October 2010 Alberta Fundamentals

[Ally]

Edmonton Journal scores big in audience study

EDMONTON — The number of people reading the Edmonton Journal has grown significantly since a spring industry audience study, led by the growing reach of The Journal`s digital product -- edmontonjournal.com.

Weekly online readership increased by 21 per cent to 140,600 adult readers in the Edmonton area from 115,900 since the spring 2009 study was released in March, the Newspaper Audience Database (NADbank) reported Wednesday in its interim 2009-10 report.

The Journal website`s weekly readership has soared a whopping 75 per cent since the 2007 study.

On the print side, The Journal has shown remarkable stability in its core readership since 2005 through boom, bust, and recovery.

New weekday readership grew to 276,300, up from 275,500 since the spring study. Over the course of a week, more than half a million readers (509,000) are reading The Journal in print or online -- a gain of 1,400 from the spring.

A growing number of young adults are also turning to The Journal. Readers aged 18-34 increased to 68,100, up 20 per cent from 56,900 from the NADbank Spring 2009 study.

Read the full article here.

 

[Ally]

Calgary building permits show decline in August

The construction value of building permits for the Calgary census metropolitan area fell in August from the previous month but remained above year-ago levels.

Statistics Canada reported today that contractors took out $260.6 million in permits in the Calgary CMA in August, down 10.7 per cent from July but up 5.3 per cent from August 2009.

In Alberta, total building permits of $851.9 million were off 11.2 per cent from the previous month but 2.0 per cent higher than a year ago.

In the residential sector, building permits in the province hit $481.2 million. That was a 20.6 per cent month-over-month decrease and a 15.9 per cent year-over-year decline.

In the non-residential sector, building permits of $370.7 million were up 4.9 per cent on a monthly basis and by 40.9 per cent on a year-over-year basis.

Nationally, contractors took out $5.7 billion in building permits in August, down 9.2 per cent from July, but still 11.4 per cent higher than in August 2009.

Read the full article here.

 

[Ally]

Town and acreage MLS sales fall

The residential MLS market outside the city of Calgary experienced a sharp decline in sales in September compared with year-ago levels.

According to the Calgary Real Estate Board, sales in the towns outside the city fell by 33.42 per cent from September 2009 and sales in the country residential (acreage) market were down by 50.5 per cent.

"In general, small towns and acreages they`re all going to kind of take their cue from what`s going on in the city," said Dan Sumner, economist with ATB Financial in Calgary. "The city`s going to lead the market and that`s going to slowly filter out into the smaller towns and into the countryside.

"There`s usually a bit of a time lag. But the trend is set here. And what happens here determines what goes on out there."

In September, Calgary metro single-family MLS sales were down 23.79 per cent from a year ago while condo sales were off by 36.9 per cent.

The local real estate board said there were 271 sales in the town outside the city market in September for an average sale price of $363,507, up 2.45 per cent from $354,797 in September 2009.

Read the full article here.

 

[Ally]

Luxury home sales boom in Calgary

CALGARY - The sale of luxury homes remains a "bright spot" in Calgary`s real estate market with sales in the high-end market booming.

The Re/Max Market Trends Report Fall 2010, released Tuesday, said year-to-date (until the end of August) sales of homes over $1 million surged 25 per cent ahead of 2009 levels - 242 units versus 194 units - "as buyers take advantage of the current window of opportunity."

Christina Hagerty, a realtor with Re/Max Realty Professionals, said inner-city realtors were extremely busy running around making deals in August - "like chickens with our heads cut off."

"I was probably writing a deal every second to third day," she said.

"I`ve had at least two of my own competing offers in the last 10 days. They`re not competing above list but they are competing nonetheless. So what we`re feeling right now is I think with the resurgence of the oil industry ... people are coming for the jobs, they`re looking and they`re starting to buy and they realize that with the price adjustments they`re picking up (properties)."

Read the full article here.

 

[Ally]

Edmonton luxury-home sales up 26 per cent from last year, ReMax says

EDMONTON — While homebuying activity is cooling in Edmonton, luxury-home sales are picking up, says a new national report by ReMax.

"One area of the market that has outperformed all others is the upper end," said the ReMax Market Trends Report Fall 2010, released Tuesday.

Sales of homes priced at more than $700,000 are up 26 per cent over 2009, with 240 upscale properties changing hands as of August, compared with 190 in the same period last year, it said.

Fifty-five homes in the Edmonton area sold for more than $1 million in the first eight months of the year.

The urgency seen earlier this year in Edmonton`s residential housing market -- prompted by tighter lending policies and the threat of higher interest rates -- has given way to more stable conditions heading into the fourth quarter, the report said.

Read the full article here.

