| Real Estate in the News
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--- City council sets an annual budget to cover the services Edmontonians want, such as police, snow removal and road maintenance. Revenue from residential property taxes are used to pay 15 per cent of the city's budget, a number which may come as a surprise to many. Your property tax is a share of that 15 per cent. The city also establishes a tax rate (also known as the mill rate) to fairly distribute the tax levy among all properties. This rate reflects the amount of taxes to be paid for every $1,000 of assessment and is set by city council in April or May. --- Edmonton renters will again pay double-digit increases this year, says the 2008 first-quarter multi-family report by real estate company Cushman & Wakefield. It will be the 13th year in a row that rents have gone up. But the good news is that the projected average hike of 14.6 per cent won't sting quite as badly as last year when the average rent jumped 18.2 per cent, the report said. "As rents increase, there's always the balance between what rent payment is and a mortgage payment is and there's a lot of existing condominiums from the conversion market last year that are priced within (that) range." The report cites competition by tenants for rental units and increased operating costs for rising rents. The report predicts the vacancy rate will remain relatively unchanged in 2008. --- Consumers are starting to see savings on loans after bold moves by the Bank of Canada to stimulate a flagging economy. Loan charges that vary with changes in the prime lending rate, such as mortgages and personal lines of credit with variable rates, have started to fall. They are down about 1.5 percentage points from last summer, and some economists expect further large cuts in light of the central bank's pessimistic remarks when it cut its bellwether overnight lending rate half of a percentage point to 3 per cent Tuesday. Economists at TD Bank Financial Group are predicting the steepest cuts: half a percentage point in June and another half in July, with no increases until late next year. Richard Kelly, a senior economist with TD, said he expects the central bank would then hold rates steady for a year or more. --- So life is all petunias and paycheques until the day comes when a sign is pounded into the sacred soil of your idyllic home neighbourhood. The sign warns of a developer's plans to build an affordable housing complex -- duplexes, row houses or highrises -- within a stone's throw of your dream home. The lack of proactive planning isn't just unfair to communities, says Henderson. Developers, too, get caught in a process that becomes adversarial and puts them at risk of losing the investment they've made in land and consultants. In this economy, development proposals come fast and furious. And Edmonton needs housing, especially of the affordable kind, sooner rather than later. --- The number of homes worth at least $1 million for sale in Edmonton is higher than ever, says a spokesperson for the Edmonton Real Estate Board. Last year, 82 homes in the Edmonton area sold for a minimum of $1 million. So far this year, 19 homes have sold in that price range, says Hall. It's quite likely Edmonton will sell as many high-end houses this year as last, he says. “The average days on market for a million-dollar house last year was 45 days. It's currently 51, 52 (for other types)." --- Secondary suites are now allowed in Strathcona County. There are many positives to having these suites. There will be an affordable housing option for young people who want to continue to live in the community and these suites will give homeowners some much-needed supplementary income. So many people who have grown up in Sherwood Park have been priced out of the community and forced to live in either Edmonton or other surrounding areas. These secondary suites will allow at least some of those residents to stick around and live in the area they grew up in. Then there are the people who are house poor -- living on the edge of poverty because their salaries go to massive mortgage payments. This bylaw change should help people in that situation considerably. --- Construction starts of single-family homes dropped by more than 61 per cent from the same month a year ago, while multi-family housing activity suffered a decrease in excess of 57 per cent, says Canada Mortgage and Housing Corp. For the ninth month in a row, the Edmonton region's single-detached housing builders registered another year-over-year decline in construction starts, says Richard Goatcher, CMHC's senior market analyst for Edmonton. During March, work started on 205 homes compared to 531 a year ago -- a decline of 61.4 per cent. That puts year-to-date activity at 657 starts compared to 1,718 in 2007 -- the lowest level of activity since January to March 1996. --- 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 this week by ReMax. Despite a higher degree of frustration in the marketplace than in previous years, the ReMax 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, the report says. 