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Last updated March 18,
2010
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Colliers is
the Answer
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| As an investor in multi-family properties,
you need a firm with experience, broad reach, and the ability to market or
locate an asset no matter how challenging the economic environment.
Colliers
International has the largest and most experienced team of multi-family
specialists in the industry and can serve you in key markets throughout North
America. Our combination of expertise, market dominance and singular focus make
us uniquely successful in helping our clients achieve their acquisition or
disposition objectives.
Whether you are
selling a single asset or a national portfolio, use our combined resources to
obtain the best market information and achieve the highest price. If
expanding your portfolio is the objective, our local market relationships can
help you identify and acquire properties, which meet your investment
goals.
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| Edmonton Multifamily
Update |
| March 18, 2010 |
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Multifamily News:
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| We're growing... |
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The Edmonton Multifamily
division is pleased to announce Jandip Deol as the newest addition to
their expanding team.
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Released: Edmonton Multifamily Report | Year End
2009 | Outlook 2010
 MARKET HIGHLIGHTS
As
expected, Edmonton was not immune to the effects of the subprime mortgage
crisis and market crash experienced by the economic world in 2007 and 2008
respectively. This led to a slow
start in 2009, but the Edmonton economic market started to bounce back with the
surging price of crude oil and favorable interest rates towards the end of
2009. These factors coupled with
Alberta having the highest GDP per capita in Canada has resulted in a projected
migration to Alberta of approximately 60,000 in 2010 (CMHC).
more...
Reports Page
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Alberta no. 3 in
growth outlook |
| February 23, 2010 |
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 Forecast
projects rebound after record drop
Alberta’s energy sector is set to
bounce back and help lift economic growth by 2.5 per cent this year, the
Conference Board of Canada said Monday.
And the provincial economy is
expected to continue gaining momentum into 2011, with growth forecast to jump
by 4.1 per cent.
British Columbia will lead all provinces
this year, with 3.7-per-cent growth, thanks to Olympic spinoffs and an improved
outlook for forestry and manufacturing, the board said in its provincial
outlook.
Renewed U.S. auto demand will help
Ontario surpass the national average for the first time in nearly a decade,
with growth of 3.5 per cent,
“The recovery in Central and
Western Canada began to take shape in the last few months and will continue to
do so through 2010,” the report said.
“In fact, all provinces are
expected to post positive economic growth this year,” said
Marie-Christine Bernard, associate director of provincial forecasting.
Government stimulus spending in the U.S.
and Canada will be the main driver, before a recovery in the private sector
begins to take hold in the latter part of this year and into 2011, the report
forecasts.
Household spending, aided by a recovery
in labour markets in the second half of 2009, will also be a strong
contributor.
Housing is expected to benefit from
that, pushing up residential construction investment by 4.7 per cent.
Commercial construction, however, will post barely positive growth after
companies hurt by the economic downturn slashed investment in structure.
The board described Canada’s
near-term outlook as “surprisingly strong,” and predicted national
growth will total 2.8 per cent.
“This year a modest recovery in
U.S. auto sales and housing starts will provide a long-awaited rebound in
exports of autos and parts, and of lumber and other construction
materials,” boosting the economies of Ontario and B.C., respectively.
Saskatchewan will benefit from a
resurgent energy sector and recovering global demand for potash, with growth of
2.5 per cent this year.
Quebec’s recovery from recession
is expected to be more gradual — an estimated 2.2 per cent pace in 2010
— as it wasn’t as hard hit as others during the downturn.
Newfoundland and Labrador will lead the
Atlantic provinces at 2.4 per cent growth, fuelled by additional offshore oil
investments and the return to normal production at the Voisey’s Bay mine.
The rest of the Atlantic Canadian provinces will post growth under two per
cent.
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Five years of local growth
seen |
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| January 28, 2010 |
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Forecast projects rebound after record
drop
After shrinking for the first time since 1991 last year,
Edmonton’s economy will snap back in 2010 by growing 3.2 per cent, says a
new national forecast released Wednesday.
While the mid-decade boom is clearly over, the Conference
Board of Canada’s Metropolitan Outlook says the Edmonton region’s
gross domestic product will grow an average of just over four per cent annually
between 2011 and 2014.
Last year, Edmonton’s GDP fell an estimated two per
cent — the biggest drop on record.
