An estimated 1.5 million households in 10 major Canadian centres surveyed indicated they completed renovations last year that cost an average of more than $12,800, according to the Renovation and Home Purchase Survey released today by Canada Mortgage and Housing Corporation (CMHC).
“Close to $19.7 billion was spent on renovations in 2007 across the 10 major centres surveyed, an increase of more than $2 billion compared to 2006,” said Bob Dugan, Chief Economist at CMHC. “As well, when Canadian homeowners in these 10 centres surveyed were asked about their plans for this year, 40 per cent indicated that they intend to spend $1,000 or more on renovations by the end of 2008.”
The Renovation and Home Purchase Survey reports on actual renovation expenditures made in the previous year, as well as intentions to buy or renovate a home in 2008 in the following 10 major centres: St. John's, Halifax, Québec, Montréal, Ottawa, Toronto, Winnipeg, Calgary, Edmonton, and Vancouver1. The survey enables all market participants to benefit from timely information on renovation market trends.
Close to half — 46 per cent — of households reported that the cost of renovations was in line with what they had budgeted, while 37 per cent went over their planned budget for the renovation. More than a quarter — 26 per cent — of households that undertook a renovation project hired a contractor for a portion of the work, up slightly from 24 per cent that undertook renovations in 2006. ‘Do-it-yourselfers' accounted for 31 per cent of renovators in 2007, down slightly from 34 per cent in 2006. However, many households — 41 per cent — chose to contract out the entire renovation project.
The main reason given by households for renovating in 2007 was to update, add value or to prepare to sell — 59 per cent. Some 27 per cent of respondents stated that the main reason for renovating was that their home needed repairs. The top three renovations completed last year were: remodelling rooms — 31 per cent, — painting or wallpapering — 27 per cent, — and hard surface flooring and wall-to-wall carpeting — 26 per cent.
Of the 10 major centres surveyed, the percentage of households that spent $1,000 or more on renovations in 2007 was highest in Winnipeg at 36 per cent, followed by St. John's and Halifax at 35 per cent, while the centre with the least proportion of households that undertook renovations was in Québec at 28 per cent.
Similarly, renovation intentions for 2008 across the 10 major centres are strongest in Winnipeg and St. John's, where 50 and 48 per cent of consumers, respectively, indicated they plan to undertake renovations costing $1,000 or more. The proportion of potential renovators is lowest in Québec where 35 per cent of households indicated they intend to renovate in 2008.
On the home purchasing front, six per cent of households across the 10 major centres surveyed intend to purchase a home that will be used as a primary residence in 2008. This is down from eight per cent in 2007. Forty-two per cent of households that stated they intend to purchase a home in 2008 are first-time buyers. This percentage is identical to the share of actual first-time home buyers in 2007. The majority of first-time buyers are between the ages of 25 and 34, with a household income between $40,000 and $60,000 annually.
Home buying intentions are strongest in Calgary where 8 per cent of households reported that they are considering buying a home this year, down from 14 per cent in 2007. Purchase intentions are the lowest in Québec at four per cent.
CMHC OTTAWA, May 22, 2008
Wednesday, May 28, 2008
Monday, May 12, 2008
MORTGAGE RATE FORECAST
At the end of April, the borrowing cost for a five-year fixed rate mortgage was 6.99 per cent, 55 basis points (bps) below year-end 2007. BCREA expects rates to remain stable over the second and third quarters of 2008 before rising modestly in Q4 2008 and into 2009.
US Weakness Impacts Canada
Lower interest rates are being driven by the faltering economy south of the border. The US is in the middle of a housing market-led economic downturn; housing starts are at the lowest levels since the early 1990s. Meanwhile, aggregate US resale home prices have dropped and unemployment rates have risen, contributing to lower consumer confidence, spending and greater economic uncertainty.
In response, the US Federal Reserve slashed its policy interest rate by 200 bps thus far in 2008, pushing it down to 2.25 per cent. Despite these efforts, US growth looks to remain weak for much of 2008 and into 2009.
A potential US recession will weigh on Canadian economic growth through various channels. Canada’s export sector, already reeling from the rapid ascent of the Canadian dollar in 2007, will be further challenged by reduced product demand. Undoubtedly, US weakness will flow through Canada’s economy, given that more than 78 per cent of Canadian goods exports are sent to the US.
Canada’s economy grew by only 0.8 per cent in Q4 2007, the lowest growth since Q2 of 2003. While domestic demand remained robust, export activity fell by 2.2 per cent over the previous quarter. Declines were mostly confined to the manufacturing, other goods and transport sectors, which depend more on cross-border trade.
Interest Rates to Fall
The Bank of Canada’s (BoC) mandate is to maintain price stability, rather than to explicitly target economic growth. That said, current and expected economic activity play critical roles in future inflation pressures and monetary policy. Core inflation was 1.3 per cent in March, marking the lowest growth since March 2004. The increased value of the Canadian dollar vis-à-vis the US has lowered import prices, and consumers have further benefited from the recent GST cut. Low inflation and a weak US economy point to further cuts in the BoC’s policy rate at future meetings this year.
