What Does This Mean for You?

Consumers’ buying power in the housing market has been affected. In order to adapt and continue to meet your clients’ needs, you need to work with a mortgage broker who knows how to get real estate purchases done.  

We specialize in the most competitive solutions for borrowers who do not fit inside the traditional “A” Lending guidelines. This includes buyers who:

  • Are self-employed or commissioned individuals with stated income
  • Are salaried individuals with a GDS/TDS that does not meet traditional bank requirements
  • Earn additional “soft income” on the side that may not be reported on taxes – like auto mechanics and computer programmers
  • Have imperfect credit due to extenuating circumstances
  • Are new immigrants to Canada – we love New-to-Canada buyers!
  • And sophisticated residential real estate investors

If you know someone who does not meet the traditional “A” guidelines, call me today to for a discussion on what is possible for you.

Mark Herman, 403-681-4376

Calgary listed as one of the more affordable housing markets in Canada

Great headline for sure. 1 RBC report has 2 articles written about it below.


Calgary listed as one of the more affordable housing markets in Canada

RBC report says city market experiencing a ‘renaissance’

CALGARY — Calgary experienced a housing market renaissance in 2012, reaping the benefits of strong provincial GDP and in-migration, which propelled home resales in the area, says a report released Monday by RBC Economics Research.

The latest Housing Trends and Affordability Report listed Calgary as one of the more affordable housing markets in Canada.

“Calgary-area buyers enjoyed significantly lower home ownership costs as a share of income than they faced at the market peak in early 2007 and the bar fell even further in 2012,” said Craig Wright, senior vice-president and chief economist of RBC. “In fact, it is the only major city in Canada where RBC measures are lower than their historical averages, suggesting that Calgary is one of the more affordable markets in the country.”

Thanks to improvements in previous quarters, all RBC measures stood below their previous-year levels in the fourth quarter. There was some minor deterioration in the latest period, however, with the measure for detached bungalows rising by 0.2 percentage points. But the measure for two-storey homes remained flat, and that for condominium apartments fell by 0.1 percentage points.

The RBC housing affordability measures capture the pre-tax household income needed to service the costs of owning a home at market values.

In Calgary, the average price of a detached bungalow in the fourth quarter of 2012 was $440,600 and the affordability measure was 38.1 per cent. The average price for a standard two-storey home was $434,700 with a measure of 38.6 per cent and for a standard condominium the average price was $250,100 with a measure of 22.2 per cent.

“It’s an exciting time for buyers, borrowing is very affordable right now. I’m seeing this affect the first-time homebuyer and investor market the most lately,” said Shayna Nackoney-Skauge, realtor with RE/MAX Rocky View Real Estate.

“Last week we listed a house that is in relatively original condition in the Varsity area. Within the first eight hours we had 15 showings and two offers. Buyers are flocking to scoop up new competitively-priced listings and investors are quick to pick up well-priced homes for their lot value in high-demand inner-city areas. It’s definitely keeping us on our toes to keep up with what is coming on and off the market on a daily basis.”

RBC said Alberta’s housing market remained vibrant in the final quarter of last year, buoyed by attractive affordability levels, accelerating population growth, a healthy labour market and a strong provincial economy. Although the pace of home resales slowed in the closing months of 2012, the housing market tightened up as fewer properties were listed for sale, it said.

“While homes are not particularly cheap in the province, Albertans boast the highest household incomes in Canada, which helps ensure that the share of their budget taken up by home ownership costs is easily manageable,” said Wright. “Barring an unexpected shock to the economy, housing market conditions in Alberta should remain positive in 2013.”

The RBC housing affordability measures for the province fell across all three housing types tracked by RBC. RBC’s measures for the benchmark detached bungalow and the standard two-storey fell by 0.2 percentage points to 32.1 per cent and 34.7 per cent, respectively. The measure for condominium apartments fell by 0.1 percentage points to 19.7 per cent. Average prices were: bungalow, $357,900; two-storey, $378,800; and condo, $213,300.

Nationally, affordability measures dropped by 0.2 percentage points for both bungalows (42.1 per cent) and condos (28.0 per cent) and by 0.3 percentage points for two-storey homes (47.8 per cent). Average prices in Canada in the fourth quarter of 2012 were: bungalow, $363,400; two-storey, $410,600; and condos, $237,600.

