Calgary housing market demand strong for 2012: RE/MAX
Great news for the upcoming year.
By Mario Toneguzzi, Calgary Herald December 6, 2011
CALGARY — Fuelled by low interest rates and job security, demand for residential real estate in Calgary is on the upswing, says the RE/MAX Housing Market Outlook 2012 report released Tuesday.
And the real estate firm says Calgary will be a Canadian leader next year in the annual growth rate for MLS sales.
By year-end 2011, 22,500 homes are expected to change hands, an eight per cent increase over the 20,801 sales reported in 2010, it said.
And the average price in Calgary is forecast to appreciate as well, rising a “modest” one per cent to $405,000 in 2011, up from $401,186 one year ago.
The report forecasts the average MLS sale price will jump by three per cent in 2012 to $417,000 while sales will rise by five per cent to 23,600 units.
Lowell Martens, of RE/MAX Real Estate (Mountain View) in Calgary, said any hesitation on the part of some buyers in the city is more than likely a direct reflection of the uncertainty in the European economic situation.
He said commercial real estate construction taking place in Calgary “tells us the long-term feeling out there is very positive for Calgary.”
“We have a very stable market over the next little while. We don’t anticipate any big upswings but at the same time we don’t anticipate any big downswings either. It’s going to be very stable,” he said.
Buyers in the city are cautiously optimistic after more than two years of recession, making their moves while interest rates are at historic lows and housing values are affordable, said the report.
“Single-family homes remain most popular with purchasers, representing close to 60 per cent of total residential sales. Demand is greatest for entry-level product, priced between $350,000 and $450,000,” it said.
“Condominium apartments and town houses have also experienced solid momentum in recent months, with the lion’s share of activity occurring from $200,000 to $300,000. Luxury home sales — priced over $1 million — have been particularly brisk, up approximately 25 per cent over 2010 levels.”
While global concerns still loom overhead, the market appears to be gaining some traction moving into the new year, added the report.
“First-time buyers are expected to continue to capitalize on low interest rates, while move-up buyers cautiously enter the market in the mid-range price points. Sales in the upper-end are expected to remain robust,” said the report.
A recent housing market outlook by Canada Mortgage and Housing Corp. forecast a 2.3 per cent increase in MLS sales in 2012 for the Calgary census metropolitan area to 22,700 transactions and a 2.2 per cent hike in the average sale price to $411,000.
“Many factors that support resale housing demand have become or remained favourable this year, including growth in full-time employment, low mortgage rates and improved net migration,” said the CMHC.
“However, competing factors such as uncertainty in the global economy has kept some prospective buyers on the fence, and will continue to temper any large increases in sales.”
RE/MAX said the Canadian residential real estate defied conventional logic and outperformed expectations in 2011, posting another solid year of housing activity virtually across the board.
The trend is expected to carry forward into 2012 as Canadians “continue to demonstrate their faith in home ownership, despite concerns over the European debt crisis and its impact on the global economy.”
By year-end, an estimated 460,000 homes are expected to change hands, up three per cent from the 447,010 units reported in 2010. Sales are expected to climb one per cent to 464,500 units in 2012. The value of a Canadian home is set to climb to $363,000 by year-end — an increase of seven per cent over the $339,030 posted one year ago. By year-end 2012, the average price in Canada is forecast to appreciate two per cent to $371,000, added RE/MAX.
“What 2011 proves is that real estate continues to have momentum,” said Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada, in a statement. “The economic underpinnings support ongoing demand, particularly as job creation efforts continue and unemployment rates edge down further.”
Canada’s economy surges ahead
There is good news out there for the Canadian economy and home buying. Here is some below.
Christine Dobby Nov 30, 2011 – 7:06 PM ET
The Canadian economy was not as bad as first feared in the third quarter. In fact, it was much better than almost anyone had hoped.
Fuelled by record monthly output from the oil-and-gas and mining sectors and overall export strength as temporary headwinds drifted away, third-quarter economic growth shot past expectations.
