Economic Fundamental Research Archived - Recent Threads

Gov't of Alberta Housing and Urban Affairs Monthly Report

HeatherBrandt — Fri, 14 Jan 2011 04:33:13 GMT

Hi all,

I recently found this report. You can go to the website and subscribe to it if you are interested.

Carl Gomez Presentation - July 2010

RussellWestcott — Tue, 17 Aug 2010 01:14:05 GMT

Enjoy the timely insights from one of Canada's leading economist from Bental Capital

Will Dunning Economic Fundamentals - May 2010

RussellWestcott — Wed, 23 Jun 2010 02:32:18 GMT

Will Dunning:
Senior Canadian Housing Economist

Click the play button below in the middle of the video player

Enjoy...

Alberta’s Economic Prospects

RussellWestcott — Sat, 12 Jun 2010 01:03:17 GMT

Alberta’s Economic Prospects
Mary MacGregor
Alberta's Chief Economist

FED NOT EVEN THINKING ABOUT RAISING RATES TILL 2012

YehoramShenhar — Fri, 21 May 2010 10:53:27 GMT

FED NOT EVEN THINKING ABOUT RAISING RATES TILL 2012
This is from the set of FOMC minutes from the April 27-28 policy meeting. I underlined the key sentence from this paragraph:
“Participants expected the economic recovery to continue, but, consistent with experience following previous financial crises, most anticipated that the pickup in output would be rather slow relative to past recoveries from deep recessions. A moderate pace of expansion, in turn, would imply only a modest improvement in the labor market this year, with the unemployment rate declining gradually. Most participants again projected that the economy would grow somewhat faster in 2011 and 2012, generating a more pronounced decline in the unemployment rate. In light of stable longer-term inflation expectations and the likely continuation of substantial resource slack, policymakers anticipated that both overall and core inflation would remain subdued through 2012, with measured inflation somewhat below rates that policymakers considered to be consistent over the longer run with the Federal Reserve's dual mandate.”

MORE TROUBLING HOUSING DATA
Following on the heels of the near 30% weekly plunge in the MBA purchase index yesterday, we saw some more bad housing news. Data from the Mortgage Bankers Association (MBA) showed that mortgage delinquencies rose to 10.06% in Q1 from 9.47% (on a seasonally-adjusted basis), a new record high. The MBA did note that the seasonally-adjustment process may be flawed and suggested using a “degree of caution” when interpreting these numbers. Even so, on a year-ago basis, delinquencies were up by 94bps.
Mortgage delinquencies in the U.S. hits a new record high, now over 10%
Virtually every category of delinquencies saw an increase: 90 days-plus due hit a new record high, early-stage delinquencies (30-59 days) increase by 0.2ppt, fixed/adjustable rate mortgages and prime/subprime all increase in the quarter (the one exception was FHA mortgages). Regionally, Florida is “still getting worse” while California seems to “showing signs of improvement”.
The rate of new foreclosures inched up, to 1.23%, and the total inventory of foreclosures moved up, to 4.63%, which translates to 2 million homes. This can’t be good news for home prices and our guess is that home prices will move lower with all this supply. (Already, the Case-Shiller home price metric showed accelerating price declines in February.)

SCARY MATH
1 in every 10 American homeowners missed a mortgage payment in Q1 (a record)
1 in 6 Americans are either unemployed or underemployed
Over 4 in 10 unemployed Americans have been out of work for at least six months.
1 in 4 Americans with a mortgage have negative equity in their homes.
1 in 10 Americans believe their income will rise in the next six months.
1 in 5 Americans see business conditions improving in the next six months.
1 in 50 Americans plan to buy a home in the next six months.
1 in 8 Americans believe that current government policy is actually helping the economy.
1 in 10 American small businesses have a job opening.
1 in 10 American’s credit card usage is being written off (a record).
There are 5 unemployed workers competing for every job opening (hence downward pressure on wage growth).

Economic Fundamentals General

Ian — Sat, 01 May 2010 01:48:30 GMT

Hello
I am looking for economic data/graphs for Alberta -- economic growth, unemplyment rate, disposable income, retail sales average income inflation rates etc. I know that the RBC site has info. Is there any other site(s) to reference?