Twitter: MTone123

© Copyright (c) The Calgary Herald


Low mortgage rates muster slight boost in housing market affordability


PublishedMonday, Feb. 25 2013, 5:00 AM EST

Owning a house became slightly more affordable in Canada during the second half of 2012, but that’s mostly due to rock-bottom mortgage rates, RBC Economics says in a report to be released Monday.

The sharp drop in house sales that occurred during the final six months of the year led to some small month-over-month declines in house prices in many cities. And, as sales fell, banks made further small cuts to their already-low mortgage rates. Those two factors helped to take a tiny bite out of the cost of home ownership during the final three months of the year, for the second quarter in a row, RBC says.

The report comes as economists debate the health of the housing market and whether the moves that Ottawa made to tighten the market last summer will continue to have an impact this year.

On Friday, BMO Economics said that the latest data suggests falling mortgage rates and rising incomes are offsetting the effects of high house prices in most markets. That report said that affordability is not a “major problem” in most of the country, including Toronto’s much-watched condo market, and that it should not become one even when rates hit more normal levels.

“If interest rates remain low, income continues to rise, and prices stabilize this year – as we anticipate – fears of a deep housing correction should recede,” BMO senior economist Sal Guatieri wrote in that report. But he urged policy makers to “remain vigilant,” pointing to a number of major exceptions, namely the markets for detached homes in Vancouver, Toronto and Victoria, each of which are vulnerable to a significant correction if incomes fall or rates rise.

Finance Minister Jim Flaherty made changes to the mortgage insurance rules in July, after growing concerned that house prices and household debt levels were rising too fast. Those changes, which made it somewhat harder to obtain a mortgage, included cutting the maximum length of an insured mortgage to 25 years from 30 years.

“We expect overall housing market activity to remain subdued this year,” says RBC chief economist Craig Wright. “That said, we believe that there is scope for some mild strengthening from recent activity levels, as the negative effects of the mortgage insurance rule changes, implemented in July, 2012, gradually dissipate.”

While affordability is improving, RBC is warning that many families could be priced out of the market if interest rates were to jump.

“Exceptionally low interest rates have been the key factor keeping home affordability from reaching dangerous levels in recent years,” says Mr. Wright. “Residential property values are elevated in Canada and, for many households, ownership remains accessible only because of rock-bottom mortgage rates.”

BMO’s report suggests that, nationwide, Canada’s housing market is overvalued by about 10 per cent.

RBC’s housing affordability measure calculates the proportion of pre-tax household income that is required to service the costs of a house at current market prices. Both detached bungalows and condos saw the measure fall by 0.2 percentage points (to 42.1 per cent and 28 per cent respectively), while the measure for a two-storey home fell by 0.3 percentage points to 47.8 per cent.

All of the measures remain slightly higher than their historical averages, but the national figures are being propped up by “extremely poor affordability conditions” in the Vancouver area, RBC says.

Roughly 82.2 per cent of pre-tax income was required to service the cost of a detached bungalow in Vancouver during the final quarter of 2012, down 2.6 percentage points from the prior quarter, RBC says. Toronto’s measure was 52.8 per cent, down 0.4 percentage points; Montreal was 39.3 per cent, down 0.9 percentage points; Ottawa 38.8 per cent, down 0.5 percentage points; and Edmonton 30.7 per cent, down 0.1 percentage points. In Calgary, where the market is on an upswing, the measure was 38.1 per cent, up 0.2 percentage points.

Calgary and area average house prices jump 108% over 10 years $412,315 in 2012: RE/MAX report

CALGARY — Calgary’s residential housing market is poised for expansion in 2013, with move-up buyers set to lead the charge, says a report released Thursday by RE/MAX.

The report said the 10-year appreciation in average house prices for residential properties in the city and area was 108 per cent going from $198,350 in 2002 to $412,315 last year.

By comparison, average house prices across Canada jumped by 93 per cent during the same period from $188,164 to $363,740.

