Albertans confident about economy heading into 2013

Personal financial picture expected to improve

By Mario Toneguzzi, Calgary Herald November 27, 2012

 

Albertans see a rosy economic picture for 2013.

Photograph by: Ted Rhodes , Calgary Herald

CALGARY — Albertans are the most likely people in Canada to expect their personal financial situation will improve as well as believing the Canadian economy will get better in 2013, according to the quarterly RBC Canadian Consumer Outlook released today.
The survey also said Albertans are the least likely to be anxious about potential job loss.
Heading into 2013, more (43 per cent) Alberta consumers feel their personal financial situation will improve than they did at this same time last year (39 per cent).
Throughout Canada, 37 per cent feel their personal financial situation will improve, up from 32 per cent last year.
The report said 42 per cent of Albertans expect the Canadian economy will improve, up from 37 per cent last year while only 29 per cent of Canadians felt the same way, up slightly from 26 per cent a year ago.
Only 15 per cent of people in Alberta said they were anxious about a potential job loss, down from 19 per cent last year. Nationally, 22 per cent of Canadians, the same as last year, felt that way.
And the survey showed that 22 per cent of Albertans, the same as last year, expect their local economy to improve. Nationally, 16 per cent of Canadians were positive in this response, up from 12 per cent last year.
RBC said 29 per cent of Albertans plan to reduce their debt in 2013, 23 per cent plan to spend less, 25 per cent plan to save or invest more, and 29 per cent plan to take all those actions.
Nationally, 31 per cent of Canadians plan to reduce their debt in 2013, 26 per cent plan to spend less, 20 per cent plan to save or invest more and 25 per cent plan to take all those actions.
“Canadians may believe brighter days are ahead because they are making resolutions to better manage their finances by reducing debt and curbing spending not because of their outlook on the Canadian economy,” said Richard Goyder, vice-president of personal lending, RBC. “While New Year’s resolutions may start with great intentions and fizzle out later in the year, setting out a plan to reduce your debt, keep it under control and save more for that rainy day will help keep you on track.”
The most recent Economic and Fiscal Update issued by the federal government in November estimated that Canada’s real GDP will grow by 2.0 per cent in 2013. RBC Economics is currently forecasting the Canadian economy will grow by 2.4 per cent in 2013 and will be releasing its next Economic and Financial Outlook in December.
“The Canadian economy has been growing at a rate close to its long-run potential,” said Craig Wright, senior vice-president and chief economist, RBC. “However, we will have a sharper picture of Canada’s future growth prospects when the U.S. addresses the fiscal cliff and European policy-makers can move the eurozone out of recession and address fiscal and financial market imbalances.”
mtoneguzzi@calgaryherald.com
Twitter:@MTone123

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Alberta wholesale sales reach $6.5 billion

Up 7.4% from last year

By Mario Toneguzzi, Calgary Herald November 20, 2012

 

CALGARY — Year-over-year growth in wholesale sales was the highest in Alberta among all provinces in September, according to Statistics Canada.
The federal agency reported Tuesday that sales reached $6.5 billion during the month, up 7.4 per cent from September 2011.
Nationally, sales increased 2.2 per cent on an annual basis to $48.8 billion.
On a monthly basis, sales in Alberta fell 0.4 per cent while they fell 1.4 per cent nationally, the third decline in four months.
mtoneguzzi@calgaryherald.com
Twitter:@MTone123

© Copyright (c) The Calgary Herald

Calgary housing market tops in Canada for sales growth

Sales up nearly 27% in October from a year ago

By Mario Toneguzzi, Calgary Herald November 15, 2012

 

