August 2011 Alberta Economic Fundamentals

[Ally]

Alberta MLS sales expected to increase





CALGARY ` MLS sales and average prices are forecast to increase in Alberta this year and next year, according to the Canadian Real Estate Association.




In a new forecast released Tuesday, CREA said sales in the province will increase by 7.3 per cent this year over last year to 53,350 units and rise by another 6.8 per cent in 2012 to 57,000 sales.




The year-over-year percentage hikes are the highest in Canada in each of the next two years.






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[Ally]

Companies line up to develop Fort McMurray neighbourhood




FORT MCMURRAY - Eleven developers have bid to develop 54 hectares in Fort McMurray as part of the highly anticipated Parsons Creek community, which will one day house an estimated 24,000 people.




With the oilsands region on the cusp of another boom, land sales for the massive project could earn the government an estimated $800 million in additional revenue by 2013.




Still, locals say the development isn`t happening fast enough and the city will run out of single-family housing stock by the end of this year.





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[Ally]

Conditions 'supportive' for Alberta housing markets




Adrienne Warren, senior economist with Scotia Economics, says it remains to be seen how the recent volatility in financial markets and mounting concern over global growth prospects will impact consumer confidence and home sales in the coming months.




`However, barring a major pullback in hiring, conditions still appear reasonably supportive,` she says. `Some move-up buyers, particularly at the high-end of the housing market, may now be more inclined to stay on the sidelines. However, it also now appears that borrowing costs will remain lower for a longer period of time ` good news for both new homeowners and those renewing their mortgages.`





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[Ally]

Allied properties REIT purchases Calgary buildings





CALGARY ` Allied Properties Real Estate Investment Trust has made a huge move into Calgary`s commercial real estate market.




In just over a year, the REIT has purchased five Calgary properties in the downtown and Beltline areas and closes in the near future on the acquisition of four additional properties including the Cooper Block (809 10th Ave. S.W.), the Alberta Hotel Building (801 1st St. S.W.), Fashion Central (804 1st St. S.W.) and Art Central (100 7th Ave. S.W.), the Herald has learned.




Michael Emory, president and chief executive of the REIT, said once all acquisitions take place, at a cost of $142 million, it will own nine buildings in Calgary, representing 392,000 square feet of rentable area. The REIT might also set up a corporate office in Calgary in September in the Art Central building to handle its growing Western Canadian portfolio.




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[Ally]

Political rancour enemy of pipeline




Any day now, the U.S. State Department will release a final environmental impact statement on the proposed Keystone XL oil pipeline from Alberta to Texas. It's a step in the approval process that proponent TransCanada Corp. and the large part of the Canadian economy dependent on oil sands growth hope will lead to a permit by the end of the year.




But as the gridlock in Washington over how to handle the country's debt demonstrated, U.S. politics has gotten more complicated, and it's a safe bet it will get even more unpredictable in the run-up to the 2012 presidential election.




Indeed, some are beginning to worry the much-delayed oil-sands pipeline could be sacrificed by the embattled Obama administration to avoid eroding support from one of its strong constituencies, the environmental movement, which has been rabidly opposed to the $7-billion project.





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[Ally]

Venezuelan oil giant sitting atop a well of trouble





Venezuela received an enviable honor last month: OPEC said it is sitting on the biggest reserves of crude oil in the world ` even more than Saudi Arabia.



But the Venezuelan oil industry is also sitting atop a well of trouble.




The South American nation has struggled to take advantage of its bonanza of expanding reserves. And a scandal over embezzled pension funds at state oil company PDVSA has renewed concerns about corruption and mismanagement.






Retired workers from the oil behemoth have taken to the streets in protest. Their beef: nearly half a billion dollars of pension fund money was lost after it was invested in what turned out to be a Madoff-style Ponzi scheme run by a U.S. financial advisor who was closely linked to President Hugo Chavez`s government.





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[Ally]

Oil windfall drives Alberta's turnaround




Alberta is once again awash in petro dollars as revenues from rising oil prices and record land sales have handed the province a projected $2-billion windfall.




As the government delivered its first-quarter fiscal update, Finance Minister Lloyd Snelgrove said higher-than-expected revenues will slash the projected deficit to $1.34-billion for the fiscal year ending March, 2012.





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[Ally]

Alberta chops projected deficit by half




CALGARY` Alberta`s $3.4-billion projected deficit is now expected to be chopped in half and its sustainability fund is now projected to double, according to the province`s 2011-12 first-quarter fiscal update, released Wednesday.




But Alberta finance officials warn that the province`s financial update was produced in June before the economic crisis in the United States and Europe and they can`t say how recent developments have affected the rosy forecast.




`We must remain cautious and continue to be prudent fiscal managers,` said Finance Minister Lloyd Snelgrove in a release.`Mounting government debt problems in the U.S. and Europe, and fluctuating oil prices and exchange rates demonstrate how volatile and interconnected the global economy is, and Alberta`s prospects are significantly influenced by the global situation.`





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[Ally]

Sun about to shine on natural gas




EDMONTON - It`s been a long time since I bumped into anyone who is even remotely bullish on natural gas, the energy sector`s unloved stepchild.




Roughly two years after the recession ended, natural gas prices remain stuck in the basement, as a tidal wave of new shale gas supplies gluts the U.S., Alberta`s only existing export market.