“Low interest rates and a slow but steady increase in average price have provided the impetus, with purchasers finding the current climate ideal for trading up to a larger home and/or better neighbourhood, or laterally, to a downtown condominium,” said the RE/MAX Move-Up Buyers Report about the Calgary market. “While equity gains have been limited over the past five-year period, those who purchased within the last decade have realized solid appreciation.”

Tanya Eklund, a realtor with RE/MAX Real Estate Central, said it has been amazing start to the new year in the market.

According to the Calgary Real Estate Board, year-to-date until February 20, MLS sales in the City of Calgary are up 11.97 per cent compared with the same period last year and average sale prices have increased by 9.36 per cent.

“Listing inventory is down and sales are up based on last year to date. We seem to be in this little sweet spot in the market right now,” said Eklund. “Sellers have gained momentum due to inventory levels and low selection. We are seeing multiple offers again, not just on land but on resale homes.

“Buyers seem to be very confident and are considering move-up homes or buying investment properties. Rental rates have increased due to the low vacancy so this is putting new buyers into the market and giving consumers confidence to purchase revenue properties again.”

Calgary and area average house prices are actually down slightly by just under one per cent from 2007 when they were $416,399 during the housing boom.

The RE/MAX report said a supply shortage, particularly in sought-after neighbourhoods, could place “serious” upward pressure on pricing once again.

“The strong economic fundamentals at play in Calgary and the province overall, will likely buoy the residential real estate market in 2013,” said RE/MAX. “While more experienced, move-up buyers are forecast to dominate homebuying activity this year, the first-time buyer won’t sit still for long. Pent-up demand — combined with a tight rental market — could spark renewed interest by year-end.”

Calgary’s 10-year price appreciation was the seventh highest in the country of the 16 markets surveyed by RE/MAX.

The top percentage increases and the average prices in 2012 were: Regina, 198.90 per cent, $301,145; Saskatoon, 165.41 per cent, $315,834; Winnipeg, 160.12 per cent, $255,058; St. John’s, 149.10 per cent, $285,529; Greater Vancouver, 142.17 per cent, $730,063; and Edmonton, 122.63 per cent, $334,318.

Against a backdrop of strong equity gains and lower interest rates, move-up buyers are once again set to ramp up their role in major Canadian housing markets, said the RE/MAX report.

Driving the upward movement has been substantial price appreciation in most major centres.

But gains have been more muted over the last five-year period.

“Canadian confidence in home ownership continues to fuel homebuying activity, particularly in the move-up segment,” said Elton Ash, regional executive vice-president for RE/MAX of Western Canada. “Equity gains have been a primary driver, with return on investment exceptionally strong in the past decade. In fact, the Prairies have seen a substantial upswing in housing values between 2002 and 2012, yet prices remain surprisingly affordable. Strong economic fundamentals helped fuel record price appreciation in markets like Regina, Saskatoon, and Winnipeg after decades of slow but steady growth.”

RE/MAX said the time between moves has decreased with first-time buyers generally prepared to upgrade within four to seven years after their initial purchase.

Twitter: MTone123

© Copyright (c) The Calgary Herald

Inspection needed even when buying new condo

Many people do not get inspections for new condos but since it is one of the most expensive things you can buy, it is worth it. Read below for more info.

Many buyers think it’s unnecessary to hire a building inspector before purchasing a new condo. Prospective owners often assume a condo building and their unit of interest is fine and everything is to code and working properly. While this is usually the case, purchasers still need to protect themselves against those rare occasions where a problem exists.

A friend of mine, for example, moved into a newly constructed condo where someone had inadvertently dropped a piece of plywood down the chimney flu, blocking it off. When the new owner lit the fireplace, smoke backed up through the unit.

Although the condo corporation took care of the fireplace, the owner was responsible for the smoke cleanup. A pre-purchase inspection would likely have avoided this problem as the offending piece of wood was within view of a casual look up the chimney.

I have sold many condos where buyers think they do not require an inspection, but every condo should be inspected by a certified building inspector.

Remember: It’s a good idea to put a building inspection clause into your offer. And it’s important to find a building inspector who is familiar with condo inspections. He or she will be cognizant of the types of problems to look for and of condominium building codes and regulations.