Edmonton’s recovery puts it in a four-city tie behind
front-runners Vancouver, Toronto and Kitchener, which will grow economically by
4.5, 3.5 and 3.3 per cent, respectively.
Calgary’s GDP is expected to rebound from its first
recession since 1989 with three-per-cent growth and strong gains in the goods
sector, retail sales and services.
“Only four Canadian cities posted economic growth
of any kind in 2009 — Halifax, Saint John, Winnipeg and Regina,”
said Mario Lefebvre, director of the Centre for Municipal Studies.
“Fortunately, Canadian cities are on the rebound in 2010, although the
pace of recovery will vary markedly.
“Vancouver is poised for a substantial rebound. In
addition to the boost provided by the Olympic Winter Games, housing
construction and consumer spending are forecast to rebound strongly this
year.”
Edmonton’s recovery will be more modest, the forecast
says.
The report predicts Edmonton’s job market will remain
soft this year; an unemployment-rate increase to 7.5 per cent is in the cards.
Retail sales, home resales and the construction sector are
expected to also show moderate gains. Slower but persistent migration to the
city is forecast to prompt a small rebound in Edmonton’s housing starts,
the board said.
“Following a tough year in 2009, Alberta’s
oilpatch is expected to see better days in 2010, although a full recovery is
not expected until 2011,” the outlook said.
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| Realtor sees rebound in
commercial sector |
| January 20, 2010 |
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 Market expected to
parallel recovery in energy
industry
As Alberta’s energy sector
rebounds from recession, it will pull Edmonton’s commercial real estate
market into a teady and cautious recovery in 2010, says a new national report
by Avison Young.
“Currently, 1,053 major
projects with a total value $240.2 billion are either underway or have been
announced to start in the next two years in Alberta,” said the commercial
realtor’s 2010 forecast.
“With over 70 per cent of the
projects occurring in the north-central region, Edmonton is positioned to be
the primary beneficiary of this infrastructure investment.”
Rising activity will especially felt in
the Edmonton area’s industrial real estate market, which heavily depends
on energy prices, the forecast says.
Low commodity prices last year pushed
industrial vacancy over four per cent for the first time in three years.
Avison Young’s forecast calls for
industrial-sector vacancy in 2010 of 4.4 per cent, up from 4.2 per cent in
2009.
“As a result of tempered levels of
construction in 2009, vacancy may even begin to see marginal decreases in the
later stages of 2010, provided the sublease market does not grow
significantly,” said Avison Young principal Rob Iwaschuk.
In the office market, Avison Young
forecasts the overall vacancy to continue rising to 8.9 per cent in 2010, from
8.3 per cent last year.
“A slow first
half of 2009 set the office market back as companies focused on protecting
their bottom-line costs," said Avison Young principal Cory Wosnack.
“However, during the final two
quarters, we saw some encouraging signs as tenants are now positioning
themselves to benefit from the current tenant-friendly market conditions that
we haven’t seen in the last few years.”
He said higher vacancy rates and more
sublease space are driving down rental rates and sparking large inducement
packages by landlords to potential tenants.
As businesses downsize and consolidate,
greater Edmonton’s sublease market has grown 350 per cent larger than the
previous quarter, said Colliers International in its fourth-quarter market
report, also released this month.
“The south-side submarket has not
only experienced significant increases in sublease space but has abundant new
product being introduced, leading to increasing landlord competition,”
Colliers’ report said.
Edmonton’s
retail sector is expected to remain steady because the city still posts
relatively low unemployment numbers compared to other parts of Canada and has
the highest average weekly earnings, Avison Young’s forecast said.
Food, drug and necessities retailers
will attract more consumer spending and new residential subdivisions will
include new retail sites which will be developed and absorbed by the market,
the report said.
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| Realtors forecast 10%
sales gain |
| January 14, 2010 |
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 Price of
single-family home expected to go from $367,000 to $385,000
Edmonton’s housing markets will grow in 2010, but don’t
expect the runaway sales and prices of the housing boom, industry
representatives said at a realtors’ forum Wednesday.
The resale market will go through 2010 the same way it left 2009
— stable and steady, Larry Westergard, president of the Realtors
Association of Edmonton, said at the group’s annual housing forecast
seminar.
Sales and average home prices will both grow moderately, Westergard
said.
Residential sales are expected to reach 21,000 homes this year, up
about 10.5 per cent from the 19,000 residential properties sold in
2009.