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. --- Roy Almog first opted for a private commission-free company, figuring it would be a cinch to unload the two-year-old 1,330-square-foot abode - complete with a finished basement - in Edmonton's then-overheated housing market. "We didn't get much traction," Almog recalled. So they switched to a realtor. And after two weeks and a "ton of showings," they closed the deal, Almog said. --- Michael Polzler isn’t losing sleep over the Canadian real estate market yet. Sure, crashing housing prices in the United States have the executive vice-president and regional director of Re/Max Ontario–Atlantic Canada worried. But Canada is still pretty safe. Unemployment is near its lowest levels ever, the dollar is near par with the greenback, and our resource-rich economy is doing well by most measures. What would cause him sleepless nights? Polzler thinks a while before answering. “If we started to see an abundance of properties coming onto market and the length of time they were on the market really started to increase,” he says. “That has not happened. Yes, we can see it softening, but you have to remember we’ve been running at 100 miles per hour.” A slowdown might even be a good thing, especially for anyone who is looking for a first home, who needs to find housing quickly — or who’s looking to invest in property without getting sucked into a multi-bid price war. While Canadians are generally not big buyers for investment purposes, real estate has been one of the safest plays during the past 40 years or so — returning roughly 5% a year, for a real rate of return of just more than 2%. That’s not to suggest the threat of a housing downturn in Canada isn’t real, but it’s unlikely to reach the epic proportions it has in the States. --- Funding from the city's Cornerstones housing fund will help create 379 affordable housing units this year, Mayor Stephen Mandel announced today. Mandel held a press conference at City Hall with provincial Housing Minister Yvonne Fritz to celebrate the achievements of the housing initiative. The province last year promised $45 million a year over three years to help Edmonton create affordable housing. That money is being combined with city money - $25 million over five years - to create the Cornerstones fund. There was $33.8 million of provincial and city money given to fund projects in the past fiscal year. --- A third of St. Albert homeowners will see double-digit tax hikes this year, thanks in part to skyrocketing housing prices. The largest increases will be felt among owners of the city's most affordable homes. City hall announced on Friday it plans to mail letters to 4,500 homeowners hardest hit by tax increases. Condominiums, duplexes, townhouses and older homes will see the largest increases, some exceeding 15 per cent. Mayor Nolan Crouse said rising taxes are a concern and acknowledged the situation is making St. Albert unaffordable for some residents. Corporate services general manager Dean Screpnek attributed the large tax increases to skyrocketing real estate prices in the last year. The average single-family home ballooned to $462,000 in July 2007, up from $290,000 the year before. --- Canada's mortgage market set another record year for growth in 2007, with total outstanding residential mortgage debt soaring by a staggering $94 billion from the previous year, according to a housing report by AltusClayton. The report said that in percentage terms the growth rate is not as high as the peaks in the late 1980s, "but market-wide growth of 13 per cent a year in an 'established industry' (and low inflation environment) is still very impressive." Total outstanding mortgage debt at the end of year in 2007 was $821.4 billion. And mortgage debt in Alberta last year increased by more than the national average. --- “Condominium buyers are out there, but they're not in a hurry to buy," says Marlene Swinton, realtor with Re/Max Realty Professionals. "They're taking their time and really looking. There's so much choice out there today, that they are slow to make decisions." In a nutshell, she says, people are waiting to see just what might unfold in a bizarre year where listings have skyrocketed and sales are slower than anticipated. "People are feeling very cautious because of what they're hearing, so they're holding on and sitting on the fence,"says Swinton. Overall, she remains positive. "There is real activity out there, and people are still looking. They will buy." Louie, too, says the fundamentals of the economy are positives that will bring about a shift. --- Whether we're talking new plumbing fixtures, new flooring or new kitchen cabinets, a suitable renovation can improve your home, as well as increase its value. Updating a kitchen or bathroom may require a trained professional, but there are many projects accessible to the do-it-yourselfer, according to the Royal LePage Renovations and Returns survey. According to Statistics Canada, renovation spending grew by 8.3 per cent in the fourth quarter of 2007 to $9.2 billion, from the same period in 2006. --- Barry McCarthy got great service, as well as a rebate cheque of almost $7,000, he says. In the wake of soaring real estate prices, which have led to huge paydays for many top realtors, consumers like McCarthy are questioning if they get value for money. Some are turning to discount real estate brokers, which offer services for a flat fee or reduced commissions. The broker offers two other types of commission plans. A 1-percent commission, which includes a listing on the MLS website and full service such as open houses, newspaper advertising and colour feature sheets. Since this plan doesn't offer any commission for the buyers' agent, there is an alternative plan that costs sellers 3.5 per cent of the selling price. Home @ Ease takes 1 percent and other 2.5 per cent goes to the buyer's agent. --- It's not unusual for homebuyers to be shocked by the amount of debt lenders will let them take on, but the U.S. sub-prime mortgage crisis is making banks on both sides of the border a little more cautious. With the Ontario