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Tuesday, April 24, 2012
CPP Huge Real Estate Investment in Vancouver and Chile
Our Federal Government invests in Real Estate. Why aren't you?
The Canada Pension Plan Investment Board is Buying more Real Estate Related expanding its infrastructure portfolio with an agreement to purchase minority stakes in five major Chilean toll roads.
CPPIB will make an investment of 560-billion Chilean pesos, or approximately $1.14-billion, to acquire a 49.99% interest in Grupo Costanera from the Atlantia Group. Atlantia Group will continue to own the balance of Grupo Costanera, the largest urban toll road operator in Chile. “The addition of these five major urban toll roads in Chile is an excellent opportunity to expand our infrastructure portfolio in a developing market,” said André Bourbonnais, senior vice-president of private investments for CPPIB.
The Canada Pension Plan Investment Board (CPPIB), which has been aggressively building its real estate portfolio, announced a further investment on Tuesday in the prime office real estate market in Vancouver, Canada’s most expensive property market.
The CPPIB, which invests on behalf of 18 million Canadians, said it has bought a 50% stake in two downtown Vancouver office properties worth $230-million (US$232.83 million). The CPPIB’s equity investment, before closing costs, adjustments and working capital, is $115-million.
The other half is owned by Oxford Properties, the real estate investing arm of OMERS, the Ontario Municipal Employees Retirement System, another major Canadian pension fund and the CPPIB’s largest real estate partner.
“The downtown Vancouver office market is very attractive for long-term investors such as CPPIB,” Peter Ballon, the fund’s vice-president and head of real estate investments, said in a statement.
The acquisitions expand CPPIB’s Vancouver office real estate portfolio to six buildings in a market where quality assets rarely exchange hands.
CPPIB is on the hunt for real estate acquisitions, mostly interested in property in emerging powerhouses such as Brazil and China, but it also has its eye on more established centers.
Tuesday, April 24, 2012
Alberta Housing Starts Are Jumping
Home construction is booming in the Prairies, and Alberta, after years of tepid housing starts, is leading the charge.
The rate of residential construction, especially condominiums, has lagged the oil boom in Alberta in the past few years. But blockbuster housing starts in March — they jumped 72% year over year — hint that residential construction is getting hot again.
read the full article: http://natpo.st/If6j7C
Friday, April 20, 2012
Canadian Inflation and Interest Rates
Looks like the recent data showing a drop in the national inflation rate will NOT affect the interest rate rise in the near term:
A drop in Canada’s year-on-year inflation rate to an 18-month low in March will not delay interest rate hikes by the Bank of Canada, which is paying closer attention to economic growth, analysts said on Friday.
Statistics Canada said the annual inflation rate fell to 1.9% in March from 2.6% in February, the lowest level since the 1.9% recorded in September 2010. Analysts had forecast a rate of 2.0%.
The Bank of Canada, which targets a 2.0% inflation rate, this week made it clear it might have to start raising rates from near-historical lows because of reduced slack in the economy and increased underlying inflationary pressures.
The central bank has kept rates unchanged since September 2010.
“We now see the bank firmly in a data dependent mode as it considers when and how much of the considerable monetary stimulus currently in place will need to be withdrawn,” said TD Securities strategist David Tulk. “There is nothing in this report in our view that will influence the outlook for monetary policy.”
Story from the Financial Post: http://natpo.st/I6lNMr
Tuesday, April 17, 2012
Bank of Canada: Top 6 Summary
Today's summary of the Bank of Canada decision:
Interest rates stay at 1% Tuesday.
However, Mr. Carney’s comments send the clearest and most hawkish signal yet that rates will be moving higher — but precisely when remains to be seen.
“In light of the reduced slack in the economy and firmer underlying inflation, some modest withdrawal of the present considerable monetary policy stimulus may become appropriate, consistent with achieving the 2% inflation target over the medium term,” Mr. Carney said. “The timing and degree of any such withdrawal will be weighed carefully against domestic and global economic developments.”
