Alberta leads North America in economic freedom: Fraser Institute report
This is great news for those of us in Alberta – we already knew we are booming. The rest of Canada is finding out as there were 26,000 new people added to Calgary this year. Almost the same as the boom in 2006. That means more people looking for homes or to rent and that demand will take up the housing slack.
Alberta leads North America in economic freedom: report
FILE – An oilsands mine facility seen from the air near Fort McMurray, Alta., Monday, Sept. 19, 2011. THE CANADIAN PRESS/Jeff McIntosh
CTVNews.ca Staff
Date: Tuesday Nov. 22, 2011 2:02 PM ET
Quebec and Ontario lag far behind their Western cousin Alberta and many U.S. states when it comes to economic freedom in North America, according to a new report.
While Alberta finished first of all Canadian provinces and U.S. states, Ontario finished fifth among the provinces and a dismal 49th when U.S. states were factored in.
Quebec finished eighth among the provinces — ahead of only Nova Scotia and P.E.I. — and a sluggish 58th overall in the analysis by the Fraser Institute titled Economic Freedom of North America 2011.
The report measures the economic freedom of 50 states and 10 provinces based on indicators such as size of government, taxation levels, and labour market freedom.
It found a direct connection between the states and provinces with the most economic freedom, and those where residents earned the most.
“The 12 Canadian and American jurisdictions with the highest levels of economic freedom had an average per-capita GDP of $54,435 in 2009, compared to the 12 lowest-ranked jurisdictions in North America, where average per-capita GDP in 2009 was $40,229,” the report stated.
Following are the top five finishers:
- 1. Alberta
- 2. Delaware
- 3. Texas
- 4. Nevada
- 5. Colorado
After Alberta, Saskatchewan was the second-highest Canadian finisher, but came in at only 32nd overall. Newfoundland and Labrador followed as the third-place overall Canadian finisher at 37th place.
B.C. came in 43rd overall, Ontario finished in 49th, and the bottom five spots on the entire list were dominated by the following Canadian provinces:
- 56. Manitoba
- 57. New Brunswick
- 58. Quebec
- 59. Nova Scotia
- 60. P.E.I.
Improvements in Canada
But the news wasn’t all bad for Canada. On average, the report found that levels of economic freedom increased in Canada between 2000 and 2009.
And in Newfoundland and Labrador and Saskatchewan, levels of economic freedom rose significantly in that same period.
Though less dramatic, B.C. and Alberta have also shown signs of improvement, which has allowed them to surpass several U.S. states in the rankings.
“It’s no coincidence that the provinces showing increased levels of economic freedom are also the provinces whose economies have been the most vibrant and shown the most growth in recent years,” said Fred McMahon, Fraser Institute vice-president of international research and the co-author of the report, in a statement.
“A common theme among provinces with high levels of economic freedom is a commitment to low taxes, small government, and flexible labour markets. These conditions foster job creation and greater opportunities for economic growth.”
Conversely, he said, provinces with low levels of economic freedom result in lower standards of living and reduced opportunities for families.
The report states that Quebec, Ontario, Manitoba, Nova Scotia and New Brunswick have all shown declines in economic freedom between 2000 and 2009.
Particularly troubling, McMahon said, is the fact Canada’s two most populous provinces, Ontario and Quebec, have fared so poorly.
“If governments in these two provinces want to boost prosperity and improve the standard of living for their residents, they should look to the successful policies of provinces where economic freedom has increased,” McMahon said.
Calgary housing market poised to show strong price growth
More good news on the market outlook.
November 6, 2011. 8:33 pm
Pay attention. Something’s happening here,” says Don Campbell, president of the Real Estate Investment Network in Canada.
Campbell is paying attention to the all the reports coming out these days showing some positive economic news for Alberta and Calgary. Good economic growth. In-migration levels rising. And employment growth leading the way in Canada.