Mortgage Rates
Cuts in the overnight rate directly impact variable mortgage rates, which are tied to prime rates. Prime rates adjust when the BoC adjusts its target for the overnight rate. In the fixed-rate mortgage market, rates are highly correlated to bond yields of similar maturity. While short-term rates partially filter into longer-term rates, future expectations for the economy, inflation and interest rates play larger roles. With the economy likely to remain weaker for much of 2008, inflation is likely to stay well anchored. As a result, the expectation of lower interest rates moving forward should dampen bond yields and lead to downward pressure on administered one and five year mortgage rates. However, continued volatility in financial markets has also translated into higher costs of credit for banks used for lending purposes. This should offset some of the downward pressure on mortgage rates.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
US Weakness Impacts Canada
Lower interest rates are being driven by the faltering economy south of the border. The US is in the middle of a housing market-led economic downturn; housing starts are at the lowest levels since the early 1990s. Meanwhile, aggregate US resale home prices have dropped and unemployment rates have risen, contributing to lower consumer confidence, spending and greater economic uncertainty.
In response, the US Federal Reserve slashed its policy interest rate by 200 bps thus far in 2008, pushing it down to 2.25 per cent. Despite these efforts, US growth looks to remain weak for much of 2008 and into 2009.
A potential US recession will weigh on Canadian economic growth through various channels. Canada’s export sector, already reeling from the rapid ascent of the Canadian dollar in 2007, will be further challenged by reduced product demand. Undoubtedly, US weakness will flow through Canada’s economy, given that more than 78 per cent of Canadian goods exports are sent to the US.
Canada’s economy grew by only 0.8 per cent in Q4 2007, the lowest growth since Q2 of 2003. While domestic demand remained robust, export activity fell by 2.2 per cent over the previous quarter. Declines were mostly confined to the manufacturing, other goods and transport sectors, which depend more on cross-border trade.
Interest Rates to Fall
The Bank of Canada’s (BoC) mandate is to maintain price stability, rather than to explicitly target economic growth. That said, current and expected economic activity play critical roles in future inflation pressures and monetary policy. Core inflation was 1.3 per cent in March, marking the lowest growth since March 2004. The increased value of the Canadian dollar vis-à-vis the US has lowered import prices, and consumers have further benefited from the recent GST cut. Low inflation and a weak US economy point to further cuts in the BoC’s policy rate at future meetings this year.
Mortgage Rates
Cuts in the overnight rate directly impact variable mortgage rates, which are tied to prime rates. Prime rates adjust when the BoC adjusts its target for the overnight rate. In the fixed-rate mortgage market, rates are highly correlated to bond yields of similar maturity. While short-term rates partially filter into longer-term rates, future expectations for the economy, inflation and interest rates play larger roles. With the economy likely to remain weaker for much of 2008, inflation is likely to stay well anchored. As a result, the expectation of lower interest rates moving forward should dampen bond yields and lead to downward pressure on administered one and five year mortgage rates. However, continued volatility in financial markets has also translated into higher costs of credit for banks used for lending purposes. This should offset some of the downward pressure on mortgage rates.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
BC Housing Starts 2008
Housing starts in the province climbed 8 per cent to 39,195 units last year. High-density housing gained a larger proportion of total housing starts as a result of land supply and affordability constraints and consumer preferences Multiple housing starts comprised 63 per cent of total housing starts in the province last year.
Housing starts in BC climbed 15 per cent in the first quarter of 2008 compared to the same period in 2007, but housing starts are not expected to reach last year’s total by year end. Capacity constraints in the province’s large urban centers will limit new construction activity this year. The tightening of credit will also negatively impact the availability of financing and the cost of borrowing. In addition, a marked increase in resale listings and fewer investors are slowing presales of new homes and causing developers to re-evaluate their market exposure.
While housing starts may be higher in the first half of 2008, they are expected to decline during the second half, resulting in a 3 per cent decline in total starts to 37,900 units by year end. Higher new home inventories and moderating demand is expected to pull housing starts back an additional 6 per cent to 35,500 units in 2009. Multiple housing starts are forecast to increase 1 per cent this year on the strength of projects currently planned or underway. However, rising inventories are expected to reduce multiple starts by 10 per cent to 22,500 units in 2009.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
Housing starts in BC climbed 15 per cent in the first quarter of 2008 compared to the same period in 2007, but housing starts are not expected to reach last year’s total by year end. Capacity constraints in the province’s large urban centers will limit new construction activity this year. The tightening of credit will also negatively impact the availability of financing and the cost of borrowing. In addition, a marked increase in resale listings and fewer investors are slowing presales of new homes and causing developers to re-evaluate their market exposure.
While housing starts may be higher in the first half of 2008, they are expected to decline during the second half, resulting in a 3 per cent decline in total starts to 37,900 units by year end. Higher new home inventories and moderating demand is expected to pull housing starts back an additional 6 per cent to 35,500 units in 2009. Multiple housing starts are forecast to increase 1 per cent this year on the strength of projects currently planned or underway. However, rising inventories are expected to reduce multiple starts by 10 per cent to 22,500 units in 2009.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
ECONOMIC OUTLOOK 2008
Economic growth in the province is expected to slow this year. The higher Canada/US exchange rate and overall weakness in the US economy, especially in residential construction, will curtail BC exports again this year. The dollar value of softwood lumber exports to the US fell 22 per cent last year. Recovery in US housing starts is not expected this year. In addition, less consumer spending by Americans, combined with a high Canadian dollar, will also curb the number of US tourists to BC. Total US traveler entries to BC declined 6 per cent last year, and a marked improvement is unlikely this year.
Despite some weakness in BC exports, the economy is forecast to grow by 2.5 per cent this year and 2.7 per cent in 2009. Construction is underway on $57 billion worth of capital projects and a further $75 billion in capital projects are proposed. Retail sales are expected to remain brisk, growing a further 6.5 per cent this year and 6.7 per cent in 2009.
