Thursday, July 20, 2006

Slowing Housing Market Were Cutting Into Consumer Spending

The construction of new homes fell by 5.3 % in June 2006, another sign that the once-booming housing market is slowing.

Tuesday, July 18, 2006

Housing Boom Slowing Down

The housing boom is slowing down in Central Canada but Western markets continue to soar. Major markets such as Toronto, Ottawa and Montreal are taking a breather as price increases are moving closer to the rate of inflation and multiple offers are less frequent.

Western Canada is a different story, with price increases in the hot Calgary market hitting levels never seen before in close to three decades of record keeping by the Canada Real Estate Association. The average price of a two-storey home in Calgary is up more than 54 % in the first half of this year compared with a year earlier, according to Royal LePage.

Average home prices in Calgary are now reaching Toronto levels and are expected to pass Toronto by the end of the year. The major factor behind the growth is fuelled by the booming energy sector.

In the rest of Canada, it is expected the moderating market conditions will last. But that balance could be upset if the central bank overshoots its targets in raising rates.

The year-over-year increase in average price for Toronto was 5.5 % in May, the most recent numbers from CREA show. In Ottawa it was 4.7 % and 8.2 % in Montreal. That's in sharp contrast to Calgary, where the number jumped by 43.6 %.

Canadian Housing Markets Set Records in 2006

Resale housing activity in Canada's major markets in the first half of 2006 set a new record for the first six months of any year.

Sales activity is on pace to set a new annual record this year despite expected softening in the second half of the year, the association reported.

Actual unadjusted home sales via the multiple listing service in Canada's major markets totaled 186,177 units in the first half of 2006, a 3.6 %rise over the previous record for first-half activity set in 2005.

Sales activity was particularly strong in Calgary and Edmonton, the association reported, and new records for resale housing activity in the first six months of the year were set in those cities and Regina, Saskatoon, Winnipeg, London, Sudbury, Ottawa, Montreal and Quebec City. Seasonally adjusted MLS home sales in the second quarter of 2006 numbered 84,391 units – which represents a slight decline from the record levels posted over the past year.

Actual unadjusted sales reached the second highest level on record for the second-quarter period, and were 1/2 % below activity levels reached during second-quarter 2005. Seasonally adjusted home sales activity eased by about 1 percent from the previous month to 28,185 units in June 2006. Monthly sales activity ebbed in Toronto, Edmonton, Halifax, and a number of other markets, which more than offset monthly gains in Calgary, Ottawa, Vancouver, Winnipeg, Montreal, and London.

Actual unadjusted MLS residential new listings totaled 308,923 units in the first half of 2006 – a new record for the first six months of the year and the highest level on record for any six-month period. New listings were up by 4.6 % from the first half of last year and were 2.3 % higher than the previous record set in the first half of 1990, which is the only other six-month period on record in which new listings topped 300,000 units, the association reported.

"There are no signs that new listings have peaked, as seasonally adjusted quarterly and monthly new listings reached their highest levels in more than 15 years," the association also announced. Victoria and Montreal led the increases, with seasonally adjusted new listings in the second quarter reaching the highest level since fourth-quarter 1990. "A rebound in Calgary helped to push major market new listings to the highest monthly level since May 1991."

The major market MLS residential average price at mid-year was up by 11.8 % compared to December of last year. It was also up by 12.2 % year-over-year in the second quarter, which tied with the second quarter of 2004 for the highest year-over-year price growth of any quarter in the past 15 years. The 6.8 % jump in price from the last quarter was also the highest quarterly increase since 1989.

Average price in the second quarter of 2006 set new quarterly records in almost every major market in Canada. The major market MLS residential average price reached $269,000 U.S. in June – up 11.8 % from the same month last year.

Average price has posted double-digit year-over-year gains in every month during the first half of 2006, the association announced, and reached the highest monthly level on record in June in Calgary, Edmonton, London, Montreal and Quebec City.

The average home price fell from the record levels reached in May 2006 in a number of other markets.

CREA Chief Economist Gregory Klump said in a statement, "The housing market is tightest in Alberta, where a sizzling job market is stoking buyer demand and fueling remarkable price increases. The rise in new listings in Montreal and Toronto gives buyers in those centers a wider selection of homes to choose from, and will keep price increases in those markets below those for major markets in British Columbia and Alberta."