Result: at the current price of less than $4 US per million British thermal units (MMBtu) in New York, natural gas is roughly 70 per cent below its 2008 high. Likewise, Alberta (AECO) spot prices are mired in the $3.65 (Cdn) range.





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[Ally]

Alberta wholesale sales balloon close to $6 billion





CALGARY ` Wholesale sales in Alberta jumped to close to $6 billion in June, according to Statistics Canada.




The federal agency reported Thursday that sales of $5.947 billion were up 3.0 per cent from May and by 18.6 per cent from June 2010.




Across the country, wholesale sales rose 0.2 per cent in June to $47.782 billion. That`s also up 8.0 per cent from last year.






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[Ally]

Calgary region EI beneficiaries decline





CALGARY ` The number of people receiving regular Employment Insurance benefits in the Calgary region plunged in June compared to a year ago.




Statistics Canada reported Thursday that 9,710 people in the Calgary census metropolitan area received regular EI benefits in June, down by 4,890 people or 33.5 per cent from June 2010.




In Alberta, regular beneficiaries in the month dropped by 280 people or 0.8 per cent from May and fell by 14,350 or 29.5 per cent from June a year ago.






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[Ally]

Calgary Real Estate Board ratchets down sales forecast for 2011, citing wait-and-see buyers





CALGARY ` The Calgary Real Estate Board has revised downward its annual forecast for MLS sales in the city`s housing market this year.




In its housing market update in August, CREB now predicts 13,100 single-family home sales for the year, up 7.7 per cent from a year ago and 5,100 condominium sales, which represents a 1.51 per cent decline from 2010.




At its annual forecast in January, the organization forecast single-family sales of 14,500 for an annual increase of 19.9 per cent and condo sales of 6,000 for a hike of 15.8 per cent.




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[Ally]

Alberta crop prices well above 2010





EDMONTON ` Prices for Alberta wheat, canola and barley have fallen about 10 per cent recently, but they`re still up significantly compared with this time last year.




Wheat prices are higher by 29 per cent, canola 16 per cent and barley nine per cent. Better still, as of Aug. 11, Alberta Agriculture rates 77 per cent of the provincial wheat crop and 69 per cent of the canola crop as good or excellent.





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[Ally]

Albertans are optimistic about business growth



People in our province are optimistic about future of business growth





The Bank of Montreal says that Albertans are among the highest percentage of Canadians expressing confidence in local entrepreneurs making gains this year.







The Leger Marketing survey finds that across the country only 44 per cent of Canadians are optimistic about business growth.







Bill Hogg with BMO tells 660News that the people in the west are buoyant about the future.







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[Ally]

Calgary industrial real estate vacancy low




According to commercial real estate firm CB Richard Ellis, Calgary`s industrial real estate market had a low vacancy rate of 3.5 per cent at the end of the second quarter. In a total inventory of just under 115.8 million square feet, there is only just over four million square feet of vacant space.




The availability rate (which includes available and vacant space) is 4.4 per cent or just over 5.1 million square feet.



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[Ally]

Calgary inflation second highest in Canada





CALGARY ` Consumers prices in the Calgary region rose by the second highest monthly rate in the country in July, according to Statistics Canada.




The federal agency said Friday that prices in the Calgary census metropolitan area were up 0.5 per cent from June, behind only St. John`s, Newfoundland, which saw a 0.6 per cent hike.




In Alberta, inflation was 0.3 per cent while in Canada it was 0.2 per cent.






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[Ally]

Canada's handyman, Mike Holmes, lends talents to Edmonton housing project




EDMONTON ` Canada's most recognizable handyman is bringing his talents to an affordable housing project in inner-city Edmonton.







Mike Holmes and his housing company, The Holmes Group, have partnered with the Metis Capital Housing Corp. to build an affordable and accessible complex in the city's Boyle neighbourhood.







The 90-unit, senior-friendly and barrier-free housing complex is part of the city's neighbourhood-revitalization efforts.





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[Ally]

Owning a Calgary house more expensive: RBC





Owning a home in Calgary became more expensive in the second quarter of this year but housing in the city is one of the most affordable among major cities in Canada, says a report released Monday.




`The long hoped for rebound in the Calgary-area market that appeared to be on track earlier this year lost some momentum in the second quarter,` says the RBC Housing Trends and Affordability report.




`After posting two successive increases, home resales edged down during the April-June period, providing little impetus to prices, which continued to move sideways for the most part.






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[Ally]

CNQ restarts Horizons oil sands facility




The Horizon oil sands plant is back up and running after almost eight months of downtime.




Canadian Natural Resources (CNQ-T 34.53 1.63 4.95%) says it expects to reach full production in the next week.





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[Ally]

Alberta repeat home buyers moving onto larger homes





CALGARY ` Repeat home buyers in Alberta are moving on to larger or more luxurious homes, according to a survey released Tuesday.




The TD Canada Trust Repeat Home Buyers Report said Albertans are the most likely in the country to feel they compromised on the layout and features of their current home and are not willing to do so again in their next house hunt.




The report, which surveyed Canadians who recently bought or intend to buy a home that is not their first, found that 59 per cent of Alberta repeat buyers are moving on to larger or more luxurious homes. And even though many are upgrading, they are among the least likely to need a mortgage to finance the purchase (58 per cent versus 69 per cent nationally).






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