Besides the bright lights of capital projects and retail sales, labour market conditions are favorable to BC households and housing demand. The unemployment rate in BC fell from 4.8 per cent in 2006 to 4.2 per cent last year. In the last five years, the unemployment rate has decreased by more than 50 per cent. Strong labour demand is expected to continue this year, with employment increasing by 2.5 per cent in 2008 and 2.6 per cent in 2009. Robust employment growth and low unemployment puts upward pressure on wages and salaries, a positive side effect for BC households. Both personal disposable income and workers wages are expected to be higher again this year.
Employment in wood manufacturing fell by 8,400 jobs during the first quarter, with total manufacturing employment down by 18,200 jobs. However, a gain of 25,400 construction jobs during the same period more than offsets the job losses in manufacturing, and illustrates that the goods sector in the province remains on a solid footing. In the service sector, finance and related employment is showing little growth, no doubt due to tightening credit conditions. Nevertheless, strong employment growth in transportation and warehousing, commercial and personal services, and public administration is expected to propel service sector employment upward by more than 38,000 jobs this year.
BC’s robust economy contributed to a 31 per cent increase in net inter-provincial migration last year. The population was bolstered by an additional 13,385 individuals who migrated from other provinces in 2007. While economic growth is expected to slow in 2008, BC will remain one of the strongest economies and continue to attract Canadians searching for employment and lifestyle opportunities. Net inter-provincial migration is forecast to rise a further 5 per cent to 14,100 this year before dipping 2 per cent to 13,800 in 2009.
International migration is continuing on an upward trend. Total net international migration is forecast to reach 41,000 individuals this year, an increase of 3 per cent. International migration is not as susceptible to the ebbs and flows of the business cycle and appears limited only by federal government policy. Efforts to address the sizable backlog of international applicants is expected to increase the number of immigrants to the province over the next five years. Skilled workers are the largest segment of BC immigrants.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
Despite some weakness in BC exports, the economy is forecast to grow by 2.5 per cent this year and 2.7 per cent in 2009. Construction is underway on $57 billion worth of capital projects and a further $75 billion in capital projects are proposed. Retail sales are expected to remain brisk, growing a further 6.5 per cent this year and 6.7 per cent in 2009.
Besides the bright lights of capital projects and retail sales, labour market conditions are favorable to BC households and housing demand. The unemployment rate in BC fell from 4.8 per cent in 2006 to 4.2 per cent last year. In the last five years, the unemployment rate has decreased by more than 50 per cent. Strong labour demand is expected to continue this year, with employment increasing by 2.5 per cent in 2008 and 2.6 per cent in 2009. Robust employment growth and low unemployment puts upward pressure on wages and salaries, a positive side effect for BC households. Both personal disposable income and workers wages are expected to be higher again this year.
Employment in wood manufacturing fell by 8,400 jobs during the first quarter, with total manufacturing employment down by 18,200 jobs. However, a gain of 25,400 construction jobs during the same period more than offsets the job losses in manufacturing, and illustrates that the goods sector in the province remains on a solid footing. In the service sector, finance and related employment is showing little growth, no doubt due to tightening credit conditions. Nevertheless, strong employment growth in transportation and warehousing, commercial and personal services, and public administration is expected to propel service sector employment upward by more than 38,000 jobs this year.
BC’s robust economy contributed to a 31 per cent increase in net inter-provincial migration last year. The population was bolstered by an additional 13,385 individuals who migrated from other provinces in 2007. While economic growth is expected to slow in 2008, BC will remain one of the strongest economies and continue to attract Canadians searching for employment and lifestyle opportunities. Net inter-provincial migration is forecast to rise a further 5 per cent to 14,100 this year before dipping 2 per cent to 13,800 in 2009.
International migration is continuing on an upward trend. Total net international migration is forecast to reach 41,000 individuals this year, an increase of 3 per cent. International migration is not as susceptible to the ebbs and flows of the business cycle and appears limited only by federal government policy. Efforts to address the sizable backlog of international applicants is expected to increase the number of immigrants to the province over the next five years. Skilled workers are the largest segment of BC immigrants.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
Housing Market Moderating 2008
Residential unit sales on the Multiple Listing Service® (MLS®) in BC are forecast to dip 9 per cent to 93,800 units this year, and a further 2 per cent to 92,000 in 2009. The combination of eroding affordability and weaker economic growth are trending home sales away from historically high levels.
The housing recession in the US and belt tightening by US consumers is negatively impacting the forestry and tourism. As a result, economic growth in the province is forecast to decline from 3.1 per cent in 2007 to 2.5 per cent in 2008. However, BC economic growth is expected to exceed the national average by a wide margin, contributing to elevated inter-provincial migration and relatively robust employment growth.
A marked increase in the inventory of homes for sale is providing more choice for homebuyers and reducing the chances of multiple bids on the same property, providing less upward pressure on home prices. After climbing 12 per cent to $438,975 in 2007, the average MLS® residential price is forecast to increase 9 per cent to $479,000 this year, and a further 4 per cent to $499,000 in 2009.
Regional housing market differences will persist; however, the gap is expected to narrow. Average home prices in the Okanagan, Kootenays and Kamloops are forecast to climb a more modest 8-14 per cent this year as weaker demand from Albertans and investors is expected. In addition, a strong Canadian dollar and falling home prices south of the border are drawing the attention of some recreation homebuyers away from BC.