The real estate market lags the economy by about 18 months, he says.And the economy is in recovery. We’ve now seen the job growth and the population growth starting to affect the rental vacancy rates which have gone down, resulting in rents rising.
Campbell says that by the spring of 2013, and perhaps by the fall of 2012, there will be a real strong upward pressure on demand for resale homes in Calgary and surrounding areas.
He predicts there will also be a jump in listings at that time which will keep a little bit of a cap on the price increases. So will continued world economic turmoil.
But even with that Calgary should expect strong price growth in the value of resale properties.
“I think you’re going to see a nice steady eight to 10 per cent increase in 2013 in average sale price for Calgary (year-over-year),” says Campbell, one of the authors of the book Secrets of the Canadian Real Estate Cycle.
Couple retires in Rimbey home built from 30 steel shipping containers
This is cool.
Containers are built to ISO 9000 standards so they are all the same and made to the same standard. Neat.
—
The Glennon family’s retirement home might just look like a stack of shipping containers of all different colours from the outside.
But once it’s complete, it will be a sprawling, 5,000-square-foot, four storey building — two levels above ground, a walkout basement and another level below — with four bedrooms, five bathrooms, a games and media room, garage and workshop, and two enclosed decks.
A massive garden with a potato crop, chickens, and a trout pond, will surround the residence on the eight-hectare property just outside Rimbey, about 180 kilometres north of Calgary.
And the shipping containers won’t be visible forever — the plan is to cover the exterior with stucco.
“It’s just going to look like a regular home,” said homeowner Bill Glennon.
Except most regular homes aren’t made of Sea-Can shipping containers — and the Glennon’s might be the only one in North America built with the containers from the footings all the way up to the roof, he said.
After years of touring show homes, checking out homes on the market, and attending home and design shows, Glennon said he never found anything he liked under $1 million.
By chance, his wife Roseann spotted a newspaper article about a shipping container home several years ago, which sparked their interest.
Putting his construction abilities to work, the former scaffolder and carpenter started drawing up plans to build his own home out of 30 shipping containers, each weighing about 5,000 kilograms with a load capacity of about 30,390 kilograms.
Besides being “really tough,” the containers are economically sound and structurally practical, Glennon said, though it can be a challenge to cut and grind materials, he added.
The couple, in their late 50s, started excavation in September 2009. A month later, 30 containers were shipped from Calgary to their property for a cost of about $3,000 per container.
Ever since, the couple and their 19-year-old daughter Kala, with help from Glennon’s brother Bruce and sister Colleen, have been hard at work welding, putting in the insulation and roof truss system, painting, installing weeping tile, lighting, and tending to the garden.
The family also hopes to live “off the grid completely” and has installed energy efficient windows, a wind generator, a 4.8-kilowatt solar panel system. A solar hot water heater, which will be their main source of heat, will come later, Glennon said.
The wooden interior walls will be insulated for extra warmth, though the fact that much of the home is underground means it will be fairly easy to heat in the winter, he added.
“Right now, we’re trying to insulate the outside, and we’re still waiting for the concrete to be poured on the roof, backfill the garage, and get some plumbing in,” Glennon said last week. “We’ve got a long ways to go.”
Glennon declined to disclose the exact cost to build the entire structure, though he offered that it works out to about $125 per square foot.
He indicated he hoped to have the entire exterior finished by next spring.
The long-term goal is to convert the residence into a bed and breakfast. After all, the Glennons already receive enough guests — both friends and strangers — driving in to catch a glimpse.
“We’ve got a lot of people come up from Calgary just to see it,” he said. “They think it’s pretty incredible.”
Housing Market in Canada is Stable
Housing Market Still Stable: CREA
- Friday, 16 September 2011
According to new data released from the Canadian Real Estate Association, housing activity in Canada remained stable in the month of August, which represents the second month in a row.
“The housing market in Canada remained on a firm footing in August when compared to volatile financial markets,” said Gary Morse, CREA President. “Through their actions, homebuyers are showing that they remain confident about the stability of the Canadian housing market, and recognize that the continuation of low interest rates represents an excellent opportunity to buy their first home or trade up.”
