January 2011 Alberta Economic Fundamentals

[Ally]

Secrecy by Complexity: Obsfucation in energy data, and the primacy of crude oil




The dramatic fall of Mexican oil production, and its largest field Cantarell, is often cited as a signature example of the problems facing Non-OPEC supply. Since the production highs of 2004-2005, Mexican production has lost over 800 kbpd (thousand barrels per day) which is fairly dramatic for a country that was producing around 3.4 mbpd as recently as 5-6 years ago. But as accelerated as these declines have been in Mexico, there`s another oil producing region has seen even quicker declines. The North Sea, which comprises `United Kingdom Offshore, Norway, Denmark, Netherlands Offshore, and Germany Offshore` has just lost 20% of its production in 24 months. Daily production is down 600,000 barrels per day in that period. | see: North Sea Crude Oil Production in mbpd 2008-2010.





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[Ally]

Ottawa ready to approve Mackenzie Valley pipeline: Report





CALGARY - Ottawa is ready to approve the $16.2-billion Mackenzie gas pipeline now that the project has regulatory approvals, a report said Tuesday.




The federal government is expected to give final green light to the long-delayed Arctic gas project as soon as next week, the Canadian Broadcasting Corp. reported on Tuesday.




But the decision may also come with a caveat -- no federal subsidies -- the broadcaster also said in its report.




Federal officials declined to comment on Tuesday when asked about the approval.




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[Ally]

Calgary region new home prices stabilize





CALGARY - New house prices in the Calgary region remained stable in November.




In releasing its New Housing Price Index Wednesday, Statistics Canada said new home prices in the Calgary census metropolitan area did not change on a monthly basis but rose 0.8 per cent from a year ago.




David Hooge, president of the Canadian Home Builders' Association-Calgary Region, said we can expect the current trend to continue into next year "going hand in hand with the modest increases predicted in sales unless the industry is faced with building code or regulation changes that impact the cost of construction."




Richard Cho, senior market analyst in Calgary for Canada Mortgage and Housing Corp., said the house only component of the NHPI rose by 0.3 per cent in the Calgary region from last year while the land only component was up 1.6 per cent.




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[Ally]

Drilling rights bring in $155 million





CALGARY - Alberta oil and gas producers have started 2011 with the largest opening auction of conventional drilling rights in at least 15 years.




Results posted on the Alberta Energy website Wednesday afternoon show that the oilpatch spent $155 million on licences and leases covering 286,000 hectares at $543 per hectares.




That's more than three times the $46 million spent in the Jan. 13, 2010, auction and continues a trend that resulted in land sales last year delivering the highest ever payout to the provincial treasury of $2.4 billion.




"Things are starting off nicely," said Gregg Scott of Scott Land and Lease, which acted as agent for about half of the buyers.




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[Ally]

Calgary's economy expected to grow over next two years





CALGARY - The road out of the recession has been an uphill but by no means steady climb for Calgary's economy.




And "depressed natural gas prices and the laggard economy in the United States" will continue to be a drag on the city's recovery, says Calgary Economic Development's State of the Economy semi-annual review, released in partnership with the Herald.




But oil prices recovering to pre-recessionary levels, strong recent indicators of foreign direct investment and commercial real estate absorption rates are positive factors that will boost the economy.




"Calgary can expect a more sustainable level of economic activity in 2011," says the report. "In 2011 and beyond, the City of Calgary forecasts that a combination of moderate employment growth, commensurate labour income growth and increased consumer confidence will drive increases in gross domestic product in the region of 3.3 per cent in 2011."








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[Ally]

Calgary home sales slump worse than national average






CALGARY - The pace of growth for total residential MLS sales in Calgary as well as the average sale price came in lower than the Canadian average in 2010.




Statistics released Friday by the Canadian Real Estate Association showed Calgary's average price, for all residential properties, was $398,764 for the year, up by 3.3 per cent from 2009. However, at the national level, the average price rose by 5.8 per cent to $339,030.




Sales in Calgary fell by 15.6 per cent from the year before to 20,996 transactions while sales across the country dipped by only 3.9 per cent to 447,010.




CREA said new listings in Calgary increased by 11.1 per cent in 2010 to 46,278 and by 7.5 per cent across the country to 853,489 units.








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[Ally]

Albertans lead pack in buying new vehicles





The rate of growth in new motor vehicle sales in Alberta eclipsed the national average in November and it was the largest monthly increase in the country.