Thanks.

Ian

David Rosenberg on Canadian housing and GDP growth

YehoramShenhar — Mon, 26 Apr 2010 08:18:51 GMT

Interesting analysis by economist David Rosenberg on the role of housing in the recent economic recovery in Canada.

"We did a bottom-up accounting from the GDP data to see just how much of the post-recession recovery in Canada has been due to the direct and indirect effects from the housing boom. Part of that indirect impact comes via the “wealth effect” on consumer spending from the 20% YoY surge in home values seeing as housing comprises nearly one-quarter of the asset base in the household sector. In Canada, this means that every dollar increase in housing wealth translates into 7-9 cents of incremental spending in the GDP accounts. Housing has tremendous spin-off effects outside of the “wealth effect” — the impact on building materials, real estate income, legal services, architecture billing, classified ads, infrastructure, etc — and it’s all locally-driven (ie, marginal import leakage).

Based on our statistical work, around half of the 7% annualized growth rate in nominal GDP from the recession trough has been due to the combined direct and indirect benefits from the housing boom. And, when we apply the price deflators to the various sectors of GDP, we actually find that every penny of economic activity, in real terms since this recovery began, has occurred thanks to the housing sector. In other words, if not for housing real GDP would have stagnated since Q2 2009 instead of rebounding at a 3% annualized pace"

The fool report attached.
(Link to the article - requires free registration - https://ems.gluskinsheff.net/Login.aspx?Ret...ave_042310.pdf)

China's oil demand increase 'astonishing'

jgrover — Fri, 19 Mar 2010 23:42:45 GMT

China's oil demand increase 'astonishing', says IEA

http://news.bbc.co.uk/2/hi/business/8563985.stm

Looking for Pre-1981 Provincial GDP stats

alangoldade — Sun, 14 Feb 2010 10:09:46 GMT

Does anyone know where I can obtain pre-1981 provincial GDP stats?

I have found 1981 to present online, but am stumped on the older data.

Thanks in advance.

The end of Chimerica

YehoramShenhar — Tue, 29 Dec 2009 04:13:12 GMT

Interesting paper - http://www.hbs.edu/research/pdf/10-037.pdf

Are We in a Bubble

BrianPersaud — Wed, 09 Dec 2009 12:06:09 GMT

TD bank recently published a Resale Housing Outlook report (see here)

TD comments if the real estate market is in a bubble.

Conclusions:

* On a national level, they feel that prices are overvalued 12% based on market fundamentals (income growth, job growth etc).
* Most of pent up demand from the sales crash last year should be clear by now
* From next year on, we should see the real estate market return to growth based on fundamental drivers (or have price growth slow to catch up to the fundamentals since incomes are expected to go up).
* They don't expect prices to fall, in fact their fear is prices may continue to rise.

Real Experts Comment: Yes the market overshot, and people have been taking advantage of rates to get into the market. As more supply comes online in the market (finished condos, and new listings) and as supply of buyers capable buyers fall, prices should level off to a lower growth rate.

As of today, this is no bubble.

Quick facts on Canadian oil

GlennLasiuta — Thu, 26 Nov 2009 23:32:07 GMT

Please follow the link below to view some quick facts related to Canadian oil.

http://www.viraleruption.com/imgs/411-canada-oil.jpg

Glenn

2007 Neighbourhood Income and Demographics

NickDavis — Tue, 17 Nov 2009 03:14:26 GMT

Hey all,

I found this while "googling" for information. I thought it may be of interest to everyone; it shows the average income for each FSA (ex. V0A) as well as a lot of other information.

If anyone else has found information that may be helpful it would be great if you posted it as well!

Good Luck!

Nick

[attachment=2422:BC_2007_...graphics.pdf]

Real Estate is 'somewhat' forecastable

BrianPersaud — Sat, 24 Oct 2009 23:14:18 GMT

According to Robert Shiller, statistical studies of forecasting models for home prices show that roughly half of the variability of home prices can be predicted one year ahead.

In the US (I'll explore this for Canada as well)...you will have just as much luck proving that cities with good feng shui will cause an increase in prices then as you would with building costs, population, or interest rates (see chart here).