The average price information can be useful in establishing trends over time, but does not indicate actual prices in centers comprised of widely divergent neighborhoods or account for price differential between geographic areas.

Friday, July 14, 2006

Bank of Canada Wants to Meet With CMHC

Bank of Canada wants to meet with Canada Mortgage and Housing Corporation (CMHC) to discuss new rules the Crown corporation has put in place that could fuel an already-robust Canadian housing market.

New products such as interest-only mortgages make borrowing easier. CMHC, which insures mortgages when the downpayment is less than 25% of the value of a home, introduced a new program last month that allows consumers the option of not making any principle payment for the first 10 years of a mortgage.

Tt is something they are watching and they will be talking with Canada Mortgage about that.

If we look elsewhere in the world where there has been a major move to interest-only mortgages or other innovations of that sort, that has had an influence on housing prices, and we would want to sit down with Canada Mortgage to look at their analysis of the influence they expect it to have here.

Some commentators suggested Mr. Dodge may have been thinking about the United States with his comments yesterday. About 25% of new mortgages in the US are so-called "exotic loans," which include everything from the interest-only option to a reverse amortization, whereby the principle amount of a loan actually goes up in the early years. Those types of US-style loans have yet to become a significant segment of the Canadian market. There also have not been problems in the US, referring to the fact the loan-default rate there is still low, despite the new products.

In addition to the interest-only loan, CMHC has introduced measures allowing consumers to amortize their mortgage payments over 35 years. The change effectively lowers monthly payments by spreading the debt over a longer period.

The CMHC changes have as much to do with competing in a tough marketplace as a change in policy. The agency controls two-thirds of the mortgage insurance market in Canada while rival Genworth Financial Canada controls the rest.

Another change that would make it easier for consumers could come from the Department of Finance, which last month issued a white paper suggesting consumers should be able to put up as little as 20% as a downpayment, in order to borrow without mortgage insurance.

New products like interest-only mortgage will lead to more prices increases as opposed to get more people into the housing market.

Thursday, July 13, 2006

Mortgage Rates Drop for 1st Time in 5 wks. in U.S.

Rates on 30-year mortgages declined this week for the first time in 5 weeks amid expectations that the Federal Reserve Federal Reserve won't push interest rates much higher.

Housing sales, which have set records for five straight years, are expected to decline by around 7 %this year as higher mortgage rates make home ownership more expensive.

The financial market's expectation of only one additional interest-rate hike by the Fed this year has helped soften the upward pressure on long-term rates. Rates also declined for other types of mortgages this week.

Rates on 1-year adjustable rate mortgages slipped to 5.75 % from 5.83 % last week.

Canadian Housing Market Continued to Boom

The Canadian housing market continued to boom, although demand is expected to slacken somewhat in the next two years.

The bank said the Canadian economy is expected to grow by 3.2 % this year, but its growth will slow to 2.9 % next year and 2.8 % in 2008. The global economy will grow by nearly 5 % this year, but will slow to 4.4 % by 2008.

In the first half of the year, Canadians continued to spend more because of rising wages and the increased worth of their homes. A hot home market meant many Canadians realized the worth of their houses and sold them for a high premium.

The booming Alberta oilpatch is also driving the national economy since the province is creating jobs and generating strong construction and housing activity.

Bank of Canada Wants to Review Mortgages

The BoC said it wants to review the influence that new mortgage products could be having on the Canadian housing market.

Bank of Canada Governor David Dodge said he would like to see what effect longer-term mortgages have had in housing markets in other parts of the world.

They would want to sit down with Canada Mortgage Housing Corporation (CMHC) to look at their analysis of the influence they expect it to have here.

Wednesday, July 12, 2006

Energy Efficiency is not Going to Curb Soaring Electricity Demand

Encouraging people to cut back on air conditioningto and buy energy-efficient lightbulbs is not going to curb Canada's soaring energy consumption.

Government efforts to promote conservation could cut energy demand by only about 10 % by 2025 compared with business as usual. That is far less than projected by environmentalists who see energy efficiency as a key strategy for cutting greenhouse emissions and smog.

The study does not include aggressive measures and may reflect the spin of industries committed to using fossil fuels.

The study explores some of the potential for energy efficiency in Canada, but should not be taken as the last word on energy efficiency potential.

