Alberta

Economic Outlook 2014–17

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Alberta’s Economy powers ahead Alberta’s economic expansion is expected to accelerate to 3.7% in 2014 after gaining momentum through 2013. One of Canada’s main economic engines is firing on all cylinders as Alberta’s business, household and government sectors all contribute to growth in Gross Domestic Product (GDP). Alberta’s robust outlook builds on an estimated 3.3% expansion in 2013, the fourth straight year above 3%, outperforming Canada and US economic growth (Chart 1). A key driver of Alberta’s growth is the energy industry, which is poised to see large gains as oil sands production ramps up. The manufacturing industry is expected to strengthen as global growth picks up, increasing exports in 2014.The agriculture industry is also expected to expand through the forecast period, building on a very strong production year in 2013. To read more click here

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Alberta’s economy powers ahead of the US

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A key driver to Alberta’s growth is the energy industry, which is poised to see large gains as oil sands production ramps up. The manufacturing industry is expected to strengthen as global growth picks up, increasing exports in 2014.  The agriculture industry is also expected to expand through the forecast period, building on a very strong production year in 2013.

New migrants have provided Alberta with a much‑needed source of labour, and have helped the economy grow at a solid rate without bumping into major labour supply constraints and cost pressures. Migration, while forecast to moderate from record levels, will continue to support a strong housing market and further gains in consumer spending in Alberta over the forecast period. To Read more about the report: click here

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To see more about what Alberta is doing…

What’s Happening in Alberta

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Grande Prairie high
on Canada “boom” list

Three Alberta communities are among the top 20 on the Communities in Boom list published by the Canadian Federation of Independent Business.

The CFIB released its list in late 2009, and tagged Grande Prairie as No. 2 on its list.

The Alberta-Saskatchewan border city, Lloydminster, was ranked fifth by the CFIB, while Fort McMurray/Wood Buffalo was No. 14 on its list.

Other Alberta communities ranked include Red Deer (32nd), Medicine Hat (tie for 37th), Calgary (tie for 41st), Lethbridge (43rd), and Edmonton (47th).

The CFIB’s rankings rely on 12 factors to come up with an entrepreneurship index for all surveyed communities. Those factors include businesses per capita, self-employment intensity, future full-time hiring expectations, cost of local government and local government tax balance.

Grande Prairie mayor Dwight Logan was quick to celebrate the rankings.

“This is great news from an economic development point of view as we strive to demonstrate Grande Prairie is a great place to live, work, play and do business,” Logan said

JANUARY 2010, Volume 25 Issue 1 (Western Investor)

Canadian real estate markets elude US collapse: PwC/ULI report

TORONTO, Nov. 11 /CNW/ – While conservative banking practices and stricter regulation kept lending in check and most Canadian real estate investors were saved from overleveraging, they are still worried about suffering more economic shocks if the US can’t get its financial house in order more quickly. This, according to the annual Emerging Trends in Real Estate 2010 report, released by PricewaterhouseCoopers (PwC) and the Urban Land Institute (ULI).

The report reflects interviews with and surveys of more than 900 of the industry’s leading real estate experts, including investors, developers, lenders, brokers and consultants in both Canada and the US. Other versions of this report are conducted in countries around the world including Asia Pacific and Europe.

According to the report, total value losses in Canada will average 10 to 20 % off previous highs but some markets and sectors could suffer steep losses. Markets should enter a slow recovery phase by year-end 2010, but respondents see better investment opportunities eventually in top US and European cities, which could rebound more sharply after steeper declines.

“The conservative, careful approach to managing government and markets is paying dividends now for Canadian real estate players,” says Frank Magliocco, leader of the PwC Canada Real Estate practice. “Sideswiped by the US fallout, they experienced a manageable market correction rather than a full-blown credit crisis-precipitated market meltdown.”

The Emerging Trends 2010 investment barometer forecasts a relatively stable transaction market, slightly better for buyers than sellers. According to the survey, average cap rates will increase modestly by year-end 2010, ranging from about 7% for moderate-income apartments to 9.5%-plus for hotels. Power centers and central city office will register the sharpest increases. Hotels, malls, and neighbourhood shopping centers will record the smallest bumps.

