Calgary ranks #17 on the list of top global financial centres!

AGAIN – this will cause more head offices to move here, creating or supporting continued housing demand and price support. Once a city hits about one million people the influx of in-bound migration continues.

CALGARY — Calgary continues to draw attention globally as a financial centre.

The city has moved up 11 spots to 17th overall in the London-based Z/Yen Group’s Global Financial Centre Index (GFCI) — the only well-established index measuring global financial centres. The index ranks 77 of the world’s major financial centres in terms of competitiveness.

The index has been in existence since 2007.

Calgary made the list for the first time in March 2012.

“Calgary continues to make strong progress as a financial centre having joined the Global Financial Centres Index one year ago,” said Mark Yeandle, GFCI author, Z/Yen Group, in a statement. ”The Economist Intelligent Unit rates Calgary highly in its Business Environment Index and its Operational Risk Rating, The Fraser Institute rates Canada highly in its Economic Freedom of the World index and Standard & Poor rate Canada very highly in its measure of Banking Industry Country Risk. Additionally the Milken Institute ranks Canada very highly in its Capital Access Index. Respondents to our questionnaire continue to recognize the significant growth in financial services within Calgary as a result of the success of the energy sector.”

Bruce Graham, president and chief executive of Calgary Economic Development, said the city’s 11-point improvement in the past year supports the organization’s goal to build Calgary’s reputation as a global financial centre and demonstrates the growing strength and confidence in the sector.

“Building on the strength of the energy sector, Calgary is well-positioned to see sector diversification and continued growth in the financial services sector,” he said. “Through our Calgary. Be Part of the Energy campaign, our inclusion in the index will help elevate the international profile of Calgary in the attraction of financial institutions and qualified talent needed in this sector.”

According to Calgary Economic Development, Calgary’s finance and business industry is experiencing huge growth with 8,100 new jobs created over the past 10 years, an increase of 47.6 per cent (2003-2012). A result of the success of the energy sector is that most major Canadian financial institutions and lenders have a presence in Calgary, along with a growing list of international financial groups, says the organization. Examples of international financial institutions in Calgary include the Bank of America, Citigroup, Barclays Capital, Deutsche Bank, Bank of China, Goldman Sachs, HSBC, ICICI Bank, JP Morgan, Merrill Lynch, Royal Bank of Scotland and Société Générale.

Rachel Yin, business development manager for financial services at Calgary Economic Development, said the index is important for Calgary in attracting investment and talent in the industry.

She said several factors led to Calgary’s improvement in the global ranking including: Canada’s strong banking system; Calgary’s economy; investment into Canada and Alberta in the resource sector; and support from different industries and levels of government.

“We have the financial sector advisory committee that’s led by CED and in that committee we have a lot of experts from the industry so they promote Calgary. They are a good promoter for Calgary,” said Yin.

“Calgary has always been famous for energy. An energy hub. We see a lot of deals going on.”

She said 12 per cent of the city’s global energy deals are conducted in Calgary.

© Copyright (c) The Calgary Herald  

Calgary ranked top Canadian city in which to live

Thanks to this kind of press Calgary has a high in-migration rate. All those people moving here need to live somewhere. Rents are high and that causes people to buy, supporting home prices. High quality jobs and high employment will keep this trend going.

 City comes out on top in MoneySense magazine rating of 200 places across Canada
By Mario Toneguzzi, Calgary HeraldM

Calgary is ranked as the top city in Canada to live.

CALGARY — Calgary has overtaken Ottawa as the best place to live in Canada, according to an annual survey by MoneySense magazine in a ranking based on hard data such as employment, housing prices, crime, weather and household income.

In releasing its results of 200 Canadian cities on Wednesday, the magazine said “high incomes and an abundance of jobs fuelled by the boom in the energy sector are among the reasons it jumped from No. 14 last year to No. 1 this year.”

In addition to being the top city, it was also named the top city in which to raise kids.

Alberta has five places listed in the top 10 this year.

St. Albert is second with Strathcona County fourth, Lacombe eighth, and Lethbridge ninth.

Other top 10 places are Burlington third, Oakville fifth, Ottawa sixth, Saanich seventh, and Newmarket 10th.

In a list of the top large cities in Canada, Calgary is first followed by Ottawa and Edmonton.

In a list of top small cities in Canada, St. Albert was first followed by Strathcona County as second and Lacombe third.

It is cheaper to buy than rent in Okotoks!

