MONTREAL (CP) – Canada will see “relatively modest” gross domestic product growth of 2.2 per cent in 2007 as the pace of world economic growth moderates and a slowdown in the United States acts as an anchor to expansion here, the National Bank (TSX:NA) predicted Wednesday in its quarterly outlook.
Rapid industrialization in Asia, where powerhouses China and India continue to gain steam, will ensure the continued expansion of the world economy, “albeit at a slower pace,” the bank said in a release.
An American slowdown already in progress “will spread in 2007 as American households become more focused on savings in the wake of the real estate sector’s nosedive,” National Bank said. “Although its fundamentals are among the most solid of all G7 nations, Canada will not be protected from the headwinds blowing south of the border in 2007, with a relatively modest 2.2 per cent growth in GDP predicted.”
Chief economist Clement Gignac said the bank believes a regional divide will continue between the hard-hit manufacturing centres of Central and Eastern Canada and the burgeoning Western provinces in 2007.
As natural resources continue to drive the Western economies, Ontario and Quebec will likely see economic growth under two per cent in the coming year.
The bank said it believes there are interest rate cuts on the horizon, with the “Bank of Canada’s key rate likely to total close to 100 basis points,” which is good news for Canadian households.
A drop in rates will likely produce a drop in the loonie, “which is expected to take a break from its climb of recent years and settle between 85 and 88 cents US before rising to trade on par with the greenback by the end of the decade.”
In another report Wednesday, the Canadian Chamber of Commerce said the economy will be hit by several speed bumps in the first two quarters in 2007, producing slower growth and slightly higher unemployment.
The business lobby group said Canada’s average annual real GDP growth will be 2.8 per cent this year, slowing to two per cent in the fourth quarter. Growth will average 2.4 per cent in 2007 because of the weaker American economy.
In its forecast, the Ottawa-based chamber predicts:
– The national unemployment rate will rise to 6.4 per cent in 2007 from 6.3 per cent this year.
Housing affordability down despite stable borrowing rates, says RBC EconomicsDecember 20, 2006 – 10:43 a.m.
TORONTO (CP) – Housing affordability diminished for the fourth straight quarter in Canada despite stable borrowing rates and a decline in utility costs but the cost to own a home will likely abate somewhat next year, RBC Economics said Wednesday.
House prices continued to climb across the country, the economics wing of Royal Bank (TSX:RY) said in releasing its quarterly Housing Affordability Index.
“Across Canada, housing affordability further eroded as rising house prices outpaced income growth in the third quarter of 2006,” assistant chief economist Derek Holt said in a release.
“However, affordability is likely to improve slightly next year as the lagged effects of fourth quarter mortgage rate declines, easing energy price pressures and a topping out of home price appreciation will have a positive impact for home buyers.”
The pace of the decline in housing affordability eased somewhat during the quarter almost everywhere except Alberta, though that province will likely see an improvement in affordability as well in 2007, Holt said.
According to the RBC index, which measures the proportion of pre-tax household income needed to service the costs of owning a home, condos remain the most affordable housing class, with an index of 28 per cent.
Standard townhouses were the next affordable class at 32 per cent, followed by a detached bungalow at 40.2 per cent. The standard two-storey home is still the least affordable housing type with an index reading of 45.8 per cent, the bank said. Both new home construction and resales are expected to soften in 2007 while the overall volume of home sales activity remains high and the majority of home equity gains seen in recent years should also be retained, the report said.
December 18, 2006
The following information was obtained from newspaper articles appearing in the Globe and Mail and the National Post for the week ending December 17, 2006:
RioCan REIT has signed a memorandum of understanding with Michigan-based Ramco-
Gershenson Properties Trust to buy and develop shopping centres across the U.S. The two
partners intend to create a joint venture that will begin with about US$450-million in property now owned by Ramco-Gershenson and plan to develop an additional US$1-billion in properties. The joint venture would be 70% owned by RioCan and 30% by Ramco-Gershenson. RioCan will also purchase a 4.5% stake in Ramco-Gershenson for US$36.39 a share, an investment worth about US$27-million, and the Canadian REIT will hold warrants for an additional 4.5% interest with a strike price of US$43.15.
RioCan REIT will reportedly purchase the Yonge-Eglinton Centre in midtown Toronto for $220-
million. The property includes a 300,000-square-foot mall and a 700,000-square-foot office tower.
RioCan REIT and Chartwell REIT’s development arm, Spectrum Seniors Housing Development LP, are teaming up in a $30-million joint venture deal that will involve the construction of a six-storey, 144-unit seniors apartment building at an existing strip mall in Mississauga’s Lorne Park area. The redevelopment project will include about 14,000 square feet of retail street-front space.
