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Housing Bulletin Monthly Report
March 2011
Issue HIgHlIgHts
ancing). canadians believe in the long-term benefits of owning a home, including the value it can provide, both personally and as a long-term investment (RBc Head of Home-equity financing). cana
A lB e R tA’ s p R e li M i nA Ry H o u s i n g s tA R t s i n c R e A s e d M o n t H - ov e R - M o n t H i n F e B R uA Ry 2 0 1 1
1
The recovery in Canada is proceeding slightly faster than expected, and there is more evidence of the anticipated rebalancing of demand( Bank of Canada).
Building PermitsBuilding permit values decline in Alberta.
Page 4
Consumer Price IndexCPI continues to climb across Western Canada.
Page 5
Net MigrationTotal net migration declines in Alberta.
Page 6
* Data reflects centres with a population of 10,000 and over.Source: Canada Mortgage and Housing Corporation
• InFebruary2011,Canada’stotalpreliminaryhousingstarts increased one per cent overJanuary2011anddeclined seven per cent comparedtoFebruary2010.
• AcrossAlberta,preliminaryhousingstartsdeclined20percentfromFebruary2010toFebruary2011.Month-over-monthhousingstartsincreased21percent.
• AccordingtotheCanadaMortgage and Housing Corporation (CMHC), housing starts across Canada movedhigherinFebruarymainlyduetoincreases in Ontario and the Prairie provinces.
Ca
na
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Ho
us
ing
sta
rt
s
0
750
1,500
2,250
3,000
3,750
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5,000
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15,000
20,000
25,000
FE
B 1
1
JAN
11
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0
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OC
T 1
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P 1
0
AU
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0
JUL
10
JUN
10
MAY
10
AP
R 1
0
MA
R 1
0
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B 1
0
JAN
10
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C 0
9
NO
V 0
9
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T 0
9
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P 0
9
AU
G 0
9
JUL
09
JUN
09
MAY
09
AP
R 0
9
MA
R 0
9
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B 0
9
Pre l iminary Hous ing st ar ts in A lber t a* and Canada*February 200 9 to February 20 11
Alberta Canada al
Be
rta
Ho
us
ing
sta
rt
s
2
der wraps (ciBc). We continue to expect a softening in overall housing starts, particularly with the anticipated higher interest rates and a slower second half of the year keeping home prices under wraps (ciBc). We contin
s i n g le - d e tAc H e d H o u s i n g s tA R t s s H ow M i x e d p eRF o R M A n c e Ac Ro s s A lB eRtA’ s s ev en M A j o R c en t Re s
M u lt i - FA M i ly H o u s i n g s tA R t s i n c R e A s e M o d e R At e ly i n c A l g A Ry
• InJanuary2011,single-detachedhousingstartsfellacrossAlberta,averagingadeclineof27.7percentyear-over-year.
• InCalgary,Edmonton,GrandePrairieandMedicineHat,single-detachedhousingstartsfell29.1percent,48.4percent,5.9percentand63.6percent,respectively,fromJanuary2010toJanuary2011.
• InLethbridge,RedDeerandWoodBuffalo,single-detachedhousingstartsincreased over the same period.
• ComparedtoJanuary2009,single-detached housing starts increased in six ofAlberta’ssevenmajorcentres,atanaverageof35.7percent.
Source: Canada Mortgage and Housing Corporation
• InJanuary2011,multi-familyhousingstartsincreasedinfourofAlberta’s sevenmajorcentres,Calgary,GrandePrairie,LethbridgeandWoodBuffalo, averaging an increase of 31.3 per cent year-over-year.
• InEdmonton,multi-familyhousingstartstotalled158unitsinJanuary2011,representingadeclineof12.2percentfromthe180unitsbuiltinJanuary2010.
• InCalgary,multi-familyhousingstartstotalled225unitsinJanuary2011,a 122.8percentincreasefromthe101 unitsbuiltinJanuary2010.
