The second quarter of 2020 marked the first full quarter since COVID-19 began to weigh on the economy.

Calgary housing sales slowed by 35 per cent compared to the previous year. This is better than original expectations, thanks to June figures that were far stronger than initial estimates. The pullback in new listings in the second quarter caused inventories to trend down, preventing a more significant decline in prices.

The second quarter benchmark price trended down compared to the first quarter and eased by 2.3 per cent compared to last year, just slightly above initial forecasted levels.

“Unquestionably, COVID-19 will continue to impact the housing market over the next several quarters. However, the extent of the impact may not be as severe as estimates from three months ago,” said CREB® chief economist Ann-Marie Lurie.

“While the situation may look brighter than it did a few months ago, it is also important to note that challenges remain.”

Overall, we continue to expect citywide benchmark home prices to ease by nearly three per cent this year and sales activity will remain weak compared to the already low levels recorded last year.

Despite the wide range of expectations on home prices, we do not expect a stronger price decline in 2020 for a couple reasons:

• Adjustment in supply. Demand has fallen, but so have new listings and inventory levels. This is preventing significant gains in the months of supply and slowing the downward price pressure.
• Support provided by lenders and government is expected to cushion the blow from COVID-19, preventing a more significant price drop this year.

As we move into the second half of this year and into 2021, there remains significant downside risk. If jobs do not return as anticipated and the support from lenders and government ends, we could start to see a rise in supply relative to demand. This may cause stronger price declines in the market entering 2021.

Q2 2020 Calgary & Region Quarterly Update Report.

Source: Calgary Real Estate Board 

EDMONTON -- Alberta's energy ministry is welcoming news that energy companies in Canada added more drilling rigs last week than they have in five years.

A total of 118 rigs were added in Canada for the week ending Jan. 10, according to the latest numbers from Baker Hughes, which has provided publicly available rotary rig counts since 1944.

The last time that many new rigs were added in the country was back in 2015, according to data obtained from Baker Hughes.

Alberta added 69 rigs week-over-week, while Saskatchewan added 42, numbers show. It brings the total number of rigs added in Canada up to 203.

In a statement, Alberta's energy ministry called the spike in drilling rig activity good news for the province's oil and gas sector.

"Since taking office last year, government has been focused on reducing unnecessary red tape, and introduced the Job Creation Tax Cut, to attract further investment," the ministry said. "We will continue our work to ensure that investors know that Alberta is once again open for business."

The Calgary-based Canadian Association of Oilwell Drilling Contractors (CAODC) agreed that it was good news for the industry, but said oil and gas isn't out of the weeds yet.

"This is traditionally in the past the way that it should work is that we always get a bump in the beginning of January and it lasts until around spring break, so we'll see if this is sustained," said Mark Scholz, president and CEO of CAODC.

He said time while tell how much money producers are willing to spend, as their overall budgets have not seen a material change.

He credited the Alberta government for lifting oil curtailments for new conventional wells in November and reducing corporate taxes and red tape, saying there was "no question" those measures were having some degree of impact.

"There are about an extra 10,000 people working today who weren't working this time last year," said Scholz.

With construction beginning on the Trans Mountain pipeline expansion and Enbridge's Line 3 coming online in December, as well as natural gas prices starting to increase, Scholz said it's a good start to the year for the industry.

"This is still a very difficult industry to be in today, but certainly the way we're starting in 2020 I think this is good news."

Source: CTV News Edmonton

When it comes to investing in real estate, it’s not a matter of striking while the iron is hot. Rather, invest when the market is cool, and just warming up. And according to an analyst who tracks the city’s market, Calgary real estate is just about to emerge from a multi-year slump.

“We’re now seeing GDP growth for Calgary, Edmonton and Alberta as a whole,” says Jennifer Hunt, vice-president of research at the Real Estate Intelligence Network, which provides data and advice for Canadian real estate investors.

As Hunt further notes, economic growth ultimately buoys the housing market.

“GDP drives jobs, which drive population growth, and that drives the rental market and then property values.”

Recently, these economic metrics have been looking better for Calgary.

Despite a Calgary Economic Development update for November forecasting the city’s real GDP (net of inflation) is expected to contract slightly this year (-0.4 per cent), it also predicts GDP will grow by two per cent next year and 2.8 per cent in 2021.

What’s more, migration to the province is up significantly compared with the previous year. Provincial data show in the second quarter of 2019 (the latest numbers available), net migration was 12,899, an increase of more than 40 per cent compared with a net inflow of 9,189 in the same quarter of 2018.

As a result, REIN’s Top 10 Towns and Cities in Alberta — released earlier this fall — ranks Calgary’s real estate market second behind Edmonton among provincial investment opportunities. Hunt says the recovery may be slow-moving, but the city offers plenty of opportunities for investors seeking rental and property value growth.

Indeed, Calgary Real Estate Board data showed a modest median price increase of 2.28 per cent month to date (Nov. 25) compared with the same month last year. That’s a major shift in the direction, which had seen monthly price decreases, year over year, for several consecutive months.