Looking at specific metropolitan centres, Toronto and Ottawa registered a monthly increase in activity, compared with Calgary, Montreal and Vancouver registering slight declines. Year-over-year, actual sales activity nationally rose by 15.8%.
Representing the first time that year-to-date activity has surpassed 2010 levels, 324,030 homes have traded hands, which is also in line with the ten year average.
70% of all local markets were solidly in balanced territory for the month of August, which represents the largest percentage on record. Only 12 markets reported being in buyer’s market position.
The national sales-to-new listings ratio, a measure of market balance, stood at 51.6 per cent in August, unchanged compared to July. The actual (not seasonally adjusted) national average price for homes registered in at $349,916, which marks a 7.7 % increase year-over-year, which was also the lowest price point seen in 2010.
“Once again, economic and financial market headwinds outside Canada are keeping interest rates lower for longer,” said Gregory Klump, CREA’s Chief Economist. “Those headwinds will likely persist until, and indeed after, fiscal quagmires in the U.S. and Europe are resolved. In the meantime, the Bank of Canada will have ample reason to delay raising interest rates further, which is supportive for the Canadian housing market.”
Centres that had been hotbeds for both sales and for price appreciation, that had been having the effect of skewing national prices upwards like Toronto and Vancouver appear to have moderated somewhat, pulling price levels more in line with averages.
Alberta repeat home buyers moving on to larger homes
Alberta repeat home buyers moving on to larger homes
This article is EXACTLY what we have been hearing over the last 6 months.
CALGARY — Repeat home buyers in Alberta are moving on to larger or more luxurious homes, according to a survey released Tuesday.
The TD Canada Trust Repeat Home Buyers Report said Albertans are the most likely in the country to feel they compromised on the layout and features of their current home and are not willing to do so again in their next house hunt.
The report, which surveyed Canadians who recently bought or intend to buy a home that is not their first, found that 59 per cent of Alberta repeat buyers are moving on to larger or more luxurious homes. And even though many are upgrading, they are among the least likely to need a mortgage to finance the purchase (58 per cent versus 69 per cent nationally).
“If you are moving because you want more room or certain features in your home, a renovation could be an option to save the expense of moving by making your current home work for you,” said Jessy Bilodeau, Mobile Mortgage Specialists, TD Canada Trust.
The TD Canada Trust Repeat Home Buyers Report found that seven-in-10 Alberta repeat buyers were moving earlier than they expected (40 per cent) or had no intention of moving but now find themselves on the house-hunt again (30 per cent). The number of people intending to buy a home that is not their first in the next two years increased 21 percentage points over 2010 (84 per cent versus 63 per cent in 2010).
The large majority of Albertans (84 per cent) plan to sell their current home before buying a new one. More than one-in-five (22 per cent) say market conditions played a factor in their decision to buy another home and 69 per cent expect to sell their home at or above asking price, said the report.
“The reality is that it’s still a buyers’ market, and homes need to be priced correctly to sell,” said Bilodeau.
Albertans are more likely this year to say they are keeping their current home as a rental property (46 per cent versus 25 per cent last year) or that they will stay in their current home and the new home will be a rental property (41 per cent versus 25 per cent last year).
© Copyright (c) The Calgary Herald
A 180 Degree Change in Mortgage Rate Expectations
This last blip in the stock market has taken the wind out of the world’s recovery sails. It now looks like rates are going to stay the same or go DOWN!?! for the 12 months or so.
The USA has said for the 1st time ever that they are not going to change their rates until 2013. They have never given a date in the past and this IS a big deal. It means that Canadian rates are going to have to track closely to the USA rates or our dollar will skyrocket and quickly slow our growth and path to recovery.
That would mean that while fixed rates have NEVER been better in 111-years, variable rates are also super attractive because Prime (P) will now stay close to 3% (where it is today) and the rate of P-8% = 2.2% for a mortgage is CRAZY low now that we know it is going to stay around there for 2 more years!