This is my guest blog post for Karen Salmon, a superstar realtor in Okotoks. The numbers are surprising. Also note the tax savings at the bottom apply to ALL those who have a roommate!

Is it Cheaper to Rent or Buy in Okotoks?

March 19, 2013

Have you ever wondered if maybe you’d be better off buying than renting? I had Mark Herman of Mortgage Alliance run the numbers on buying either a starter home in Cimarron or a two bedroom condo in the Mesa.

Payments on a 2 story home at $305,000 would be $1,392 a month … that is lower than rent of $1,800 for the same home. Add in other costs of owning: property tax of $146, utilities of $250, and fire / home insurance at $40 a month, your monthly total would be $1828 a month! Only a difference of $28 a month ALL IN between renting and owing the same home! And now you can paint, hang pictures and make it your own place without a land lord getting fussed, or selling it on you and causing you to move again.

Payments on a condo at $220,000 would be $1,020 a month for the mortgage plus $318 condo fees, $125 property tax and say $150 for other utilities not covered by condo fees (totally realistic) then payments would be $1613 a month vs. renting at $1450. AND you own it and have stopped throwing rent funds out the window and are building equity. All this for only $163 more a month to own and not rent BUT ADD in this data below:

Tax Breaks on a Roommate: This condo is a 2 bedroom. If you have a renter then you can deduct ½ of the mortgage interest for the year and ½ of the condo fees and utilities as it is the cost of running an “investment property” that you just happen to live in. So in the end that would save you:

Half of the total yearly mortgage interest of $6183 /2 = $3091 + half the condo fees ($318 x 12 months /2 = 1908) = $4999 tax refund at the end of the year!  Just for having a roommate. $4999/12 months = $416 in tax savings a month so then $1,613 a month, all in, to run the condo – $416 in tax savings = a total cost of $1,196 a month ALL IN or $250 / month LESS than renting the same place!

If you’d like more information about a mortgage, feel free to email mark at mark.herman(at) . If you’d like help buying a home in Okotoks, contact me!

Calgary listed as an “out-performer” in Canadian real estate market

Great news to show support for Calgary home prices. It is due to the in-migration which has Canadians from all over moving here for higher quality and higher paying jobs. That is not expected to slow any time soon.

Calgary listed as an “out-performer” in Canadian real estate market

Pace predicted to be moderately lower for the rest of Canada

Calgary realtor Kaitlyn Gottlieb of Century 21 Bamber Realty Ltd.

Photograph by: Colleen De Neve Colleen De Neve, Calgary Herald

CALGARY — Canada is expected to embark on a gradual, modest, downward housing market adjustment over the next three years with a “measly” two per cent annual price gain over the next decade, says a study released Monday by TD Economics.

But the bank has also listed Calgary as an “out-performer” in Canada for the long-run rate of return on Canadian real estate. Compared with the national picture, Edmonton, Vancouver, Victoria and Toronto were also listed as out-performers for the future.

“With the slowdown in the Canadian housing market well entrenched, many are worried about the future value of their homes. This is not surprising as real estate is the largest financial asset most Canadians have in their possession,” said TD Economics.

“The housing market is prone to cyclical ups and downs and we should embark on a gradual, modest, downward adjustment over the next three years. We project a 3.5 per cent annual rate of return on real estate to prevail beyond 2015 – this is the long-run rate of increase for home prices in Canada. However, this pace will be moderately lower than they have been historically (5.4 per cent).”

Derek Burleton, vice-president and deputy chief economist with TD Economics, said Calgary had a run-up in prices before the recession and then a sharp decline during the recession.

“I guess prices didn’t come back too much but certainly sales fell back and now you’re getting a bit of a cyclical bounce,” he said, adding a long-term forecast takes into account key economic drivers like population growth and the potential of the economy to generate income.

“Based on some of the key drivers of growth, Calgary ranks right up there at the top and that should stand the housing market good stead. At least continue to drive above average price gains over the long run.”

The average MLS sale price in Calgary was $180,420 in 2000. That climbed to a peak of $423,770 in 2007 before dipping to $394,064 in 2009. From then, it has steadily climbed, reaching an all-time record of $428,644 in 2012.

Becky Walters, president of the Calgary Real Estate Board, said the Calgary market is really strong this year due to the in-migration it has been getting over the past 12 months.

“It’s not maybe as strong this year as it was last year but it’s certainly strong,” said Walters. “We’re seeing a nice steady growth. We’re seeing prices starting to come up a little bit not tons.”