economy slowing and financial market fallout continuing over the meltdown that has pushed mortgage rates higher in Canada, banks are making sure people know what they are getting into. "We are being more cautious," says Joan Dal Bianco, a mortgage expert and vice-president of real estate secured lending at TD Canada Trust. "We have a discussion about how much you can really afford." She notes house hunters here don't face the same dangerous choices that got so many Americans in over their heads. --- A tone of economic uncertainty was set early at the Edmonton Real Estate Forum Tuesday when a fiscal analyst warned that the Alberta Advantage is becoming the British Columbia and Saskatchewan Advantage. All three western provinces are prospering, but the neighbours are catching up fast to Alberta, said Niels Veldhuis, director of fiscal studies at the Fraser Institute and a forum speaker at the Shaw Conference Centre. To keep its advantage, Alberta should better control its rising government spending, reduce corporate and personal income taxes and invest more in infrastructure, Veldhuis said. "When you have provinces that are trying to take your investment, you can't do things like increase your royalty rates." Downtown rents have risen to between $10 to $25 per square foot in the last two years, but most speakers agreed it was unlikely that rates would reach $50 -- except for isolated spot pricing -- in the next two years. --- Farmland values in Alberta saw their biggest average increase in at least a decade during the last half of 2007, propelled by strong demand for land to grow high-dollar-value grain and oilseeds crops. Industrial and urban pressures for more land -- especially along the corridor from Lethbridge to Grande Prairie -- as well as expansion projects by larger producers, also had a role in pushing Alberta's land values up an average of 10.3 per cent in the latter half of 2007, Farm Credit Canada (FCC) said Monday. Alberta's increase is second only to British Columbia's 14.5 per cent gain for the period -- due largely to a strong demand there for land suitable for grape production. --- Homebuyers are cautious because of what they're hearing globally," says Marlene Swinton of Re/Max Realty Professionals -- although as a big city, there's always some activity in the market. Nearly 6,000 single-family resale homes are currently in the For Sale inventory of the Calgary Real Estate Board listings. "Single-detached housing (construction) starts continue to be impacted by the high level of competition in the resale market and potential homebuyers taking more time to shop around," says Louie. That's the new reality for this year, says general manager Bill Bobyk of Sterling Homes, and builders are adjusting. "The market has been softer than we anticipated, but we're just a bit under what we budgeted for," he says. --- A new report lists a few renovation projects that could ensure top-dollar for your property when it's time to sell. Updating a kitchen or bathroom may require professionals, but there are many projects accessible to the do-it-yourselfer, according to the Royal LePage Renovations and Returns survey. According to Statistics Canada, renovation spending grew by 8.3% in the fourth quarter of 2007 to $9.2-billion, from the same period in 2006. --- Au, who moved into her new Minto home in Chapman Mills with her husband Kung and their two children in December, has plenty of tips for first-time buyers of new homes. Her first bit of advice: No matter what the sticker price says, add on another $20,000. That's how much the 38-year-old estimates the average person will need in cash -- or room on their mortgage, charge card or line of credit -- to pay for all the "hidden" costs associated with buying a new home. That's everything from those dreaded closing costs to floor and counter upgrades. Especially upgrades. "I had done my research, and I always expected to set aside $20,000," Au says, recalling the early days after the purchase agreement was signed. "But when you go to the builder's design centre, and you see everything looks so nice and you want this and you want that -- you just have to control yourself." --- Yes, affordability is a real issue. It takes 67 per cent of our income in Vancouver, for example, to buy the average priced property. Paying $800,000 for a condo downtown and renting it for $2,500 is not an investment; it's a gamble on a higher-priced sale in the future. Generally, if you need cash flow now, if you wish to be an investor, you are likely best off in suburbia or the smaller towns with good population bases, good employment and a strong base of renters are good bets. Now you are safe, whether prices rise or rents increase becomes irrelevant. It is a bonus. If you believe that the new container port in Prince Rupert will become a superport, then Prince George and Edmonton are worth another look. --- Don't expect real estate prices in the area to skyrocket like they have in recent years. Realtors say price stability is proving to be beneficial to buyers. According to statistics from the Edmonton Real Estate Board, 50 homes were sold in Fort Saskatchewan during the first quarter of 2008, 19 less than the same time last year but 14 more than two years ago. "It's probably leaning more towards a buyers market at this moment, just because of the high inventory," Harold Walters, a Fort Saskatchewan realtor said. He said the months of March, April and May are usually a busy time of year and that judging by March statistics he expects prices to remain fairly stable. A major increase in prices won't occur unless the inventory