February 2011 Alberta Economic Fundamentals

[Ally]

Multi-family sector boosts Calgary housing starts





CALGARY - Multi-family construction has boosted housing starts in the Calgary region to kick off the new year for the homebuilding industry.




In January, there were 225 housing starts in the multi-family sector in the Calgary census metropolitan area, up from 101 in January 2010, said Canada Mortgage and Housing Corp., in a report released Tuesday.




That boosted total housing starts to 518 for the month which was up slightly from 514 a year ago.




Read the full article here.

 

[Ally]

Greater Vancouver real estate prices surged 7.8% per year for more than a decade




VANCOUVER - It`s been a seller`s market in Greater Vancouver for 55 per cent of the last eleven years, according to a RE/MAX Housing Barometer Report released Monday.







The report shows that a buyer`s market prevailed only 13 per cent of the time, while the remainder was balanced.







Values rose from $295,978 in 2000 to $675,853 in 2010 ` for a compounded rate of return of 7.8 per cent each year, while Canada earned a 6.8 per cent return over the same duration, the report says. Average price increases from 2000 to 2010 ranged from an annually compounded rate of return of 4.82 per cent in London-St. Thomas to a high of 9.56 per cent in Regina.



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[Ally]

Gains in Metro Vancouver housing outpaced TSX since 2000





Metro Vancouver real estate has proved to be a solid investment over the last decade despite the market's recent ups and downs, according to a new report. However, analysts warned that those returns will be hard to match in the coming 10 years.




A Metro Vancouver home earned its owner a compounded-annual return of 7.8 per cent between the start of 2000, when it was worth $296,000, and the end of 2010, when it was worth $676,000, Re/Max reported in its Housing Barometer Report.




That is better performance than an investment in the main Canadian stock index, which would have earned a compounded annual return of 6.64 per cent over the same period, but not quite as good as gold, which returned almost 12 per cent annually, according to data from Bloomberg








Read the full article here.

 

[Ally]

Calgary homes beat national average for investment return





CALGARY - Calgary homeowners earned among the highest compounded rate of return for real estate between 2000 and 2010, according to a report released Tuesday by Re/Max.




The report said the average residential price in the city grew from $176,305 in 2000 to $398,764 last year - an annual compounded rate of return of 7.7 per cent.




That bested the national average of 6.82 per cent. Across Canada, Re/Max, in its Housing Barometer report, said residential average prices went from $164,091 in 2000 to $339,030 in 2010.




Lowell Martens, of Re/Max Real Estate Mountain View in Calgary, said the report indicates that as a long-term investment real estate has been "relatively stable" in the local market.




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[Ally]

SAIT job fair points to more buoyant Calgary employment market






CALGARY - Unlike the last two years where post-secondary students have had a hard flog to secure employment, Wednesday's career fair at SAIT Polytechnic is showing Calgary's job market may be on the climb.




Thirty-six per cent more companies were looking for applicants at SAIT's twice-annual fair this week than the same time last year.




And with a further 19 firms on the waiting list, SAIT could have hosted 50 per cent more recruiters than one year ago, if it had had enough space.




"We take this as a sign the economy is turning around. In fact, our theme this year is things are looking up," said SAIT's employment specialist Travis Ouchi.




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[Ally]

Calgary downtown office activity a sign of employment growth





CALGARY - Record leasing activity in the downtown office market in 2010 means job growth isn't far behind, says a commercial real estate expert.




John Savard, vice-president of CITI Commercial Real Estate Services, said absorption of office space in the central business district hit 2.6 million square feet last year - four times the 10-year average of 640,000 square feet.




He said the average tenant occupies about 300 square feet per employee therefore the downtown area will employ an additional 8,667 jobs are a result of the leasing activity.




Read the full article here.

 

[Ally]

Alberta housing sales growth forecast to lead country





CALGARY - Resale housing market activity has picked up in Alberta since last summer but "it still has some way to go before we can confidently declare it out of its lethargy," says a report released Thursday by RBC Economics.




It predicts resales in the province to grow by a nation-leading 9.5 per cent this year. Also, the average sale price of a detached bungalow is forecast to grow by a nation-leading 4.2 per cent in 2012.




"After showing signs of renewed vigour in 2009, home resales fell back to near decade-low levels mid-year 2010 which were just modestly higher than those reached at bottom of the 2007-2008 market downturn," says the report authored by Robert Hogue, senior economist at RBC. "Demand has gradually strengthened in the past several months, thanks to a provincial economy that finally gained traction and stronger net migration especially from abroad."




Read the full article here.

 

[Ally]

Bank of China opening branch in Calgary





CALGARY - As Chinese investment in Alberta builds, one of the country's largest banks is opening an office in Calgary, a move many say signals Asian interest is expanding beyond the resource sector.