CALGARY — Calgary’s resale housing market had the highest annual rate of sales growth in the country in October, according to the Canadian Real Estate Association.
In releasing its monthly MLS data on Thursday, the association said sales in Calgary rose by 26.7 per cent to 2,104 transactions.
Nationally, sales dipped by 0.8 per cent to 35,971.
Robert Kavcic, economist with BMO Capital Markets, said “strong population and income growth are supporting demand” in Calgary.
“This has helped draw down the excess supply built up during the prior boom — the market is now close to full-scale sellers’ territory,” he said.
The average sale price in Calgary also outpaced the national average. Prices in the city rose by 5.0 per cent from a year ago to $418,721 while the price remained stable across the country at $361,516.
“Sales data in October held steady at the national level, but we are seeing some diverging trends among local housing markets,” said Wayne Moen, president of CREA. “Markets in Alberta and Saskatchewan are gaining strength, while some of Canada’s traditionally most active markets have lost steam.”
Gregory Klump, chief economist at CREA, said national sales in October were on par with the same month last year and in line with the 10-year average for the month.
“These results suggest that the Canadian housing market overall has returned to a more sustainable pace,” he said.
In Alberta, sales of 4,815 in October were up 17.5 per cent from last year while the average sale price rose by 3.5 per cent to $363,295.
CREA also reported Thursday that its MLS Home Price Index, which follows a benchmark price, increased by 3.6 per cent from last year across the country in seven major markets, the sixth consecutive month in which the price gain slowed and is the slowest rate of increase since May 2011.
Regina recorded the highest increase at 12.98 per cent followed by Calgary at 6.76 per cent.
According to the Calgary Real Estate Board, so far this month up until Wednesday, total MLS sales in the city of 619 have increased by 0.98 per cent compared with the same period a year ago and the average sale price has risen by 2.63 per cent to $430,594.
Sonya Gulati, senior economist with TD Economics, said housing market trends in Canada for 2012 can be characterized as before and after regulatory changes.
“In the first half of the year, sales and price gains were modest, but positive. More stringent mortgage rules and tighter mortgage underwriting rules have purposely knocked the wind out of the housing market sails,” she said.
“While regulation is having the intended impact on the housing market, it typically has only temporary staying power. The cool down we are currently experiencing should be lifted in early 2013. What happens thereafter is less certain. The low interest rate environment could pull homeowners back onto the market, causing home prices to once again trek upwards. Alternatively, an absence of pent-up demand may leave the market in a bit of a lull until interest rate hikes resume in late 2013. Under either scenario, it is safe to say that there is a low probability of out-sized home price gains over the near-term.”

mtoneguzzi@calgaryherald.com
Twitter:@MTone123

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Calgary and Edmonton displace Toronto and Vancouver as top real estate markets

Limited supply in Calgary pushes rents higher

By Mario Toneguzzi, Calgary Herald November 6, 2012

 

CALGARY — Calgary and Edmonton have displaced Toronto and Vancouver as the top-ranked cities for overall real estate prospects, according to the Emerging Trends in Real Estate 2013 report released Tuesday.
The report, by PwC and the Urban Land Institute, said the Canadian real estate market is expected to remain steady with “modestly good” investment and development prospects across most property sectors for 2013, reflecting expectations of solid supply and demand.
Calgary was the top-ranked city in the country followed by Edmonton, Toronto, Vancouver and Ottawa.
In this year’s survey, Calgary ranked first in both investment and development prospects and second in homebuilding prospects.
“Growth characterizes Calgary’s future; it displaces Toronto as the top ranked city for 2013,” said the report. “This has made it challenging to acquire high quality real estate in Calgary, absorption of prime properties has reached record levels, and rents are being pushed due to limited supply.
“This trend will continue in 2013, especially in office and industrial employment space. Construction will increase in the housing and non-residential arenas, but nowhere near pre-crisis levels.”
According to survey participants, Canada’s real estate market will follow along in a seeming state of near-perpetual equilibrium compared with other more volatile regions studied in the report, including most obviously the United States.
“The results of this year’s Emerging Trends report reflects the fact that the Canadian real estate community understands real estate fundamentals and knows how to react to fluctuations in monetary policy and capital markets. Canada’s real estate industry continues to operate well despite uncertainties in domestic and global economies,” said Lori-Ann Beausoleil, PwC Canada’s Real Estate Leader.
The report said Calgary’s expanding economy is requiring a larger and more highly-skilled workforce. Employment forecasts indicate growth of 2.8 per cent next year and 2.9 per cent in 2014.
“This growth, driven mostly by the oil and gas industry, has made it challenging to acquire high-quality real estate in this market,” said the report.
“Absorption of prime properties has reached record levels and rents are continuing to be pushed due to limited supply.”
The report said potential approvals of controversial pipeline projects to the United States and into British Columbia would boost real estate construction projects further in Calgary.
The strength of Calgary’s real estate market is evident in both the residential and non-residential sectors.
According to the Calgary Real Estate Board, year-to-date as of Monday, total MLS sales in the city of 18,905 are up 15.56 per cent from the same period last year.
Canada Mortgage and Housing Corp. is forecasting total housing starts in the Calgary census metropolitan area to finish at 12,400 units this year, an increase of more than 33 per cent from 2011 and the highest level since 2007.
RealNet Canada recently said Calgary has experienced the second best ever year for commercial real estate transactions for the first nine months of the year with $3.394 billion in sales so far this year.

And a recent report by Jones Lang LaSalle suggested a downtown office development boom in Calgary could be on the horizon.
mtoneguzzi@calgaryherald.com
Twitter:@MTone123

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