 

[Ally]

Natural gas forecast gets even bleaker

CALGARY - Just when it seemed prospects for natural gas prices couldn`t get worse, they have.

On Monday, Calgary-based AJM Petroleum Consultants reported that its earlier prediction that included a slow rebound in gas prices is wrong and a recovery will take even longer than anticipated.

"Over the past year or more, the increase of unconventional natural gas development and the steady decline of conventional gas production led me —– and the futures market as a whole — to anticipate a revival of natural gas prices over the next few years," said AJM economist and vice-president Ralph Glass.

"It appears now that the realization is setting in for everyone that the revival is not happening and natural gas prices are destined to stay in the $4 to $5 US per thousand cubic feet range for the foreseeable future."

AJM downgraded its Alberta AECO natural gas forecast by a dollar to sit at $3.80 Cdn per mcf for the remainder of 2010, rising in real terms to $6.25 per mcf by 2022.

Read the full article here.

 

[Ally]

Municipality builds capacity through engineering partnership

(Fort McMurray, AB – October 5, 2010) – In order to respond to existing growth and prepare for future development the Engineering Department is building capacity through exciting new partnerships, the Regional Municipality of Wood Buffalo announced today.

The Municipality has experienced unprecedented growth over the last decade, resulting in the demand for increased infrastructure and a backlog of capital projects. To assist in delivering the capital program, the Municipality has entered into partnerships with two consulting firms, Associated Engineering and AECOM.

"The benefits these partnerships provide are numerous," said Darcy Elder, Director of Engineering, "Our staff will benefit from the mentorship opportunities and residents will benefit from our ability to provide shovel-ready projects. We are embarking on a very exciting time!"

"We are very pleased to support this important infrastructure program that is vital to the Municipality`s continued growth and quality of life. We look forward to working in this long-term partnership," said Art Washuta, Vice President, Alberta North District, Canada West AECOM.

Read the full article here.

 

[Ally]

New road on Edmonton outskirts to connect industrial park to city

EDMONTON - A short piece of freshly-paved road that opened Wednesday just east of the city`s Clover Bar waste-management site will soon become a key link between a new industrial park and the final leg of the Anthony Henday ring road.

The new Aurum Road runs southwest from the city boundary at 33rd Street NE through the 325-hectare Aurum Energy Park, which has already attracted several major firms, including Waiward Steel, Kiewit, and Mammoet in the first three of its eventual eight phases.

"We hope we can be as interesting an opportunity for staging and construction as the Leduc and Nisku industrial area has become," said Kenneth Mariash, chairman of the Focus Group.

"With the (future) extension of this road to the Anthony Henday, this area will be centre ice as we go forward."

The last leg of the Henday, which involves a major bridge crossing the North Saskatchewan River, is expected to be opened by the fall of 2015.

Aurum is ideally located to take advantage of new oilsands-related construction planned for both the Industrial Heartland region, near Fort Saskatchewan and Redwater, and the Fort McMurray and Cold Lake regions, Mariash said.

Read the full article here.

 

[Ally]

Calgary housing starts drop in September

Total housing starts in the Calgary census metropolitan area fell by just over two per cent in September from year-ago levels, says Canada Mortgage and Housing Corp.

Builders started 796 units last month compared with 813 units in September 2009.

To the end of September, total housing starts in the region increased from 4,097 units in 2009 to 7,437 units in 2010.

"We are pleased to note strong increases year-to-year in total starts," said Dave Hooge, president of the Canadian Homebuilders` Association-Calgary Region. "A slow-down in the number of starts in fourth quarter of 2010 was not unexpected. We are encouraged to see MLS (resale) listing numbers showing signs of easing.

"When you combine that with housing affordability in Calgary improving, continued low interest rates and improvement in the provincial job market, we believe this implies little downside risk to the market and makes buying a home in Calgary right now very attractive."

Read the full article here.

 

[Ally]

Slowdown expected in Edmonton home construction

EDMONTON — More apartment construction helped push up local housing starts in September, but a sharp drop in building permits means that trend is about to reverse.

"We anticipate a cooling of activity for new-home construction over the next few months," said Richard Goatcher, Canada Mortgage and Housing Corp.`s (CMHC) senior market analyst for Edmonton.

"This year is the opposite of last year, which started slowly and picked up. This year started strongly but things are expected to slow down."

Statistics Canada said this week that building permits for residential construction in Edmonton were down 24 per cent in August.

ATB Financial senior economist Todd Hirsch noted that trends in building-permit applications tend to lead housing starts by three to six months, "which means starts are likely to show some weakness in coming quarters."

Goatcher noted there is a good inventory of houses for sale in the Edmonton area, making for a strong buyers` market, with just one home sold for every five listed for sale.

