Calgary’s resale housing market should be in good shape in the coming months, says the president of a national real estate company.
The resale housing market is still going great guns, even though Calgary no longer has the seller’s market conditions that dominated for so long, says Gary Hockey, president of Coldwell Banker Canada.
Calgary’s dollar volume for MLS sales was up 10.6 per cent in October this year compared to a year earlier. Edmonton’s dollar volume was up 29 per cent in October 2003 compared to October 2002. Unit sales were up five per cent in Calgary and 13 per cent in Edmonton.
“The nay-sayers have been waiting for the bubble to burst but the Canadian economy is still pretty strong,” Hockey said.
He was in Calgary last week for a meeting with Coldwell Banker brokers in the area.
With the dollar performing well and the interest rate low, the Bank of Canada might have to raise interest rates if the high Canadian dollar affects the country’s exporting industries too much.
“At the bottom end (of the housing market) where the first-time buyers are moving in, the affordability gets better as the interest rate is lower,” said Hockey.
The seller’s market disappeared with new listings, putting the market on a more even keel because buyers have more selection. Yet prices are still going up.
“There will undoubtedly be a correction in our housing market.”
Sophisticated investors may be going back to the stock market, but the average person still feels more comfortable with real estate, he said, adding the “touch and feel factor” is important to investors.
Rosalee Krygier, president of the Calgary Real Estate Board (CREB), also sees a good year for Calgary resale housing, crediting both the strong local economy and positive forecasts in the oilpatch.
CREB figures released earlier in November show 2,021 sales in October, breaking the 2,000 mark for the eighth consecutive month.
New listings numbered 3,622 in September and 3,474 in October. New listings for the first 10 months numbered 35,218, compared to last year’s figure of 33,905.
Meanwhile, Statistics Canada reported last week that residential construction investment in Canada jumped 4.3 per cent in the third quarter. It was the fastest pace in six quarters, brought on by low interest rates, growing employment and income, and shortages in rental markets.
The national statistical agency said real estate agents and brokers benefited, with double-digit gains in output.
HERITAGE FOR SALE
A heritage developer is eyeing the sale of a potential Calgary downtown showcase.
Heritage restoration developer Neil Richardson has three buildings on the block, two of them after doing all he can for them, he said. The third one is the Lougheed Building.
Richardson’s Heritage Properties Corp. restored the Lorraine Building in the Beltline and the North West Travellers’ Building downtown. The Lorraine, in the 600 block of 12th Avenue S.W., has been restored, acquired a heritage designation and is leased. “I’ve done everything for it that a heritage developer can do,” he said of the Lorraine Building.
The North West Travellers Building, in the 500 block of 1st Street S.E., only needs one more tenant.
Richardson said that the Lougheed Building, in the 600 block of 1st Street S.W., needs government help to be restored. He’s optimistic that the city will step up to the plate to help.
IMPERIAL BUYS WAREHOUSE
Imperial Equities Inc. (IEI-TSXV) has bought the Mayfield Industrial Plaza in Edmonton’s popular Sheffield Industrial area.
The two-acre site at 114th Avenue and 163rd Street has a concrete block building of 23,500 sq. ft. and is appraised at $1.2 million. Imperial Equities, which is based in Edmonton, will first refurbish the building.
“Desirable industrial land in Edmonton is scarce and at a premium,” company president Sine Chadi said. “This new acquisition gives us a great opportunity to grow our holdings by bringing a two-acre corner site with a concrete block building into our portfolio, at about half of what it would cost to build this same property new. This means we should enjoy a healthy return on this investment.”
BUILDING BOOMING
The construction industry should grow impressively in the next couple of years, an annual forecast says. Informetrica, economic forecaster for the Canadian Construction Association (CCA), said last week that the industry should follow a flat 2003 with gross output rising 4.5 per cent next year and in the 3.9-per-cent range in 2005. Growth is expected to be about two per cent in 2006.
With Canadian gross output of just over $1 trillion, the construction industry will contribute more than 12 per cent of Canada’s GDP.
Breaking the industry down into various sectors – residential construction, non-residential building construction, engineering and repair construction – projected investment in public infrastructure puts non-residential building construction ahead of most other sectors over the next three years.
Its growth rates are expected to be 4.3 per cent in 2004, six per cent in 2005 and 6.3 per cent in 2006.
Engineering construction is expected to top non-residential growth in 2004 with growth of 7.5 per cent, powered by planned development of large projects such as Voisey’s Bay in Labrador, hydroelectric developments in Quebec and continued development of the oilsands in northern Alberta.