Call to discuss if you have any questions on this. 403-681-4376: Mark
A 180 Degree Change in Rate Views
- 46% probability of a rate cut Sept. 7.
- 100% probability of a rate cut by year-end.
That’s what prices of closely-followed overnight index swaps (OIS) were implying at the close of business on Monday. OIS trade on market expectations for Bank of Canada rate moves.
That amounts to a 180 degree swing in market psychology. Just a few weeks ago traders were pricing in a rate hike by January.
“As we’ve seen, markets can swing and perception can swing quite aggressively, and we could well be back to a fall expectation [of a rate hike] in a month’s time,” said RBC economist Eric Lascelles to the Globe & Mail.
Lascelles counterpart at Scotiabank, Derek Holt, says: “Any talk of the Bank of Canada hiking this year is just foolish in my opinion.”
Peter Gibson, chief portfolio strategist at CIBC World Markets notes: “I think it’s clear that there are a lot of serious problems still in the world and it’s more likely that we’re setting the stage for a sustainably low level of interest rates for a very long time.”
And that is the takeaway here.
Despite the roller coaster of emotions as of late, this about-face in rate assumptions reminds us of the necessity to focus on long-term trends. Long-term, North America’s prognosis still seems compatible with low-growth and low-inflation. That’s an environment where fixed mortgage rates typically underperform.
Mark Herman in the press on high-end properties selling quickly
High-flying stock market sends business to brokers Lingering caution at the big banks and wealthy clients increasingly bullish on the stock market are helping brokers claim their biggest share of high-end deals in years – with a Re/Max study helping explain the phenomenon.
By Vernon Clement Jones
Mortgagebrokernews.ca
Lingering caution at the big banks and wealthy clients increasingly bullish on the stock market are helping brokers claim their biggest share of high-end deals in years – with a Re/Max study helping explain the phenomenon.
“In the last week, we’ve just had two of the biggest deals of my career,” Mark Herman, an agent and team leader for Mortgage Alliance Mortgages Are Marvelous Inc. in Calgary, told MortgageBrokerNews.ca. “One was a new purchase for $1.525 million, with 5% down, and the other one was for a $750,000 line of credit on a $1.5 million purchase. High-end mortgage business for brokers in Calgary has picked up like we’ve never seen.”
Calgary brokers may not be alone.
Re/Max examined 12 major centres from coast-to-coast and found that luxury sales surged in two-thirds of them during the first four months of 2011, compared to the same period last year.
While Vancouver led in terms of percentage increases – 118% year over year – Dartmouth, at 27%, Winnipeg, 24%, Hamilton-Burlington, 13%, and Greater Toronto, 9%, also saw spikes.
Herman’s market of Calgary was also on that list, at 51%, although that scorching hot performance fell short of setting a new record, unlike the other top jurisdictions on the list. With the exception of Vancouver, their sales growth can be chalked up to domestic buyers.
Michael Polzler, executive vice president for Re/Max in Ontario-Atlantic Canada, pointed to three key factors for the rise in high-end business: equity gains, stock market recovery, and improved economic performance.
Brokers like Herman are pointing to the some of the same factors to explain why they’re getting more high-net-worth clients stepping across their thresholds.
“These guys weren’t buying as much during the recession, but with prices still below recent highs, high-end buyers are now out bargain shopping,” said the mortgage agent, also an MBA.
“But what they’re doing is they’re looking to keep their money in the stock market and other high-yield investments and want to buy homes with as little money down as possible – it’s all about limiting opportunity costs. Also they’re coming to brokers this time because they’re finding the banks have been slower to ease credit and aren’t giving them the discounted rates they expect.”
Less than five months into 2011, another broker, Sharnjit Gill, has already surpassed last year’s total for high-value deals.
“We’re also seeing more activity there because those clients are more educated about what we as brokers can do for them beyond rate,” he told MortgageBrokerNews.ca.