Statistics Canada said Wednesday that gross domestic product for the period rose by an annualized 3.5%, beating economists’ more moderate average prediction of 3.0% growth and the Bank of Canada’s forecast of 2.0%. In September alone, the economy grew 0.2% from August, falling just short of a 0.3% increase economists predicted.
The growth during the quarter comes as a welcome change after a revised 0.5% contraction in the second quarter.
Net exports staged a decided recovery as external pressures like the fallout from the Japanese natural disasters in March were no longer a factor.
But the devil is in the details as flagging domestic demand and weak business investment lurked beneath the report’s strong headline growth. A close look at the data has economists forecasting only modest growth — in the range of about 2% — in the coming quarters and predicting the Bank of Canada will remain on hold with interest rate hikes.
Here’s what stood out from Wednesday’s report:
EXPORTS
The driving force behind the uptick in GDP for the quarter, exports grew at an annualized rate of 14.4%, up from a pullback of 6.4% in the previous quarter.
Paul Ferley, assistant chief economist at Royal Bank of Canada, said that factors that weighed on Canadian exports in the second quarter — including the Japanese supply-chain disruptions as well as wildfires in Northern Alberta that led to shutdowns of oil sand production facilities — were resolved in Q3 and contributed to the increase.
But, he cautioned, “The boost to third-quarter growth provided by the reversal of these factors is not expected to continue to the same extent into the fourth quarter.”
As the global economy stalls and prospects for a quick turnaround look increasingly grim, economists predict it will could spoil the Canadian export party.
HOUSING
Canada’s unstoppable real estate market was another bright spot during the quarter. Residential construction shot up 10.9% annualized, following on comparatively modest increases of 1.6% in Q2 and 6.7% in Q1.
“After quarters of booming housing starts data, the residential construction bonanza finally translated into the GDP numbers,” said Emanuella Enenajor, economist at CIBC Economics.
The expansion in this sector came from all three major components including fees and transfer costs related to resale transactions, new housing construction and renovation activity.
“Continued strength in new-home sales has elicited more and more new housing construction, particularly in the high-rise condo market,” said David Madani, Canada economist for Capital Economics.
He noted that a reported increase in housing starts bodes well for further strong growth in this category next quarter.
CONSUMER SPENDING
Canadians slowed their spending on goods and services during the quarter, raising red flags for economists concerned about sluggish domestic demand.
Personal expenditures grew at an annualized rate of 1.2%, down from an expansion of 2.1% in the previous quarter.
“A slowing pace of income growth owing to tepid hiring and weaker wage dynamics will likely continue to put downward pressure on consumption activity,” Ms. Enenajor said.
BUSINESS INVESTMENT
Business investment actually contracted during the quarter with a decrease of 3.6% annualized, down from last quarter’s 14.6% increase.
“Weak business investment is a worry, as it has been an important source of growth since early 2010 and replaced personal spending as the main source of domestic growth,” said Charles St. Arnaud, an analyst with Nomura Global Economics.
He noted that this, coupled with the fact that personal spending is likely to remain weak, “Could mean that domestic demand stays weak over the next few quarters, as global uncertainty remains high.”
FINAL DOMESTIC DEMAND
The combined slowdown in consumer spending and business investment was a drag on final domestic demand, which rose only 0.9% in the third quarter, down from a 3.1% gain in Q2. The other component, government expenditures, was flat in the quarter as government stimulus spending continues to slow to a trickle.
“Note that the pace of final domestic demand has been consistently slowing since 2010, weakening from around 6% to its current sub-1% pace,” Ms. Enenajor said.
Rates, spreads and all the rest
This is an article that was sent to me. It is totally technical and I love it. This is the real reason behind what are the lowest rates we have ever seen.
It also explains why the days of Prime -.95% are GONE for what looks like a long time.
In between the lines is says rates are going to go up quickly as soon as there is a sniff of recovery.
—
In the last few days, RBC and Scotiabank have eliminated their advertised variable-rate discounts.
They’re now promoting variable mortgages at prime + 0.10%, twenty basis points more than their previous “special offers.”
Prime + 0.10% (i.e., 3.10%) is an interesting number. A few months ago consumers thought that fat variable-rate discounts were here to stay. Variables above prime will now come as a shock to some people.