Source: Canada Mortgage and Housing Corporation0
100
200
300
400
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1,000
JAN2011
JAN2010
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rt
s
CalgaryCMA EdmontonCMA GrandePrairieCALethbridgeCA MedicineHatCARedDeerCAWoodBuffaloCA
Actua l Hous ing st ar ts – Mul t i -Fami ly Dwel l ings ( January Year - Over-Year 200 6-20 11)
0
100
200
300
400
500
600
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800
900
JAN 2011
JAN 2010
JAN 2009
JAN 2008
JAN 2007
JAN 2006
Actua l Hous ing st ar ts – s ing le-Det ached(January Year - Over-Year 200 6-20 11)
Ho
us
ing
sta
rt
s
CalgaryCMA EdmontonCMA GrandePrairieCALethbridgeCA MedicineHatCARedDeerCAWoodBuffaloCA
3
desjaRdins economics). there is no doubt that the upward trend in employment growth is continuing as jobs lost during the recession have now been completely recovered. in the coming months, we should expect thejob market to show more sustainable, long-term growth (desjaRdins economics). there is no doubt that: the upward
e d M o n t o n R e s A le p R i c e s d i p y e A R - ov e R -y e A RYear- to-Year Compar ison of Hous ing Resa le Act iv i t y in
edmonton in the Month of February
s i n g le - FA M i ly H o M e s A le s R i s e w H i le co n d o M i n i u M s A le s co n t i n u e t o FA ll i n c A l g A Ry
Year- to-Year Compar ison of Hous ing Resa le Act iv i t y in Ca lgary in the Month of February
sIngle-FAMIlY DwellIng COnDOMInIuM
Month new days Month new days average end listings on the average end listings on the Price inventory added sales Market Price inventory added sales Market
Feb 07 $448,557 2,032 2,206 1,942 29 $301,812 654 889 895 28
Feb 08 $471,696 4,985 2,981 1,252 39 $311,812 2,301 1,244 562 45
Feb 09 $415,568 4,352 2,057 825 51 $268,971 2,065 892 343 51
Feb 10 $458,254 3,106 2,154 1,035 34 $282,880 1,741 1,109 536 43
Feb 11 $461,786 3,504 2,268 1,169 45 $290,145 1,750 971 468 52
• Thenumberofsingle-familyhomessoldinCalgaryincreased12.9percent and the average resale price increased0.8percentyear-over-yearinFebruary2011.
• InFebruary2011,thenumberofcondominiumssoldinCalgaryfell12.7percentyear-over-year,whilepricesincreased2.6percentoverthe same period.
• Newlistingsincreased5.3percentforsingle-familyhomes,anddecreased12.4percentforcondominiumsfromFebruary2010toFebruary2011.
average PriCe average Year to Monthly date single- days sales to sales to family duplex / on the residential residential listings listings dwelling Condominium rowhouse Market listings sales ratio ratio
Feb 07 $376,273 $248,493 $314,518 27 3,857 3,487 92 90
Feb 08 $383,251 $263,963 $297,042 56 4,843 2,440 37 50
Feb 09 $349,810 $229,685 $281,406 64 3,876 1,875 42 48
Feb 10 $371,467 $232,425 $321,570 49 3,615 2,223 52 61
Feb 11 $359,934 $230,911 $303,440 62 4,769 1,866 39 39
• Theaveragepriceofasingle-familydwellinginEdmontondecreased3.1percentfromFebruary2010toFebruary2011.Overthesameperiod,the average price of condominiums fell0.7percentanddecreased5.6 per cent for duplexes and rowhouses.
• AhomeinEdmontonspentanaverageof62daysonthemarketinFebruary2011,anincreaseof26.5percentoverFebruary2010.
• ResidentiallistingsinFebruary2011areup31.9percentyear-over-year;however, sales are down 16.1 per cent.
Source:CalgaryRealEstateBoard
Source:Realtors’AssociationofEdmonton
4
da) While the value of single-family and multi-family permits have moved in opposite directions, overall, the total value of permits fell in 21 of 34 census metropolitan areas in canada (statistics canada). Wh
B u i ld i n g p e R M i t vA l u e d e c li n e s i n c A l g A Ry a n d e d M o n t o n
p R o p o R t i o n o f M o R t g Ag e s i n A R R e A R s co n t i n u e d u p wA R d t R e n d i n d e c e M B e R 2 0 1 0
Source: Statistics Canada
*DataforNorthwestTerritoriesandNunavutareincludedinAlberta.Source:CanadianBankersAssociation
• ResidentialpermitsissuedinAlbertainJanuary2011totalled$665.5million,adecreaseof23.2percentoverDecember2010.Year-over-year,thevalueofresidentialpermitsissuedinAlbertaincreased 10.3 per cent.