Most housing markets in the province will enter balanced conditions this year. After six years of a strong sellers’ market, it is welcome relief for many homebuyers. BC’s housing markets continue to be underpinned by robust employment growth, elevated net immigration and strong consumer spending. In addition, mortgage rates are stable, with some downward pressure expected before year end.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
The housing recession in the US and belt tightening by US consumers is negatively impacting the forestry and tourism. As a result, economic growth in the province is forecast to decline from 3.1 per cent in 2007 to 2.5 per cent in 2008. However, BC economic growth is expected to exceed the national average by a wide margin, contributing to elevated inter-provincial migration and relatively robust employment growth.
A marked increase in the inventory of homes for sale is providing more choice for homebuyers and reducing the chances of multiple bids on the same property, providing less upward pressure on home prices. After climbing 12 per cent to $438,975 in 2007, the average MLS® residential price is forecast to increase 9 per cent to $479,000 this year, and a further 4 per cent to $499,000 in 2009.
Regional housing market differences will persist; however, the gap is expected to narrow. Average home prices in the Okanagan, Kootenays and Kamloops are forecast to climb a more modest 8-14 per cent this year as weaker demand from Albertans and investors is expected. In addition, a strong Canadian dollar and falling home prices south of the border are drawing the attention of some recreation homebuyers away from BC.
Most housing markets in the province will enter balanced conditions this year. After six years of a strong sellers’ market, it is welcome relief for many homebuyers. BC’s housing markets continue to be underpinned by robust employment growth, elevated net immigration and strong consumer spending. In addition, mortgage rates are stable, with some downward pressure expected before year end.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
Tuesday, May 6, 2008
Housing Forcast KREB 2008
The Kootenay economy has posted a strong performance in recent years. Employment increased 11 per cent in 2007, and the unemployment rate is at its lowest in more than a decade. The labour force participation rate increased from 59 per cent in 1997 to 67 per cent last year. Robust employment growth is expected to continue in construction, agriculture and metals manufacturing, as well as accommodation and food services, retail and wholesale trade and high technology. Strong labour market conditions are underpinning local housing demand.
The Kootenay real estate market also benefits from homebuyers originating from outside the region, particularly Alberta. With Calgary’s economy falling from its lofty heights and its housing market firmly in buyers’ market conditions, reduced demand from Alberta buyers will impact Kootenay home sales in 2008 and 2009.
MLS® residential sales climbed 22 per cent to 3,476 units last year, the highest level ever recorded. The combination of eroding affordability and reduced demand from Alberta buyers will contribute to a decline in home sales this year. A total of 3,080 homes are forecast to trade hands in 2008, a decline of 11 per cent. This level of activity is expected to continue through 2009, though home sales will edge down 2 per cent to 3,020 units.
Kootenay home prices posted the largest year-over-year gains in the province in 2007. The average price of a home climbed 30 per cent to $272,138. Home prices are forecast to rise a further 13 per cent to $308,000 this year and 6 per cent to $327,000 in 2009. The Kootenays have not experienced a sizable increase in active listings like other BC markets; however, reduced demand is expected to sustain balanced market conditions this year.
Housing starts in the Cranbook CA are forecast to remain at nearly 195 units per year over the forecast horizon. Nearly 90 per cent of housing starts in the Cranbrook CA are single detached homes, though a marked increase in condominium development is expected over the medium term.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
The Kootenay real estate market also benefits from homebuyers originating from outside the region, particularly Alberta. With Calgary’s economy falling from its lofty heights and its housing market firmly in buyers’ market conditions, reduced demand from Alberta buyers will impact Kootenay home sales in 2008 and 2009.
MLS® residential sales climbed 22 per cent to 3,476 units last year, the highest level ever recorded. The combination of eroding affordability and reduced demand from Alberta buyers will contribute to a decline in home sales this year. A total of 3,080 homes are forecast to trade hands in 2008, a decline of 11 per cent. This level of activity is expected to continue through 2009, though home sales will edge down 2 per cent to 3,020 units.
Kootenay home prices posted the largest year-over-year gains in the province in 2007. The average price of a home climbed 30 per cent to $272,138. Home prices are forecast to rise a further 13 per cent to $308,000 this year and 6 per cent to $327,000 in 2009. The Kootenays have not experienced a sizable increase in active listings like other BC markets; however, reduced demand is expected to sustain balanced market conditions this year.
Housing starts in the Cranbook CA are forecast to remain at nearly 195 units per year over the forecast horizon. Nearly 90 per cent of housing starts in the Cranbrook CA are single detached homes, though a marked increase in condominium development is expected over the medium term.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
Wednesday, April 30, 2008
Canadian economy rattled
Weakness in manufacturing and wholesale trade undermined Canada's economy in February, leading to a 0.2 per cent contraction compared to a month earlier – a much poorer performance than economists' expectations of a 0.2 per cent expansion.
“Very little to cheer about in February,” said Stewart Hall, market strategist with HSBC Securities Canada Inc.
The February contraction means that over the past three months, Canadian economic activity declined 0.7 per cent at an annualized rate – the deepest three-month contraction since 1997 and the first such contraction since November 2001, when the U.S. was dealing with a recession, notes Michael Gregory, economist at BMO Nesbitt Burns.
“Canada's sturdy domestic demand is being nearly offset by the headwinds coming from U.S. recession, a strong loonie and credit conditions,” Mr. Gregory said.
Statistics Canada said wholesale trade and manufacturing were mainly responsible for the decline, but declines were also noted in retail trade, oil and gas extraction, transportation and the financial sector.
The weak February real gross domestic product comes after a 0.6 surge in January, and a 0.7 decline in December.
Tourism, government and construction activity all rose in February, but not enough to offset the declines in the other six sectors of the economy, Statscan said.