According to preliminary figures, housing starts in the Edmonton region totalled 873 units in September, up from 699 in September 2009. To the end of September, total starts reached 7,891 units compared with 3,620 units after three-quarters of last year.

Read the full article here.

 

[Ally]

Shell reverses course on upgrader

Shell Canada has withdrawn its regulatory application to build a 400,000-barrel-per-day oilsands upgrader, a four-phase project estimated by analysts to have a price tag of around $30 billion.

Instead, John Abbott, executive vice-president for heavy oil, told reporters Friday morning the Canadian arm of giant Royal Dutch Shell plans a three-phase program to boost output from existing oilsands mining and upgrader facilities by 85,000 bpd.

"We have decided to withdraw the application for our new upgrading facility," Abbott said in Calgary. "That was a proposed 100 per cent Shell equity, 400,000-bpd facility which could have been constructed adjacent to our existing facilities in Fort Saskatchewan (northeast of Edmonton).

"But I remind you Shell has existing licences for 290,000 bpd of bitumen upgrading capacity already at the Scotford upgrader and we already have approval for 400,000 bpd of what we call bitumen-blending facilities."

Abbott said the company also has approvals for mining production of 470,000 bpd.

The news continues a trend by Shell to reduce its ambitions in the oilsands from the goal of tripling output to 750,000 bpd just a few years ago, and by oilsands companies in general to cancel upgraders.

Read the full article here.

 

[Ally]

Alberta gains just 300 jobs in one month

EDMONTON - Alberta`s job growth flattened out in September, prompting concerns the economic recovery may have hit a bump in the road.

While unemployment rates dipped slightly in Edmonton and across the province, only 300 jobs were added last month, Statistics Canada said Friday.

ATB chief economist Todd Hirsch said the job market has been sluggish this year, with most new jobs coming on the goods-producing side, particularly in oil-and-gas and construction.

"After a few months of encouraging job growth in the late spring and early summer, Alberta`s job market may have hit a road bump.

"While it is unlikely that Alberta`s economy is sliding back into recession, the employment situation may not be poised for big improvements in the coming months."

Indicators on the goods-producing side are starting to soften, especially building permits and natural gas prices, Hirsch said.

Read the full article here.

 

[Ally]

Ground broken at Edmonton`s Cameron Heights interchange

EDMONTON — Federal and provincial politicians helped break ground Saturday for the final interchange on Anthony Henday Drive.

The federal government and the province are each contributing $12.5 million toward the $25 million Cameron Height interchange to be completed in the fall of 2011. The other four interchanges at Stony Plain Road, Lessard Road, Callingwood Road and Rabbit Hill Road, will open at the same time.

"The Cameron Heights interchange project is significant because it will not only improve safety and relieve congestion, it will also remove the last set of lights making this stretch of road free flow when completed in 2011," said Alberta Minister of Transportation Luke Ouellette.

Edmonton-McClung MLA David Xiao said the interchange will improve the flow of traffic, motorists` safety and provide a vital transportation link for the movement of goods.

"The Government of Canada is pleased to be working together with the Government of Alberta to ensure this interchange gets built," Rona Ambrose, Minister of Public Works and Government Services and Minister for the Status of Women, said at the official ground breaking ceremony.

Read the full article here.

 

[Ally]

Calgary`s job growth stalling amid uncertainty

CALGARY - Diane Riley counts herself as one of the lucky people in today`s uncertain labour market in the city.

Riley, a registered massage therapist and reiki master, was hired in September to work at RnR Wellness The Spa, in the basement level of the Fairmont Palliser hotel.

She had moved to Calgary in early September to be closer to her family. By the end of the month, she was hired by Elisabeth Fayt, owner of the downtown spa.

"My search for work here was good," said Riley. "There`s a lot of places hiring, but there`s a lot of applicants for every job as well. I did have a lot of options."

She said she feels fortunate finding a job so quickly considering the economic uncertainty that still exists in Calgary.

"I`ve got a really great job," said Riley. "It`s different in our industry, too. I find there`s always work for massage. I`ve never really had much trouble finding massage work."

Read the full article here.

 

[Ally]

Housing dollars fuel social chaos: Residents

EDMONTON - The province is spending tens of millions of dollars to build hundreds of subsidized homes in Edmonton`s most impoverished and blighted communities, which some residents warn will exacerbate the severe social problems in those neighbourhoods.

A Journal analysis of city and provincial data shows nearly 30 per cent of the city`s subsidized housing units are concentrated in Edmonton`s 13 most distressed neighbourhoods, while more than 60 have none at all.

Still, in recent years half of all the money the province has spent to build homes for the needy has paid for projects in 13 struggling communities, and inner-city residents say their neighbourhoods are on the verge of social chaos.

