Canada’s Labour Market Catches a Summer Cold from the U.S.

August 29, 2010

Canada lost 9,000 jobs in July, Statistics Canada recently reported. That was after six months of solid back-to-back increases totaling over 300,000 new jobs in the first half of this year.

Relative to most other countries, Canadians have had little to complain about on the jobs front.

From October 2008 to July 2009, Canada lost 400,000 jobs in the recession. These have all since been recovered. The U.S. lost 8.4 million jobs from December 2007 to December 2009. Some progress has been made in reducing that shortfall this year, but the current level of employment in the U.S. is still 7.7 million below what it was before the abrupt change in job prospects.

In September 2008, just before the stock market crashed and the recession began in Canada, employment in construction peaked at 1.250 million. Nine months later, Canada’s construction jobs level was down to 1.130 million (-120,000). Over the past year, there has been a steady climb back up to 1.224 million, or almost a complete recovery of jobs lost during the recession.

Year-over-year employment in construction in Canada is now +8.6%. In the U.S., the comparable figure is -6.3%. While that figure certainly looks bad, it is actually a considerable improvement versus the -17.4% year-over-year performance for the U.S. in September 2009.

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Kevin O’Leary CBC Video – Real Estate Interview

August 19, 2010

CBC News – Kevin O’Leary and Amanda Lang discussed the Canadian real estate in particular to the ‘shoe box condos’ with the pre-sales.   Kevin expressed opinion of a possible 15-20% dip on these market.  View the first 7 mins of the video by  clicking on the image.

Doug Porter, Chief Economist with BMO, (video min 13:30) – expressed that a lot of the activities in 2010 in BC and Ontario has been front loaded because of the expected HST in July.  Among different sectors, the investor market would be affected more due to the insurance policy in place on April 19th (used to be 5% down, now 20% down).  Due to relatively low interest rate and stable fundamentals, he is positive on the general real estate market.  He also thinks that the next 10 years growth will be very different from the past 10 years the gains we’ve seen.  Some cities, such as Toronto and Vancouver, in his opinion, had been over-heated in terms of price and activity.


Mid-Year Commercial Real Estate Transaction Volumes and Prices Increase Over Last Year – Lower Bond Rates and Increased Available Debt Prompt Market Activity Increases – CBRE

August 17, 2010

According to the Mid-Year National Investment Report released today by CB Richard Ellis Limited (CBRE), Canadian commercial real estate transaction volumes from January through June increased by 60.2 per cent, year-over-year, from $4.9 billion halfway through 2009 to $7.8 billion half way into 2010. Mid-year through 2010, the number of commercial transactions was 2,243, up from 1,565 transactions completed halfway through 2009.

Despite the significant national year-over-year increase in transaction volume, it is important to note that mid-year figures from last year were far lower than the historical average, due to the global economic crisis that characterized much of 2008 and 2009. When comparing the current national mid-year figure to mid-year 2005 – a year more reflective of the country’s normal commercial real estate activity levels – volume is up by 22.8 per cent.

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HST contributing to double-digit decline in B.C. housing starts

August 11, 2010

The number of B.C. housing starts fell 13.3% in July, according to data released Tuesday morning by the Canada Mortgage and Housing Corporation (CMHC). The number of starts fell to 1,817 in July, down from 2,096 in June. The most significant decline was in Metro Vancouver with a 10% decline to 1,124 units from 1,250 in June.

From a seasonally adjusted basis, B.C. housing starts fell 14.8% in July, slipping to an average annual rate of 20,100 from 23,500 in June. The average annual rate in Metro Vancouver fell to 12,900 units from 14,100.

CMHC senior market analyst Robyn Adamache said in an interview, “The decline is not huge, but it’s pretty much what we had been expecting in terms of some moderation in the market going forward. People are expecting mortgage rates to go up a bit and sales in the resale market have slowed a bit.”

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Financial Post – Top 10 Cities to Invest in Canada

August 9, 2010

Financial Post – When investing in real estate, sometimes it’s necessary to look beyond your own backyard. The Real Estate Investment Network (REIN), a national organization of investors, has compiled what it says are the top 10 Canadian cities in which to invest. Few are major cities and some are surprising. Don Campbell, president of REIN, as well as one of the researchers on the study, says the results are based on factors such as planned transportation improvements, or if the area’s average income, population growth and job growth are increasing faster than the provincial average.

Oddly enough, nothing east of Ontario shows up on the list, and while Mr. Campbell says cities like Halifax, Saint John and Moncton “still provide decent returns,” the top cities are ones that will outperform the national average between 2010 and 2015.

1. Calgary

Calgary is “poised to outperform the average by a wide margin,” says Mr. Campbell, making it the top-ranked city.

After two years of declining average resale housing prices, the Canada Mortgage and Housing Corp. has predicted they will increase year-over-year in 2010.

The REIN report credits the downturn to a much-needed correction, and that it was “economically impossible for the [Calgary] market to continue at the pace at which it was heading.” But now that it is coming out of the recession, along with economies elsewhere, Calgary’s strengths in producing food, fuel and fertilizer will boost its growth.

“Calgary is in a unique economic and geographic position to take advantage of the direct and indirect jobs this increase in demand will create,” says Mr. Campbell, who adds that with strong in-migration and renewed affordability, the city provides a good buying window for long-term investors.

2. Kitchener-Waterloo-Cambridge, Ont.

REIN refers to Canada’s Technology Triangle as the “economic Alberta of Ontario.” That means KWC is not only seen as the economic engine of the new Ontario economy, but also that it “will outperform all other major regions in eastern Canada,” Mr. Campbell says. For indicators, he points to job growth, student growth and a new light rapid-transit system.

3. Edmonton

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Real estate sales slow more than expected

August 2, 2010

Vancouver Sun – Real estate markets have slowed a bit more than the B.C. Real Estate Association’s (CREA) earlier predictions, prompting a downward revision in the group’s latest market forecast that includes a softening of prices.

Association chief economist Cameron Muir released his third-quarter forecast Friday, calling for Multiple Listing Service (MLS) recorded sales to dip to 79,500 by the end of the year, a seven-per-cent decline from 2009.

In the association’s second-quarter forecast, Muir had predicted British Columbia’s MLS sales would fall three per cent from the 85,028 recorded in 2009.

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Calgary CREA – Predict 10% Drop in Sales

August 2, 2010

CALGARY – The Canadian Real Estate Association has revised its forecast downward for MLS residential sales activity but elevated its average price forecast at the national level.

The national association of realtors said today that weaker than anticipated sales activity during the crucial spring home buying season in Canada’s four most active provincial markets prompted the revision. “The decline is consistent with the exhaustion of pent-up demand from deferred purchases during the economic recession, and sales having been pulled forward into early 2010 due to changes in mortgage regulations,” said CREA.

In Alberta, CREA is predicting total MLS sales of 51,300 this year, down 10.8 per cent from the previous year and a further 3.2 per cent annual decline in 2011 to 49,650 sales.

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