“We’ve heard a lot of news about Husky and Encana, which are stoking fear about the economy,” Hunt says about the large energy companies making recent announcements — large layoffs and moving headquarters out of Calgary, respectively — seen as having a negative impact on the city.

“But the expectation is largely the economy will stay on the positive side.”

One upside for investors in rental properties is vacancy remains low (3.9 per cent in 2018, Canada Mortgage and Housing Corp. data show). As well, rents remain among the most affordable in Canada, according to Calgary Economic Development.

CED further states Calgary’s weekly wages are highest among all major cities.

Hunt also says investors should also look to other, lesser-known metrics REIN included in its Calgary Transportation Effect Report from March.

For example, it found that multi-family homes typically see between a 27 and 99 per cent boost in value when located less than a kilometre away from a freeway access point, or LRT station.

“And then the average single-family home experiences about a 10 to 20 per cent increase within 800 metres proximity to an LRT station,” she says.

The market’s recovery aside, Hunt recommends investors and homebuyers use these more granular metrics in addition to macroeconomic figures like GDP growth to guide their decisions.

“I would caution investors to go in with their eyes wide open, with as much knowledge as possible.”

Calgary Herald

Buying and owning Real Estate is an exciting investment strategy, that can be both satisfying and lucrative. Unlike stock and bond investors, prospective real estate owners can use leverage to buy a property by paying a portion of the total cost up front, then paying off the balance, plus interest, over time. While a traditional mortgage generally requires a 20% to 25% down payment, in some cases, a 5% down payment is all it takes to purchase an entire property. This ability to control the asset the moment papers are signed emboldens both real estate flippers and landlords, who can in turn take out second mortgages on their homes in order to make down payments on additional properties.

Here are four ways in which investors can put properties to good use:

1. So You Want to Be a Landlord

CALGARY -- The Calgary Real Estate Board says there were fewer sales in the City of Calgary last month, continuing a trend that has persisted for some time.

In its housing market report released this week. CREB says 1,160 units were sold in the City of Calgary last month, with the drop being driven in the apartment sector.

There were 21 per cent fewer apartments sold in the city last month over November 2018.

CREB says it's likely due to the continued uncertainty and poor economic conditions weighing down on the market.

"Achieving more stable conditions will take time," said Anne-Marie Lurie, CREB chief economist in a release. "While the amount of supply in the market continues to ease, the persistent oversupply continues to weigh on prices."

According to the report, the average price of a home in Calgary is now $458,523, 4.37 per cent less than in November 2018 when it cost about $479,593 to buy a home.

CREB also says the number of new listings in November has dropped year-over-year to 29,874, nearly 11 per cent less than last year.

Elsewhere in the southern Alberta region CREB says sales have improved in Airdrie, where a decrease in new listings helped to ease the oversupply in the market. Cochrane's market also remains oversupplied and the benchmark price of a home there was $394,200, over four per cent lower than November 2018.

Calgary Real Estate Board Housing Stats: Home Stats Doc

Source: CTV News Calgary

The timeline for building a new $550-million event centre could see the Calgary Flames kicking off the 2024-2025 season in their new Victoria Park digs.

Following a year of finalizing design details and acquiring the requisite permits, construction will commence in 2021 and be completed in 30 months, or 2-1/2 years, said Clare LePan, spokeswoman for Calgary Municipal Land Corp. (CMLC), which will quarterback the project.

Less than a day after city council ratified a cost-sharing deal to build the facility, LePan couldn’t say exactly when in 2021 construction would begin. But that timeline could put its completion in sync for the October 2024 Flames’ season opener.

“We don’t have definitive dates. . . We’d like the facility to be completed in advance of the NHL season starting,” said LePan.

After years of wrangling and verbal sparring over the need for a replacement for the 36-year-old Scotiabank Saddledome, a new chapter now lies ahead, she said.

“A huge amount has been done to get here but it’s now turned into a living, breathing project that has to be realized,” said LePan.

It’s possible the Flames could take their first face-off in the new building in the fall of 2024, said Coun. Jeff Davison, who spearheaded efforts in pursuing the deal for the city.

By then, the Scotiabank Saddledome will be 41 years old.

But for now, the next step is determining how the new building will look and function, a process expected to kick off after Sept. 5 when a CMLC report — on how public engagement will proceed — goes to the city’s Event Centre Assessment Committee, said Davison.

That’s largely to ensure, he said, that a multitude of expectations can be met by that feedback, which will be added to those of conceptual designers.

“Calgarians have said loud and clear this is not just going to be a hockey facility, it’s something that can used for more than one purpose,” said Davison.

A virtual pre-requisite is that the 19,000-seat facility be capable of hosting major concerts, something the Saddledome’s unique but finicky roof was often unable to accommodate, he said.

“Calgarians are tired of going to Edmonton for those,” he said.

And the beauty of the recently-opened central public library, just a few blocks away, will be expected to set a standard for the Flames’ new home, added Davison.

“We’d expect nothing less,” he said.