The Bank of China decision to make Calgary's its third Canadian location is an indication of the city's place on the world economic stage, industry watchers believe, providing an opportunity to grow from the oil and gas base.




"I think you'll see investment become more and more diverse," said Sarah Kutulakos, CEO of the Canada-China Business Council. "It's a benefit both for the Chinese investors, as well as for Canadian companies that are doing business with China, in that there are more options available.




Read the full article here.

 

[Ally]

Province vulnerable to oilsands lease lawsuits





The Alberta government is failing in its constitutional duty to properly notify First Nations of oilsands leases on their traditional lands -a practice that could lead to a Supreme Court challenge, says a University of Calgary aboriginal law expert.




Nigel Bankes, who is also the university's chair of Natural Resources Law, said the government's policy of simply posting lease sales online and not going to First Nations directly doesn't stand up to scrutiny.




"I'd say the province isn't doing a good job," Bankes said. "Particularly when it comes to granting oilsands rights, because they basically say, 'We can fulfil our duty simply by posting stuff on our website.' I don't think that's real consultation."




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[Ally]

Energy demand to triple by 2050: Shell





OTTAWA - Global energy demand will triple by the year 2050, leaving the world in a gaping shortfall equal in size to the industry`s total output in 2000, Royal Dutch Shell cautioned Monday in a report on the future of energy use.




The report warns broadly of an uncertain and volatile period ahead, both for oil prices and for global politics as demand from emerging nations like China and India intensifies and supply fails to keep pace.




`We believe that the world is entering an era of volatile transitions and intensified economic cycles. The recession interrupted the oil and commodity price boom but it may return,` the British energy giant states.




Emerging nations are now entering their most energy-intensive phase of economic growth as they industrialize, build infrastructure and increase transportation use, and will continue to put upward pressure on prices, Shell said.




Read the full article here.

 

[Ally]

Has the Canmore market turned the corner?





For a couple of years now the Canmore housing market has been in a marked correction. How much of a correction can be argued depending on what subset of the market you are actually talking about: Condos, recration, single family homes, land, etc.



Certainly the condo and vacation rental market have been the hardest hit and may still have some room to move down. Condos are down 10% and vacation rentals are down 18% from 2009. That is very significant but it also means that the much need affordability that many first time home buyers are looking for is more attainable.




The high end second home also had a significant pull back and although we still see solid pricing the volume of high end homes trading hands has diminished significantly from the peak in 2007 however we did see volumes trend higher in 2010.



Read the full article here.

 

[Ally]

Enbridge proceeding with Bakken expansion






Enbridge Inc. (ENB-T57.56-0.04-0.07%) is going ahead with a $560-million expansion of its Bakken pipelines, adding 145,000 barrels per day of new capacity from one of North America`s fastest-growing oil producing regions, the company said Monday.




Enbridge will expand its North Dakota and Saskatchewan pipeline systems in order to handle rising oil output from the Bakken field, which spans the Canadian province of Saskatchewan, and the U.S. states of Montana and North Dakota.





Read the full article here.

 

[Ally]

Albertans seeing sunny-side up for Canadian economy: RBC Canadian Consumer Outlook index





TORONTO, Feb. 8 /CNW/ - Almost two-thirds (61 per cent) of Albertans feel Canada's economy is going to improve in 2011, the highest level of optimism across the country, according to the January 2011 RBC Canadian Consumer Outlook Index (RBC CCO). Alberta residents are also the most confident that their own financial situation will improve this year, registering a positive outlook of 48 per cent compared to the national average of 38 per cent.




Albertans' confidence in their finances may be reflected in their spending over the holidays. The RBC CCO survey found that almost one-third (31 per cent) of Albertans overspent their holiday season budgets, on average spending $507 more than they intended to over the holidays, compared to the national average of $429, and those who overspent are now looking for ways to pay their bills. Their top five post-holiday cutbacks include spending less on entertainment (51 per cent) and day-to-day living expenses (42 per cent), using credit cards and lines of credit less (30 per cent and 15 per cent respectively), as well as cutting back on smaller expenses such as lunches and coffee expenses (29 per cent).




"Budgeting to pay off holiday season expenses and to accommodate the various financial changes that each new year brings are good reasons to revisit your financial plan for 2011," said Bruce MacKenzie, regional president, Alberta and the Territories, RBC. "It's important to pay off your bills, but it's also a very good idea to set aside savings whenever possible. This is where a financial advisor can help you set up a budget and plan for your present and future needs."



Read the full article here.

 

[Ally]

Wikileaks continues to increase value of Alberta oilsands



The US fears that Saudi Arabia, the world's largest crude oil exporter, may not have enough reserves to prevent oil prices escalating, confidential cables from its embassy in Riyadh show.