“For 2010, we are rating only fair investment outlooks for most property types and predict generally weak conditions for development. Limp demand threatens to soften property cash flows across all sectors and most markets,” says Chris Potter, PwC partner and leader of the firm’s Canadian Real Estate Tax practice.

Indeed, across Canada, apartment investment prospects rank barely above a fair rating at 5.44 out of 10, followed by office at 5.04, retail at 5.00, industrial/distribution at 4.68 and hotels at 3.69. Development prospects in any segment never break past the 3.74 out of 10 mark (apartment segment). Hotels suffer the worst in development options at a low 2.68.

Lori-Ann Beausoleil, PwC partner and leader of the firm’s Advisory Real Estate practice comments, “We expect to see developers curbing their activity in light of softened demand as bankers rein in construction loans. Furthermore certain condo projects will likely stall out until residential prices firm up in Vancouver and Toronto. Canadian office markets have performed better than expected particularly when most major US cities are experiencing double digit vacancies, whereas the Canadian markets are averaging only 8%. Demand remains weak in most markets but that is expected however, concern is growing with Calgary office builders – that market is experiencing a supply splurge at a time of waning demand from deflated energy companies. In Toronto, where some smaller developers may be in over their heads in residential construction, there could be an opportunity for the larger players with more experience and lender relationships to take over these struggling projects.”

Prospects for Major Commercial/Multifamily

Property Types in 2010

Scale of 1 – 10,

where 1 is abysmal and 10 is excellent

 

—————————————–

Property Type   Investment   Development

Prospects    Prospects

—————————————–

Apartment       5.44         3.74

—————————————–

Office          5.04         2.96

—————————————–

Retail          5.00         3.30

—————————————–

Industrial/

Distribution   4.68         3.35

—————————————–

Hotel           3.96         2.68

—————————————–

Markets to Watch

The Vancouver market is considered to be the higher performing of all regions, albeit at only a slightly above fair rating for commercial and multifamily investment and development (5.75 out of 10 for investment prospects and 4.68 for development prospects). Many wonder what will happen after the Olympics.

Toronto ranks third highest with better investment prospects (5.63) than development prospects (3.83). Indeed, new condominium high rises and office tower projects adorn downtown streetscapes, raising concerns about too much construction in a problematic economy.

Single-family home and condo buyers are surging to make deals before a new harmonized sales tax (HST) takes effect on July 1, and developers fear a demand drop-off afterwards. Warehouse markets have stumbled-with rents declining 25 to 30%.

Montreal ranks fifth as the real estate market sleepwalks through equilibrium-measured development and limited demand growth. Investment prospects rate an almost exact fair at 5.05 and development prospects fall to 3.53.

Calgary, Alberta’s largest city suffers the biggest rating decline for any North American market in Emerging Trends surveys (investment prospects 4.75 and development at 3.58) About 6 million square feet of office comes online at just the wrong time. Condos and housing are overbuilt, too.

Prospects for Commercial/Multifamily

Investment and Development

Scale of 1 – 10,

where 1 is abysmal and 10 is excellent

 

—————————————–

City            Investment   Development

Prospects    Prospects

—————————————–

Vancouver       5.75         4.68

—————————————–

Ottawa          5.69         4.31

—————————————–

Toronto         5.63         3.83

—————————————–

Edmonton        5.10         3.79

—————————————–

Montreal        5.05         3.53

—————————————–

Calgary         4.75         3.58

—————————————–

Halifax         4.55         3.90

—————————————–

About PricewaterhouseCoopers’ Real Estate Services

PricewaterhouseCoopers has an unparalleled commitment to the Real Estate industry and we consistently deliver the highest quality of service with an in-depth understanding of the industry allowing us to offer integrated and comprehensive services that cover the entire real estate life cycle.

Our team of over 200 experienced real estate professionals including accountants, lawyers, consultants, valuators, tax and corporate finance specialists as well as senior executives have hands-on experience working with all of the subsectors of this industry including residential, commercial and industrial developers, investors, property managers, pension funds, REITs and several other public and private real estate industry enterprises. Our local contacts have access to a global network of highly skilled professionals with unsurpassable real estate industry credentials. About PricewaterhouseCoopers LLP

PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 163,000 people in 151 countries across our network share their thinking, experience and solutions to develop fresh perspectives and practical advice. In Canada, PricewaterhouseCoopers LLP (www.pwc.com/ca) and its related entities have more than 5,300 partners and staff in offices across the country. “PricewaterhouseCoopers” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership, or, as the context requires, the

PricewaterhouseCoopers global network or other member firms of the network, each of which is a separate and independent legal entity. About the Urban Land Institute (ULI) The Urban Land Institute (www.uli.org) is a non-profit education and research institute supported by its members. Its mission is to provide leadership in the responsible use of land and in sustaining and creating thriving communities worldwide. Established in 1936, the Institute has more than 40,000 members representing all aspects of land use and development disciplines.