• InJanuary2011,thetotalvalueofEdmontonresidentialbuildingpermitsfell22.5percentmonth-over-monthand33.9percentyear-over-year.
• InJanuary2011,thetotalvalueofCalgaryresidentialbuildingpermitsfell41.3percentmonth-over-monthand36.6percentyear-over-year.
• Both Vancouver and Ottawa experienced anincreaseinresidentialbuildingpermits,withayear-over-yearincreaseof4.0percentand83.7percent,respectively.
• AcrossCanada,mortgagearrearsremainlow, at less than half of one per cent. AsofDecember2010,0.44percent of mortgages in Canada were in arrears, amonth-over-monthincreaseof 2.3percent.
• InAlberta,0.83percentofmortgageswereinarrearsinDecember2010comparedto0.75percentofmortgagesinDecember2009and0.4percentofmortgagesinDecember2008.
• Alberta’sproportionofmortgagesinarrears remains the highest in Canada. InBritishColumbiaandtheAtlanticprovinces,0.46percentand0.45per cent of mortgages are in arrears, respectively.Mortgagearrearsinthe restofCanadafallbelowthe Canadian average.
0
200
400
600
800
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JAN
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DE
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JUL
10
JUN
10
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10
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va
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is
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Value of Res ident ia l Bu i ld ing Permi ts IssuedJanuary 20 1 0 to January 20 11
EdmontonCalgary
Toronto Vancouver
Ottawa Victoria
0.0
0.1
0.2
0.3
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0.5
0.6
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P 1
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G 1
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10
JUN
10
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B 1
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JAN
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DE
C 0
9
NO
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9
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P 0
9
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9
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09
JUN
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MAY
09
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JAN
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8
to
tal
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in a
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ea
rs
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)
Per cent o f tot a l Mor tgages in Ar rears A lber t a* vs . Canada (December 2007 to December 20 1 0)
Alberta Canada
5
alberta’s strong net asset position combined with solid expected growth should mean that alberta is able to regain its fiscal footing in a relatively short period of time (Royal Bank of canada). albe
(f )Albertagovernmentforecastsforthecalendaryear.Source:RoyalBankofCanada
• Thechangeinthepricelevelofconsumer goods and services increased acrossWesternCanadabetween2009and2010andisforecasttoriseoverthenexttwoyears.
• TheconsumerpriceindexinAlbertaremainsthehighestinWesternCanada.AcrossWesternCanada,pricesrose1.1percentinAlberta,1.6percentinBritishColumbia,1.2percentinSaskatchewan,and0.7percentinManitobabetween2009and2010.
• AccordingtoStatisticsCanada, onayear-over-yearbasis,pricesincreasedinsevenoftheeightmajorcomponents of the consumer price indexinJanuary2011.
t H e co s t o f g o o d s a n d s e Rv i c e s co n t i n u e s t o c li M B Ac R o s s w e s t e R n c A nA dA
i n t e R e s t R At e s R e M A i n s tA B le i n M A R c H 2 0 1 1
* Theratesshownaremosttypicalofthosechargedbythemajorcharteredbankonresidential5-yearmortgages,onthelastWednesdayofthemonth.Source:BankofCanada
• ThetargetfortheovernightlendingrateisthemaintoolusedbytheBankofCanadatoconductmonetarypolicy.WhentheBankchangesthetargetfortheovernightrate,thischangeusuallyaffects other interest rates, including mortgage rates and prime rates charged bycommercialbanks.
• TheBankofCanadaannouncedthat it is maintaining its target for the overnight rate at 1 per cent.
• AccordingtotheBankofCanada, therecoveryinCanadaisproceedingslightlyfasterthanexpected,andthereis more evidence of the anticipated rebalancingofdemandforhousing.