decreases significantly, he said. --- A report released Thursday by TD Bank Financial Group says housing starts in Alberta as well as the number of homes sold will retreat in the next two years as the country on the whole experiences a cooling trend in the residential real estate industry. "A soft landing is anticipated," said the report about the Canadian housing market. "This moderation will reflect the fact that the past rapid price appreciation has eroded affordability and has encouraged additional supply from new listings and new home construction. A weaker domestic economy will also contribute to the cooling." The report said total housing starts in Alberta will decline by 16 per cent this year compared with last year and a further 7.7 per cent in 2009. --- Newspapers, magazines and television can sell stories about a red-hot real estate market. They can sell them about one that's collapsed. But they can't sell them when the market is in the middle. And to Kasprisin, what we're seeing now is not a residential real estate collapse, but the sight of the residential market returning to normal. All the panelists agreed that the real estate market we saw in 2004 and 2005 - when homes seemed to sell before they were even listed - is not coming back. That market, they agree, was an irrational one. What we need is a calmer market, one where houses do appreciate, but not by the double-digit yearly increases we saw during the real estate boom. The panelists also warned attendees that while we'll undoubtedly see a strong real estate market again - probably beginning sometime in 2009. --- Economists say Canada has become one of the safer places in the developed world to own residential real estate. “The dynamics of house prices in Canada are in line with what we would expect based on fundamentals of the economy,” said Roberto Cardarelli, senior economist at the IMF. Canada and Austria were the only two of 17 countries included in the study in which house prices appeared to be at a lower than where they should have been at the end of the period from 1997 to 2007. For each country in the study, house price growth was modeled as a function of the following: an affordability ratio, growth in disposable income per capita, short and long-term interest rates, credit growth, changes in equity prices and changes in the working age population. The study used data from 1997 to 2007. Canada is in better shape than many other countries and home prices here aren’t expected to drop this year, said Benjamin Tal, senior economist at CIBC World Markets Inc. --- Although it is new to the Edmonton real estate market scene, PropertyGuys.com has built up its reputation as the most complete private sale network in other parts of North America for 10 years now and has just been recognized as one of the Top 25 Most Successful Franchise Systems by Canadian Franchise Magazine. The Hurleys are one of over 100 PropertyGuys.com franchise operators, covering over 550 communities nationally from British Columbia to Newfoundland. Recognized as Canada's Largest Private Sale Franchise Network, buyers from coast to coast visit their website to check out listed properties. In fact, PropertyGuys.com boasts over 50 million hits each month. PropertyGuys.com online packages start at $349, with base packages starting at $699. --- Resale home prices are going to continue to soften in Calgary and across Alberta as the year progresses, providing some affordability relief, says a Royal Bank economist. In its most recent Housing Affordability survey, the bank found that prices from October to December in Calgary declined as much as $42,000 compared to the July to September period, something that is likely to continue. "There is a lot of volatility in the quarter-over-quarter price declines that we saw across all home segments in Alberta," says RBC economist Amy Goldbloom. Healthy income gains (running at five per cent from October to December compared to the same period in 2006), combined with a decline in house prices, led to overall affordability improvements for people trying to tap into the "overvalued" Alberta housing market, says RBC. --- Although Edmonton is the city claiming the MDP causes them detriment, several landowners and developers said that it is Edmonton causing the detriment. Bob Horton of Trans America developments said his company has lost $30 million worth of investments because of the appeal. REALTOR® Mike Golka, who spoke representing nine landowners in the growth node area, said he has also lost deals because of the delay. --- An annual study done by the City of Edmonton compared nine municipalities in the Capital Region, indicated that Stony Plain had the lowest average tax, while Spruce Grove had the second highest average tax, behind St. Albert. According to the numbers presented, Stony Plain's property taxes are $461 less than Spruce Grove. The average property and utility charges for a single detached house is $4,243 in Stony Plain and $5,350 in Spruce Grove. Stony Plain's mayor, Ken Lemke said "I would simply say that certainly based on this information Stony Plain is certainly a more affordable place to live in terms of taxes." --- Many first-time buyers don't wait for marriage before jumping into hot housing market. This investment-savvy generation of 20 and 30-somethings knows a hot market when they see one, and many have developed creative strategies to reach home ownership at a younger age, often without the benefit of a spouse's salary. Some buy their first home jointly with a friend or sibling. Others become small-scale landlords, renting out basements or extra