That consultation will also include how the surrounding Rivers District is developed for public use, said an CMLC official.

The new facility will occupy a three-hectare site at 12 Avenue and 4 Street S.E. on Calgary Stampede-owned land now occupied by parking lots.

Its construction will occur almost in tandem with the expansion of the BMO Centre, which is also expected to be finished in 2024 and whose proximity will benefit the event centre and overall cohesiveness of the Rivers District, said the CMLC’s LePan.

“It’ll be just across the street. . . It’s quite rare for a city to be able to co-ordinate that,” she said.

The demolition of the Saddledome won’t happen until after its replacement is completed, added LePan.

One of four city councillors to vote against the new arena deal said he remains concerned about how any cost overruns will be shared in the pact, that sees the city and Flames’ parent company Calgary Sports and Entertainment Corp. putting up $275 million each  for construction costs.

Jeromy Farkas also said he’s also concerned about a possible repeat of the kind of flood damage that ravaged the Saddledome in 2013.

“It’s building on a flood plain and we’re going to be on the hook for flood insurance but we don’t know what the cost of that premium will be,” said Farkas. “And if the budget does go over for the ($15 million) demolition of the Saddledome, council hasn’t set aside anything.”

He said residents of Victoria Park who live mostly in newer condo developments west and northwest of the proposed site haven’t been consulted about how the project will proceed.

“As this proceeds, it’s only going to heat up,” he said.

Farkas also opposed the agreement because it comes at a time when the city is slashing emergency service funding.

But he said as area councillor, he’ll now “roll up his sleeves to make sure it’s a success.”

Source: Calgary Herald

If there are no companies willing to move into Calgary's empty office towers, real estate developers Strategic Group are betting people will.

That's the thinking behind the developer's decision to reconfigure some of its office buildings in Calgary and Edmonton as rental apartments, rather than fighting the headwinds of persistently high office vacancy rates.

One of those is the Barron Building, a historic building on Stephen Avenue that was Calgary's first skyscraper and the home of some of its first oil and gas giants when it was completed in 1951.

"I love the building," said Strategic Group president Randy Ferguson, in a Monday interview with Calgary Eyeopener host David Gray.

• Iconic Calgary building can be read like a swanky and hopeful history of our city
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The building is 11 stories tall with a single residential unit: a penthouse apartment that once belonged to J.B. Barron.

The plan was to keep it that way when Strategic Group bought it, but then the oil crash happened, said Ferguson.

"We put a redevelopment plan together that we worked on since 2012 to convert the building — double the floor plate — into an office building while still respecting the architectural characteristics of the building," Ferguson said.

"Unfortunately," he added, "our plan was completed and permitted in 2015 where things came to a little bit of a stop in the office industry."

Now the interior is being reconfigured into residential units, with an expected opening in 2020.

Departing tenants

That same phenomenon came into play a few years ago, when Alberta Health Services announced it wasn't renewing its lease at another Strategic Group building, known as the Cube, on 11th Avenue S.W., across from the Midtown Co-Op.

Rather than trying to find a new tenant to replace their departing one, the company decided to repurpose the building as apartments.

Ferguson said the combination of design and location made it an appealing candidate.

"We looked at the building over what might happen in the next 10 to 15 years as an office building," Ferguson said, "and we looked at our costs and our returns on converting it to residential — and due to the location and the physical structure of the building, it was ideal for repurposing."

The building contains 67 suites. Ferguson described it as "more of a jewel box type building" than a lot of the high rise style apartments downtown, which distinguishes it from them, and as the thinking goes, appeals to a different sort of demographic.

"There is a big propensity and a big demand for purpose-built rentals in the city of Calgary today," Ferguson said.

"That could mean singles, it could mean empty nesters. It could mean new citizens moving into the city and even into the country."

The Cube is still under construction on its exterior, but has people living in it already.

"We're particularly proud of the Cube," Ferguson said, "because it's the first repurposing project that we're delivering into the two big markets in Alberta."

Demographically desirable

Strategic is also converting several office buildings in Edmonton into residential towers, for the same reason they're doing it in Calgary: older stock offices can't compete with new office buildings in a shrinking office demand economy.

But, Gray asked, what about the condo gluts that exist in both cities?

Ferguson suggested that there's room for rental units, particularly when compared with aging rental stock in both cities.

"The two youngest cities by a demographic in the country are Calgary and Edmonton and a young population," Ferguson said. "Remember, our average age is 35, and a young population has a greater propensity to rent than to buy.

"The second leading economic indicator is the fact that our rental inventories in the two big cities in Alberta, greater than 50 percent of that inventory was built prior to 1976 — so there's tranches of inventory every year that are becoming functionally obsolete."

Change downtown

It's not cheap to convert office buildings into residential units. The Barron Building conversion will cost $44M, while the Cube's is around $24.5M — but Ferguson said it beats the alternative.

Will it change downtown Calgary?

Could a ghost town transform into something resembling a community?

"It can absolutely change," Ferguson said.

Source Link: CBC