• Whileconsumptiongrowthremainsstrong, there are signs that household spending is moving more in line with the growth in household incomes.
95
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2012(f)2011(f)201020092008200720062005
Co
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uM
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Pr
iCe
in
de
x
(20
02
=1
00
)
Consumer Pr ice Index (CP I ) for western Canada , Ac tua l and Forec ast ( f ) , 2002=1 00
Alberta BritishColumbia Saskatchewan Manitoba
0
1
2
3
4
5
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7
8
MA
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01
1
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JUL
20
10
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20
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JAN
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9
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8
SE
P 2
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8
JUL
20
08
MAY
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JAN
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08
NO
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P 2
007
JUL
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07
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6
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6
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int
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es
t r
at
e (
%)
Overn ight lending Rate and Convent iona l Mor tgage In terest Rate (5 year ) * March 200 6 to March 20 11
OvernightRate Conventional Mortgage 5YearInterestRate
6
mail) alberta is confidently projecting another energy boom that would drive a return to surplus and claim the province a spot at the forefront of canada’s economic recovery (gloBe and mail). alberta is con
R e l At i o n s H i p B e t w e e n t h e H o u s i n g i n d u s t Ry a n d e co n o M i c g R ow t H
Alberta’seconomyisexpectedtoshiftfromrecoverytoexpansionfrom2011onwardsatahealthygrowthratenear3percentannually.• HousingstartsinAlbertarecordedastrongrecoveryin2010drivenbytheimprovingeconomyandhistoricallylowinterestrates.Provincialhousingstartsareexpectedtocontinuetorise,albeitataslowerpace,whichismoreinlinewithdemographicrequirements.
(f )areAlbertagovernmentforecastsforthecalendaryear.
Source:AlbertaFinanceandEnterprise
• GDPasanindicatorcanbeused to determine the overall healthofaneconomy.
• Economistsgenerallyagreethatarangeof2to3percentgrowth is optimum as it is not so fast that it causes rapid inflation or too slow sothatindividuals’standardof living declines.
• Alberta’seconomicrecoveryin2010wasstrongerthaninitialforecastspredicted.Astheoilsectorcontinuestopickup,
R e c e s s i o nA Ry t o ll o n n e t M i g R At i o n i n A lB e R tA’ s M A j o R c e n t R e s
• NetmigrationtoWoodBuffalopeakedin2007asoilsandsinvestmentcontinuedtoincrease.From2009to2010,netmigrationtoWoodBuffalofell62percent,duemostlytoalossof1,701interprovincialmigrants.
Sources:AlbertaFinanceandEnterprise
• Accordingtoaspecial March2011reportbyAlbertaFinanceandEnterprise,netmigrationtoEdmontonandCalgarypeakedin2006,particularlyasoilsands capital investment increased.
• From2009to2010,followingtheglobalrecessionandweakenedlabourmarkets, net migration saw a sharp declineof48percentinbothCalgaryandEdmonton.
-4
-2
0
2
4
6
8
2014(f)2013(f)2012(f)2011(f)2010200920082007200620050
10
20
30
40
50
60
an
nu
al
gd
P g
ro
wt
H (
%) a
nn
ua
l H
ou
sin
g s
tar
ts
(0
00
’s)
Alber t a ’s Rea l gross Domest ic Product (g DP) vs . Hous ing st ar ts Forec asts (200 5-20 1 4f )
AverageAnnualRealGDPGrowth(%change)AverageAnnualHousingStarts(000s)
-3
-2
-1
01
2
3
4
5
6
7
8
JUN 2010
JUN 2009
JUN 2008
JUN 2007
JUN 2006
JUN 2005
JUN 2004
JUN 2003
JUN 2002
JUN 2001
(12,000)
(7,000)
(2,000)
3,000
8,000
13,000
18,000
23,000
28,000
tot a l net Migra t ion in edmonton , Ca lgary and wood Buf fa lo June 200 1 to June 20 1 0
AlbertaGDPGrowth CalgaryEdmonton WoodBuffalor
ea
l g
dP
gr
ow
tH
(%
)
ne
t M
igr
at
ion