Sheldon, Nathan, Derek, Lisa and I (and over 800 other people) are at the annual 2009 Housing Forecast Seminar presented by the Realtor's Association of Edmonton this morning at the Shaw Conference Centre. This year there were a record number of attendees, probably because we're all looking for answers in the time of "economic uncertainty." Sheldon and I always attend and always come away with our brains full of useful information and this morning is no exception.
Ron Gilbertson, President and CEO of the Edmonton Economic Development Corporation just finished his talk on the Edmonton Business and Commercial Climate, here are some of the key points:
- Edmonton has the second lowest unemployment rate in Canada
- Edmonton is 5th in Canada for full time employment (a significant improvement)
- We are the lowest in Canada for business bankruptcies and fifth lowest for personal bankruptcies
- GDP growth per capita is 25% ahead of Calgary, Vancouver, Toronto, Montreal and Ottawa
- GDP growth per capita has increased almost twice as much as Calgary over the last number of years
- RBC and CIBC both projected an increase in GDP for Alberta in '09
- Conference Board of Canada projects Edmonton to lead all Canadian cities for GDP in '09
- While many projects in the Oil and Gas sector have been put on hold, there are still $172Billion underway
Patrick Adams, Chair of the Home Builders Association talked about trends in home design:
- The three hottest styles are Pre WWII (Arts & Crafts bungalows, Victorians, Tudors and Colonial), Mid-century modern (flat roofs, open floor plans, geometric shapes) and Mediterranean (stucco, tile roofs, grand entries, central stairs, wrought iron accents
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Buyers today are looking for "Ensuite spa retreats", kitchens as gathering places, modern clean lines, new colours, and spaces to eat, work, relax and entertain
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Green is hot and it varies in degree:
- Dark greens are very eco-conscious, motivated by sense of responsibility to the planet, mid-upper income, strong sense of community pride
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Medium greens tend to be young parents concerned about children's future, affluent and key values include hope. convenience and prevention
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Light greens are less eco-consious, emerging middle class and 20-something city dwellers, embrace eco movement because it's cool (eco-chic)
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Non-greens – all ages, focused on survival or material gain (depending on level of wealth)
Current technologies in demand by home buyers include home theatre rooms, home health care installations, micro display based TVs, lighting automation, security systems, iPod products, smart sound systems
Ian Glassford, Chief Economist Servus Credit Union was "realistic, but optimistic" looking at Edmonton's economic situation:
- Before 1985 the global economiy averaged a recession every 4.5 years that lasted 15 months and impacted the economy b y-3.25%
- After 1985 recessions globally have occured every 11 years, lasted 8 months and impacted the economy -.9% on average
- Our current situation is not over yet and there is potential for more shocks but the good thing is the problem was recognized quickly with strong coordinated action and no sign of protectionism and other mistakes of the past
- In Canada we are in better shape than most so far but we will be affected, commodities are a concern
- In Alberta we are quite solid so far, with a strong long term case fo oil investment, we will see improved in migration but we will be affected
- His forecast is that we are not done yet, the recovery will be longer and less robust, more shocks are likely. We should see rate cuts in January and March, deflation is a concern for some time
- He pointed out some positives for Edmonton real estate – new purchasers are coming over time, new supply is dropping to match demand, rates are coming down and improving affordability (he did up a great chart I'll post when I can)
- He urged us all to remember that while there is pain in recession there is also opportunity. What we are going through is nothing new, we just haven't seen it in a while so manage intelligently and remember after recession comes recovery
Richard Goatcher from CMHC presented the quarterly stats that we've already discussed on this blog. Charlie Pond, the new President of the Realtor's Association of Edmonton closed out the seminar with stats about Edmonton real estate that I'll post later today. Ciao for now!
Good to see how possitive the spin is on Alberta. Maybe for the moment, but going forward not sure that will be the case. I’m afraid the Alberta down turn may just be beginning.
In todays Canadian Press:
With the price of oil tumbling, Alberta’s economy also showed signs of slowing and actually recorded the sharpest employment decline of any province last month with 16,000 fewer jobs, all full-time. That pushed the jobless rate in the province up 0.7 percentage points to 4.1 per cent
http://ca.news.finance.yahoo.com/s/09012009/2/biz-finance-canada-s-jobless-rate-jumps-6-6-cent.html
P.S., Thank you for all the stats/information.
Your right Fred,
Lets be serious are they really going to tell us that we’re in for a significant drop in sales and house prices??
Prediction:
All these listings that were taken off the market will come back starting May 09. People will be expecting a “spring rush” but there wont be any this year and the inventory will jump back to 11000 listings putting substantial downward pressure on prices. At least 15% drop this year.
EREB Prediction
08 SFH +4% Actual -7.0%
09 SFH 0% Actual ?????
I hope Im wrong but I dont think so. If someone could argue the reasoning behing stabilizing of markets let me know.
I think that in the long run housing prices in Alberta will pick up and increase gradually at a sustainable rate. Whoever bought a piece of real estate in 2007 thinking on selling for a profit in 2009 was mistaken…now…those who bought in 2007 or 2008 will se a good capital gain if they hold the property for 15 years and sell in 2025. Historically that’s what it has been happening over the last decades… Short-term real estate investors are usually speculators…speculators affect the market enormously.
Alberta will be okay as long as jobs are being created every year… unless of course, they figure out the way to efficiently run a car on water, or sun light, or wind and not OIL!!!