Brookfield Properties Corp. plans to raise about US$1.2-billion by issuing 30 million shares.
Parent company Brookfield Asset Management will purchase 11.25 million of the shares issued,
which would reduce its stake in Brookfield Properties to 48% from 51%. The company will use
US$420-million of the cash to repay debt incurred to finance the purchase of an equity stake in its purchase of Trizec Properties Inc. and another US$437-million will be used to take a larger
equity interest in the office fund Brookfield created to buy Trizec. The balance of the proceeds will go for general corporate purposes, repayment of lines of credit and help to facilitate acquisition and development opportunities.
The Casino Windsor will reopen as the Caesars Windsor in 2008 after a $400-million expansion
that will include a new 22-storey hotel and a 5,000-square-foot entertainment centre. Harrarh’s Entertainment Inc. is licensing the Caesar’s brand to the Ontario Gaming and Lottery Corp., which is renaming the casino, and Harrah’s will manage the casino.
According to CB Richard Ellis Ltd., the total value of investments in real estate in Canada is
expected to reach $23-billion in 2006, up from $19.7-billion in 2005.
Lasalle Investment Management recently attracted $309.5-million to its Canadian Income and
Growth II funds, which will use the funds for the acquisition of three-quarters of a billion dollars in industrial, office, retail and multifamily properties.
According to CIBC World Markets, the unweighted average compound return for the Canadian
REIT sector is 18% over the past 11 years, compared with 11% for the Standard & Poor’s/TSX
According to Statistics Canada, the average price for a new home nationally increased 0.2% in
October from September. In Calgary, the average price dropped 0.5% from September. Prices
also fell 0.5% in Victoria, 0.1% in Toronto and 0.7% in Windsor. New-home prices increased in 11 of 21 major metropolitan areas, with increases of 2.2% in Edmonton, 0.6% in Winnipeg and 0.5% in Vancouver. Contractors’ selling prices have risen 11.4% over the past year in Canada, with gains of 53.5% in Calgary and 41.1% in Edmonton.
According to the Canadian Real Estate Association, sales of existing homes nationally increased 1.5% to 27,630 units in November from October. Sales for the first 11 months totalled 318,612 units, on par with levels last year. The average sale price increased 9.4% to $298,094 from a year ago. The average price in Edmonton rose 42.5% to $282,434. In Vancouver, sales volume fell 21% in November from November, 2005, and so far this year, volume is down nearly 13% from a year ago. The average price increased 20%.
According to Royal LePage Real Estate Services, the average price of a standard condominium
increased 16.5% to $218,015 this year from 2005. The price of a detached bungalow rose 16.2%
to $304,271, while the cost of a standard two-storey house was up 13.4% to $366,839. Housing
prices are expected to climb 10.5% across Canada in 2006 and 6.5% in 2007, with volume down
about 3% next year. Prices are projected to rise 38% in Calgary for 2006 and 10.1% in 2007.
The median value of a house in Canada appreciated by about $75,000 between 1999 and 2005,
according to Toronto-Dominion Bank and the Canadian Centre for Policy Alternatives.
According to Canada Mortgage and Housing Corp., resale home prices are expected to increase 3.1% for both Ontario and Quebec in 2007. Resale prices are projected to climb 12.6% in Alberta, following a 29.4% gain in 2006. In British Columbia, prices are projected to increase
7.7% in 2007, compared with 17.2% this year and 14.9% in 2005. The number of new houses
starting construction is expected to drop to 210,900 in 2007 from about 227,900 in 2006. The
national rental vacancy rate is projected to reach 2.7% this year and move up slightly in 2007.
According to Canada Mortgage and Housing Corp., the national rental vacancy rate dropped to
2.6% this year from 2.7% a year ago. Calgary and Victoria had the lowest apartment vacancy rate at 0.5%. In Edmonton, the vacancy rate plunged to 1.2% from 4.5% in 2005 and 5.3% in 2004. In Vancouver, the vacancy rate is 0.7% and a two-bedroom apartment rents for $1.045. The vacancy rate is 10.4% in Windsor and 6.8% in Saint John. In Toronto, the apartment vacancy rate is 3.2%, while the condo vacancy rate is 0.4%. A two-bedroom condo rents for an average of $1,487 a month, compared with $1,067 for an apartment. Rental rates climbed 19.5% in Calgary to $960 and 9.9% in Edmonton to $808 over the past year.