The banks are well aware of that. They know that pricing above prime impacts consumer psychology.
They could have priced at prime. Spreads are not that horrendous. But pricing above prime makes more of an impact. It makes higher-profit fixed rates more appealing and it mentally prepares consumers for potentially higher VRM premiums down the road.
That said, banks are not just arbitrarily sticking it to borrowers. Far and away, the main reason variable rates are worsening is that banks’ costs are rising.
At the moment, there are multiple factors at play:
• Higher risk premiums are compressing margins.
O We have Europe to thank for the that.
O The TED spread, a measure of interbank credit risk, just made a new 2½ year high. As volatility increases, banks have to factor that into their funding models.
O Another reflection of risk is the most recent floating rate Canada Mortgage Bond (which some lenders use to fund variable-rate mortgages). It was issued at a 15 basis point premium over the prior issue in August.
• Margin balancing is an underlying bank motive.
O Banks have publicly stated their desire to even out margins between profitable fixed rates and low-margin variables, and they’re slowly doing just that.
O Back in September, RBC Bank exec David McKay put it this way: “…Given the dislocation between fixed and variable, the very, very thin margins (of variables), we felt we needed to move prices up in our variable rate book.”
• New regulations (e.g., IFRS) have boosted the amount of capital required for mortgage lending.
O That has lowered the return on capital for mortgages, and thus influenced rates higher.
• Status Quo for prime rate doesn’t help margins.
O Lenders partly rely on deposits (that money rotting in your chequing and savings accounts) to fund VRMs.
O Demand deposit rates rise slower than prime rate. So, when prime goes up, some lenders get wider margins temporarily.
O When expectations changed three months ago to suggest that prime rate will fall or stay flat (instead of rise like expected), it was bad news for some deposit-taking lenders. That’s because they now have no spread improvement to look forward to in the near-to-medium term.
O MBABC President Geoff Parkin says that until recently, “lenders have been prepared to accept low (VRM) profit margins with the knowledge that, as the prime rate inevitably rises, so too will their profit on variable mortgages.” As it turns out, the inevitable is taking longer than the market expected.
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Housing affordability improves: RBC
“After two consecutive quarters of deterioration, Canada’s housing affordability has improved modestly in the third quarter, according to the latest Housing Trends and Affordability Report released today by RBC Economics.
Elevated uncertainty relating to the European sovereign-debt crisis and the downside risk for economic growth have contributed to keeping interest rates at low levels,” said Craig Wright, senior vice-president and chief economist, RBC. “The lower interest rate environment – which also includes mortgage rates – has played a part in slightly reducing the costs of owning a home in Canada in the third quarter.”
The RBC housing affordability measure captures the proportion of pre-tax household income that would be needed to service the costs of owning a specified category of home at going market values. During the third quarter of 2011, measures for the national level fell for all housing categories tracked by RBC (a fall represents an increase in affordability).
Earlier this year, deterioration in affordability at the national level was skewed by substantial increases in homeownership costs in Metro Vancouver. In the third quarter, RBC measures in the majority of provinces and cities experienced modest declines (less than 1 percentage point). More remarkable improvements materialized in a few local markets across Canada, including Montreal (for two-storey homes and detached bungalows), Manitoba (for two-storey homes), and Vancouver (for detached bungalows).
“Housing affordability levels are quite good in most parts of Canada and will pose little threat to overall housing demand,” added Wright. “The Vancouver area market continues to be a major exception, with sky-high property values in upscale neighbourhoods making it both extremely unaffordable and the most at risk of a downward correction.”
Going forward, RBC forecasts that interest rates will remain exceptionally low in Canada until mid-2012 and rise gradually after that.
“We expect to see further slowing in the pace of home price increases next year, as housing demand levels out,” said Wright. “These factors will set the stage for a period of relative stability in affordability trends in Canada.”
The RBC report indicates that the cost of owning a home at market value remains close to historical norms in the majority of markets outside of British Columbia, implying that local markets are, for the most part, at worst, slightly ‘unaffordable’. Affordability tensions emerged earlier this year in Toronto, Ottawa and Montreal (particularly in two-storey homes) and continue to be in a slightly uncomfortable range.