Economists immediately began scaling back their expectations for annualized growth in the first quarter of 2008. The Bank of Canada said last week it expects a 1 per cent expansion, at annualized rates, in the first quarter, but after seeing the February GDP details, economists said first quarter growth would barely be on the positive side of zero.
“Right now, assuming GDP comes in flat in March, first quarter GDP is on track for a mere 0.2 per cent annualized gain, which is well below the Bank of Canada's forecast,” Jacqui Douglas, economics strategist at TD Securities, wrote in a note to clients.
Wholesale activity, especially in motor vehicles and building supplies, dropped 1.4 per cent in February, reversing a big climb in January, Statscan said.
Manufacturing activity fell 0.7 per cent on the month. Even though production of motor vehicles registered a healthy advance, February saw big drops in output of wood products, and petroleum and coal products.
The energy sector dropped 0.9 per cent, dragged down by a 0.7 per cent contraction in oil and gas extraction.
And retail trade activity dropped 0.6 per cent because of sparse activity at pharmacies, clothing stores and car dealerships, Statscan said.
In a sign that the global credit crunch is taking a toll in Canada, activity in the finance and insurance sector slid 0.2 per cent as the volume of trades on stock exchanges fell.
Overall, goods production dropped 0.4 per cent in February, the fourth month in the last six to register a contraction. Output of services dropped 0.1 per cent in February, the second time in six months for a small decline.
Compared to a year ago, economic activity in February advanced 1.5 per cent, with a 2.0 per cent contraction in goods output offset by a 3.2 per cent advance in services.
HEATHER SCOFFIELD , Globe and Mail Update
“Very little to cheer about in February,” said Stewart Hall, market strategist with HSBC Securities Canada Inc.
The February contraction means that over the past three months, Canadian economic activity declined 0.7 per cent at an annualized rate – the deepest three-month contraction since 1997 and the first such contraction since November 2001, when the U.S. was dealing with a recession, notes Michael Gregory, economist at BMO Nesbitt Burns.
“Canada's sturdy domestic demand is being nearly offset by the headwinds coming from U.S. recession, a strong loonie and credit conditions,” Mr. Gregory said.
Statistics Canada said wholesale trade and manufacturing were mainly responsible for the decline, but declines were also noted in retail trade, oil and gas extraction, transportation and the financial sector.
The weak February real gross domestic product comes after a 0.6 surge in January, and a 0.7 decline in December.
Tourism, government and construction activity all rose in February, but not enough to offset the declines in the other six sectors of the economy, Statscan said.
Economists immediately began scaling back their expectations for annualized growth in the first quarter of 2008. The Bank of Canada said last week it expects a 1 per cent expansion, at annualized rates, in the first quarter, but after seeing the February GDP details, economists said first quarter growth would barely be on the positive side of zero.
“Right now, assuming GDP comes in flat in March, first quarter GDP is on track for a mere 0.2 per cent annualized gain, which is well below the Bank of Canada's forecast,” Jacqui Douglas, economics strategist at TD Securities, wrote in a note to clients.
Wholesale activity, especially in motor vehicles and building supplies, dropped 1.4 per cent in February, reversing a big climb in January, Statscan said.
Manufacturing activity fell 0.7 per cent on the month. Even though production of motor vehicles registered a healthy advance, February saw big drops in output of wood products, and petroleum and coal products.
The energy sector dropped 0.9 per cent, dragged down by a 0.7 per cent contraction in oil and gas extraction.
And retail trade activity dropped 0.6 per cent because of sparse activity at pharmacies, clothing stores and car dealerships, Statscan said.
In a sign that the global credit crunch is taking a toll in Canada, activity in the finance and insurance sector slid 0.2 per cent as the volume of trades on stock exchanges fell.
Overall, goods production dropped 0.4 per cent in February, the fourth month in the last six to register a contraction. Output of services dropped 0.1 per cent in February, the second time in six months for a small decline.
Compared to a year ago, economic activity in February advanced 1.5 per cent, with a 2.0 per cent contraction in goods output offset by a 3.2 per cent advance in services.
HEATHER SCOFFIELD , Globe and Mail Update
Tuesday, April 29, 2008
Make Green Homes Attainable
A simple incentive to purchase new green homes would improve attainability for homebuyers, lay the foundation for incentives to renovate existing homes and help the government meet its greenhouse gas (GHG) emissions reduction targets faster.
According to the Canadian Home Builders’ Association of BC (CHBABC), new homes that meet a green standard cost approximately 4 to 6 per cent more than conventional homes and account for less than 1 per cent of the overall housing stock in BC. The cost to renovate the remaining stock of homes to a green standard can vary widely.
Cash-strapped homebuyers may be more likely to buy new green homes and existing homes that meet a green standard if an up-front financial incentive was provided.
Pilot Project
This could be achieved by investing a small portion of the Property Transfer Tax (PTT) revenue (which exceeded $1 billion in 2007-08) into a pilot project that reduces transfer tax costs as a consumer incentive to buy new homes that meet or exceed Built Green™ standards.
Built Green™ is a national standard that qualifies new homes on criteria of energy efficiency, indoor air quality, resource use management and overall environmental impact. Each Built Green™ BC Gold home has the potential to eliminate 2.5 tonnes of GHG emissions annually over the life of the building, reports CHBABC.
In 2007, 771 Built Green™ BC homes were completed across BC, representing about 5 per cent of all new housing starts. In 2008, about 1,500 Built Green™ BC Gold level homes will be introduced, representing about 3 per cent of forecasted starts and resulting in reduction of GHG emissions equivalent to taking 165 cars off the road.