Still the trend is less obvious at other mortgage brokerages, even in those markets highlighted by the Re/Max report.
While her Ottawa brokerage has seen an uptick in volume, said Kim McKenney, senior VP at Dominion Lending Centres The Mortgage Source.
“The average dollar amount has risen by only a couple of thousands of dollars,” she told MortgageBrokerNews.ca.
Mortgagebrokernews.ca is a division of KMI Media.
Upcoming Interest Rate Announcement – No Change Anticipated
It is almost that time again, when eyes will turn towards Mark Carney and the Bank of Canada to see if interest rates will stay put again this time around.
The next announcement, slated for Tuesday May 31, comes at an interesting time. Throughout the first part of this year, it was widely believed that interest rates had stayed as low as they could, and for as long as they could, and the prediction was that rates would begin to creep up as early as this spring.
However, as with many predications, several things were not foreseen in the forecasting.
What has happened most notably in advance of this latest announcement- was unpredicted behaviour on a number of fronts. Consumer prices across many categories have been rising rapidly (although fell slightly below expectations last month), but are clearly displaying an upward trend. Inflation, while still manageable, is running a little too high to be ignored as a factor as well.
So, rates will rise at some point, but given the existence of some volatile conditions in the market, and fears that a rate hike will erode an already tenuous hold on affordability due to rising prices, the question is, is that time now?
According to a survey done by Reuters last week, forecasters predict that a rate hike will not happen until Q3 2011. It is widely believed that rates will go up to 1.25% in the third quarter from the current 1%. Almost unanimously, the forecasters polled agreed that the announcement on May 31 will be a rate hold- again.
Supporting these findings, three of the major banks have also indicated that they don’t expect to see rate hikes until the fall either.
If all of this comes to pass, it is good news for the Canadian housing market. The time-limited offer of ultra-low interest rates will get extended. Coupled with the fact that this will end at some time contributes to a sense of urgency as well.
How does this translate into daily business for Real Estate and for the Mortgage professions? Propertywire.ca asked some members of the community.
Tara Gibson, Mortgage Broker, TAG Financial – Mortgage Alliance TAG Mortgages, agrees that rates will remain steady for the time being, but thinks that an increase could come as early as the summer. “In my opinion, our strong dollar is enough to predict that we won’t see an increase in interest rates this time; more likely in July. The question is, will discounts on Prime change with the lenders? I think we may start seeing this compress a bit soon enough; in fact, some lenders have already started to close the gap. Many clients are currently choosing to go with a variable rate; simple case of supply and demand, prices go up with increased demand.”
“Despite all the pressure to see interest rates increase, industry experts believe that the Bank of Canada and lenders will increase rates at a slow rate. Advice to borrowers, if you want a variable, get in on the rate holds before we see more lenders change the discount! Further to that and much more important, global uncertainty is only postponing the inevitable, rates WILL go up so make sure you are fully prepared to handle the change when you go to renew your mortgage in 5 or 10 years!”
Trish Pigott,Broker/Owner, Primex Mortgages agrees too that status quo will be the order of the day on Tuesday. “I’m sure they are going to remain steady and unchanged. The majority of economists were predicting July as our next increase but they are now changing that until September and even some as early as next year. With our global economy in the state it’s in, I can’t see it changing much until the rest of the world stabilizes.”
Calgary region MLS sales and prices forecast to rise: CMHC
Good news:
House sales up 5%
Prices up 1%
CALGARY — A report by Canada Mortgage and Housing Corp. forecasts MLS sales in the Calgary region to increase by nearly five per cent this year compared with a year ago while the average sale price will rise by just over one per cent.
The CMHC’s Spring 2011 Calgary Housing Market Outlook, released Monday, predicted MLS sales in the Calgary census metropolitan area would hit 22,000 this year, up by 4.8 per cent, and increase a further 2.3 per cent in 2012 to 22,500 transactions.