RBC’s housing affordability measure for the benchmark detached bungalow in Canada’s largest cities is as follows: Vancouver 90.6 per cent (down 1.5 percentage points from the previous quarter), Toronto 52.1 per cent (up 0.1 percentage points), Montreal 40.9 per cent (down 1.3 percentage points), Ottawa 40.8 per cent (down 0.6 percentage points), Calgary 37.6 per cent (up 0.5 percentage points) and Edmonton 33.2 per cent (down 0.6 percentage points).
Western marke…
Western market
Move over, Toronto – there’s a new hotspot in town
shelley white
Special to Globe and Mail Update
Published Monday, Oct. 31, 2011 4:54PM EDT
Last updated Monday, Oct. 31, 2011 7:43PM EDT
Sky-high rents. Heavy demand for downtown office space. A magnet for company headquarters. It may sound like Toronto, but this commercial real estate hotspot is decidedly farther west.
Despite erratic markets and a lingering world recession, Calgary’s office and commercial real estate market rivals Toronto as the most robust in the country, driven predominantly by the continued growth plans of energy companies.
“We’ve got a vibrant downtown core, a strong commodity-based economy, low tax rates in Alberta and [many] corporate head offices in Calgary, most of those tied to the energy sector. Calgary is a dynamic place to be right now,” says Joe Binfet, managing director of Colliers International in Calgary.
Indeed, the Toronto Board of Trade’s 2011 Scorecard on Prosperity, which compares 24 of the world’s most prosperous urban centres, gave Calgary third place, just below Paris and San Francisco. Toronto came in eighth.
Don R. Campbell, president of the Calgary-based Real Estate Investment Network, says that on a per capita basis, Calgary has already redefined itself as a leader in commercial and office space.
“Jobs are pouring in, population is growing and businesses are flourishing – and this is during the world’s economic downturn,” he says.
When it comes to downtown office space, the demand in Calgary seems boundless of late. “One year ago, the vacancy rate in the downtown office market was 16 per cent; today, it’s under 8 per cent,” says Mr. Binfet. “We’ve had over two million square feet of positive absorption in the downtown office market for this year, to date.”
According to Mr. Binfet, in the past 12 months Colliers has leased more than one million square feet in Eighth Avenue Place, a Platinum LEED-certified development in the downtown core, with pre-leasing interest bubbling up for a second, 600,000 square-foot tower. And Eighth Avenue is far from the only hot property – the 1.9 million square-foot Bow Tower has been completely rented by energy giants EnCana and Cenovus, who are now looking for more space.
Oxford Properties, having completed Centennial Place in 2010 (two towers totalling 1.2 million square feet), has announced plans for a new 25-storey tower in the Eau Claire neighbourhood, which would create another 600,000 square feet of office space.
“Energy companies are expanding,” explains Mr. Binfet. “They’re securing space not only for today, but for their future growth.”
“If company ‘A’ is currently [occupying] 50,000 square feet, the presidents that we talk to are saying, ‘Given our growth plan, we need 75,000 square feet,’” said Greg Kwong, regional managing director of CB Richard Ellis Ltd. in Calgary.
A recent study by Jones Lang LaSalle, a financial and professional services firm specializing in real estate, found that Calgary’s Third Avenue commands rents for office space that are among the highest in North America.
Law, energy, and oil companies pay rent averaging $47.51 per square feet on Third Avenue. The study placed the street’s rents at 13th highest in the continent, a few slots below Toronto’s Bay Street, which came in at No. 9.
Todd Throndson, managing director of Avison Young in Calgary, says rents in the downtown core have jumped around 50 per cent this year, which has made it difficult for some companies to find space.
“It’s creating some struggles for the smaller organizations as rents go up and opportunities go down,” he said. “We have an AA market that’s around 2 per cent, and an A-class around 4 per cent, and those are very, very low vacancy levels, especially in a market like ours, which has such large tenants and the capacity to grow quickly.”
Although Toronto is still the top dog when it comes to the overall number of major corporate headquarters, Calgary is starting to nip at the city’s heels.