For example, according to CREB, year-to-date until March 10, there have been 3,595 MLS sales in the city, up 4.66 per cent from the same period a year ago, and the average sale price has jumped by 9.23 per cent to $451,189.

However, at the national level, TD said a string of lacklustre performances over the next few years will mean that the annual rate of return for real estate in nominal terms will be a “measly” two per cent over the next decade, meaning home price gains should simply match the pace of inflation.

“Our research at REIN Canada is showing that for the coming five years, outperforming markets will be those based not in speculation or foreign investment, they will be those markets supported by underlying economics,” said Don Campbell, senior analyst and founding partner of the Real Estate Investment Network. “The Canadian real estate market is too broad and too diverse to paint with one story or byline and will become an increasingly regional story. Supporting economics such as increasing jobs, increasing population through migration — especially those areas which are attracting a younger, working age cohort — and increasing incomes will play a larger role in market demand and value than it has in the last five years.

“Despite Calgary and Edmonton’s value moves already experienced, they are both rated in the most affordable major centres in the country because average incomes are also higher than in most other regions. This, along with the younger age of in-migrants to these cities from other parts of the country, will be strong and supporting factors for these market for the coming years.”

Richard Cho, senior market analyst in Calgary for Canada Mortgage and Housing Corp., said in the Calgary region the average price in 2013 is expected to reach $423,000, up 2.6 per cent from 2012.

“The rate of growth is anticipated to be higher here than in many other areas of the country as the average resale price in Canada is forecast to increase by only one per cent in 2013,” he said. “Supply of homes in Calgary’s resale market has come down from a year earlier while sales have been fairly stable. The resale price in 2014 is forecast to continuing rising in Calgary, averaging $434,000.”

How the Bank of Canada just affected your Mortgage.

This is a great article by broker in Toronto.

Wednesday, 06 March 2013 20:42

With a movement towards lower rates for a longer period of time what should you do?

This Newsletter will explain what the Bank of Canada said at this morning’s meetings and aid you in your mortgage decision making process.

The Bank of Canada and most economic indicators suggest that our economy is struggling and we need low rates and economic stimulus to support it well into the future. Whether you have a Fixed or Variable Rate Mortgage right now, or have an impending mortgage decision to make in the next 6 to 8 months reading this newsletter could really help.

There are few lines from the Bank of Canada’s meeting today that strike us as important enough to quote for you.
First off: “considerable” monetary stimulus “will likely remain appropriate for a period of time.”

This is a change from the previous Bank of Canada message, and to us signals that low rates will be the norm for a while. The Bank of Canada had been indicating that the low rates we are experiencing were to be removed in 2013. However, now there is no expected removal date.

Secondly: “With continued slack in the Canadian economy, the muted outlook for inflation, and the more constructive evolution of imbalances in the household sector, the considerable monetary policy stimulus currently in place will likely remain appropriate for a period of time, after which some modest withdrawal will likely be required,”

The outlined comments signal to us that the Bank of Canada remains comfortable with rates being as low as they are and keeping them there for some time. It should also be noted that the Bank of Canada is now less concerned with the amount of our consumer debt.
We agree that the economy is on shaky ground, and as mentioned in last month’s newsletter, Banks are looking for ways to profit from consumers in the current market. Our sound, unbiased mortgage advice based on this information:

1. Be wary of the low fixed rate mortgage offers coming from the Banks, they come with horrible penalties!
Consumers should be paying attention to the message from the Central Bank and avoiding the messages coming from the Economists writing reports from Canada’s Big Banks. The flurry of Banks rushing to offer low 5 year fixed rate mortgages can be blinding, but one must look carefully at what is being offered. Today the CBC news quoted us for an article explaining some of these low rate mortgages. We would caution prospective mortgage shoppers on some of the strategies employed by these Banks. Most importantly the penalties to break these mortgages will be enormous. Our strong distaste for such practices is a matter of record. I strongly feel that the increase of these low rates mortgage offers will only serve to trap more consumers with high penalty mortgages offered by The Big Banks. There are plenty of mortgages available that are not from the Big Banks, they have low penalties and great interest rates. Consumers must be careful when they are shopping, it is too bad that only one third of all Canadians use a Mortgage Broker. A good Mortgage Broker can really help you navigate through the various pitfalls and traps that arise when you deal directly with a Bank, and can help you secure a Mortgage that saves you money.