Here’s a look at the factors Mr. Carney cites as a basis for this conclusion:
The global outlook is on the upswing
Since the bank released its January Monetary Policy Report, there have been signs of improvement around the world. Europe is now expected to “emerge slowly from recession” in the second half of the year, although the risks remain high. The U.S. is benefiting from somewhat improved labour markets, financial conditions and confidence, as well as fiscal consolidation and household deleveraging. Meanwhile, emerging market economies will “moderate to a still-robust” pace supported by an easing of macroeconomic policies.
Canada’s economy firmer than expected; 2012 growth boosted
The bank has hiked its GDP forecast for 2012 higher, to 2.4% from 2.0%. “The external headwinds facing Canada have abated somewhat, with the U.S. recovery more resilient and financial conditions more supportive than previously anticipated,” the bank said. “As a result, business and household confidence are improving faster than forecast in January.” Mr. Carney expects domestic demand and consumption to remain the primary driver of the economy, again warning that household debt burdens are still the biggest domestic risk. Business investment will remain robust, but government spending contributions will be modest.
But 2013 growth will slow
On the other hand the bank has also trimmed its forecast for 2013 growth to 2.4% from 2.8%, returning to full capacity in the first half of that year, while maintaining a 2.2% outlook for 2014. “The BoC is signalling that it does not expect growth to materially outstrip potential growth, or the speed limit of the economy,” Mr. Holt said. “While spare capacity may close in 2013H1 it won’t trip materially into excess demand that would spark deeper inflation concerns. That’s why the guidance here is toward ‘modest’ rate hikes.”
Speaking of inflation
Mr. Carney also characterized inflation as “somewhat firmer than anticipated” in January. Total CPI inflation is expected, along with core inflation, to be around 2% for the foreseeable future. This fits with the more hawkish tone, as Mr. Carney had previously forecast inflation to ease to 1.7% for both headline and core by the fourth quarter, Mr. Porter said. “The bank is clearly uncomfortable with keeping interest rates below inflation when household debt continues to grind higher.”
The loonie will be a factor
The loonie, meanwhile, is spiking higher, up a penny and rising. Mr. Holt suspects that fiscal tightening has not been priced into the dollar and its movements will be a limiting factor on the BoC’s policy flexibility.
Commodities are still elevated
Improving global economic prospects, supply disruptions and geopolitical risk have also kept commodities prices higher, particularly oil. However, international oil is now “considerably higher than that received by Canadian producers” — a possible reference to the supply bottleneck at Cushing, Okla. that has contributed to the price gap between North American crude and London Brent. “If sustained, these oil price developments could dampen the improvement in economic momentum.” As well, exports will remain constrained due to the persistent strength of the dollar.
Read the Full article: http://natpo.st/IumE9l
Saturday, April 14, 2012
My Home is Not Selling. What are YOU doing besides asking me to Drop the Price?
Pretty common complaint from Homeowners in Calgary. 'All you Realtors do is tell me to drop my price'. Lets look the common factors that influence how long a home takes to sell:
Obviously some things are in our control and others are not. Like always, we MUST focus on the things we can control:
Location is one issue which we cannot influence and only in rare cases can be mitigated. For example if you are near the C-Train or Major road way, you could construct a berm or sound wall which can mitigate some of the effect of sound. However this is a cost prohibitive and not something that makes sense financially for most homeowners. Obviously some locations are less valuable to buyers and your asking price must reflect this.
Condition of the property is one that can usually be controlled unless the condition is so poor as to render efforts useless. Usually the condition of your home is obvious prior to listing the property, but sometimes feedback from prospective Buyers and Realtors does uncover hidden issues. Very often, something as simple as a professional paint job will create a dramatic improvement in value and appearance. Other times you need to commit cash and resources to other repairs and improving the home to bring it up to current standards. If you are not prepared to do this then you must be willing to drop the price.