Yes 2009 will be a bad year too, probably worst than 2008, even 2010 could be a bad year as well, even 2011…but eventually there will be a point where the global economy can’t go any lower, it’s human nature to grow and further develop our civilizations, not the opposite…come on people we have survived 2 World Wars, and several other types of wars and Global Markets are still up from 50 years ago even taking into account the inflation rate over the last decades.
Global Economy and Markets are correcting themself, that’s normal, that’s even healthy.
I agree kenucho and here is another interesting article, everyone should read.
Ezra Levant: Don’t believe the Great Depression hype
Posted: January 03, 2009, 12:00 PM by NP Editor
Ezra Levant, U.S. Politics, Canadian politics, economy
So we’re in for another Great Depression, are we? Don’t believe it.
Now that the epic U.S. presidential race is over, a caffeinated press corps is in withdrawal, so hyperventilating about a new Depression is their new fix. Just to pick one newspaper at random, Toronto’s Globe and Mail used the phrase “Great Depression” over 300 times in December alone — or about a dozen times each edition. And that’s restrained compared to U.S. cable news shows.
It’s not just bored reporters exhibiting their twin traits of hyperbole and economic illiteracy. There’s a dose of wishful thinking at work, too. When the U.S. stock market started to tumble last fall, European commentators — who had yet to have their own stock markets pulled into the undertow — cackled with glee that it marked the end of U.S. economic supremacy. Igor Panarin, the dean of Russia’s academy for diplomats, even opined that America would disintegrate into six different countries, with the mid-West falling under Canadian “influence.”
Even to U.S. pundits, a failing economy is a useful story — it’s the mainstream media’s preferred choice for George W. Bush’s presidential legacy, as opposed to liberating and pacifying Iraq. And for Barack Obama, who once gave a speech suggesting his presidency would mark the “moment when the rise of the oceans began to slow and our planet began to heal,” lowering messianic expectations of him, by exaggerating the economic troubles he’s inheriting, is a political priority.
Of course, there are real problems in the U.S. economy, the most significant of which is the subprime mortgage fiasco. Hundreds of billions of dollars of “ninja” mortgages have been issued — “no income, no job, no assets,” with no down payment. That worked well enough when real estate prices kept going up — which also allowed the ninjas to keep refinancing their homes at higher values. When the bubble finally burst, U.S. banks were left holding overpriced homes.
That’s a real problem for the financial industry, which has since had its worthless assets backstopped by taxpayers. And the U.S. real estate bubble, while small compared to that in Europe, has been popped. But a Great Depression?
True, unemployment in the United States is ticking up, approaching 7%, and some economists think the figure might crest at 8%. For the millions of people this affects, that’s bad news — but it’s hardly comparable to the Great Depression of the 1930s, when more than 25% were unemployed, over 50% in some regions. If 8% unemployment is considered a Great Depression, then Canada has been in a Great Depression for most of the last 30 years.
The IMF predicts that U.S. GDP will dip by 0.7% in 2009. Again, not good news. But a Great Depression? The U.S. economy shrank 12% in 1930, another 16% in 1931, a whopping 23% in 1932 and another 4% in 1933. That’s a Great Depression. A 0.7% dip is America taking its foot off the gas for a moment.
Speaking of cars, the apocalyptic cries of the auto industry represent an opportunistic piling on. The decline of North American auto makers isn’t a sudden crisis. It’s the free market doing what it should: penalizing companies that pay domestic auto-workers six-figure incomes to do what Japanese automakers do for five figures. Canada’s Big Three have 27,000 unionized autoworkers building cars — and 40,000 more retirees collecting pensions. That’s why they’re in trouble.
The Great Depression just isn’t here. In fact, the recession we do have is already remedying itself. The decline in the cost of oil, from a high of US$147 a barrel to US$40, represents a massive stimulus to oil-consuming countries such as the United States; and though it takes the sparkle off Canada’s oil patch, that sector was doing just fine with oil in the US$30s, where it was until 2004. (On the other hand, countries such as Russia and Venezuela, where oil exports account for 50% of the government’s revenues, and Iran, where they make up 80%, are in for big recessions. That’s actually good news — it’ll be tougher for them to finance their rogue foreign-policy schemes.)
Canada will do just fine. We’re entering 2009 with nearly the lowest unemployment rate in 30 years, with lower debt, no structural deficit and an enormous stimulus in the form of tax cuts already working through the economy. The real threat is fear-mongering politicians looking to grow government, and opportunistic businesses happy for a new excuse to ask for handouts.
National Post
Ezra Levant blogs at ezralevant.com.
Although I generally disagree with Mr. Levant, I do respect his intelligence and p.o.v. … and I outright applaud him for this post. I imagine things will get worse before they get better… but the media hyperbole of a great depression is getting very tired. Basic math: 25% does NOT equal 8%.
Can we get the EREB forecast stats, what they posted in the release on their site seems incomplete. Thanks
The sugar coating by Ron Gilbertson is disgusting to say the least.
“Conference Board of Canada projects Edmonton to lead all Canadian cities for GDP in ’09″
I find it hard to believe that little Edmonton is going to lead all Canadian cities in GDP in 2009. I might buy GDP per capita, but I’d still put my money on Regina or Saskatoon.
“GDP growth per capita is 25% ahead of Calgary, Vancouver, Toronto, Montreal and Ottawa ”
Does he mean last quarter? last year? Baseless comments like this certainly give him little credibility.
Here’s the real story:
http://www.financialpost.com/story.html?id=1086679
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