The cables, released by WikiLeaks, urge Washington to take seriously a warning from a senior Saudi government oil executive that the kingdom's crude oil reserves may have been overstated by as much as 300bn barrels ` nearly 40%.





Read the full aritcle here.

 

[Ally]

Impact of Epcor Tower on downtown hard to gauge





The Epcor Effect.




That's what they're calling it in Edmonton's commercial real-estate world.




The Epcor Effect doesn't have anything to do with light switches or flushing toilets. It refers to the expected impact of the opening of the new Epcor office tower at 101st Street and 104th Avenue.




It's been a long time since Edmonton saw a new highrise office building downtown. The last one to open was Commerce Place in 1990.




A new office tower is, on balance, a fabulous thing for the downtown. But its consequences are complicated. The Epcor Tower is big -it will have almost 600,000 square feet of office space. Epcor and Capital Power will be the anchor tenants, taking up approximately 290,000 square feet, roughly half the space. The federal Department of Justice will also be moving its offices to the new tower, occupying another 130,000 square feet.




Read the full article here.

 

[Ally]

Proposals vie to transform Edmonton City Centre Airport site






EDMONTON ` Long-awaited proposals released Tuesday for redeveloping the City Centre Airport show a potential green oasis of parks, lakes, ravines and a tram line.




Five international design teams worked since August on the best way to bring the city`s vision of a compact, energy-efficient, family-friendly neighbourhood for 30,000 residents on the site into reality.


They came up with ideas that include low-rise apartments with grass-covered roofs and solar panels, a three-kilometre canal filled with stormwater, geothermal heating linked to downtown and a 72-hectare park.




There could be rowing, skating, performing arts spaces and possibly one day a station to catch a high-speed train for a 90-minute trip to Jasper.




`The opportunity we see with this project is absolutely fantastic. The opportunity to create a model for the future of Edmonton is absolutely unbelievable,` said Tom Sutherland, part of Rotterdam`s KCAP Architects and Planners team.




Read the full article here.

 

[Ally]

Deal gives go-ahead to upgrader





A provincial bitumen royalty supply deal that will formally kick-start the long delayed $5-billion first phase of North West Upgrading's project will be announced Wednesday, The Journal has learned.




Partners North West Upgrading and Canadian Natural Resources Ltd. (CNRL) will sign the agreement Tuesday with the province under the Bitumen Royalty in Kind (BRIK) program, becoming the first recipients of a scheme for encouraging more bitumen upgrading in Alberta.




Premier Ed Stelmach and his cabinet are scheduled to be in Fort Saskatchewan on Wednesday morning.




Read the full article here.

 

[Ally]

Schlumberger profit climbs, see strong 2011






NEW YORK (Reuters) - Schlumberger Ltd , the world's largest oilfield services company, posted a higher-than-expected profit boosted by strong demand in North America, and said it expected brisk activity to continue.




Like others in the oilfield service sector, Schlumberger depends on spending by its oil and gas-producing customers, and the rising oil price has bolstered confidence that its business will benefit in 2011.




"It was a strong quarter, better than expected," said Bill Herbert, analyst with Simmons & Co International, a boutique investment firm in Houston.



Read the full article here.

 

[Ally]

Oil production retreating from the ends of the earth





Chapter 4 in my book A Thousand Barrels a Second (McGraw-Hill, 2006) was one of my favourites. Titled, `To The Ends of the Earth,` I spoke about the diverging trends of a growing, global appetite for oil and the industry`s diminishing ability to serve the hunger at the then price of around $50/B. After five turbulent years that hosted an intermission for a financial crisis the same script appears to be replaying. But the theatre is not the same as it was in 2006. Some themes need revisiting, notably that the oil industry must still go to the `ends of the earth` to find new barrels of oil for a hungry world.





The 150-year progression of the oil industry`s exploration activity from easy-to-find onshore oil, to progressively more challenging and deeper offshore regions, to increasingly inhospitable geographies, to more demanding, uncomfortable and constrained political locales, all constituted a costly migration to `The Ends of the Earth.` Against a backdrop of a voracious oil appetite from emerging markets like China the megatrends in play were a strong and correct argument for a rising oil price.




Read the full article here.

 

[Ally]

Calgary beltline office space in demand



CALGARY - Demand for office space in the Beltline area strengthened throughout last year with the vacancy rate declining.





Vacancy decreased in the fourth quarter of 2010 for the fourth consecutive quarter in the popular area just outside the downtown, according to a report by Barclay Street Real Estate in Calgary.





The Beltline office vacancy rate fell from a peak of 16.3 per cent in the fourth quarter of 2009 to 10.0 per cent in the last quarter of 2010.





There was 148,300 square feet of positive absorption in the fourth quarter.

Read the full article here.