"It`s not unfair to use the word ghetto," said Martin Garber-Conrad, a McCauley resident who has been working to house vulnerable people for more than 25 years. "It got to be too much. It got to the tipping point, where finally there were too many."

There is no question concentrating poverty in small areas has severe consequences for the people who live there.

Read the full article here.

 

[Ally]

Edmonton building permits down 19% in month

The value of building permits in the Edmonton area for July was down 19.1 per cent from June, but up 21 per cent from July 2009, Statistics Canada said Wednesday.

Local municipalities issued building permits -- an indicator of future construction activity -- worth $367 million, compared with $453.7 million in June and $303.4 million a year ago, the federal agency said.

"Edmonton experienced a decrease as a result of the commercial and industrial components," Statistics Canada said.

Across Alberta, declines in industrial and commercial intentions pushed the total permit value to $966.1 million, down 18.7 per cent from June, but up 12.2 per cent year-over-year.

Residential permits worth $610.6 million were issued for increases of 0.4 per cent and 23.2 per cent from the previous month and July 2009, respectively. Non-residential permits fell 38.8 per cent from June and 2.8 per cent from July 2009.

Provincially, construction activity is relatively flat, Alberta Construction Association executive director Ken Gibson said.

Read the full article here.

 

[Ally]

Calgary`s low-cost downtown housing project carried huge price tag

CALGARY - The new affordable housing apartments the city built downtown with a private developer cost taxpayers about four times more than it would have cost to refurbish the units in a nearby building the city will soon demolish, according to figures city officials have quoted.

Calgary Housing Company abandoned an aging, unpainted concrete 72-unit complex on 1st Avenue S.W. and moved residents this year into the 88-unit Louise Station project three blocks away, as part of a controversial land deal.

The Louise Station tower cost the city and provincial governments about $28.7 million, or $320,000 per unit, council was told two years ago.

That same 2007 report to council said that bringing the then-35-year-old Eau Claire Apartments building on 1st Avenue up to modern standards was not "financially reasonable," and would have forced the elimination of eight units. But the city didn`t give a dollar figure to explain what "financially reasonable" meant.

Read the full article here.

 

[Ally]

Province approves bus link to Edmonton International Airport

EDMONTON — The province has approved a new transit line to shuttle commuters between south Edmonton, Leduc County and the international airport.

The C-Line will cost $5 one way, $4 for youth and seniors, with stops at Century Park, the airport, Nisku, and 13 points in Leduc. Monthly passes and ticket packs will also be available at discounted rates.

Edmonton Transit expects to begin service within a month, operating during peak commuting hours in the morning and afternoon.

Greyhound Canada, which also runs commuter service between Edmonton and Leduc, has long objected to the C-Line proposal, stressing it can`t compete with the publicly subsidized service. The matter went to a provincial hearing, which concluded last week with a decision in favour of the new line.

Greyhound is now weighing its options, including appealing the decision in Federal Court.

Read the full article here.

 

[Ally]

Two Oilsands projects on deck

Canadian Natural Resources Ltd. (CNRL) is getting ready to launch two major oilsands projects that will be worth billions of dollars and create thousands of construction jobs.

Much of the engineering is complete, site clearing done and some equipment ordered for the second phase of the Horizon oilsands mine and upgrader north of Fort McMurray, and the Kirby Lake underground oilsands development 85 kilometres northeast of Lac La Biche.

All that is needed is the final green light from the board of directors, Leon Harder, director of supply chain management, told local firms on Thursday.

"If you are wondering whether Canadian Natural is going to be spending a lot of money in the near future, and getting more production out of Horizon, well some indicators are pretty solid," he said at a presentation to the Resource Industry Suppliers Association.

The first phase of Horizon cost $9.7 billion, and "the scope of the next phase is bigger."

Read the full article here.

 

[Ally]

Industrial building sales decline, vacancy rate drops in Calgary

Calgary - This year has been a "relatively weak market" for industrial building sales in the Calgary area, says a report by Colliers International.

"Sales activity nearly came to a halt in October 2008 and didn`t regain composure until May 2009 when vendors began to accept a downward price adjustment," said the commercial real estate firm`s third quarter industrial real estate market report.

Both 2009 and 2010 have been lower than average sale years with only 67 sale transactions occurring in 2009 and 48 sale transactions to date in 2010, said the report, adding that the figures do not include condo unit sales.

Colliers said the average annual number of industrial building transactions in the 10 years prior to 2009 is 120 sales per year. The previous low was 80 sales in 2001 with a high of 161 transactions in 1998.

Total dollar volume traded to date in 2010 is $227,544,000 excluding the Kingsett/AIMCo deal - an investment transaction. The greatest annual sales volume for Calgary on record was in 2008 with 107 transactions for $730,193,000.

Read the full article here.