The study is based on measures considered to be politically feasible, but admitted they do not include such proposals as charging the true cost of electricity.

There's almost no province in Canada where consumers actually see the true cost of electricity - and it's something that my association advocates, but politically it's very, very hard.

If governments were to take all the measures that are technically possible the savings could be 50 %. But those measures would be highly unpopular.

It's tough, isn't it? You're saying to consumers, 'Look, you're going to be facing not only the energy price increases that you've seen in the last little while but you're going to see more, and you're going to see more because we made it go that way.'

The easiest steps to promote energy efficiency have already been taken.

This includes, for example, the penetration of higher efficiency appliances, motors and lighting. Unless economic circumstances change considerably the potential that remains will be more difficult to capture.

The Canadian energy consumption increased 22 % between 1990 and 2003, even though there has been a considerable improvement in energy consumption per unit of economic output.

What is happening is that the effects of economic activity, namely the growth of the housing and commercial building stock, larger homes, the market penetration of more energy-using devices, and industrial production growth together offset the effects of energy efficiency improvements.

Kanata Vacancy Rate Continues to Decline

Kanata is the most active office space market in the city, with the vacancy rate falling 1.3 % to 8.0 % in the second quarter.

In its latest report on office vacancies, Colliers International says the overall office vacancy rate in Ottawa in the April-to-June period was 8.8 %, unchanged from the first quarter. As always, downtown space remains the most expensive and the hardest to find, with the vacancy rate at 3.9 % in the downtown core, up from 3.8 % in the first quarter.

Four major office projects are under construction in the downtown core, totaling 757,000 square feet. Four other projects are on the drawing boards, but Colliers says "it is very unlikely that any project will proceed without major lease commitments in place."

But the biggest deals have been in the suburbs, particularly Kanata, where Mitel sub-leased 42,000 square feet at 350 Legget Drive to General Dynamics.

More than 51,000 square feet of space in Kanata was taken up during the quarter, reducing the vacancy rate to 7.9 %. A year ago, Kanata's vacancy rate was 19.1 %.

There is now talk of new development in Kanata as lease rates increase, positive absorption continues, and vacancy drops.

Tuesday, July 11, 2006

Canada Not Welcoming to Immigrants

Canada is undermining the integration of immigrants and contributing to their social isolation despite the fact that the country relies on immigration for population and labour market growth.

The latest waves of newcomers are better educated than their predecessors, but they have had a more difficult time obtaining employment, reuniting with their families and getting language training, proper housing and even health services.

Some of the more than three dozen immigrants interviewed said they are worse off than they were in their homelands, according to the report, which was undertaken on behalf of Community Foundations Canada and the Law Commission of Canada.

"I interviewed one woman from Bulgaria whose husband is now back in Bulgaria sending money to support the family here. To waste human resources like this is a crime," says Sarah Wayland, author of Unsettled: Legal and Policy Barriers for Newcomers to Canada, which will be released tomorrow. "To fail at social inclusion also has costs in terms of ethnic and race relations, human rights, the settlement process and mental health."

Every year, between 230,000 and 260,000 immigrants come to Canada. The immigrants who have arrived during the past two decades have had a harder time catching up to their Canadian-born counterparts, a trend attributed in part to cutbacks in settlement programs and difficulty finding work.

One in six young, highly educated male immigrants leaves Canada within a year due to the job market, a 2006 Statistics Canada study shows. "That is quite shocking. Canada should be trying to keep those people," says Ms. Wayland.

Ottawa and the provinces have acknowledged the difficulty immigrants face getting their foreign credentials recognized and have created initiatives to overcome these barriers. The federal Conservatives' first budget called for the creation of an agency to help foreign professionals integrate into the work force. The Ontario government has announced a $14-million investment in two dozen programs to help foreign-trained professionals and tradespeople upgrade their skills and training.

However, these efforts fail to address other obstacles. The selection system can be onerous, forcing many immigrants to wait a long time for family reunification. The average time to bring in parents and grandparents has increased to as much as a decade, and the federal government is facing a lawsuit that accuses it of discriminating against certain kinds of applicants and causing unacceptable delays.

Other difficulties include lack of access to language classes, according to Faye Wightman, CEO of the Vancouver Foundation, which supports programs for immigrants. Federal funds to teach English and French as second languages have not increased since 1996, and newcomers say the classes are not sophisticated enough.