The home price index that Shiller uses is a national index, therefore it doesn't take into account Regional booms that result from the building of infrastructure (services for new land, community centre, schools etc), attracting of new employers (a manufacturing plant) or the addition of better transportation (rail, canals, highways subways).

Moral of the story: study more than just one fundamental when looking to see where home prices are going

Calgary Sales Statistics September 2009

RedlineBrett — Sat, 10 Oct 2009 00:50:07 GMT

From Dianne Scott - President elect of CREB

"“In the third quarter Calgary shifted to a more balanced housing market. But conditions are still very favourable for home buyers,” says Scott. “Mortgage rates remain low, affordability continues and federal government incentives such as the $5,000 tax credit may motivate first-time homebuyers to make a purchase before the end of the year.” “This recession has been a tricky one. Consumers were expecting the worse yet the housing rebound came faster than expected. I think it is safe to say the worst is behind us, but it will take some time for consumers to really shake off their economic jitters,”

My thoughts

Prices have come up due to reduced supply. Supply has reduced in every month since march and we are noticeably below the monthly average for the past 24 months.

The market has certainly recovered with sales numbers coming up steadily in the last few months however we are now returning more to what we've seen earlier in the year.

In my opininon the market is certainly trending upwards but more so at the consistent low single digits that investors should be expecting for the foreseeable future. I use a weighted average of price vs. sales for my trending (the Rolling weighted average line) and it is showing clear signs of market confidence starting in the spring of 2009.

However there continues to be a reduced supply of good quality investment properties. Many clients are on the sidelines waiting for a good buy to come up and have found themselves waiting on the sidelines for a few months now... unsure of whether or not to buy a less desirable property and hope it appreciates or wait and see if better quality property comes on the market and hope it's not priced too high. Most of the good suited property has come on the market in the 400s where the sweet spot is still really between 380 and 350. Investors may have to be prepared to put a little work into their properties to get the best value as few turn-key rental properties are hitting the market right now.

orthwest LRT
Ranchlands Single Family Home September 09
Ranchlands Condominium September 09
Silver Springs Single Family Home September 09
Silver Springs Condominium September 09
Dalhousie Single Family Home September 09
Dalhousie Condominium September 09
Brentwood Single Family Home September 09
Varsity Single Family Home September 09
Varsity Acres Condominium September 09
Varsity Village Condominium September 09

West LRT
Glendale Single Family Home September 09
Rosscarrock Single Family Home September 09
Shaganappi Single Family Home September 09
Westgate Single Family Home September 09
Spruce Cliff Single Family Home September 09
Spruce Cliff Condominium September 09

Overall Calgary Market
Citywide Sales Stats - last 24 months - Current to September 2009

Gregory Klump- Chief Economist For Canadian Real Estate Association

RussellWestcott — Thu, 08 Oct 2009 07:19:28 GMT

Discover the 2010 forecast for Canadian Real Estate Market from CREA's Chief economist.

Enjoy this 37 minute video presentation

Sliding down the 'W'

YehoramShenhar — Tue, 06 Oct 2009 09:18:43 GMT

Bank analyst Meredith Whitney shared a dim but pragmatic view on the prospects for economic recovery in a Wall Street Journal article last week:

"Anyone counting on a meaningful economic recovery will be greatly disappointed. How do I know? I follow credit, and credit is contracting. Access to credit is being denied at an accelerating pace. Large, well-capitalized companies have no problem finding credit. Small businesses, on the other hand, have never had a harder time getting a loan"

"...I believe that we are only in the early stages of the second half of this credit cycle. I expect another $1.5 trillion of credit-card lines to be removed from the system by the end of 2010"

Read the full article here - http://online.wsj.com/article/SB1000142405...0989162030.html

Most Skilled Immigrants Leaving the US

BrianPersaud — Tue, 22 Sep 2009 12:12:35 GMT

Click here to watch this Video from FoxBusiness.com

This video is a follow up to a previous blog post on bringing in skilled workers who can't get US visa into our major cities.

Vivek Wadwha in the interview illustrates how great an opportunity it is to poach these folks before the go back home to India and China.

Since many of these skilled workers are entrepreneurs, we could be opening up the red carpet to the next RIM in Canada.