bedrooms to tenants whose rents offset the mortgage. About one-quarter of Canadians aged 18 to 34 are homeowners, according to a recent survey by the Canadian Association of Accredited Mortgage Professionals (CAAMP). A Statistics Canada report found that almost one-quarter (22 per cent) of people aged 25 to 39 who owned a home in 2006 bought it by themselves, while 76 per cent became homeowners with a spouse or common-law partner. About two per cent bought a house with a parent, in-laws, other family member or friends. --- Canadian consumers, unlike Americans, not only keep spending and borrowing more, but are also meeting their debt payments. And for the most part, they are expected to continue doing so. And despite rising debt levels and the expected slowdown in Canada's economy, CIBC World Markets also anticipates only a moderate increases in bankruptcies, mortgage defaults or credit card delinquencies here, which is also in contrast to what's occurring in the U.S. This is due to the strength of Canada's job market, where unemployment is at a modern-day low of 5.8 per cent and employment at an all-time high, CIBC said. "So far, the credit crunch did not impact the Canadian household credit market in any significant way," CIBC World Markets said in its report. "Household credit in Canada is rising by an annual rate of well over 10 per cent, with both consumer and mortgage credit expanding at a similar rate." --- The city and provincial government shouldn't spend money on a new downtown arena until they do more to solve the affordable housing shortage, the head of a local social agency says. Although a report on the proposed $450-million project concluded that funding will have to come from all levels of government, Jim Gurnett of the Mennonite Centre for Newcomers says they first have to increase assistance for the homeless. "We better not hear that government's going to put money into an arena or there will be a lot of really upset people living in lousy, low-quality housing," he said. "Governments have (invested) far too little practical resources to solving the housing problems to be considering letting any money go to arenas at this point." --- Mayor Stephen Mandel's proposal for inner-city transitional housing may be jumping the gun because many affected agencies and businesses haven't been consulted yet, says the area's MLA. Hugh MacDonald, the MLA for Edmonton-Goldbar, said federal Tory MP Peter Goldring may have had a good point when he suggested Mandel's idea of transitional housing neighbouring the gentrification area known as The Quarters may simply overload the downtown core with poor people. "Those neighbourhoods are already doing their share to support hard-to-house people," said MacDonald. "Let's hear from the community league, from the citizens of Boyle-McCauley and the people operating businesses and paying taxes there." --- After two years of double-digit increases, Edmonton condo prices will moderate over the next five years, says a report released today by Genworth Financial Canada. That's good news for first-time buyers, said the company. Prices for condos are forecast to rise 6.4 per cent in 2008, after they went up 25.8 per cent in 2006 and 43.2 per cent last year, says Genworth's Winter 2008 Metropolitan Condominium Outlook. The average resale condo price in Edmonton last year was $235,881. This year, it will be $250,873, said the outlook. --- Edmonton Mayor Stephen Mandel has a few things on his mind. Mandel is first riding herd on a city feeling economic growing pains, with demands for affordable housing, expanded civic services and infrastructure. Then there's the political balancing act of trying to finesse the Edmonton region's integration into one big economic unit. Add to that his controversial plans for a new downtown arena and, well, you might excuse him for taking his eye off the ball. --- With the appointment of a chair for the regional board, long-range planning can start moving forward for the Capital Region. Christopher Sheard, President of Fairman Holt consulting, was named to the position by Alberta Premier Ed Stelmach on Wednesday. "This appointment furthers my commitment to bring regional planning to a new level that meets the Capital Region's needs," Stelmach stated. "Mr. Sheard is very familiar with the complex issues facing the Capital Region and his experience in governance and planning will help the board and move the regional plan forward." --- Jamie Johnston, a broker with Re/Max Condo Plus, says evidence has emerged in the United States that the shape of the high-end market is not as bad as the overall market. "If you look at the sale of homes for US$5-million or more, they are not as affected as the general market," says Mr. Johnston. CIBC World Markets senior economist Benjamin Tal says the softening in the high end has been "far, far more muted" than in the $200,000-property range. Although he doesn't believe the Canadian housing market is headed toward a severe pullback, he says the high end of the market is not immune. "If there is a severe recession and house prices start falling, they will feel the pain," said Mr. Tal. "A severe correction, everybody feels." --- Concern about the total number of new and resale homes on the market brought about a dramatic decline in residential construction starts of all kinds in the Edmonton region, says a federal agency. Adding together detached and multi-family housing, starts in February totalled 692, down from 1,106 for the same month last year -- a decrease of more than 37 per cent, says senior analyst Richard Goatcher of Canada Mortgage and Housing