Allowing for a small range of seasonal monthly variations, prices for
single family homes are expected to gain about five per cent to $385,000 at
year’s end, up from today’s $367,000, he said.
“Most of the rise in the market will be in the
single-family-home market,” Westergard said.
“Condos, on the other hand, unfortunately, will continue to be
flat.”
Under pressure from new units being built, condo prices are forecast
to stay at current levels, for a 2010 average price of about
$244,000.
Consumer confidence, along with low interest rates, will continue to
drive sales, he said.
“The indicators … are that interest rates will stay the
same for most of the first part of the year. By the time the summer ends,
we’ll probably see an interest rate rise of one or two per
cent.”
Westergard sounded one caution, however. If the current relatively low
supply of home listings continues, it could tilt the market toward sellers and
boost prices higher than expected, he said. For now, he thinks it’s a
seasonal downswing that will pick up later in the year.
There were 4,037 residential MLS listings at year-end 2009. “We
would be a little more happy to see 6,000 properties for sale in the Edmonton
market.”
But even with strong demand and fewer homes, Westergard doubts the
market will overheat as it did leading up to a correction starting in
2007.
“It still has a lot to do with the global economy. There’s
still some uncertainty. You don’t see a lot of the projects in the
Edmonton area that you did in 2005, 2006 and 2007.
“You’re going to get a little bit slower economy and,
hence, the industry will be a little bit slower.”
In the new-home market, builders are also much busier than they were
at this time last year but remain wary of building at 2005 or 2006 levels, said
Guy St. Germain, Edmonton president of the Canadian Home Builders
Association.
“We went through hell here in 2008 and the first half of
2009,” St. Germain said.
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| Housing market
rebounds |
| January 6, 2010 |
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Consumer
confidence returns to resale buying
Edmonton’s resale housing
market stumbled at the start of 2009.
Even as home sales fell dramatically and
prices slipped from year-earlier levels, Charlie Ponde last January forecast a
reasonably good year for real estate despite the bite of recession.
It turns out, the Realtors Association of
Edmonton president wasn’t optimistic enough.
“We predicted residential sales of
15,550 this year and exceeded it in early October,” Ponde said on Tuesday
as the group released its final month of Multiple Listing Service figures for
2009.
“We anticipated that single-family
prices would end the year at $352,000 and condos would be at $222,500.”
The average prices turned out to be $364,032
and $240,322, respectively.
Despite the slowest start since 1996, the
year ended with 19,139 home sales to beat the 2008 tally of 17,317. Sales
records were set in June and July, and in six of the last seven months, MLS
sales topped numbers from a year ago. September fell just short of 2008 sales.
Throughout the year the average singlefamily
home sale price see-sawed from a low of $347,000 in February to $373,000 in
July — a spread of 7.5 per cent or $26,000.
Condo prices varied within a nine-per-cent
range from $227,000 in February to $247,000 in June.
The Edmonton-region market ended 2009 by
nearly breaking the December sales record.
Sales of single-family houses, condominiums,
duplexes and other homes through the Multiple Listing Service tallied 948 in
December — missing the record of 1,074 set in 2006.
“Strong year-end sales put a crown on a
year that started slow but ended big,” said Ponde, the outgoing
association president.
Renewed consumer confidence, low interest
rates and government incentives triggered more sales, he said.
December marked a dramatic 55.9-per-cent
turnaround from December 2008, which saw 608 Edmonton-region homes sold —
the stingiest number recorded since 1995.
Prices, however, remained stable.
Singlefamily homes dropped one third of a per cent to $366,761 from an average
selling price of $368,018 in November.
Compared to December 2008, the average
selling price of a single-family home was up 4.23 per cent.
The average price of a condo increased 5.4
per cent in December, more than recovering a 2.5-per-cent drop in November.
Condo prices rose on average in December to $244,174, up from $231,684 the
previous month. Compared year-over-year, condos are up 4.22 per cent.
There were 1,118 homes listed in December for
a sales to listing ratio of 85 per cent. The average days on market was 50
days.
Ponde said a detailed forecast for 2010 is
scheduled for next week, saying only he looked forward to a stable market
continuing.
“The bubble would only happen if people
get greedy,” Ponde said.
A shortage of listings could
also drive prices up, he added.
