Canada’s GDP Shrank at Fastest Pace in 27 Years

January 31, 2009

OTTAWA, Jan 30 (Reuters) – Canada’s economy shrank more than expected in November as businesses across most sectors clipped back production, suggesting the recession that started in the fourth-quarter is steeper than expected.

The economy contracted 0.7 percent in the month, the biggest drop in five years, as feeble global demand forced cuts and layoffs in manufacturing, construction, wholesale and real estate industries, Statistics Canada said on Friday.

In the worst year-over-year performance since August 1991, the economy shrank 0.8 percent compared with November 2007. The Canadian dollar strengthened slightly after the data

Economists, surprised by the swift deterioration from a 0.1 percent decline in October, now expect the fourth-quarter contraction of close to 3 percent. That compares with the Bank of Canada’s latest projection of a 2.3 percent decline.

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Vancouver – Another Agency Puts Vancouver on Credit Watch

January 31, 2009

Moody’s joins Standard & Poor’s in revising outlook to ‘negative,’ citing city’s financial risk over athletes village project

VANCOUVER — The City of Vancouver has now been hit by a double credit whammy over its stake in the troubled Olympic village project on the shores of southeast False Creek.

Just two weeks after debt rating agency Standard & Poor’s placed the city on a credit watch because of the city’s decision to assume financing and guarantee completion of the cash-poor billion-dollar development, Moody’s Investor Service yesterday did the same thing for the same reason.

Moody’s revised the city’s normal stable outlook to “negative,” and held out the possibility that the long-time triple-A credit rating the agency has assigned to Vancouver could be downgraded.

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REALTORS(R) Welcome Federal Housing Initiatives in Stimulating Canadian Economy

January 31, 2009

OTTAWA, Jan. 27 /CNW Telbec/ – The Canadian Real Estate Association (CREA) welcomes the federal government initiatives to stimulate economic growth outlined in the 2009 budget, especially those that will encourage home ownership in Canada. The Association applauds the government for recognizing the economic importance of the housing industry in some of the budget measures.

“The change announced to the popular Home Buyers’ Plan will help Canadians who want to own their own home, and do it in a responsible way that is not a major drain on taxpayers,” says the President of The Canadian Real Estate Association (CREA), Calvin Lindberg. Research conducted for CREA by the Altus Group shows that each residential real estate transaction in Canada generates $32,200 in ancillary consumer spending.

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January 27, 2009 Federal Budget Highlights

January 28, 2009

New in Effect as of Jan 27, 2009 – FTHB, Home Buyer’s Plan, Rennovation Tax Credit

Under a new temporary renovation tax credit, home owners can claim a 15 % non-refundable tax credit for eligible expenditures between $1,000 -$10,000, for a maximum credit of $1,350 ($9,000 × 15%). The credit is available for eligible costs of work performed or goods acquired after January 27, 2009 and before February 1, 2010. Only on family’s principal residence or that of one or more of their other family members.

First-time home buyers’ credit

First-time home buyers who acquire a qualifying home after January 27, 2009 may be entitled to claim a new non-refundable tax credit of $5,000 and worth up to $750 ($5,000 × 15%). To qualify, neither the individual nor his or her spouse or common-law partner can have owned and lived in another home in the calendar year of the new home purchase or in any of the four preceding calendar years. The credit can be claimed by either the purchaser or by his or her spouse or common-law partner. < First Time Home Buyer eligibility>

Home Buyers’ Plan threshold increased

The budget increases the amount that first-time home buyers can withdraw tax-free from a Registered Retirement Savings Plan (RRSP) to purchase or build a new home to $25,000 (up from $20,000). The new limit applies to withdrawals made after January 27, 2009.  <Home Buyers Plan>

US – Housing Starts, Permits in U.S. Slump to Record Low

January 26, 2009

Jan. 22 (Bloomberg) — U.S. builders broke ground in December on the fewest houses since record-keeping began as sales and credit dried up, signaling the real-estate slump will keep hurting economic growth.

Housing starts fell 16 percent last month to an annual rate of 550,000 that was less than forecast and the lowest since the government started compiling statistics in 1959, the Commerce Department said today in Washington. Building permits, an indicator of future projects, were also at a record low.

Builders, whose shares have lost 76 percent of their value over the last three years, are slashing prices to compete with a record number of foreclosed homes coming onto the market. Barack Obama’s advisers say the president will use up to $100 billion in financial-rescue funds to ease the mortgage crisis.

Another government report showed the number of Americans filing first-time claims for unemployment benefits rose last week, matching a 26-year high. Initial jobless claims increased by 62,000 to 589,000, more than forecast, in the week ended Jan. 17, according to a Labor Department report today in Washington.

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Calgary real estate prices keep sinking

January 26, 2009

Calgary’s real estate market will continue its swoon this year and remain, at least until spring, a place where buyers continue to have the upper hand, says the incoming president of the Calgary Real Estate Board.

Bonnie Wegerich, who took the reins from outgoing president Ed Jensen today, said that in 2009, the price of single-family homes will continue sinking, decreasing by 2% to an average price of $451,120.

Condominium prices, she said at the organization’s annual conference, are expected to drop by 5% this year to an average price of $287,300.

Last year, prices for single-family homes and condominiums fell by 2.5% and 4.4%, respectively.

MLS listings, which peaked in May 2008 and have been slowly declining since then, will rise again this spring, Wegerich said, leading to “plenty of choice in most neighbourhoods.”

The pace of sales, made more swift by a return of consumer confidence, will turn the market around in the second half of this year, Wegerich predicted, and lead to an overall 5% rise in sales, led by a 10% sales increase of single-family home.

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Vancouver – Athletes Village Mess (What did go wrong?)

January 26, 2009

VANCOUVER — It was March 27, 2006. The Vancouver real-estate market was still in a frenzy, high-rise developments were selling out in days at skyrocketing prices, and Bob Rennie, the city’s undisputed condo king, was on top of the world.

He decided to let an otherwise lacklustre housing workshop in on a little secret. Within days, Mr. Rennie confided, the city-owned, downtown waterfront land earmarked for the Olympic village would be sold for a price so high it would send shockwaves through the entire development community.

Sure enough, 10 days later, Vancouver City Council made its fateful decision to award the blue-ribbon Olympic village contract to a reputable but mid-sized development company with shallow pockets, anxious to show it could play with the big boys. The price paid by Millennium Development Corp. for the 2.6 hectares of prime property, destined for luxury condos, rental units and social housing once the 2010 Games were over, was a staggering $193-million. That was believed to be the highest sum per square foot ever paid for land in Canada.

Left in the dust were experienced, well-heeled developers Concord Pacific and the Wall Financial Corp., which bid around $170-million and $150-million, respectively.

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