Corp. With detached starts last month at 243, the total for the year to the end of February was 452, down from 1,187 for the same period a year ago. "The industry is responding to concerns about the size of new and resale inventories and this will further restrain activities in the months ahead," says Goatcher. --- This investment-savvy generation of 20- and 30-somethings knows a hot market when they see one, and many have developed creative strategies to reach home ownership at a younger age, often without the benefit of a spouse's salary. Some buy their first home jointly with a friend or sibling. Others become small-scale landlords, renting out basements or extra bedrooms to tenants whose rents offset the mortgage. "It's something that a lot of people have to turn to because housing prices are just sky-high, particularly in a lot of the larger cities," says Brenda Bouw, author of Home Girl: The Single Woman's Guide to Buying Real Estate in Canada. "I think a lot of people have been influenced by their parents, whose best investment has been their house. They're feeling pressure to get into the market any way they can." About one-quarter of Canadians aged 18 to 34 are homeowners, according to a recent survey by the Canadian Association of Accredited Mortgage Professionals (CAAMP). --- Canada's banks have lowered most of their mortgage rates by a tenth of a percentage point following the recent move by the U.S. Federal Reserve Board to cut its benchmark short-term rates, which has affected other interest rates. --- Renovations involving bathrooms and kitchens offer the best return on investment for homeowners looking to improve the value of their houses as the residential real estate market enters its traditionally busiest time of the year. A report released by Royal LePage on Wednesday said the renovation with the best return on investment (80 to 100 per cent) is installing an additional bathroom on a main floor, followed by renovating a bathroom (75 to 100 per cent) and renovating a kitchen (75 to 100 per cent). The Royal LePage Renovations and Returns Survey said even some simple home improvements could mean sellers getting top dollar for their properties. According to Statistics Canada, renovation spending grew by 8.3 per cent in the fourth quarter of 2007 to $9.2 billion across the country compared with the same period in 2006. --- Alberta's 3.5-per-cent inflation rate led the nation in February, Statistics Canada reported Tuesday. "While a bit higher than expected in February, the big picture is that Canadian inflation trends remain comfortably below two per cent and comfortably within the Bank of Canada's target range," said Douglas Porter, deputy chief economist with BMO Capital Markets. Housing also was an upside source of pressure, with mortgage interest costs up 0.8 per cent and new homes up 0.7 per cent. --- Edmonton has the second-lowest overall office vacancy rate in the country, says a new report released Tuesday by CB Richard Ellis. At 4.9 per cent, Edmonton's market for combined downtown and suburban office space is tighter than nearly anywhere else in Canada, the commercial real estate firm found in a review of office vacancy rates in 10 cities nationwide. Edmonton's overall vacancy fell from 5.2 per cent in the fourth quarter of 2007 due mainly to the expansion of three major engineering firms, the report said. Still, Edmonton's downtown office space tightened from the end of last year when it was 5.7 per cent. --- An Ontario couple thought they had found the perfect place to raise their two young children. But the home of their dreams, located in a good community, soon turned into a nightmare. They had purchased a former marijuana grow op. "In my case, it was my neighbour coming out and saying: 'By the way, did you know this house was used as a grow op?' and my mouth dropped," said the husband. The family is now embroiled in a costly legal battle over the purchase of the house. The couple is suing the previous owner, the listing agent and the REALTOR® involved with the transaction. Brown said the former drug house took six months and cost more than $150,000 to renovate. In Calgary, health services work with the Calgary police when shutting down a grow op. Alberta is the only province in Canada where public health officers have the status of "executive officers" who can make specific remediation orders to properties. "We disclose this information on a regular basis to the public so they can make an informed decision on whether they want to purchase a home that's been a grow op," said Robert Bradbury, director of health protection for the Calgary Health Region. --- Greater Fool: The Troubled Future of Real Estate will hit bookstores across Canada on Monday. By next weekend, it will undoubtedly have rattled a few readers, though a bit of a reality check might be in order for anyone feeling squeezed under the current "good times" climate. Turner can expect to be branded as a fearmonger, especially by people whose livelihoods require that home prices keep rising. The rest of us might want to prepare for a barrage of reassurances that a U.S.-style market meltdown can't possibly happen here, in large part because our economy is strong and our banks adhere to much more stringent lending practices than their U.S. counterparts. But try to find a respected Canadian economist who buys into Turner's pessimism. People at the University of Toronto's economics department, the Ivey School of Business at the University of Western Ontario and University of British Columbia's Centre for Urban Economics and Real Estate couldn't find one for us. While most seem to think a gradual softening is likely after 10 years of constant price increases, a U.S.