Time on market is literally Days On Market. MyHomeAgent provides you with average times on market for similar homes to sell and you should allow for at least this length of time in our marketing efforts. If the average time required to sell your home is NOT within your personal constraints then you must be prepared to drop your price.
Marketing is what MyHomeAgent does to create EXPOSURE for your home in today's competitive marketplace. Our Marketing strategy is tested and true and we commit full resources to selling your home. We exhaust all reasonable efforts to sell your home and have been doing this successfully for a long time.
Design concerns are lack of windows, small bedrooms, poor lighting, constrictive floor plan, small yard, etc etc. Some homes are faced with a serious dilemma of poor design and very little can be done to fix this. For example, creating open space by removing wall(s) may not be an option because of cost or engineering. If your home has negative design features then you must price the home accordingly.
Price must be market driven. Sellers need to understand it is detrimental to ask for more than comparable sales in the Calgary real estate market. So why does this happen? Most Sellers think their home is worth more than market value. Homeowners are emotionally attached to their home and usually get their information from asking prices in the neighbourhood or from friends. Good Realtors use current sales data to understand the market and homeowners are usually very surprised that the neighbours house sold for XX Dollars less than it was listed. At MyHomeAgent, we analyze market prices every day to ensure our pricing is always up to date.
Overall it becomes obvious that there are really only three factors we can control: CONDITION, MARKETING, PRICE.
So why do Realtors always suggest to DROP THE PRICE? 3 reasons:
What if the home is priced right and the marketing plan is valid? Sometimes it takes TIME. The price could be right, the marketing could be proper - but the home just needs time for the market to work. Ultimately some homes only appeal to select buyers.
MyHomeAgent uses the our exclusive ELITE SELLERS PROGRAM to deliver the best results for our Calgary clients. We focus on Results Driven Strategies that sell your home in Calgary's current Real Estate Market. Call MyHomeAgent today to discuss.
Saturday, April 14, 2012
Calgary Prices Are FLAT
Calgary’s housing market remained generally flat in the first quarter due to ample housing supply, says a report released Thursday by Royal LePage. Average prices for detached bungalows increased a modest 1.9 per cent year-over-year to $422,989 due to a lack of inventory, it said.
Image courtesy of CanEquity Mortgage
But Calgary’s standard two-storey homes and standard condominiums witnessed modest price declines of 1.2 and 2.6 per cent, respectively, “as demand was met with a sufficient amount of listings.” The average price for standard two-storey homes was $418,233 in the first quarter and $248,111 for a standard condo.
“Calgary is seeing strong demand from buyers who are taking advantage of low mortgage rates but since the inventory is available, there has been no upward pressure on house prices. Calgary is in a balanced market,” said Ted Zaharko, broker and owner of Royal LePage Foothills, in a statement. “However, as the quarter drew to a close, inventory began to fall and we started to see an increase in multiple offer situations.”
According to the Calgary Real Estate Board, residential MLS sales in the first three months of this year in the city were up 7.32 per cent from a year ago to 4,970 transactions and the average sale price increased by 1.79 per cent to $416,679.
Info from mtoneguzzi at the Calgary Herald. Read Full article here: http://bit.ly/IJ2ZSN
Wednesday, April 11, 2012
Build Your Real Estate Investment Team
Whether you like it or not, you can’t do it all by yourself. Investing in real estate requires many different professionals. There are Realtors, appraisers, inspectors, builders, renovators, mortgage companies, banks, property managers, attorneys, partners, accountants, sign companies, printing companies and yes even mentors, buyers, sellers and tenants. We have all have heard MANY TIMES in business that you are only as good as your weakest link. We want to suggest that you choose your team carefully and you may even want to go as far as interviewing your team players.
After all, this is a business and the dollar amounts can be substantial so you want to make sure that your team members have the same morals, ethics, business philosophy and personality as you. You will always make some mistakes and changes along the way, but when you start out with a list of the qualities that you are looking for in your team, it makes the decision process much easier.