According to Canada Mortgage and Housing Corp., from January to October of 2006, there were 13,469 condominium housing starts in the GTA, accounting for 39.3% of all starts. During the same period there were 13,593 detached starts, representing 39.7% of starts, while semidetached houses accounted for 5% and townhouses represented 10% of the total. In 2004,
condos represented 30% of starts and detached houses accounted for 46.5%. The average price of a new detached home in the GTA rose 10.1% to $450,483 in the January-to-October period from 2005. The average price in 2004 was $363,118. In Halton, the average price of a new detached home is $507,920, compared with average prices of less than $400,000 in Durham and Peel.
According to Canada Mortgage and Housing Corp., construction began on a total of 3,381 homes in the GTA in November, representing a seasonally adjusted annual rate of 39,100 units. New home construction is down 9.5% for the first 11 months of 2006 from the same period last year.
According to the Greater Toronto Home Builders’ Association, new home sales rose 5% in
November in the GTA from 2005. Sales of high-rise condominiums climbed 13% in November,
while low-rise sales were down 2%. Condo sales soared 123% in Peel Region and rose 38% in
York Region. Sales are expected to top 40,000 units in the GTA for the year.
According to the Knight Frank Global House Price Index, Canada had an annual house price
increase of 9.8% in the third quarter, compared with 11.8% in the third quarter of 2005. The U.S. led the global slowdown in house prices with annualized price growth of 5.7% in the third quarter, down from 12.7% in the third quarter of 2005. Hungary, Portugal, Japan, Hong Kong and Germany had negative price growth of between 1% and 3%. Latvia had a price gain of 39.2%, while prices were up 19% in Bulgaria and 17.8% in Denmark.
Weyerhaeuser Inc. and Texas-based Temple-Inland Co. reportedly may seek to convert their
timber interests into REITs.
Fortress Investment Group LLC will purchase most of the properties that DB Real Estate
Investment GmbH owns in Germany for €2.1-billion ($3.2-billion).
Real estate developer Ziel Feldman has purchased control of Israeli holding company Polar
Investments Ltd. and plans to invest US$1-billion over the next two years in properties in Israel, Europe, India and North America.
Sunlight REIT, a property trust spun off by Hong Kong’s Henderson Land Development, has
reportedly raised US$402-million in an IPO. The REIT priced its 1,045 billion units at about US39 cents each.
Hilton Hotels Corp. plans to add about 120,000 hotel rooms over the next three years, with a
focus on international expansion. Hilton will expand its luxury hotels from 22 to 50 by 2010. The hotel operator plans to open as many as 10 Waldorf-Astoria hotels, including one that it may develop on the Las Vegas Strip.
Six Flags Inc. is reportedly seeking to sell Magic Mountain in California and eight other theme
parks, though not necessarily as a single package.
MGM Mirage has formed a joint venture with Mubadala Development Co. of the United Arab
Emirates to develop hotels and resorts without gambling in Abu Dhabi, Las Vegas and the United Kingdom. MGM Mirage is also holding talks to form a joint venture with Diaoyutai State
Guesthouse in Beijing aimed at developing luxury hotels and resorts in China.
December 11, 2006
RealCash Bancorp is excited and happy to formally announce that they will be participating with Durham Region Real Estate Board as a Gold Level Advertiser! Karim Kanji, Manager of Client Services with RealCash says, “We see this as a natural step in our process to further enhance our reputation as a grassroots organization. We want to be where our clients are and the Durham region continues to grow by leaps and bounds. We hope to be able to offer our services to Durham real estate professionals as they continue to succeed and grow in their businesses!”
RealCash Bancorp Inc. is honored to be Canada’s favorite and most affordable source for cash-flow solutions and commission advances for real estate professionals. RealCash has fifteen years of experience in serving our Canadian clients. It is our policy to give the best in quality and service to our customers who can be assured that our commitment to excellence will be our priority in service.
As agents continue to succeed in their real estate business we hope that they will consider RealCash for their cash-flow solutions and commission advances.
For years, agents have played “cat and mouse”. More often than not, they rushed to get listings, hurried to find the right buyer and then finally, waited for their commissions. Many times it takes months before those commission payments came in. RealCash eliminates this by creating consistent cash flow – the key to staying competitive and profitable!
Better control of cash flow allows sales representatives to manage their personal and professional lives more efficiently. As a business tool, clients use this service several times per year in order to level off their income stream and free up funds for advertising and marketing programs to help grow their business.
For more information on our company and our services please feel free to call Karim Kanji at 1.800.265.2694 416.444.7790 or visit us at www.RealCashCanada.com and http://CommissionAdvances.BlogSpot.com .
Thank you for your time and have a great day.
Manager – Client Services
RealCash Bancorp Inc.
Please visit us at www.RealCashCanada.com and http://CommissionAdvances.BlogSpot.com