“What does an inspector check in a new condo? Isn’t this a waste of time and money?” I am asked this all the time.

An inspector will make sure your hood fan exhaust is properly connected. He will ensure that the electrical system is to code, in working order and adequate to meet any special electrical requirements you might have. Windows will be inspected to see they are installed properly and to regulation. A good inspector will also check the common elements to see if any owners who moved in before you have inflicted damage to the halls or elevators.

Is the garage constructed to code with adequate drainage to prevent flooding, winter road-salt spalling and excessive humidity build-up? An inspector will check the drainage in the garage and your parking spot. You want to make sure when you open your trunk to take out your groceries you are not always standing in a puddle of water.

The inspector will check the condo’s exterior envelope to see if it has adequate drainage and if it will deter ice buildup. Since the balcony is both the exterior element in which you will spend the most time and is also a source of liability (e.g.: ice buildup or water-damaged tiles blowing down onto the cars below), it will be examined carefully for potential problems.

Inspectors will check the roof and any air conditioning units located there, the security gate to the garage and many other things you would not think to consider.

The biggest factors are plumbing, electrical, heating and wiring. These must be to code, meet regulations and be suitable to accommodate any special requirements you, the buyer, might have. To further emphasize, a recent inspection revealed an ice buildup problem that, if not caught by the inspection, would have cost the buyer, along with the condo corporation, $20,000 to correct.

Definitely not a nice housewarming present.

Arkadi Abramovitch of Artech Home Inspections told me recently that technology has changed a lot in the past few years and this has helped to ensure buyers have a positive buying experience. Arkadi, along with many inspectors today, uses infrared equipment to check for moisture buildup in or behind the walls or ceilings, which would not normally be visible.

Inspectors check the exhaust systems for bathroom ventilation fans and kitchen hood fans that have sometimes been blocked inadvertently. A memorable condo inspection Arkadi had was when he found two Tim Hortons cups in a kitchen ventilation exhaust system.

It’s better to find out before closing on your unit than to try to fix the issue (and be reimbursed) later. Ask the inspector specifically for his or her impressions of the common areas as they may or may not do this if they aren’t asked specifically.

By now, I hope you are sold on the need for a building inspection for a new condo and it should be evident that this applies even more to a resale condo.

When first considering a resale condo, it’s a good idea to ask residents (if you know any) about previous problems with the building. When you request a building inspection, ask the inspector to address specifically these areas. (Of course, you are going to have both your lawyer and your insurance agent review the status certificate before signing off on the purchase.)

On the flip side, I encourage sellers to get a pre-inspection before their property is listed for sale.

Marilyn Wilson has been selling real estate for more than 23 years and owns Marilyn Wilson Dream Properties Inc.

Brokerage in Ottawa, an Exclusive Affiliate of Christie’s International Real Estate. She can be reached through or follow her on Twitter @marilyn_wilson.

the B20 !!

There will be lots more on THE B20 – as it is the #1 issue with getting real estate deals approved right now.

To start with, that the B20 is:

  • Needs multiple financing condition extensions
  • Pre-approvals collapse at the bank and with on-line or inexperienced brokers
  • Seemingly strong purchasers outright and irreversibly declined
  • Losing out in multiple-offer situations
  • Approvals taking forever


The reason you are having a tough time removing financing conditions (COF) for your deals is called “the B20” and the details are attached. Have a read to find out why. Better yet, feel comfortable suggesting your clients use 1 of Canada’s Top-10, full-time, professional, fully-independent, mortgage brokers with a Master’s Degree in Finance, who knows what these rules mean and how to get your deals done. On time.

 OUR SYSTEM, proven during the ‘06 – ‘07 boom, gives you the winning edge in multiple offers most of the time. BEFORE clients go shopping we get all the docs in. They are then reviewed by our past-head-underwriter (with $18 Billion in residential mortgages written) who discusses directly with the bank underwriters. We know the deals will work BEFORE they write an offer. In multiple offers we review the file to shorten condition time and work with you to write the winning offer.