The study's conclusions reflect other research that has found a lack of civic engagement among second-generation immigrants. "You cannot assume people are becoming more integrated, the longer they're here," says Ms. Wayland. "The children of immigrants who grow up here may have a more jaded outlook. Many have experienced discrimination in school or just feel disengaged."

The study outlines several other recommendations to assist newcomers including the following:
  • Reduce processing times for immigration and family sponsorships;
  • Build capacity of educators to meet language needs of immigrant children and youth;
  • Provide interpreters in hospitals and schools;
  • Improve access to regulated professions.
It also says prospective immigrants should be given more accurate information about the Canadian job market.

Canada's selection criteria for skilled workers could also be adjusted. Currently, the system favours highly educated white-collar workers, even though blue-collar workers are needed.

Bank of Canada Keeps Target For the Overnight Rate at 4.25 %

The Bank of Canada today announced that it is maintaining its target for the overnight rate at 4.25. The operating band for the overnight rate is unchanged, and the Bank Rate remains at 4.25 %.

Overall, the outlook for economic growth and inflation in Canada is largely unchanged from the April Monetary Policy Report.

The global economic expansion remains robust. Growth in Canada in the first half of 2006 appears to have been a little stronger and the Canadian dollar has traded in a somewhat higher range than was envisaged in the April MPR. As well, there was a further shift in the composition of demand towards consumption and away from exports. Total CPI inflation has remained above the 2 % target, mainly because of increases in consumer energy prices, while core inflation moved up to 2 % slightly sooner than expected. All factors considered, the Canadian economy is currently judged to be operating just above its production capacity.

In 2007 and 2008, growth is projected to be a little weaker than was set out in the April MPR. The additional strength that has developed in domestic demand is expected to persist into next year, but this should be more than offset by a weaker outlook for net exports, owing primarily to the recent strength of the Canadian dollar. With some anticipated moderation in U.S. growth, combined with past interest rate and exchange rate increases, the Canadian economy is projected to return to its production capacity by the end of 2008. Total CPI inflation is expected to average just over 1.5 % from mid-2006 to mid-2007, with the reduction in the Goods and Services Tax lowering the inflation rate by 0.6 % points over this period. Inflation should then return to the 2 % target. Core inflation should remain at about 2 % throughout the projection period.

In line with the Bank's largely unchanged outlook, the current level of the target for the overnight rate is judged at this time to be consistent with achieving the inflation target over the medium term. The Bank will monitor global and domestic economic and financial developments, including adjustments in the Canadian economy, relative to its projection. Risks to the projection remain roughly balanced, with a small tilt to the downside later in the projection period related to global imbalances.

New Home Prices Continue to Climb

New home prices in Ottawa-Gatineau continue to move up, but at a pace far below other major cities.

Statistics Canada says good demand drove up the average price of a new home by 0.6 % in May, and pushed the annual rate to 3.3 %. Increased costs associated with moving into new phases were another factor in the local market.

One again, the hottest housing markets in the country are Calgary and Edmonton.

In Calgary, new home prices jumped 5.4 % in May, pushing the annual increase to 41.3 %, In the Alberta capital, prices jumped 5.3 % in May alone, and the annual increase stood at 24.4 %.

Statscan said high demand for new housing, higher material and labour costs and increased land values were cited as the main reasons for the increases. High fuel costs, which affected transportation costs, were also cited as a factor in the Calgary and Edmonton markets.

Across the country, new home prices advanced in 16 of the 21 metropolitan areas surveyed. Compared to last year, contractor's prices have risen on average 9.1 %.

Housing Starts Up Amid Signs of Slowing

CMHC says the rate of housing starts rose 4.5 % in June, but details of the data pointed to a softening of home-building activity.

Seasonally adjusted annualized starts grew 10,000 from May to 232,200 units.

However, much of the increase came from the volatile multiple segment of the new-home market.

Even with the strong showing in June, housing starts ended the second quarter more than nine per cent below their first-quarter level.

The bellwether single-detached home sector was at its second-lowest level of the year, marginally above the May level.

We expect the level of activity to moderate in the second half of 2006 as rising prices and marginally higher mortgage rates result in a softening of demand for both existing and new homes.

The numbers indicate that a soft landing in most of Canada's housing markets still appears to be unfolding.