The Urban Land Institute is an active and growing organization in Canada. With nearly 900 members across the country, Canada’s first ULI District Council was established in Toronto in 2005 and a second District Council exists in British Columbia. ULI Toronto has over 500 members in Toronto. For further information: Kiran Chauhan, PricewaterhouseCoopers, (416) 947-8983, kiran.chauhan@ca.pwc.com; Alexandra Rybak, ULI, (647) 258-0017, alexandra.rybak@uli.org

 

Stable apartments lure investors

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Garry Marr,  Financial Post 

Brett Gundlock, National Post

Ugo Bizzarri’s Timbercreek Asset Management Inc. already owns 9,000 apartment units, mostly in southern Ontario, but also in Ottawa, Halifax and Montreal. The firm is in expansion mode, but the last place you’ll see it raising money is in the public markets.

“Apartments are very predictable and very stable,” says Mr. Bizzarri, who has been investing in the apartment sector for about 10 years on behalf of institutional investors.

While stock markets have been anything but stable, apartment buildings generally held their value through the recession because of steady financing, low vacancy rates and a supply-constrained environment created by government regulations.

All the water-cooler talk may be about the red-hot housing market, but as apartment owners are quick to point out, about one-third of Canadians still don’t own.

Apartment vacancy rates across Canada remain relatively low — 2.7% in April 2009, according to Canada Mortgage and Housing Corp. That was slightly up from the 2.6% of apartments vacant a year earlier.

“Unlike an office building, you don’t have one big tenant like a bank that goes away, you have 1,000 tenants with a thousand leases. They are not going to all leave at once,” says Mr. Bizzarri.

At the same time, government rules such as rent control mean few apartments will be built, leaving the existing stock in high demand. Moreover, mandated rent increases are part of the landscape in most rent-controlled environments. The average two-bedroom apartment was renting for $827 a month in April, up about 2.9% from a year ago.

“But it’s also hard to find product because they don’t often come up for sale,” says Mr. Bizzarri, who recently bought a 10-building portfolio in London, Ont.

Derek Lobo, chief executive of Burlington, Ont.-based Rock Apartment Advisors Inc., says the apartment sector has quickly turned into a seller’s market with multiple offers and, in some cases, buyers even pre-inspecting property so they can go in with firm offers.

Statistics back up his claim. Research firm RealNet Canada Inc. said the apartment market has seen four straight quarters of increases in transactions of more than $1-million, based on total dollars. The fourth quarter of this year has already seen $277-million in deals, a sharp jump from the $117-million in activity in the first quarter, but a far cry from the peak of $799-million in fourth quarter of 2006.

Mr. Lobo said some landlords don’t want to sell in this environment because of the steady cash flow. “Apartments trade less because of their stability,” said Mr. Lobo, who has spent the past two years building a massive database of apartment buildings across the country partially for the purpose of approaching landlords to sell. His company wants to hit the sellers even before they list their properties.

Although there are large, publicly traded entities in the game, such as Boardwalk Real Estate Investment Trust and Canadian Apartment Properties REIT, approximately 90% of the apartment buildings in the country are still in the hands of “mom and pop” owners.

CMHC has made it relatively easy to finance the ownership of an apartment building for Canadians. The agency backs loans for individuals who sign a personal guarantee with as little as 15% down. That mean you can buy a small $1-million building with just $150,000.

Availability of credit is one thing, but it’s the cheap money that makes most transactions work. The interest rate on a CMHC-backed loan is as little as 3.5% for a five-year mortgage or 4.5% for a 10 year. A conventional mortgage, if you could find one, would be about 200 basis points higher for both terms. If you are borrowing at 3.5% and your return on that cash is 6% to 7% — the average in the Toronto area — that spread is making you money.