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| Tenants offered free
cable, rental rebates |
| December 17, 2009 |
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 Landlords resurrect incentives as apartment vacancy rate
jumps
Want free digital television
for a year? Or the equivalent of $500, or a month’s free rent?
All you have to do is rent an apartment in
Edmonton these days.
Figures released Wednesday show the apartment
vacancy rate in the Edmonton census metropolitan area went up for the third
year in a row, to 4.5 per cent.
And stiffening competition for renters is
prompting landlords to shower new tenants with incentives at a level not seen
in five years.
Classified ads tout an array of inducements
including free cable for a year, parking, extra appliances, two-year leases
with locked-in rents, extra appliances, or high-speed Internet.
“It’s a great time to be a renter
in Edmonton,” said David McIlveen, director of community development with
Boardwalk Rental Communities, which owns about 11,000 rental units in Edmonton.
“It’s a matter of being
competitive to get your suites rented, so we’re offering things like zero
security deposits on some suites, or $500 toward your first month’s rent,
or your first month’s rent free, or the chance to move in early. All
kinds of different things depending on what’s important to our potential
customers.”
He said the company was not offering such discounts two years ago, but started to last year
as the market softened.
“It’s part of the marketing
budget to rent the suites. If a suite sits vacant for a year, it doesn’t
take long to do the math and figure out it’s probably a good idea to
offer incentives to get a new customer to move in.”
The average vacancy rate in October climbed
to 4.5 per cent, up from 2.4 per cent in October 2008, according to Canada
Mortgage and Housing Corp.’s rental market survey released Wednesday.
“This fall’s results represent
the highest vacancy rate since October 2005, when CMHC’s rental market
survey reported the same overall apartment vacancy rate of 4.5 per cent,”
said Richard Goatcher, the national housing agency’s senior market
analyst for Edmonton.
Goatcher said a rental rate between three and
five per cent represents a healthy market. “When it gets above five per
cent, the landlord starts to struggle,” he said.
The number of landlords offering incentives
has soared to a level not seen since 2004, before the peak of the last economic
boom, said the CMHC report.
“The share of structures offering
incentives increased to 22.9 per cent this October from 3.2 per cent in October
2008,” the report said.
In the past decade, only one year has seen
landlords more generous; in 2004, 28 per cent of buildings offered incentives.
As the economy heated up, the percentage
plunged in 2005 and 2006 and incentives nearly disappeared in 2007, at the peak
of the economic boom, before emerging again in 2008.
Boardwalk isn’t stopping at incentives
to lure customers. The company’s rental rates in Edmonton have also
dropped by over $100 on average, McIlveen said.
The company isn’t alone. As property
owners and managers try to keep and attract tenants, the average apartment rent
across the region fell this year by $14 per month. It’s the first
year-over-year decline in rent levels since 1996, when a 7.6-per-cent rate
meant there was a glut of empty apartments, CMHC said.
In October 2009, an average two-bedroom
apartment rented for $1,015, down from $1,034 in October 2008.
Across Alberta, the average vacancy rate
among large urban centres rose to 5.5 per cent in October, up from 2.5 per cent
a year earlier. The last time it was this high was in the early 1990s. CMHC
says economic uncertainty has driven down employment levels especially among
younger workers who traditionally rent.
“A lower level of employment
opportunities has also reduced migration flows from non-permanent residents, a
group that has a high propensity to rent,” said Lai Sing Louie, CMHC
regional economist.
More renters are also leaving apartments to
buy homes at rockbottom mortgage rates or are living in condominiums owned by
investors renting them out.
For next year, CMHC projects fewer new
apartment buildings and strengthening renter demand will push down vacancies
toward 3.7 per cent by fall.
The growth of incentives will
also slow in 2010, the CMHC report said. “With vacancies expected to turn
the corner next year, look for the proportion of buildings offering incentives
to either stabilize or inch downward.”
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| Zero interest into
2011 |
| August 26, 2009 |
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 Lowered inflation extends Bank of Canada's
projected rate
Muted inflation will keep the
Bank of Canada’s benchmark interest rate near zero well into 2011, a full
year longer than currently expected by the country’s central bank,
according to a report Tuesday from CIBC World Markets.
CIBC chief economist Avery Shenfeld said that
while the recession may be over, the considerable slack left in the system will
keep inflation subdued next year, removing any need for the central bank to
hike lending costs.