According to Calgary Economic Development, Calgary has 9.3 head offices per 100,000 people, nearly twice Toronto’s figure of 4.7 head offices per 100,000. And while Calgary is experiencing an increase in the number of headquarters heading its way, Toronto is experiencing a decline.
In addition to its proximity to the lucrative energy market, Calgary is also attractive for companies to set up shop because of what the city and its citizens have to offer, says Mr. Campbell.
“[Calgary has an] educated work force to draw from, a high level of highly educated professionals,” he said. “And the size and infrastructure of the city allows employees to have additional free non-commute time, which leads to better and healthier lifestyles and therefore happier employees staying longer term.”
In terms of future growth, Mr. Kwong says the commercial real estate industry in Calgary is feeling very “bullish” right now, despite continued economic uncertainty here and abroad.
“The recession hit us just like everyone else, and it was very much a soft landing here and we bounced back a lot quicker than elsewhere in Canada,” he says. “We are very driven by the price of oil and the demand for oil, and until someone invents an alternative energy source to replace oil, Calgary and Alberta need to be here.”
“If oil continues to be priced above 60 dollars, then I believe the financial statements of the big energy companies, which are very positive,” says Mr. Throndson. “They have lots of cash and they are going to be very focused on growing their business opportunities, so I think we’re looking at a very healthy time period where Alberta is going to be strong economically.”
As for being “the new Toronto,” Mr. Binfet says it’s not a comparison many in his city would relish.
“I don’t think Calgary likes being compared to Toronto,” he says. “Calgary stands on its own, with an entrepreneurial attitude, a can-do spirit and a culturally diverse, vibrant downtown.”
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.”
Why you do not want a CIBC mortgage – they are beig sued for unfair payouts.
Lawyer files prepayment class action against CIBC
By Vernon Clement Jones
Twin class action lawsuits were filed in B.C. and Ontario late last week alleging some CIBC mortgage borrowers have been unfairly penalized by “vague” prepayment terms, the lawyer behind the action told MortgageBrokerNews.ca.
“There are two substantive complaints here,” Kieran Bridge, a Vancouver lawyer with the Construction Law Group, told MortgageBrokerNews.ca. “We believe that through this lawsuit CIBC’s practices with respect to how they calculate mortgage prepayment penalties will be found to be unenforceable. In this case, as with all of these types of cases, we are concerned about whether Canadians are being treated fairly and lawfully.”
Aside from what Bridge terms “uncertain and unenforceable language” in contracts dating as far back as 2005, he also points to the mathematical formula CIBC used to determine those prepayment charges, calling them “invalid,” or in legal speak a “miscalculation.”
The suits rely on individual representative plaintiffs in B.C. and Ontario. Each of those two notices of claim alleges CIBC applied terms and conditions to certain mortgage contracts that allowed it “unfettered discretion” in calculating mortgage prepayment penalties.
The suits also allege that the actual amounts of those penalties were themselves in breach of the mortgage contracts.
CIBC will have a chance to respond to the claims, with a judge’s decision on whether to certify the civil lawsuit, and move it to trial, possibly taking a year or more. The bank did not provide comment to MortgageBrokerNews Tuesday, and none of the allegations have, in fact, been proven.
The collective legal action effectively echoes some of the more perennial and broader concerns of brokers, who grapple with the widely varying interest rate differential and prepayment penalties many lenders demand of borrowers. The former, sometimes stretching into the tens of thousands of dollars, has presented a major impediment to helping clients take advantage of historically low rates by switching or refinancing clients before maturity, argue many mortgage professionals.
Those challenges have led to broker calls for industry-wide standardization of penalties.
Undoubtedly, broker-arranged mortgages through Firstline are among the thousands of transactions the dual suit is meant to address, said Bridge, at the same time expressing his support for mortgage professionals.
The B.C. lawyer led a similar case against RBC about ten years ago. It ultimately ended in a settlement, said Bridge.
Drop off your pumpkins on Nov 1.
Don’t forget about Walk of the Pumpkins at the Hidden Hut (10504 Hidden Valley DR NW) Nov 1, 2011 5pm-8pm. Drop off your pumpkins early!!