“During this whole credit crisis we’ve been quite busy because we are one of the only ones to have funds available,” says Peter Cook, assistant vice-president of commercial lending of First National Financial LP. “From a company standpoint we’ve had our biggest year ever.”

© 2009 The National Post Company. All rights reserved. Unauthorized distribution, transmission or republication strictly prohibited.

Real estate agents see return of foreign buyers

Dollar’s plunge coupled with faith in eventual economic recovery helps sales

The Associated Press

updated 12:46 p.m. PT, Sun., Nov . 22, 2009

Canadian investor Arthur Wong is buying condos in Las Vegas and Phoenix like a shopper at Costco: In bulk, with slashed prices.

Wong, president of Optimus U.S. Real Estate Fund, has bought 60 condos at heavy discounts from developers in financial trouble. Wong paid about $62,500 each for 18 Las Vegas condos that once were priced at about $250,000 apiece.

“This could be a once-in-a-generation opportunity for real estate investment,” said Wong, whose Calgary, Alberta-based fund has already invested $5 million cash and will spend millions more in the U.S. Southwest over the next several months.

While foreign real estate investment in the first six months of 2009 was lower than last year’s level, real estate agents from New York to Las Vegas say purchases have increased rapidly in recent months.

Foreign investors have long been attracted to U.S. residential real estate, drawn by the market’s stability compared with other countries. But the dollar’s descent in the past six months has made makes homes even cheaper for foreigners, and prices are showing signs of stability.

International investors bought 154,000 homes and condos in the 12-month period ending in May, down nearly 10 percent from 170,000 for the same period a year earlier, the National Association of Realtors reports.

But since June, the dollar has tumbled by 9 to 11 percent against currencies like the Japanese yen, the European euro and the Canadian dollar. The Brazilian real has gained 17 percent against the dollar in the past six months.

Buyers from Brazil, Canada, France and the Netherlands, for example, have paid mostly cash for second homes ranging from $6 million to $15.5 million in condo buildings like 40 East 66th Street, a stone’s throw from Central Park and steps from shopping, restaurants and nightlife.

“(Foreign investors) love to have everything available to them once they walk out their front door,” said Barbara Russo, an agent with The Corcoran Group Real Estate in Manhattan.

Manhattan real estate agent Cynthia Crowley recently spoke with three different Israeli investors who have complained about rising real estate prices at home.

“They want to buy,” said Crowley, an agent with Olshan Realty in New York. “This is not tire kicking.”

Foreign investors love floor-level prices and the limp dollar but also are confident in a long-term recovery of the U.S. economy and the housing market’s resurgence. Some want vacation homes, while others are looking for rental income.

Buyers from Canada, India, the Middle East, Mexico, and Venezuela like Houston’s neighborhoods and its economy, which benefits from strong oil and health care industries.

“They also like to gravitate to where they have friends or family,” said Bill Gottfried, managing director of Gottfried International Estates.

Foreign investors often pay cash, or offer down payments of 40 percent or more, because financing is difficult to get. Nearly half paid cash in the 12-month period ending in May, the Realtors group reports.

Florida leads the country in the amount of international buyers, accounting for nearly a quarter of foreign purchases. The Sunshine State was followed by three gateway states with warm climates — California, Texas, and Arizona.

Miami home prices are down by half from the peak period of late 2006 due to foreclosure sales and a glut of unsold units. With the dollar hitting a 15-month low this week against the euro, the bargains are enticing. Investors are buying single-family homes or condos for two-thirds the cost three years ago.

Peter Zalewski, a Miami-based real estate agent, said at least seven bulk deals involving foreign condo buyers have taken place in downtown Miami alone, with investors coming from Argentina, Canada, Colombia, Italy, Norway, and Venezuela. Similar deals also have taken place in heavily-populated Broward County and ritzy Palm Beach County.

Claudia Bacelar, an Esslinger Wooten Maxwell real estate agent, has seen more South Florida inquiries from Brazilian, Canadian and British buyers of second homes, many of whom gravitate to condos with great views in the $800,000 range. And they pay cash.

Argentina native Marco Bordoni bought a $860,000 house on a deepwater canal in the Golden Isles neighborhood last month. An importer-exporter of perfumes, he plans to spend half his time in South Florida on business.