We recommend qualities and work ethic are more important that experience or education. It’s easy to find someone who knows the business or has experience but it can be a challenge to find the right qualities and personality in the person you are looking for.
Start your search by seeking a referral from someone who is already successful in the business. Make sure you know the person you are seeking the referral from well enough to know that you will be well received when you contact the person.
Use common sense and look for people with good business sense. It doesn’t do any good to contact a banker for a line of credit when you have been referred by someone the banker just turned down, nor does it look good to contact a Realtor referred from someone who just backed out of the last deal they had under contract.
Once you establish your team players, be LOYAL to them. Let us give you an example. Who are you going to call when you find a listing online or another Realtor’s listing while driving the neighborhood? Most people would say to call the listing agent. We suggest you call your team player and let them go to work for you. That is how you build business relationships and commitments.
We had an investor call us on a hot lead - recognizing we closed 5 transactions for them last year. We got them the price and terms they wanted because we knew their priorities. Now we always call them about deals in advance. Everything in business works both ways.
Tuesday, April 3, 2012
Calgary Sales Moving
Calgary, April 2, 2012 – City of Calgary residential sales continued to rise in March 2012, reaching 2,167 units, an increase of 12.6 per cent over last March.
“The rise in activity is related to the continued improvement of our economy and consumer confidence, as some concerns regarding the global economy have eased,” says Ann-Marie Lurie, CREB® chief economist.
After the first quarter of 2012, sales are up by 7.3 per cent over the same time last year. While the increase is significant, when compared to historic activity, residential sales continue to remain below the long-term trend. Monthly new listings remain slightly lower than last year, whereas year-to-date figures show 7.2 per cent fewer listings have come onto the market in the first quarter of this year.
“While the number of listings for the first quarter of 2012 remains low compared to last year, the level of decline has lessened,” says Bob Jablonski, president of CREB®; “therefore pointing to the fact that those people who have been on the fence are starting to list their homes, and this trend is expected to continue.”
The year-over-year decline in new listings, combined with improving sales, has pushed down inventory levels to 5,092 units from 5,866 last year, as well as months of supply. However, as Jablonski notes, “it is not uncommon for the months of supply to decline in March as we transition from the winter season to the spring season.”
Recently, the tightening supply has brought about much discussion of multiple offers on houses. “It is important to note that multiple offers can happen during any market with a well priced listing or a unique property,” says Jablonski. “New listings coming onto the market at a good price are generating a lot of activity, but year-over-year index price growth for the typical home in Calgary in March was 2.9 per cent, which is considered a normal range. Also, the sales-price to list-price ratio does not reflect levels recorded during the peak of the market, when there were supply shortages,” Jablonski adds.
Single family homes continue to record strong activity, with sales increasing by 10.3 per cent at the end of the first quarter.Meanwhile, quarter totals for listings of single-family homes remain 8.3 per cent lower, resulting in a tightening of supply. The benchmark price reached $433,500, while the MLS® Home Price Index points towards a price growth of 3.6 per cent compared to last year.
The apartment condominium market continues to exhibit lower sales, with 782 sales recorded in the first quarter of 2012, a decline of 2.1 per cent compared to last year. However, March sales activity did post a 7.2 per cent gain over last year and is closer in line with typical March sales in this sector. New listings recorded a year-over-year improvement of 9.1 per cent for the month of March, but still remain 2.3 per cent lower than last year at the end of the first quarter. Despite the monthly rise in new listings, inventories continue to decline. Overall market conditions continue to favour the buyer.
The condominium apartment and townhouse benchmark price for the month of March was $247,800 and $293,600, respectively. While the apartment index price has remained relatively stable compared to last year, the condominium townhouse index recorded a modest improvement of 1.96 per cent over last year.
“The single family market continues to lead the housing growth in both sales activity and pricing, and the condominium market appears to have turned the corner as well,” Jablonski concludes. “Overall, the Calgary real estate market continues to move in the right direction, with all indicators pointing towards stable growth and a move towards typical levels of activity.”
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