Statistics Canada reported Friday that 17,469 new vehicles were sold in the month in the province, up 12.9 per cent from a year ago and up 1.4 per cent from October -- the sixth increase in seven months.




Nationally, the federal agency said the number of new motor vehicles sold in November was up 0.3 per cent to 135,823 units. Stronger truck sales were responsible for the increase.




On a year-over-year basis, sales increased by 7.7 per cent.




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[Ally]

Six-legged LRT with 45 new stations slated for Calgary






In its first three decades, the C-Train has spread out its light-rail tendrils 46 kilometres.




With three more decades' worth of expansions essentially mapped out, it stands to stretch out more than 70 additional kilometres, becoming a six-legged monster with more than 45 new stations.




And yes, that includes an airport LRT stop.




Most plans are still many years, engineering studies and billions of dollars away.




"As much as we love the C-Train -- and we do -- there are two drawbacks with C-Train: it's very expensive and it's very inflexible, so we have to be really darn sure when we lay those tracks that's exactly the right thing to do," Mayor Naheed Nenshi says.




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[Ally]

Sign of recovery seen in rising rent





It's a sign of a recovering economy: the Calgary rental housing sector is gaining traction, says a federal agency.




Rent is going up slightly and vacancies are tightening, says Canada Mortgage and Housing Corp.




After seeing a decline of $30 in the average monthly rent for two-bedroom apartments last fall, Calgarians will likely see an increase of $31 per month by this fall, it says.




In its rental market survey of more than 35,000 apartments in October, CMHC found two-bedroom apartments were fetching $1,069 per month on average, down from $1,099 in 2009.




By this fall, the forecast is for an increase to $1,100 per month.




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[Ally]

Housing pace set to grow







Calgary's housing markets aren't quite as cold as the weather, but there's no doubt they could use some warming up.




There has recently been some positive news from the energy industry about additional investment, with suggestions that hiring might be required to ensure future production and expansion plans will occur smoothly.




Although Alberta's north and central regions will be home for much of the activity being planned, head offices and related businesses in Calgary can't help but feel some of the effects.




Will the recent spate of good news be enough to generate a renewed interest in homebuying in Calgary?




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[Ally]

Tougher mortgage lending rules could affect number of people buying Calgary homes






CALGARY - Tougher mortgage lending rules announced Monday may price some people out of the real estate market this year as the federal government moves to ease the growing fears of household debt in the country.




Changes announced Monday include:




- the maximum mortgage amortization for government-backed mortgages was reduced to 30 years from 35 years, effective March 18. It was reduced to 35 years from 40 years in October 2008;




- also effective March 18, the maximum amount of a home's value that can be refinanced is lowered to 85 per cent from 90 per cent. The 90 per cent amount was lower from 95 per cent in April 2010;




- effective April 18, insurance will no longer be available for non-amortizing lines of credit. Under current rules, home equity lines of credit (HELOC) are available up to 80 per cent of a home's value.




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[Ally]

Canada among 12 Petro states that will boom when oil hits $100





Crude prices are above $90, and everyone from OPEC to Goldman expects them to hit $100 in the near future.





While that's a huge obstacle to growth for most countries, it represents a giant stimulus for the Petro States, including Russia, Brazil and Canada.



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[Ally]

Zoning for downtown Edmonton arena approved





EDMONTON ` The proposed downtown arena passed a major hurdle Tuesday when a near-unanimous council approved zoning for a new sports and entertainment district.




`I have been driving by that particular site for nigh on four decades. For four decades I have seen an empty field,` Mayor Stephen Mandel said.




`I hope this is the first step in building the arena I think the downtown of Edmonton deserves ` this is the beginning of change in our downtown.`




About 15 people at a daylong public hearing were split in their opinions of the scheme, with a mainly business group saying it will revitalize downtown and community speakers seeking a voice to ensure it`s done right.




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[Ally]

Gallery: Calgary's top 10 most expensive one-bed condos




Want a swanky pad in the city? Check out the top-priced one-bedroom condos for sale in Calgary.

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[Ally]

Slow recovery forecast for Calgary real estate





CALGARY - The Calgary Real Estate Board is forecasting a slow recovery for the market this year, but improved sales compared with 2010.




In its annual forecast released Tuesday, the board said Calgary's housing inventory levels are expected to stabilize, resulting in an eventual return to a more balanced and sustainable housing market.




It forecasts single-family home sales to increase by 19.9 per cent this year to 14,500 transactions while the average MLS sale price is predicted to rise 4.1 per cent to $480,000.