We expect this gentle downtrend to carry on for the rest of the year.

Meanwhile, another report released Thursday by Statistics Canada showed home prices increased by an average 1.3 per cent in May, bringing the year-over-year gain to 9.1 %.

That was the biggest 12-month change recorded since January 1990, as Calgary new-home prices increased 41.3 % year over year and Edmonton gained 24.4 % — with most other major cities under 5 %.

It is hardly new that the regional breakdown of both housing starts and new-home prices shows a great divide between housing markets in Alberta and the rest of Canada.

He observed that starts in Alberta surged 17 % from a year earlier during the second quarter, while the rest of Canada posted an eight per cent decline.

Overall, housing starts were below year-ago levels for the third month in a row.

The bottom line: Canadian house prices, especially in the West, are heating up, and that, despite the latest pop in housing starts, is biting into activity.

Friday, July 07, 2006

Bank of Canada Planed to Hike Rates Two More Times

The Bank of Canada should raise interest rates a further quarter point next Tuesday, and then again in September, a panel of private-sector and academic economists urged Thursday.

Five of six members of the C.D. Howe Institute's monetary policy council voted for the two increases in the bank's trend-setting target rate that would bring it to 4.75 per cent from the current 4.25 per cent.

While the central bank last month indicated that it would not raise rates further, reports since suggest that the economy has been stronger than it anticipated.

Behind the call for further rate hikes were "robust growth of demand in Canada and abroad; tight markets for goods and services, particularly for skilled labour and investment goods; and evidence from surveys and financial markets that private-sector expectations for inflation and price-setting are above the bank's two per cent target," the institute said.

There were concerns, however, about the "possibility of a stronger Canadian dollar dampening demand, and the possibility that tighter U.S. monetary policy is bringing about a slowdown south of the border," it noted.

Earlier Thursday, however, another think-tank predicted that even without any further rate hikes the economic expansion will moderate from what was 3.8 per cent growth in the first quarter of the year to 3.1 per cent for the year as a whole.

The Conference Board of Canada forecast that the slowdown will reflect the drag on exports from the strong dollar and a weaker U.S. economy, which will offset continued strength in spending by consumers and businesses here, whose finances are being bolstered by strong job growth and a lighter tax burden.

Strong consumer spending and private investment, which drove economic growth earlier in the year, will be bolstered by federal tax cuts and healthier-than-expected revenues for provincial governments, it said.

Still, it said growth will be limited by a further erosion in the trade balance, which could be even worse than anticipated, if rising interest rates and high energy prices weaken U.S. consumer spending more than expected.

However, the latest data on the Canadian economy continue to point to economic strength, with Statistics Canada reporting a greater-than-expected 6.9 per cent rebound in building permits in May to $5.4 billion, the third-highest level on record and the sixth straight month that construction intentions have exceeded the $5-billion mark.

The strength was mainly in the non-residential sector, and the rebound failed to recover all the ground lost from the steep drop in building plans the previous month.

Contractors took out $2.1 billion in permits for non-residential projects, up 18.1 per cent following a 19.5 per cent plunge in April the big gain reflecting vigorous industrial, commercial and institutional building intentions, especially in Alberta and British Columbia, it said.

Housing permits, meanwhile, edged up 0.7 per cent to $3.3 billion, thanks to strength in apartment and condo construction plans, which offset continued weakness in plans for single-family construction.

The steepest increases in home-building intentions during the month were in Ontario and Quebec, and the largest declines in Alberta. However, 22 out of 28 metropolitan areas have showed stronger home-building intentions this year than last, led by big advances in Calgary, Edmonton and Vancouver, while Toronto and Hamilton have showed the largest year-over-year declines.

The continued strength in housing reflects gains in full-time employment and in disposable income, it said.

But a separate report suggests some slowdown in business activity.

The Ivey index of business sentiment, based on a monthly survey of changes in business purchases, prices, inventories, deliveries and employment, fell to 62.2 from 75, suggesting a slowdown in activity.

Analysts nevertheless said it is still pointing to strong business activity. A reading of more than 50 suggests business activity is increasing, while a reading of less than 50 suggests it is contracting.

The results of the June survey of 175 companies across all sectors of the economy diverged significantly from the more pessimistic findings of Statistics Canada's latest survey of some 4,000 manufacturing firms, which saw a sharp decline in manufacturing sentiment and production, noted Ted Carmichael, economist with J.P. Morgan.