More Skilled Entrepreneurial Immigrants = More RIM's = More Jobs + Higher Incomes + Population Increase = Price Increases for Real Estate and more prosperity for our country.

REITs VS PWC

BrianPersaud — Thu, 10 Sep 2009 19:34:55 GMT

Ok here's two views of commercial Real estate

Reprieve for REITs

"More equity and debt issues hit the market, and REITs on both sides of the border started to deleverage their bloated balance sheets. As a result, REIT units quickly raced off their market bottoms, rising 55% through Friday's close, compared with 43% for the broader benchmark here in Canada, and more than 80% in the U.S. versus 51% for the S&P 500. Simon Property, which plunged to US$25.95 in March, closed yesterday at US$64.77."

With increased liquidity, the Canadian REIT sector is now well positioned to address its debt due in the second half of the year and 2010, said Neil Downey, RBC Capital Markets analyst.

and

Price Waterhouse Coopers: Limited Buyers, Scarce money: Commercial Real Estate in Tough Times

PWC sees

- Tight industry-lending conditions

- A dearth in investor appetite for commercial mortgage backed

securities (CMBS)

- Expectations for higher capitalization rates which imply decreased

valuations

- Financial weakness and/or sluggish growth amongst tenants

Calgary Sales Stats - August 2009

RedlineBrett — Tue, 08 Sep 2009 02:38:04 GMT

From CREB President Bonnie Wegerich:

"“Calgary’s housing prices are edging upwards as consumer confidence improves and demand continues to grow,"

And again

"We might see a gradual edging up in average prices come this fall, but on the whole, prices will most likely remain relatively stable. With our inventory at just under a four-month supply, the market continues to be in balance,”"

And again

"We are seeing an upward revision of our housing market forecasts at the national level,” says Wegerich. “I think it is fair to say the recovery in the market has been a little brisker then first expected—and all signs indicate the rebound, all be it gradual, will have some longevity.

My thoughts:

We have seen healthier sales numbers in the past few months - albeit seasonal- but it is still nice to see them. The listings are down significantly relative to this time last year (8835 in Aug 2009 vs 12673 in Aug 2008) This has helped to keep prices stable as buyers have a little less supply to choose from.

However, the sellers that could not sell late last year are putting their properties back on the market at better prices. We are seeing properties come on the market to replace those that are sold and we continue to be in a balanced market scenario. The true telling sign of a full recovery will be if we see home construction (and sales) numbers increase in conjunction with the residential sales staying strong. There is still a reasonable amount of sentiment that we have not fully absorbed the "overbuilding" that occured in the last half of 2007 and early 2008.

Regarding investment property: Not that much on the market right now! My investor clients have struggled to find good product at reasonable prices and my sales in that market range have slowed this month. However many landlords take the summer off and then make their moves in the fall so I expect sales to increase in this respect later this year.

Northwest LRT
Ranchlands Single Family Home August 09
Ranchlands Condominium August 09
Silver Springs Single Family Home August 09
Silver Springs Condominium August 09
Dalhousie Single Family Home August 09
Dalhousie Condominium August 09
Brentwood Single Family Home August 09
Varsity Single Family Home August 09
Varsity Acres Condominium August 09
Varsity Village Condominium August 09

West LRT
Glendale Single Family Home August 09
Rosscarrock Single Family Home August 09
Shaganappi Single Family Home August 09
Westgate Single Family Home August 09
Spruce Cliff Single Family Home August 09
Spruce Cliff Condominium August 09

Overall Calgary Market
Citywide Sales Stats - last 24 months - Current to August 2009

Toyota to move production from California to Cambridge ON

YehoramShenhar — Sat, 29 Aug 2009 04:12:18 GMT

Good news for the auto sector - http://www.ctv.ca/servlet/ArticleNews/stor...28?s_name=Autos.

Calgary Sales Statistics - July 2009

RedlineBrett — Thu, 13 Aug 2009 03:21:57 GMT

My apologies for getting this out halfway through the month this time.

Anyways a bit of a dip from Junes numbers but I somewhat expected that given the sharp rise in that months sales. Still not a bad sign. Would not surprise me to see it jump and dip a bit over the next few months given that we are in a balanced market and month to month data can be expected to rise and fall along a line of negligible net appreciation.