More Data – and on my blog @

New mortgage guidelines have been issued to ALL mortgage lenders by OSFI – the Office of the Superintendant of Financial Institutions – causing every lender to modify their policies which:

  • Significantly restricts the LTV (Loan-to-value) and overall qualification of mortgage amounts.
  • Demands significant additional scrutiny and verification of ALL client documentation – banks can no longer paper over problems like before; causing many more outright, irreversible declines.
  • Causes many banks and non-professional mortgage agents to take way too long to present approvals or produce irreversible “declines” on mortgages that were not properly documented or packaged.

Using an experienced, full-time, professional, high-volume mortgage broker is the best way to ensure your deals are completed on time, the first time. Why risk an irreversible decline for your client by using any random broker?

10 Year Term – Best Ever!

10-year fixed, full-featured mortgage is @ 3.69! (Portable, Assumable, Standard 3 month payout fee) See my comments in the Calgary Sun – full article on home page of my website:

Housing in Calgary still going strong!

Multi-time buyers will be the biggest force in the market

The predicted slump in Canada’s housing market has failed to materialize. Apart from two areas of acute weakness – Toronto’s condo market and Vancouver in general – there has been an orderly retreat.

While the December 2012 figures in Toronto, for example, showed a 20% drop in sales compared to the year before, the January 2013 numbers show a modest 1.3% decline year-over-year. At the same time prices for a single family home rose 4.3% year-over-year. Elsewhere in the country, away from the Toronto and Vancouver volatility, Calgary saw sales climb 15% while Edmonton was up 3%.

Interestingly homes in the $1 million-dollar-plus range saw a 3.5% increase sales increase in January. This would back-up recent survey results from Re/Max Realty that indicate a shift in the buyers who are driving the market. The survey suggests that second-time and multi-time buyers will be the biggest force in the market with some 70% being serious about making a move in the next two years. First time buyers made-up about 30% of those who’d buy in the same time period.

Alberta: 23,300 jobs were created, unemployment rate 2nd lowest in Canada

Canadians continue to move to Alberta for jobs and our hot economy. This is what caused the housing boom in 2007 and is expected to continue to support home prices here. With only 2000 listings for homes for sale prices are actually rising here – the opposite of Vancouver and Toronto.

CALGARY — Alberta’s unemployment rate remained unchanged in January at 4.5 per cent, second lowest in the country behind Saskatchewan’s 4.0 per cent, according to Statistics Canada.

The federal agency reported Friday that Alberta saw an employment gain of 9,700 positions from December, up 0.4 per cent. On a year-over-year basis, employment in the province has grown by 1.9 per cent or 41,100 positions.

In the Calgary census metropolitan area, the unemployment rate rose from 4.6 per cent in December to 4.9 per cent in January. There were 1,700 jobs created, up 0.2 per cent. Year-over-year, 23,300 jobs were created in the region for an increase in employment of 3.2 per cent.

“Alberta added jobs, but the unemployment rate held steady, as more people joined the labour force,” said Jacqueline Palladini, economist with the Conference Board of Canada.

Todd Hirsch, senior economist with ATB Financial, said 8,600 of the new jobs in Alberta were full-time positions.

Job gains in Alberta were concentrated in finance, insurance and real estate (6,800), business support services (5,500), and construction (4,800). Those gains were partially offset by losses in transportation and warehousing (11,800), and retail and wholesale trades (6,800), explained Hirsch.

“January’s jobs report continues to portray Alberta’s labour market as healthy and balanced,” he said. “New jobs are being created to accommodate interprovincial and international migrants, but not so many that wages or labour shortages are in danger of overheating. In the months ahead, it is certainly possible, even likely, that the pace of new job creation will slow, particularly given the challenges in the energy sector. That should not be the cause of too much alarm, however. With 4.5 per cent unemployment, the economy is more than capable of managing a more moderate job market.”

Nationally, following two months of gains, employment decreased slightly in January by 22,000. A decline in the number of people looking for work pushed the unemployment rate down 0.1 percentage points to 7.0 per cent.

Compared with 12 months earlier, employment increased by 1.6 per cent or 286,000, all in full-time work.

Douglas Porter, chief economist with BMO Capital Markets, said Canadian employment fell in January after a five-month stretch of surprisingly powerful gains.