That gap in sentiment highlights the gap in relative performance of Central Canada's struggling manufacturing sector and the rest of the economy, especially the booming resource sector in Western Canada, he noted.

The Ivey price index, meanwhile, rebounded to a more-than-six-month high of 72.4 in June from 70.3 in May, levels which, Carmichael noted, have in the past been followed by interest rate increases by the Bank of Canada.

Capital Housing Trade Cooling

Ottawa's new home industry, a sizzling sector of the economy in the first years of the decade, has slowed sharply in the past 18 months.

According to Statistics Canada, 1,983 new housing units were approved between January and May. And that's hardly an indication that the market is falling down, it's a sharp reversal from 2002, when permits were issued during the same period for construction of nearly 3,300 homes.

The boom began in 2001 with 2,855 new housing units and continued through 2004 with permits for another 2,878.

The month of May continued a sluggish trend that has been going on since early last year with the value of residential building permits down 7.1% from the month before and about 32% lower than the average month in 2005.

The entire housing market in Central Canada is cooling and Ottawa is part of that trend.

These new figures for building permits came just a day after a real estate report showing that resale homes in Ottawa have increased just 4% in the past 12 months -- less than half the national average.

Permits for multiple housing units, a mainstay in recent years, dropped 34% in May from April to $14.8 million.

Nationally the trend was going in the other direction, with municipalities issuing $5.4 billion worth of building permits in May, up 6.9% from April.

The showing was much stronger than the 1.3% rise economists had expected.

The housing sector continued to be boosted by advantageous mortgage rates, although they have increased progressively over the last year.

Home Building Market On Downswing

Ottawa’s new home industry, a sizzling sector of the economy in the first years of the decade, has slowed sharply in the past 18 months.

According to Statistics Canada, 1,983 new housing units were approved between January and May.

And while StatsCan building permits that’s hardly an indication that the market is "falling down," it’s a sharp reversal from 2002, when permits were issued during the same period for construction of nearly 3,300 homes.

The boom began in 2001 with 2,855 new housing units and continued through 2004 with permits for another 2,878.

The month of May continued a sluggish trend that has been going on since early last year, with the value of residential building permits down 7.1 % from the month before and about 32% lower than the average month in 2005.

The entire housing market in Central Canada is cooling a little bit and Ottawa is part of that trend.

The StatsCan figures for building permits came just a day after a real estate report showing that resale homes in Ottawa have increased just 4.4% in the past 12 months - less than half the national average.

Eastern Housing Boom Losing Steam

One of the country's longest housing booms is finally running out of steam in Central Canada, just as Western markets are experiencing an unparalleled period of explosive growth.

After a string of record years characterized by heated bidding wars and double-digit gains in prices, major markets such as Toronto, Ottawa and Montreal are taking a breather. Price increases are moving closer to the rate of inflation, multiple offers are less frequent and the number of homes for sale is increasing, industry sources say.

Sure, the heat has come off. It's a good market. It's not a spectacular market like it was.

The growth rate has fallen off considerably. We are clearly reaching the end of this expansion in Central Canada.

What's been happening in Calgary in the last few months is mind-boggling.

The average price of a two-storey home in Calgary is up more than 54 % in the first half of this year compared with a year earlier.

It's like eBay for houses. You have to let the market determine the price.

Some of the dramatic price increases in the Alberta market have to do with the relatively low average prices for homes compared with other major centres such as Vancouver and Toronto. It's a lot easier to have a 50% increase when you start with a $150,000 property.

Average home prices in Calgary are now reaching Toronto levels and they will pass Toronto by the end of the year. The relatively smaller size of the Alberta housing market also has helped to contribute to the rapid price appreciation. Its size makes it easier to "throw the market out of whack." Still the major factor behind the growth clearly is consumer demand, fuelled by the booming energy sector. In Calgary if you hit the street looking for a home, chances are you are not going to find one.

Looking ahead, the price increases will moderate in the coming months, ending the year about 30 % than 2005. The current rate of price appreciation is obviously completely unsustainable. The rising prices will lessen demand as some people decide not to enter the market.

In the rest of Canada, the moderating market conditions will last. "We are in that magic balanced territory. That balance could be upset if the central bank overshoots its targets in raising rates.