-style meltdown doesn't appear to be on anyone's radar. --- While the median and average prices of single-detached homes in Calgary continued to climb in February -- $471,696 and $428,000, respectively -- the rate of increase held at about five per cent compared to the same period last year, says the Calgary Real Estate Board. The median is the middle of the range of market prices. In the hectic, erratic market of early 2007, the average price of used detached homes sold through the MLS system topped out at nearly $506,000, but it has since been pulling back. "Last spring, I think prices got ahead of themselves to the point where those thinking about buying said: 'I think I'll wait,' or literally decided they couldn't afford to get into the market," says Morrow. But with the Bank of Canada currently announcing mortgage rate reductions -- with additional declines expected -- and price increases slowing, affordability remains in the housing picture as the year moves along. --- It's premature to get too concerned, but Alberta's housing market is on watch for possible further negative developments, says a national real estate report released Friday by RBC Economics. The housing affordability report said the average price of a standard two-storey home in the province fell by 4.3 per cent last quarter (2007) over the previous quarter. The report said affordability in Alberta appears to have peaked about midway through last year. Healthy income gains (five per cent year-over-year in the final quarter of 2007) and declining house prices led to overall affordability improvements for new homeowners trying to "tap into the overvalued Alberta market." "This marks the first time in over three years that the market has witnessed a broad-based affordability improvement across all home segments," said the RBC report authored by Derek Holt, assistant chief economist, and Amy Goldbloom, economist. "This also marks the start of what we fear could become a trend. All of the key housing measures are in contraction mode right now including house prices, housing starts and resale activity. --- Major snowstorms in Toronto are being credited for a meltdown in Canada's housing market last month. The Canadian Real Estate Association reported yesterday that February sales in the country's major centres fell 9.6% from a year ago with much of the decline coming in Toronto. There were 26,302 units sold last month in the country's top 25 markets, compared with 29,090 a year ago. The Ottawa-based association, which represents 100 boards across the country, noted Toronto accounts for one-third of all major markets. "Snowfall in Toronto made it tough to show prospective buyers and tough to process a listing," said Ann Bosley, president of CREA. "It was one of the toughest months ever weather-wise for realtors in Toronto." Despite the assertion that Toronto was dragging down the national numbers, the group noted sales activity was softening in Edmonton, Vancouver, Calgary, Saskatoon and Newfoundland and Labrador. Gregory Klump, chief economist with the association, noted the group had been calling for sales to fall and price gains to slow. "Figures for the first two months of this year are in step with the forecast," he said. Mr. Klump said the Alberta figures show the housing market simply had "gotten ahead of itself " over the last couple of years. "We are seeing some giveback in them but they are well above where they were. Prices have plateaued, no question there. Properties were not realistically priced," he said. Benjamin Tal, senior economist with CIBC World Markets, said the latest data shows the overall slowdown in the Canadian housing market has even spread to the west. "Even the West is not immune. In Calgary, the value of a house is not doubling over the course of breakfast any more," he joked, adding he does not expect prices to fall in most Canadian major cities. --- With the subprime contagion spreading around the world, Canadians who hoped their homes would be immune from the carnage are wrong, says financial author and MP Garth Turner. "Absolutely, without a doubt, that contagion is spreading to the Canadian real estate market," said Turner, the author of a new book on the subject titled Greater Fool: The Troubled Future of Real Estate. Within 18 to 24 months, Canadian homeowners could see the value of their homes fall by 10 to 15 per cent, Turner warned, saying early signs of a deteriorating real estate market are "all around us." Sales of existing homes fell off the cliff in January, tumbling six per cent in January alone -- or 72 per cent on an annualized basis. At the same time the number of listings nationwide shot up 11 per cent, Turner said, quoting the Canadian Real Estate Association. And prices have fallen from their peaks in such once hot markets as Calgary and Edmonton. --- Mortgage rates may be falling, but fewer people plan to buy a home this year as house price growth eases, especially in Alberta where the once red-hot market has been reduced to a simmer. The number of Albertans who would buy now rather than next year dropped sharply to 38% in January from 52% a year earlier, an annual survey of home-buying intentions conducted by Ipsos Reid for Royal Bank of Canada showed yesterday. Those in the province "very likely" to buy residential property in the next two years fell 4 percentage points to 8%. Most Canadians continue to see house purchases as a good investment, but the proportion has declined five percentage points to 85%, equaling levels in 