RT from Robyn Moser
Why Some Languages Sound So Fast
Slow Down! Why Some Languages Sound So Fast
Passengers converse with each other on a train line in Tokyo, Japan.
Here’s one of the least-interesting paragraphs you’ve ever read: “Last night I opened the front door to let the cat out. It was such a beautiful night that I wandered down to the garden to get a breath of fresh air. Then I heard a click as the door closed behind me.”
OK, it becomes a little less eye-glazing after that, with the speaker getting arrested while trying to force the door back open. Still, we ain’t talking Noel Coward here. All the same, this perfectly ordinary passage and a few others like it are part of an intriguing study just published in the journal Language — a study that answers one of the longest-standing questions about human speech. (Read why speaking more than one language may delay Alzheimer’s.)
It’s an almost universal truth that any language you don’t understand sounds like it’s being spoken at 200 miles per hour — a storm of alien syllables almost impossible to tease apart. That, we tell ourselves, is simply because the words make no sense to us. Surely our spoken English sounds just as fast to a native speaker of Urdu. And yet it’s equally true that some languages seem to zip by faster than others. Spanish blows the doors off French; Japanese leaves German in the dust — or at least that’s how they sound.
But how could that be? The dialogue in movies translated from English to Spanish doesn’t whiz by in half the original time, after all, which is what it would have to do if the same lines were being spoken at doubletime. Similarly, Spanish films don’t take four hours to unspool when they’re translated into French. Somewhere among all the languages must be a great equalizer that keeps us conveying information at the same rate even if the speed limits vary from tongue to tongue.
To investigate this puzzle, researchers from the Universite de Lyon recruited 59 male and female volunteers who were native speakers of one of seven common languages — English, French, German, Italian, Japanese, Mandarin and Spanish — and one not so common one: Vietnamese. They instructed them all to read 20 different texts, including the one about the housecat and the locked door, into a recorder. All of the volunteers read all 20 passages in their native languages. Any silences that lasted longer than 150 milliseconds were edited out, but the recordings were left otherwise untouched. (Read about the death of a language.)
The investigators next counted all of the syllables in each of the recordings, and further analyzed how much meaning was packed into each of those syllables. A single syllable word like “bliss,” for example, is rich with meaning — signifying not ordinary happiness but a particularly serene and rapturous kind. The single syllable word “to” is less information-dense. And a single syllabile like the short i sound, as in the word “jubilee,” has no independent meaning at all.
With this raw data in hand, the investigators crunched the numbers together to arrive at two critical values for each language: The average information density for each of its syllables and the average number of syllables spoken per second in ordinary speech. Vietnamese was used as a reference language for the other seven, with its syllables (which are considered by linguists to be very information dense) given an arbitrary value of 1.
For all of the other languages, the researchers discovered, the more data-dense the average syllable is, the fewer of those syllables had to be spoken per second — and the slower the speech thus was. English, with a high information density of .91, is spoken at an average rate of 6.19 syllables per second. Mandarin, which topped the density list at .94, was the spoken slowpoke at 5.18 syllables per second. Spanish, with a low-density .63, rips along at a syllable-per-second velocity of 7.82. The true speed demon of the group, however, was Japanese, which edges past Spanish at 7.84, thanks to its low density of .49. Despite those differences, at the end of, say, a minute of speech, all of the languages would have conveyed more or less identical amounts of information.
“A tradeoff is operating between a syllable-based average information density and the rate of transmission of syllables,” the researchers wrote. “A dense language will make use of fewer speech chunks than a sparser language for a given amount of semantic information.” In other words, your ears aren’t deceiving you: Spaniards really do sprint and Chinese really do stroll, but they will tell you the same story in the same span of time.
None of that, of course, makes the skull-cracking business of trying to learn a new language any easier. It does, however, serve as one more reminder that beneath all of the differences that separate Tagalog from Thai from Norwegian from Wolof from any one of the world’s 6,800 other languages, lie some very simple, very common rules. The DNA of speech — like our actual DNA — makes us a lot closer to one another than we think.