The agency forecast the average sale price to increase by 1.1 per cent this year to $403,000 while it would jump another 2.2 per cent in 2012 to $412,000.
ALBERTA’S HOUSING AFFORDABILITY REMAINS STABLE AND ATTRACTIVE: RBC ECONOMICS
Calgary market transitioning into a more vigorous phase.
This is great news as affordability is super important. Note in Vancouver it takes about 3/4 of a person’s income to pay for their home. Yikes! Have a look at some other good reports here.
TORONTO, May 20 /CNW/ – Unlike most other major centres across Canada, housing affordability in Alberta remained stable in the first quarter of 2011, according to the latest Housing Trends and Affordability report issued by RBC Economics Research.
Until the fall of 2010, abundant availability of homes for sale in the face of sluggish demand kept housing prices firmly under control. Resulting stable or slightly declining property values contributed to a substantial improvement in affordability in Alberta last year.
“The Alberta market continued to be stuck in low gear in the first quarter of 2011. Sales of existing homes and construction of new housing units showed very modest increases,” said Robert Hogue, senior economist, RBC. “While market conditions have become more balanced in recent months, owning a home doesn’t seem to be getting more expensive in the provincial market at this stage. Affordability levels are still looking quite attractive.”
RBC’s housing affordability measures for Alberta, which capture the province’s proportion of pre-tax household income needed to service the costs of owning a home, remained relatively unchanged and below their long-term averages in the first quarter of 2011. The measure for the benchmark detached bungalow in the province moved up to 31.3 per cent (an increase of 0.4 of a percentage point from the previous quarter), the standard condominium stayed flat at 20.2 per cent and the standard two-storey home fell to 34.2 per cent (down by 0.2 of a percentage point).
RBC’s report notes that there are signs that the Calgary housing market is finally overcoming its protracted slump. Home resales in the area grew for the second consecutive period in the first quarter, the most growth since the middle of 2009, helping to remove market slack and setting a healthier balance between demand and supply.
“Calgary home prices have yet to break out of their listless trends, but they rose at their fastest rate in more than a year in the first quarter, with detached bungalows leading the way,” said Hogue. “Firmer market conditions and higher prices had only limited impact on Calgary’s affordability, which remains among the most attractive of Canada’s major cities.”
The majority of Canadian markets experienced weakened affordability in the first quarter of 2011. Most notable was the sizeable deterioration in British Columbia. More specifically, Vancouver saw significant gains in property values, which drove the already elevated cost of homeownership even higher. Quebec’s homebuyers also faced noticeable rises in ownership costs, while those in Atlantic Canada saw their affordability advantage somewhat diminish. The picture remained mixed in other areas of the country, with Ontario, Alberta and Saskatchewan experiencing ups and downs in ownership costs, depending on the housing type.
“Despite the latest erosion in affordability, provincial levels generally continue to stand near their long-term averages, suggesting that owning a home remains affordable or, at worst, slightly unaffordable across Canada – with Vancouver being a notable exception,” said Hogue.
RBC’s housing affordability measure for a detached bungalow in Canada’s largest cities is as follows: Vancouver 72.1 per cent (up 3.4 percentage points from the last quarter), Toronto 47.5 per cent (up 0.8 of a percentage point), Montreal 43.1 per cent (up 2.0 percentage points), Ottawa 39.0 per cent (up 0.4 of a percentage point), Calgary 35.9 per cent (up 0.9 of a percentage point) and Edmonton 31.5 per cent (up 0.5 of a percentage point).
The RBC housing affordability measure, which has been compiled since 1985, is based on the costs of owning a detached bungalow, a reasonable property benchmark for the housing market in Canada. Alternative housing types are also presented including a standard two-storey home and a standard condominium. The higher the reading, the more costly it is to afford a home. For example, an affordability reading of 50 per cent means that homeownership costs, including mortgage payments, utilities and property taxes, take up 50 per cent of a typical household’s monthly pre-tax income.