The project would be a cost-effective investment by the government to encourage homeowners to reduce their ecological footprint and deliver valuable data to assist further reduction of GHG emissions from existing homes and commercial properties.
Benefits
Quality of Life will improve in several ways if this project proceeds. Reducing the cost to purchase a new, green home will help make those homes more attainable. That's a direct benefit to consumers and the environment, and also to the government in two ways.
First, it would provide choice to consumers and support the principle of revenue neutrality associated with the new carbon tax. Legislation will require the government to demonstrate how revenue raised from that tax is returned to businesses and individuals. In this instance, the revenue returned through the project would be directly linked to consumers, making greener housing choices that reduce GHG emissions.
Second, the project is an opportunity to make greater GHG emission reduction strides in the future by gathering data on the effectiveness of this particular incentive to inform future programs and incentives. This is critical, since approximately 11 per cent of BC’s
annual GHG emissions are attributed to the operation and maintenance of residential and commercial buildings, as reported by the Pembina Institute.
In budget 2008, the government emphasized measures to encourage greener choices by consumers and reduced GHG emissions. BCREA believes this project supports that theme perfectly, and will encourage the government to adopt it during its Government Liaison Days conference in April.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
According to the Canadian Home Builders’ Association of BC (CHBABC), new homes that meet a green standard cost approximately 4 to 6 per cent more than conventional homes and account for less than 1 per cent of the overall housing stock in BC. The cost to renovate the remaining stock of homes to a green standard can vary widely.
Cash-strapped homebuyers may be more likely to buy new green homes and existing homes that meet a green standard if an up-front financial incentive was provided.
Pilot Project
This could be achieved by investing a small portion of the Property Transfer Tax (PTT) revenue (which exceeded $1 billion in 2007-08) into a pilot project that reduces transfer tax costs as a consumer incentive to buy new homes that meet or exceed Built Green™ standards.
Built Green™ is a national standard that qualifies new homes on criteria of energy efficiency, indoor air quality, resource use management and overall environmental impact. Each Built Green™ BC Gold home has the potential to eliminate 2.5 tonnes of GHG emissions annually over the life of the building, reports CHBABC.
In 2007, 771 Built Green™ BC homes were completed across BC, representing about 5 per cent of all new housing starts. In 2008, about 1,500 Built Green™ BC Gold level homes will be introduced, representing about 3 per cent of forecasted starts and resulting in reduction of GHG emissions equivalent to taking 165 cars off the road.
The project would be a cost-effective investment by the government to encourage homeowners to reduce their ecological footprint and deliver valuable data to assist further reduction of GHG emissions from existing homes and commercial properties.
Benefits
Quality of Life will improve in several ways if this project proceeds. Reducing the cost to purchase a new, green home will help make those homes more attainable. That's a direct benefit to consumers and the environment, and also to the government in two ways.
First, it would provide choice to consumers and support the principle of revenue neutrality associated with the new carbon tax. Legislation will require the government to demonstrate how revenue raised from that tax is returned to businesses and individuals. In this instance, the revenue returned through the project would be directly linked to consumers, making greener housing choices that reduce GHG emissions.
Second, the project is an opportunity to make greater GHG emission reduction strides in the future by gathering data on the effectiveness of this particular incentive to inform future programs and incentives. This is critical, since approximately 11 per cent of BC’s
annual GHG emissions are attributed to the operation and maintenance of residential and commercial buildings, as reported by the Pembina Institute.
In budget 2008, the government emphasized measures to encourage greener choices by consumers and reduced GHG emissions. BCREA believes this project supports that theme perfectly, and will encourage the government to adopt it during its Government Liaison Days conference in April.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
Thursday, April 24, 2008
Park Given Green Light
The issue of the former gravel pit in Fairview rocked city council Monday night as politicians shoveled aside public opinion and approved the sale of a portion of the land to pay for the remainder of the park.
There was palpable tension in the room as city staff prepared to give a presentation on Davies Street Park.
It had been building during the four-and-a-half hour committee of the whole meeting, breaking into a flurry of confrontation even before nine people who showed up for the public meeting had settled into their chairs after a brief recess.
“Can I ask a question?” Councilor Gord McAdams directed towards city manager Kevin Cormack. “Is this the same proposal that we got before?”
Cormack said it was. It was the resolution of council to bring the option for the park back in the form of a public meeting he said.
“It wasn’t advertised as a new option,” Cormack pointed out.
Councilor Marg Stacey chimed in, expressing her displeasure with the time frame between the public meeting and the subsequent council vote right after.
“Actually I was hoping to give the public more of a chance to have some input on this,” she said.
The confusion for McAdams was he thought city staff would be bringing back a full report on the pros and cons of each of the six recommendations for the park.
Cormack said there would be a staff report on how the recommendation would work after council voted.
The presentation was to give the public a chance to hear about the details of the option, proposed by city staff, said Cormack.
City staff had presented city council with a presentation March 3 on what they had heard from 55 written comment sheets obtained from two separate public meetings, and then incorporated in some new elements to pull it all together.
The idea was to expand the area of the park to both sides of Anderson Creek, Cormack had told council previously, and then connect to the BNR trail.
“If council doesn’t feel the report we put together was sufficient they can vote it down,” said Cormack.
“But we heard this report already,” McAdams replied, “I’m just wondering about the sequence of events. None of us knew about this [item] until late.”
Mayor John Dooley stepped in at this point.
“Is this a wrong thing to do tonight?” he asked. “I’m quite happy to not have a presentation and schedule another public meeting. I personally didn’t think this was a bad thing.”