Bordoni is spending $450,000 to remodel the house, which was valued at $1.2 million four years ago, said his agent, Scott Patterson.

“Prices fell enough that I could buy a property I would not be able to buy two years ago,” said Bordoni, 30.

 

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Feds will contribute $30M to Alberta CO2 pipeline

Dave Cooper
edmontonjournal.com

Tuesday, November 24, 2009

CREDIT: Aaron Lynett/National Post
Lisa Raitt, Minister of Natural Resources

EDMONTON – The federal government said Tuesday it is contributing about $30 million to the Alberta Carbon Trunk Line project through the Clean Energy Fund.

The money is in addition to $33 million contributed earlier from its ecoENERGY Technology Initiative.

On Tuesday, Alberta will sign a Letter of Intent with Enhance Energy, committing the province to spend up to $495 million over 15 years to build the world’s largest carbon dioxide collection system, which will move the greenhouse gas to depleted oilfields in central and southern Alberta for enhanced oil recovery.

The trunk line will be hooked to large-scale CO2 capture projects, initially at the Redwater Agrium fertilizer plant and the nearby North West Upgrader facility.

Natural Resources Minister Lisa Raitt said in a statement that “our government’s economic action plan is investing in projects that are creating jobs now when they are needed the most, while supporting our environment and stimulating the economy.”

She added that “this innovative project further demonstrates Canada’s international leadership in carbon capture and storage (CCS) technology.”

At full capacity, which could take at least 20 years to achieve, the carbon trunk line project will transport and store 14.6 megatonnes of CO2 annually. The oil and gas reservoirs accessed by the project could have the capacity to store up to two billion tonnes of CO2, providing a much needed solution for Alberta’s large emitters, including power plants, petrochemical industries and refining facilities.

As a major component in Canada’s Economic Action Plan, Raitt said the $1-billion Clean Energy Fund is advancing Canada’s leadership in clean energy technologies and the reduction of greenhouse gas emissions from energy production.

The ecoENERGY Technology Initiative was launched in 2007 to help Canada strengthen its position as a world leader in clean energy technologies through an innovative partnership with the private sector.

According to the Canada–Alberta ecoENERGY CCS Task Force report released in 2008, CCS technology could allow Canada to cut its greenhouse gas emissions by as much as 600 million tonnes a year by 2050 – an amount equal to almost three-quarters of Canada’s current annual emissions.

dcooper@thejournal.canwest.com

© The Edmonton Journal 2009

PetroChina takes $1.9-billion stake in oil sands

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Carrie Tait,  Financial Post 

AFP/Getty Images

CALGARY — China, using its significant financial firepower, snapped up majority stakes in two oil sands projects Monday in a way experts say illustrates the energy-hungry country’s strategy to convince Canada it can be a palatable and necessary partner in the huge crude reserves buried in northern Alberta.

PetroChina International Investment Co. Ltd. has struck a deal to buy a 60% interest in Athabasca Oil Sands Corp.’s MacKay River and Dover projects for $1.9-billion, as well as other financing arrangements.

This marks a significant move for China in the enormous reserves, and gives the country — of which many in the oilpatch are still wary — the chance to prove it can be a non-threatening partner.

“China’s strategy is to take bite-sized portions initially to get an understanding of [Canada’s] business practices… [and] to give the government a sense China will be a good corporate citizen,” said Mike Percy, dean of University of Alberta School of Business, who Monday returned to Canada from a business trip in China. “By taking over a private company, it gives you the platform to demonstrate you respect existing rules and regulations.”

Ottawa has hinted it will exercise its power to protect Canadian resources should foreign companies try to take over assets important to the country’s security. Bill Gallacher, chairman of AOSC, said while his company gave the provincial and federal governments a heads-up that a deal was on the way, he is unsure which regulatory hurdles have to be cleared.

“We know there will be some [regulatory approvals needed], but we just don’t know which ones,” he said.

PetroChina’s 60% interest is only in the AOSC’s MacKay River and Dover projects, not the entire privately held company. PetroChina’s stake translates into it controlling roughly three billion barrels of recoverable bitumen, the tar-like mix of crude and sand that is processed into useable products such as gasoline and jet fuel. AOSC, therefore, is left with about seven billion barrels of recoverable bitumen. The Calgary-based company will continue on as the projects’ operator.