The real estate board is also predicting condominium sales will rise by 15.8 per cent to 6,000 transactions with the average sale price increasing by 1.8 per cent to $295,900.




Read the full article here.

 

[Ally]

Calgary housing market recovering: CREB





Calgary's housing market is on its way to recovery, the Calgary Real Estate Board said Tuesday, as housing inventory levels begin to stabilize later this year.




The board said in its 2011 forecast that low interest rates, unprecedented affordability and a large selection of inventory are expected to come together sparking a return to a more balanced and sustainable housing market.




"This could be great news for those homebuyers who have been putting off purchasing in Calgary for fear that homes may still decrease in price," CREB President Sano Stante said in a release. "2011 will offer buyers the convergence of unprecedented affordability, low interest rates and a large selection of inventory."




According to the forecast, sellers will likely see an increase in value toward the second half of 2011. The board sees the sale of existing single-family homes rising 19.9 per cent to 14,500 this year, with condominium sales up 15.8 per cent at 6,000 units. Sales of townhouses are expected to rise 13.5 per cent to 4,000 units.




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[Ally]

Aldermen urging land acquisition for Calgary SE LRT





Four Calgary aldermen will be pushing for more transit in the southeast quadrant during a city meeting today.







Calgary Transit will present a city committee with options for allocating provincial Green Trip funding ` money that is intended to reduce greenhouse gas emissions and take cars off the road.







However, some aldermen are arguing the plan is not inclusive enough of the southeast.







Shane Keating, Gian-Carlo Carra, Andre Chabot and Peter Demong will put forward their own proposal suggesting that Calgary Transit secure the land for a future LRT line.







`What we`re focusing on is land acquisition, comprehensive planning and then setting up a right-of-way that maybe won`t take light rail right away but it will take separated bus transit,` said Carra.





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[Ally]

Coal is the future and Alberta is the laboratory





Eminent climatologist, noted NASA physicist and celebrated science adviser to Al Gore in the production of The Inconvenient Truth, James Hansen has equated coal trains with the freight cars of the Holocaust ` `no less gruesome,` he has asserted, `than if they were boxcars headed to crematoria, loaded with uncountable, irreplaceable species.` He has described coal-fired power plants as `factories of death.` He has called coal `the single greatest threat to civilization.` He has proposed that coal company CEOs be put on trial for `high crimes against humanity.` Along with Mr. Gore, he has rallied environmentalists to civil disobedience, beseeching them to throw their bodies before the bulldozers wherever coal-fired power plants are built.





There was a moment a couple of years ago when Dr. Hansen could say things like this and be applauded for his keen conscience and his extraordinary perception. But that was then. Now, people seek a more pragmatic solution to global warming than turning off all the lights. A definitive example hit newsstands in December: liberal journalist James Fallow`s cover story in The Atlantic magazine, historically a publication that reflects the progressive conscience of Boston. `Why the future of clean energy,` the headline asserts, `is dirty coal.` The subtitle elaborates: `It`s the only way to stop global warming.` Curiously, Mr. Fallows has comfortably survived this appalling act of apostasy.




Mr. Fallows advances a novel argument. China has already determined, he says, the global destiny of coal. Although it has invested heavily in alternative energy, it has invested far more heavily in coal ` which will remain China`s dominant source of primary energy, by far, for decades to come. All the rest is math. Without coal, he says, `there is no plausible other way to meet what will be, absent economic or social cataclysm, the world`s unavoidable energy demands.`



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[Ally]

Calgary Employment Insurance claims plunge 37% from last year





CALGARY - The number of people in the Calgary census metropolitan area receiving regular Employment Insurance claims in November dropped by a whopping 37 per cent compared with last year.




Statistics Canada reported Thursday that 11,810 people in the Calgary CMA received benefits in November, down by 6,910 people from a year ago.




November was the largest of eight consecutive months of year-over-year declines for Calgary.




Elsbeth Mehrer, director of research, workforce and strategy at Calgary Economic Development, said Calgary is continuing to see the effect of people coming off the Employment Insurance list.








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[Ally]

Surge of Alberta oil tames rise in oil prices




As the global price of crude flirts with $100 (U.S.) a barrel, a flood of Canadian imports into the United States is suppressing North American oil prices and renewing calls for Canada to capitalize on surging demand abroad.




Oil prices are climbing across the board, but diverging by region. The benchmark North American crude, West Texas Intermediate (WTI), is trading at a near-record discount to the leading international crude, North Sea Brent.



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