He pointed to the handling of the skateboard park at last city council meeting, which was placed on the agenda just prior to the start of the meeting by McAdams, as equally “blindsiding” as Davies Street park was.
The chair of the committee of the whole meeting, Councilor Deb Kozak, asked council if they wanted to defer the matter to a public meeting instead of continuing Monday night.
The idea agreed with McAdams.
“I don’t know how we can give out comment sheets and then make a decision a half hour later.” He said.
The comment incensed Dooley, and he questioned the strength of character of those who waited almost three hours to ask for deferment of the public meeting.
“Anybody who doesn’t think we should have had this presentation here tonight should have said at 5 pm and questioned why we don’t go to a public meeting,” he said.
“But to have these people [in the audience] sit here for two-and-a-half hours and then say we should go to another public presentation, it’s not fair.”
And so the presentation went ahead.
The new park could become the third largest in the city at 4.8 hectares, up from 2.8 hectares that was presented at the two public meetings. That would put it 1 hectare behind Rosemont Park and 4.8 hectare of Lakeside Park.
However, the city staff proposal also included selling off the front lots on the park land and have a smaller playing field at .71 hectares, down from 1.12 hectares. That area was eight per cent of the larger park size, or 33 per cent of the flat area.
Other options for funding the park include selling other city property (like right of ways), access funds from reserves (water license, capital projects, land sale) or increase taxation.
If the city opted to increase taxes and borrow the money to pay for the park, over 10 years that would result in a one percent increase in taxes, said Cormack.
The city currently has $53,000 available to develop the park and complete Ninth Street to city standards, the cost to develop Ninth Street is $154,000.
The net proceeds from the sale of the lots, minus the cost to develop the street, would be between $495,000 and $660,000 said Cormack. Any net profit would be split evenly between the province and the city, which could be up to $80,000.
A grant of $45,000 has been secured by the city from BC Transit to be used for creating the pathway from BNR trail along the slope following Anderson Creek. The city is applying for another $45,000 grant for that aspect of the plan.
Council voted later in a special meeting with councilors McAdams, Kozak and Robin Cherbo against the motion, to go with city staff’s option to sell part of the park to help pay for it.
Timothy Schafer Nelson Daily News Staff April 23, 2008
There was palpable tension in the room as city staff prepared to give a presentation on Davies Street Park.
It had been building during the four-and-a-half hour committee of the whole meeting, breaking into a flurry of confrontation even before nine people who showed up for the public meeting had settled into their chairs after a brief recess.
“Can I ask a question?” Councilor Gord McAdams directed towards city manager Kevin Cormack. “Is this the same proposal that we got before?”
Cormack said it was. It was the resolution of council to bring the option for the park back in the form of a public meeting he said.
“It wasn’t advertised as a new option,” Cormack pointed out.
Councilor Marg Stacey chimed in, expressing her displeasure with the time frame between the public meeting and the subsequent council vote right after.
“Actually I was hoping to give the public more of a chance to have some input on this,” she said.
The confusion for McAdams was he thought city staff would be bringing back a full report on the pros and cons of each of the six recommendations for the park.
Cormack said there would be a staff report on how the recommendation would work after council voted.
The presentation was to give the public a chance to hear about the details of the option, proposed by city staff, said Cormack.
City staff had presented city council with a presentation March 3 on what they had heard from 55 written comment sheets obtained from two separate public meetings, and then incorporated in some new elements to pull it all together.
The idea was to expand the area of the park to both sides of Anderson Creek, Cormack had told council previously, and then connect to the BNR trail.
“If council doesn’t feel the report we put together was sufficient they can vote it down,” said Cormack.
“But we heard this report already,” McAdams replied, “I’m just wondering about the sequence of events. None of us knew about this [item] until late.”
Mayor John Dooley stepped in at this point.
“Is this a wrong thing to do tonight?” he asked. “I’m quite happy to not have a presentation and schedule another public meeting. I personally didn’t think this was a bad thing.”
He pointed to the handling of the skateboard park at last city council meeting, which was placed on the agenda just prior to the start of the meeting by McAdams, as equally “blindsiding” as Davies Street park was.
The chair of the committee of the whole meeting, Councilor Deb Kozak, asked council if they wanted to defer the matter to a public meeting instead of continuing Monday night.
The idea agreed with McAdams.
“I don’t know how we can give out comment sheets and then make a decision a half hour later.” He said.
The comment incensed Dooley, and he questioned the strength of character of those who waited almost three hours to ask for deferment of the public meeting.
“Anybody who doesn’t think we should have had this presentation here tonight should have said at 5 pm and questioned why we don’t go to a public meeting,” he said.
“But to have these people [in the audience] sit here for two-and-a-half hours and then say we should go to another public presentation, it’s not fair.”
And so the presentation went ahead.
The new park could become the third largest in the city at 4.8 hectares, up from 2.8 hectares that was presented at the two public meetings. That would put it 1 hectare behind Rosemont Park and 4.8 hectare of Lakeside Park.
However, the city staff proposal also included selling off the front lots on the park land and have a smaller playing field at .71 hectares, down from 1.12 hectares. That area was eight per cent of the larger park size, or 33 per cent of the flat area.
Other options for funding the park include selling other city property (like right of ways), access funds from reserves (water license, capital projects, land sale) or increase taxation.
If the city opted to increase taxes and borrow the money to pay for the park, over 10 years that would result in a one percent increase in taxes, said Cormack.
The city currently has $53,000 available to develop the park and complete Ninth Street to city standards, the cost to develop Ninth Street is $154,000.