AOSC, which expects the MacKay River project to hit commercial production in 2014, originally planed to sell up to 50% interest in the two projects, but PetroChina wanted a larger stake.

“This is a very bullish partner,” said Sveinung Svarte, AOSC’s chief executive. “It wants to make sure development will happen, and access large resources worldwide.”

The two projects will need roughly $15-billion to $20-billion in investment to get to production of about 300,000 and 500,000 barrels per day, Mr. Gallacher said. Further, the projects will need “sustainability capex, which will probably be a multiple of that.”

But the PetroChina deal gives AOSC the cash it needs to fund the in-situ projects. The AOSC’s business plan is now financed “in perpetuity,” Mr. Gallacher said.

Eric Newell, who led Syncrude Canada Ltd. for 14 years, welcomed the news because it comes with cash as well as brainpower, but he said he remains nervous about China owning significant stakes in the oil sands.

“I don’t see anything sinister in [China] buying up pieces of it, because they have ownership in oil and gas all over the world, and that’s fine,” he said in an interview. “But my concern would go to if they actually owned to the extent we were not able to control the development of our own resource.”

PetroChina is also trying to buy Verenex Energy Inc., a publically traded company with assets in Libya. The Chinese energy giant, however, is being stymied by the Libyan government, which has the ability to trump any Verenex suitors. In the oil sands, Sinopec owns a 50% stake in a project controlled by France’s Total SA, and CNOOC Ltd. paid $150-million for a 16.6% stake in MEG Energy Corp. in 2005.

© 2009 The National Post Company. All rights reserved. Unauthorized distribution, transmission or republication strictly prohibited.

House starts signal reviving economy

Quebec a bright spot

Jay Bryan,  Canwest News Service 

 

Canada’s home builders gave this country’s recovery an unexpected boost in August, laying foundations for new homes at a surprisingly vigorous annual pace of 150,000 units. That was up a hefty 12% from July.

Of all the good economic surprises we’ve seen recently, this is one of the more important, since housing construction is an activity that’s exceptionally powerful fuel for economic growth.

Not only does a new home require more local labour and more Canadian-made materials than a new car or television set, but its owners are likely to spend still more on furnishings and landscaping in the months after their purchase, stretching out the impact on economic growth.

Quebec was one of the more notable bright spots in a generally positive national picture. Although most regions showed gains, Quebec was the only one where August housing starts were actually above their year-ago level.

That’s partly because of a substantial revival in Quebec, but mostly because its housing starts never slumped as severely as in neighbouring Ontario, whoseautoindustry virtually collapsed early this year, or in British Columbia, where a housing bubble deflated during last winter’s financial panic.

Ontario was the only region to see no upturn in August, with construction remaining mired at about half the level of a year ago.

But this weakness won’t last much longer, predicts economist Marco Lettieri at National Bank. Now that the auto industry is showing signs of revival and modest job growth is returning to the province, “I think the biggest turnaround will be in Ontario” in coming months.”

With most analysts forecasting that home building across Canada will maintain approximately the August level of activity in the coming months, and some anticipating a further upturn, it seems likely that this industry, which had been subtracting from growth, will strengthen it in the third quarter.

It will be a while, though, before home builders are cranking out more than 200,000 homes a year, as they did during the boom years that ended in 2008. Construction next year will remain pretty close to current levels, predicts economist Robert Kavcic at BMO Capital Markets.

And there is one potential cloud over the outlook for a healthier pace of home construction. Derek Holt, chief economist at Scotia Capital Markets, worries that builders are sitting on a rising number of unsold new homes, suggesting to him that they could be inclined to limit their construction in coming months.

That’s not a factor that worries other analysts very much, though. Their outlook is guided more by resales of existing homes, a market that accounts for about twice as many transactions as the market for new homes and that heavily influences new-home construction with a lag of a few months.

Resales have shot up at a stunning rate after cratering at the beginning of this year, with July registering a whopping 18% more transactions than a year earlier.

The surge of purchases, driven by low mortgage interest rates and improving consumer confidence, has diminished the supply of existing homes available to buyers in every province, said Gregory Klump, chief economist with the Canadian Real Estate Association.