The year-over-year increase in average price for Toronto was 5.5 % in May, the most recent numbers from CREA show. In Ottawa it was 4.7 % and 8.2 % in Montreal. That's in sharp contrast to Calgary, where the number jumped by 43.6 %.

Average Housing Price Increases

May '06 - May '05* % change2005-2004 % change2003-2004 % change2003-2002 % change
Calgary 43.6%12.5%5.5%6.5%
Edmonton 22.9%8.0%8.5%10.2%
Toronto 5.5%6.6%7.6%6.2%
Montreal 8.2%11.1%12.7%16.3%

Housing Markets Continue Torrid Pace

The Canadian housing market is still hot, and searingly so in Western Canada.

Nationally, the average price of a home in the second quarter of this year was 14.2 % higher than a year earlier, and up more than 50 % in Calgary and more than 30 % in Edmonton.

Both sales and prices continued to rise across the country in the April-June quarter.

The pace of growth varied greatly by region, with activity levels and price increases in the western provinces far outpacing that in the rest of the country.

But as hot as the housing market is the pace of activity will ease during the lazy-hazy days of summer.

The will allow buyers more time to look before they leap into the market and sellers time to spruce up homes that failed to sell in the spring rush.

This summer's housing market is offering buyers real-estate opportunities that were not available during the record-breaking spring market. Earlier in the year, buyers in many parts of the country had to act instantly or lose the deal. In some cases, sellers have reduced their asking prices after failing to sell in the spring because they tried to make a killing during the market frenzy.

However, both real-estate firms are forecasting the market for housing will remain healthy, reflecting the economy and job market.

Nationally, a 9.2 %5 increase in prices is predicting this year to about $272,200. In Ottawa, where conditions appear to be more balanced, it expects prices to grow 3.5 % in 2006 compared with the year before.

The continued strength of Canada's economy, coupled with strong consumer confidence and rising but moderate interest rates, continued to drive robust demand for housing across the country, noting sales in the spring were at record or near-record levels in most markets.

Still, the supply of homes for sale met demand other than in the West, where it remained a sellers' market.

The story in the West, and particularly in Alberta, is quite different, with extraordinary demand levels far surpassing available inventory, noting that was especially the case in Calgary, Edmonton, and Vancouver. The result has been some of the highest year-over-year price increases that have been experienced in any region of this country in decades.

This pattern will likely continue for the remainder of the year.

Meanwhile, the real estate markets in Central and Eastern Canada saw more modest growth despite robust demand.

CMHC Unveils New Award For Housing Excellence

The Diane Finley, Minister of Human Resources and Social Development, unveiled a new $10,000 academic award June 27 to mark Canada Mortgage and Housing Corporation’s 60th anniversary.

"Just as past CMHC programs have helped other housing professions build their industries from within, it is my hope that this award will draw attention to the importance of housing as a field of study, and encourage world-class research in housing-related fields here in Canada," said Finley, who inaugurated the CMHC Housing Studies Achievement Award at the Canadian War Museum reception in Ottawa.
Finley said $10,000 will be awarded every two years to each of three Master’s and three Doctoral students by CMHC, in recognition of their important contribution to the understanding and advancement of housing in Canada.

Students applying for this award will be asked to send a summary to CMHC of their thesis or major research paper dealing with housing in any economic, social and technical (context). Their work must also have been recommended by a faculty advisor. Canadian students abroad will also be allowed to compete for the prizes. CMHC President Karen Kinsley, who hosted the Corporation’s 60th anniversary reception, said the award will make an important mark on the Canadian academic landscape.
"As bright as our achievements together have been, I see an even brighter future ahead," Kinsley told the crowd of housing industry partners, academics, war veterans and CMHC alumni.

Tom Carter, a professor at the University of Winnipeg’s Institute for Urban Studies and Canada Research Chair in Urban Change and Adaptation, was also on hand for the announcement. He said award winners will contribute to Canada’s reputation as a world leader in housing.

Thursday, July 06, 2006

The Real Floating Bed

A new scalemodel 1:5, the final one before realization of the real floating bed (2001 A Spaed Oddity) will be part of the www.100procent event in the Van Nelle Design factory in Rotterdam on june 15th, 16th and 17th. Floating on a magnetic field and positioned by 4 thin cables this model will be on expo in the campsite (designers).