“Combined with the steep drop in housing starts as well as the still-wide trade deficit, the jobs report rounds out a day of infamy for Canadian economic stats,” said Porter. “To some extent, the drop in jobs appears to be a payback for the surprising strength in the second half of last year, and would normally be little cause for concern. However, with housing softening notably, and consumers and governments not in much mood, or ability, to spend, the economy will need a major helping hand from a stronger U.S. performance in the year ahead to help generate renewed job gains.”

Sonya Gulati, senior economist with TD Economics, said the Canadian job market started 2013 on a sour note.

“The contraction seen this month is not the beginning of a new year – the recent pace of job creation was running too fast given economic growth,” she said.

“The Canadian job market fizzled to start the New Year. This should not have been a surprise to anyone. Labour market data in Canada are notoriously volatile and it is hard to infer trends even with a few months under your belt. If we use economic momentum and indicators as our gauge, job creation should come in around 10,000-20,000 in the next few months.”

Twitter: MTone123

© Copyright (c) The Calgary Herald

Momentum continues in Calgary luxury home market

MLS sales in January just shy of all-time record for the month

CALGARY — Calgary’s housing market experienced a record year for luxury home sales in 2012 and the pace of transactions in January 2013 suggests the market is not slowing down.

According to the Calgary Real Estate Board, there were 34 MLS sales in Calgary of properties over $1 million in January — just shy of the January record of 36 luxury sales in 2007.

Calgary finished 2012 with an all-time record of 544 luxury home sales, eclipsing the previous mark of 458 in 2007.

The luxury home market in the city has rebounded following the recession dip of a couple of years ago.

Don Campbell, senior analyst and founding partner of the Real Estate Investment Network, said that during market corrections luxury homes are the first to drop off, after recreational properties, and the first to come back unlike recreational which is always last to recover.

“In Calgary, within the business world, confidence in business has come roaring back,” he said. “This has led those with capital and strong businesses to take the leap into the market.

“In a higher than average percentage, due to their more business orientation, those buying luxury homes have their finger on the pulse of economic direction and therefore with the resurgence of the Calgary economy over the last 14 months, they are identifying the fact that the luxury homes they want are not going to get any cheaper than they are now. They are seeing the underlying economic strength of the city and want to get into the market before it is reflected in the housing market. That is why you saw so much activity in 2012.”

Campbell said the large number of luxury home sales will push average sale prices up more than it is really being felt at the mid-market level.

“This will create un-supported expectations of mid-market sellers. Also, there are only so many luxury market homes in any given market and they are often the first to move,” said Campbell. “What we often see is a slowdown in these sales after 18 to 24 months and when this occurs it slows down the average sale price increase to lower than is being felt on the street.

“The other anomaly we are seeing in Calgary in the luxury market is the profile of the buyer. Compared to Toronto and Vancouver, whose luxury homebuyer demographic is made up of a large percentage of foreign/offshore buyers, Calgary’s luxury homebuyer profile is very local. People here in business have high paying jobs in Alberta. This is a much more stable cohort than the often fickle offshore buyer.”

Last year in January there were 16 luxury home sales in Calgary. After hitting a high in 2007, the market dipped to only six sales in January 2009.

“We have seen a 20 per cent increase in luxury sales in Calgary in 2012 over 2011 and are seeing tremendous momentum building already in 2013 this past month,” said Rachelle Starnes, realtor with Royal LePage Foothills in Calgary. “We have seen 10 sales over $1 million in Rocky View County in the past month, up 67 per cent over the same period last year. The Springbank area continues to be the busiest being one of the wealthiest areas in the country.

“Prices have dropped in the higher-end to reasonable levels, there is a dwindling supply and buyers have been out shopping the market for months. They have done their research and are ready to buy the minute the ‘perfect’ home hits the market. Calgary continues to be the ‘City of Choice’ for corporations moving West and the high salaries from the oil and gas market sectors allow for lots of ‘move-up’ buyers.”

The following are the annual sales in Calgary for homes priced at more than $1 million, according to the Calgary Real Estate Board:

2012 — 544

2011 — 446

2010 — 365

2009 — 337

2008 — 369

2007 — 458

2006 — 334

2005 — 138

2004 — 44

2003 — 36

2002 — 21

2001 — 14

2000 — 14

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