As a result, the large resale market has shifted from having an excess of homes for sale to being in the early stage of developing a shortage. In large markets such as Toronto and Vancouver, there are once again reports of multiple offers on some homes, Mr. Klump said.

Since many buyers are willing to look at either new or resale homes, it’s not clear how the new-home market could suffer from a long-lasting oversupply under these conditions.

© 2009 The National Post Company. All rights reserved. Unauthorized distribution, transmission or republication strictly prohibited.

 

Canadian oil production could rise 50 per cent in 16 years

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By Dave Cooper, Canwest News ServiceJune 6, 2009

EDMONTON – Canada’s oil production could rise by more than 50 per cent to over 4.2 million barrels per day by 2025 from the current 2.7 million if the investment climate improves over time, the Canadian Association of Petroleum Producers said in a forecast released Friday.

The production and market outlook paints two scenarios. Under a conservative approach that includes projects operating or under construction, Canadian crude oil output would rise to just 2.8 million barrels per day by 2025, with oilsands replacing declining conventional production.

CAPP sees oilsands output increasing to two million barrels per day under its conservative approach, compared with 3.3 million barrels per day under its growth scenario, which assumes an improving economic market.

“CAPP’s production forecast indicates that even with delays due to current economic circumstances, oilsands production is expected to grow, although the pace of development has slowed.” said Greg Stringham, vice-president for markets and oilsands.

“Producers expect continued demand for the security of supply that crude oil from Canada provides to the North American energy market.”

CAPP sees no need for more pipeline capacity in the decade ahead.

“In terms of pipeline capacity to meet market expectations, this year’s outlook indicates that the significant pipeline development now underway will amply connect forecasted production to long-term demand in the North American energy market,” said Stringham.

Edmonton Journal

dcooper@thejournal.canwest.com

© Copyright (c) Canwest News Service

World markets boosted by positive U.S. economic data

Last Updated: Friday, June 19, 2009 | 9:57 AM ET

The Associated Press

World stock markets rose Friday after a run of stronger than anticipated U.S. economic data the previous day renewed investors’ hopes that the world’s largest economy may recover from recession this year.

By mid-morning London time, the FTSE 100 index of leading British shares was up 83.29 points, or two per cent, at 4,364.15 while Germany’s DAX advanced 21.13 points, or 0.4 per cent, at 4,858.61.

France’s CAC-40 index was 33.76 points, or 1.1 per cent, at 3,227.82.

Investors have been in a cautious mood for most of the week amid mounting concerns that the recent economic news has not been quite good enough to justify the share rally in stock markets since the middle of March.

However, strong U.S. jobs and industrial data Thursday helped ease those concerns and contributed to solid gains on Wall Street.

“Economic data continues to strengthen leaving markets with the impression that the current economic rebound is going to be self-sustaining,” said Hans Redeker, an analyst at BNP Paribas.

“The more this impression is anchored the better the bullish market reaction,” he added.

British builder’s orders boom

The FTSE outperformed its counterparts in Europe after housebuilder Taylor Wimpey PLC unexpectedly revealed that its order book has risen a massive 73 per cent since the end of 2008, a further sign that the housing market has stabilized.

This potential “green shoot” of recovery comes days after a less bleak assessment of the state of the British economy by the Bank of England and comments from Paul Krugman, the Nobel Prize winner for economics, that Britain is probably the best-placed European economy to rebound from recession.

The stock market rally around the world since March had been fuelled by hopes the U.S. economy will recover from recession sooner than anticipated. That optimism dissipated in recent days, and despite the relatively upbeat U.S. data Thursday, analysts say investors need clearer evidence that the world economy and company earnings are recovering to make sense of stock valuations.

In March, many investors saw valuations around the world as particularly cheap and started buying into the market.

Earlier in Asia, Japan’s Nikkei 225 stock average added 82.54 points, or 0.9 per cent, to 9,786.26, and Hong Kong’s Hang Seng climbed 144.27, or 0.8 per cent, to 17,920.93. South Korea’s Kospi inched up 0.6 per cent to 1,383.34.

Taiwan’s key index rose 1.4 per cent, while Australia’s benchmark inched up 0.2 per cent.

Shanghai’s index stretched its winning streak with a 0.9 per cent gain as the government lifted a nine-month ban on initial public stock offerings.

© The Canadian Press, 2009

 

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