“Inflation will still be feeling the
downward pressure of a sizable output gap next year, one as large as we saw in
the early-1980s and 1990s downturns,” said Shenfeld.
The Bank of Canada’s overnight lending
rate currently stands at 0.25 per cent.
Although core inflation did not fall as much
as the Bank of Canada forecast earlier this year, Shenfeld said, prices will
cool early in 2010, not long before the Bank of Canada has said it could begin
to raise record-low borrowing costs.
Until now, the “income effect”
has come into play. That has meant that overall or “headline”
inflation, which includes more volatile items like food and gasoline, has been
falling, putting more money in people’s pockets and helping to prop up
spending on core items. But that trend will reverse over the coming months,
Shenfeld predicts.
“If crude oil hugs the $60 to $70 (US a
barrel) range, energy will revert from a huge negative contributor to CPI (the
consumer price index) to a modest positive in early 2010, with spillovers into
related products like airline fares.
“But by reversing the income effect,
that implies diminished buying power for other goods, contributing to a cooling
in core CPI,” Shenfeld said.
The report adds that there is less benefit
from a forecast U.S. recovery than the Bank of Canada envisions. Gains will be
limited by protectionist trade barriers, a shift in U.S. stimulus spending to
industries that import less from Canada, and a greater emphasis on government
stimulus than on consumer spending in the U.S., it said.
The most recent data on
inflation from Statistics Canada showed core prices rising at an annualized
rate of 1.8 per cent in July, below the central bank’s two-per-cent
target.
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| Alberta remains best
place for real estate investors |
| June 30, 2009 |
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| But don't expect return
of 'Tiger Woods' days |
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When it comes to the housing
market, E-town still rules.
That’s the word from Don Campbell,
president of Canada’s Real Estate Investment Network.
The popular author, consultant and public
speaker says Edmonton remains the best place on the continent to invest in
residential real estate. It’s a claim he first made last August, shortly
after oil prices peaked at $147 US a barrel, and Alberta was rolling in energy
riches.
Despite a sharp drop-off in oil and gas
prices since, and a big slowdown in new oilsands projects, Campbell
hasn’t flinched. He insists Edmonton will emerge from the recession
stronger than ever.
“According to our research, Edmonton is
still the No. 1 place for long-term investing in real estate in North America,
absolutely,” says Campbell.
“Edmonton has the potential, it has the
job growth. We know that when the recovery comes — and it will come, we
just don’t know when — Edmonton is going to be able to provide fuel
and fertilizer, which is exactly what the world is looking for. So that’s
a pretty good basis for job growth.”
When Campbell speaks, others tend to listen.
About 800 investors and business owners
turned out Friday evening at the Shaw Conference Centre to hear his latest
views — and those of several economists — on the housing market and
the economy.
About 40 per cent were from out of town, with
some flying in from Ontario, Saskatchewan or the West Coast to size up
investment opportunities in Alberta.
“They’re looking at this region
because it’s a much more diverse economy, it’s stronger than many
other cities,” he says.
“If you look at the Saskatchewan market
and the level of in-migration there, it’s not as strong as we’re
seeing in Alberta. So people across the country are starting to really look at
economic fundamentals, and they see Edmonton as the No. 1 place.”
According to the latest interprovincial
migration stats, Alberta’s population grew faster than any other province
in the first quarter, with 7,144 people moving here from other parts of Canada.
More than half came from Ontario, and about
800 migrated from Quebec. Alberta is also attracting more people from
Saskatchewan and British Columbia than it’s losing, for the first time in
two years.
In the first quarter, Alberta gained 474 net
migrants from Saskatchewan, and 855 net migrants from B.C. A year ago, the net
migration flow was outbound, not inbound.
Since newcomers typically rent for a couple
of years before plunging into the housing market, that’s a bullish
indicator of future demand growth, he says.
Despite his upbeat longer-term outlook for
Edmonton and Alberta as a whole, Campbell figures real estate markets are
likely to remain choppy for the next 18 months. House prices typically lag the
economy by six to nine months, he says. “So even as we see an economic
turnaround in 2010, we’re not going to see a real estate turnaround until
the latter half of 2010,” he predicts.
While some forecasters predict an imminent
rebound in prices, “I’m going, what planet are you from?” he
sniffs.
Although the appearance of
“green shoots” is giving investors cause for hope, he says
there’s also a chance of “frost” reappearing in the months
ahead.
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