2004. --- Socially conscious church congregations are banding together to address St. Albert's sparse supply of affordable housing. The newly formed St. Albert Faith Community for Social Justice is hosting a public forum Saturday afternoon at St. Albert United Church entitled Affordable Housing: Vision and Reality. The session will examine St. Albert's current housing situation and feature input from key social agencies and community leaders. "It's all about what is the situation in St. Albert. Are there things we can do to work together," forum chair and moderator Debbie Phillipchuk said. The TRS report found 22 individuals were homeless between Jan. 1 and Oct. 5 of last year, with another 88 residents considered in imminent danger being homeless. The study marked the first time the city had real statistics to document its homeless situation. --- Edmonton housing prices stalled in February as the number of homes up for sale multiplied four-fold compared to a year ago. A monthly report by the REALTORS® Association of Edmonton described the market Tuesday as "unwavering" in making a return to "normal" price stability after two years of rapid increases in 2006 and '07. The number of homes for sale on the association's MLS® or multiple listing service climbed to 8,284 last month, quadruple the inventory of 2,120 in February of 2007 and 12.7 per cent higher than January 2008. But demand for homes strengthened enough to shorten the lag between listing them for sale and making a deal. The average waiting time dropped to 52 days in February from 61 in January. --- Expanse Movement Arts Festival, the little festival with big dreams does both, as it presents more shows, including five world premieres and a commissioned work, a full schedule of workshops, and makes the leap to a bigger venue, the Catalyst Theatre. Also featured is a new work commissioned by the festival from Kathy Ochoa, described by Expanse producer Murray Utas as "a creative powerhouse" on the local dance scene. "It's the first time we've been able to offer extended support for an artist to make work, and she's created a monster piece for us. We're excited to showcase her work." The work was made possible through sponsorship from the REALTORS® Association of Edmonton. --- A new national residential real estate report suggests a potential shift in the Canadian homebuying landscape with purchasing intentions at their lowest level in several years -- and cooling off in Alberta. According to the Royal Bank's 15th annual Homeownership Survey, released Tuesday, significantly fewer Canadians intend to buy a home within the next two years. Homebuying intentions in Alberta are cooling, according to the survey. The poll found that eight per cent of Alberta residents said they are "very likely" to buy a home, down four percentage points from 2007, while those who said they are "somewhat likely" to buy fell three percentage points from last year. "While purchase intentions in Alberta remain the highest in the country, we may see a slight cooling as potential homebuyers decide to sit tight this year," said Don Peard, vice-president for mortgage specialists at RBC. "We can attribute this shift in sentiment in part to the hot housing market that has caused home values to skyrocket." --- Canada's great economic divides -- between East and West, and between domestic and export markets -- are widening. The economy shrunk significantly in the final month of last year, reducing the annual pace of growth in the final quarter of the year to a crawl, Statistics Canada reported Monday. CIBC World Markets economist Avery Shenfeld said, "Canada isn't suffering America's housing crash, but its manufacturing sector has been in recession for the past two years," he noted. "Given the geographic distribution of the factory sector, Ontario and Quebec's economies likely ended the year with a very steep drop in activity for December." --- Despite a moderating real estate market, investment in housing in Alberta continued to soar in 2007, with this province adding the largest dollar volume of any as new housing construction pushed spending up 19 per cent to a record $14.7 billion. Analysts say galloping new construction and renovation inflation drove overall residential construction expenditures ever higher and renovation growth to its best performance since 2004, up 13 per cent from a year earlier to a record $3.7 billion. Statistics Canada said Monday that the pattern of surging housing expenditures in Alberta seen during all of 2007 was also evident in the last three months of the year, when Wild Rose Country's residential construction investment surged nearly 20 per cent to $4.1 billion. "With weaker housing starts, the only way that we achieved such gains was due to the cost escalation in the new construction market," observed Richard Corriveau, regional economist for Alberta for Canada Mortgage and Housing Corp. --- Some local business leaders are concerned that new housing starts in St. Albert aren't keeping up with building activity seen in the rest of the Capital region. Single family starts in St. Albert dropped 21 per cent in 2007 to a 10-year low of 273 homes. The highest figure in recent history was 465 starts in 1998. They've remained above 300 ever since. "We don't have an answer for the decline," said St. Albert Business and Tourism Development director Larry Horncastle while presenting the data at the annual business breakfast on Tuesday. Housing is an important issue for prospective businesses because they need to know there's available labour before locating to St. Albert, he said in a later interview. |