August is typically a slower month as well.

“We are continuing to see market improvement in Calgary home sales,” says Bonnie Wegerich, President of the Calgary Real Estate Board. “These are healthy sales numbers in a month when we typically expect a summer slowdown."”

And again here:

“Confidence has definitely returned to the housing market,” noted Wegerich. “Buyers’ moods have been buoyed by news that an economic recovery, albeit gradual, seems to be underway.”

Northwest LRT
Ranchlands Single Family Home July 09
Ranchlands Condominium July 09
Silver Springs Single Family Home July 09
Silver Springs Condominium July 09
Dalhousie Single Family Home July 09
Dalhousie Condominium July 09
Brentwood Single Family Home July 09
Varsity Single Family Home July 09
Varsity Acres Condominium July 09
Varsity Village Condominium July 09

West LRT
Glendale Single Family Home July 09
Rosscarrock Single Family Home July 09
Shaganappi Single Family Home July 09
Westgate Single Family Home July 09
Spruce Cliff Single Family Home July 09
Spruce Cliff Condominium July 09

Overall Calgary Market
Citywide Sales Stats - last 24 months - Current to July 2009

CMHC's Housing Now - Calgary CMA

AlexKubyshyn — Sat, 01 Aug 2009 12:42:25 GMT

Here's the July 2009 CMHC's Housing Now report for Calgary CMA.

Look carefully - page 4:

- 15,700 new FULL TIME jobs in Calgary in May and June;
- net migration to AB in 2009 - 16,000 vs 11,000 in 2008.

Isn't it great??? Forget about 6.5% unemployment rate they are talking about... /smile.gif" style="vertical-align:middle" emoid=":)" border="0" alt="smile.gif" />

Report on Oilsands Emissions does not absolve Alberta Industry

Ally — Sat, 25 Jul 2009 00:16:52 GMT

CALGARY - A study benchmarking full life-cycle greenhouse gas emissions from Alberta's oilsands against other crude oils refined in the United States doesn't absolve the province from finding more ways to produce cleaner-burning oil, a spokesman associated with the research said Thursday.

The report compiled information from two separate studies to conclude emissions resulting from refining Canadian oil sands were approximately 10 per cent higher than international and domestic US sources, but were approximately the same as heavy oil produced in California.

"We're here, this is where we are but we have a ways to go down, and we can go down and should go down," Eddy Isaacs, managing director of the government-created Alberta Energy Research Institute said. "This should not be seen as absolving the energy industry in Alberta to doing their utmost to get down to the levels as much as possible as low as possible."

The study was undertaken to provide a benchmark to decision makers on the full life-cycle of crude oils, from well to exhaust pipe, rather than having them rely on perception, he said.

"We don't think we should be compared by ourselves, we think we need to compare with world crudes, and that's what this study is trying to do," Isaacs added.

Read the full article here.

EnCana Bullish on Horn River Shale Gas Play

Ally — Fri, 24 Jul 2009 23:56:12 GMT

EnCana Corp. on Thursday said the Horn River shale could be one of the most important gas finds in North America, building on earlier optimism that the remote unconventional natural gas deposit has the potential to dramatically alter the continental supply picture.

Although initial results from a pilot program have been "encouraging," CEO Randy Eresman said it is still too early to commit to full-scale commercial development. Nonetheless, he said Horn River has enough gas to become "one of the most important plays in our company."

Horn River resource estimates vary, ranging from 100 trillion to more than 600 trillion cubic feet. The amount of gas in unconventional plays in Canada and the U. S. will prompt EnCana to encourage policy-makers to promote large-scale use of cleaner burning natural gas for electrical power generation and for use as a transportation fuel in cars and trucks, Eresman said.

"The emergence of shale gas changed the landscape for North American natural gas," he told a conference call to discuss the company's lower second-quarter financial results. " There is an opportunity to expand the market for natural gas to displace significant quantities of coal and crude oil."

Prolific unconventional discoveries are being blamed for creating a gas bubble that has pushed prices to multi-year lows. American production surged to postwar highs last year even as demand dwindled in the face of the recession, resulting in record storage inventories.

Read the full article here.