The net proceeds from the sale of the lots, minus the cost to develop the street, would be between $495,000 and $660,000 said Cormack. Any net profit would be split evenly between the province and the city, which could be up to $80,000.
A grant of $45,000 has been secured by the city from BC Transit to be used for creating the pathway from BNR trail along the slope following Anderson Creek. The city is applying for another $45,000 grant for that aspect of the plan.
Council voted later in a special meeting with councilors McAdams, Kozak and Robin Cherbo against the motion, to go with city staff’s option to sell part of the park to help pay for it.
Timothy Schafer Nelson Daily News Staff April 23, 2008
Wednesday, April 23, 2008
Rising housing values and lack of inventory challenge first-time buyers, says RE/MAX
While higher housing values and tight inventory levels have hampered home-buying activity so far this year, longer amortization periods and alternative housing types have offset the impact on most major markets across the country, according to a report released today by RE/MAX.
Despite a higher degree of frustration in the marketplace than in previous years, the RE/MAX Affordability Report found that first-time buyers, in particular, remain steadfast in their determination to purchase a home. In fact, entry-level purchasers are adjusting their expectations by sacrificing size, location, and even long-term financial freedom, to overcome challenges such as rising prices and serious supply issues. Innovative financing has become key to home ownership in today’s environment – with longer amortization periods gaining favour in 62 per cent of the major centres surveyed. Low or no down payments were popular with first-time buyers in 38 per cent of markets.
“First-time purchasers continue to play a pivotal role at both a local and national level,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “The impact they have on the housing market is significant, as they are the impetus for sales in the mid-to-upper price ranges. As long as this segment of the market remains healthy, the real estate outlook will continue to be favourable.”
Inventory levels, however, remain one of the foremost concerns facing purchasers across the country. A shortage of available entry-level product was identified as a major obstacle impeding buyer intentions in three-quarters of markets surveyed in the report, including St. John’s, Moncton, Fredericton, Halifax-Dartmouth, Ottawa, Greater Toronto Area, Hamilton-Burlington, Niagara Falls, Winnipeg, Regina, Saskatoon, Greater Vancouver, Victoria and Kelowna.
“Doom and gloom reports coming from south of the border have yet to hinder overall momentum,” says Michael Polzler, Executive Vice President and Regional Director, RE/MAX Ontario-Atlantic Canada. “First-time buyers are still leading the charge, taking advantage of every resource available to achieve home ownership. They’re determined to get into the market sooner rather than later. If suburban locations, smaller condominiums and town homes, or a little sweat equity is what it takes to get into the market, these purchasers are game.”
Although average price is the barometer for housing values in most major centres, first-time buyers looking to achieve home ownership consider starting prices a more meaningful gauge of affordability. Starting prices can be substantially lower than the market average. For example, average price has surpassed the $600,000 benchmark in Greater Vancouver, while the starting price for a detached home can hover as low as $237,500 in the peripheral areas.
The best value for the dollar continues to be found in the suburbs. For those unwilling to sacrifice on location, small condominium units in new developments and condominium conversions of rental buildings offer up the next best alternative. Condominium conversions in some of the country’s major centres can be picked up as low as $150,000 to $175,000.
RE/MAX Western Canada April 22, 2008
Despite a higher degree of frustration in the marketplace than in previous years, the RE/MAX Affordability Report found that first-time buyers, in particular, remain steadfast in their determination to purchase a home. In fact, entry-level purchasers are adjusting their expectations by sacrificing size, location, and even long-term financial freedom, to overcome challenges such as rising prices and serious supply issues. Innovative financing has become key to home ownership in today’s environment – with longer amortization periods gaining favour in 62 per cent of the major centres surveyed. Low or no down payments were popular with first-time buyers in 38 per cent of markets.
“First-time purchasers continue to play a pivotal role at both a local and national level,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “The impact they have on the housing market is significant, as they are the impetus for sales in the mid-to-upper price ranges. As long as this segment of the market remains healthy, the real estate outlook will continue to be favourable.”
Inventory levels, however, remain one of the foremost concerns facing purchasers across the country. A shortage of available entry-level product was identified as a major obstacle impeding buyer intentions in three-quarters of markets surveyed in the report, including St. John’s, Moncton, Fredericton, Halifax-Dartmouth, Ottawa, Greater Toronto Area, Hamilton-Burlington, Niagara Falls, Winnipeg, Regina, Saskatoon, Greater Vancouver, Victoria and Kelowna.
“Doom and gloom reports coming from south of the border have yet to hinder overall momentum,” says Michael Polzler, Executive Vice President and Regional Director, RE/MAX Ontario-Atlantic Canada. “First-time buyers are still leading the charge, taking advantage of every resource available to achieve home ownership. They’re determined to get into the market sooner rather than later. If suburban locations, smaller condominiums and town homes, or a little sweat equity is what it takes to get into the market, these purchasers are game.”
Although average price is the barometer for housing values in most major centres, first-time buyers looking to achieve home ownership consider starting prices a more meaningful gauge of affordability. Starting prices can be substantially lower than the market average. For example, average price has surpassed the $600,000 benchmark in Greater Vancouver, while the starting price for a detached home can hover as low as $237,500 in the peripheral areas.
The best value for the dollar continues to be found in the suburbs. For those unwilling to sacrifice on location, small condominium units in new developments and condominium conversions of rental buildings offer up the next best alternative. Condominium conversions in some of the country’s major centres can be picked up as low as $150,000 to $175,000.
RE/MAX Western Canada April 22, 2008
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