Third-quarter activity was far better than original expectations, as sales activity in the city improved by nearly 12 per cent over last year’s levels.
Some of the shift in the third quarter reflects activity that likely would have occurred in the second quarter. The housing market also benefited from easing lending rates and previous price declines. Gains were driven by all property types except apartment condominiums.
“As the economy started to re-open, we saw some improvements in the economic indicators,” said CREB® chief economist Ann-Marie Lurie.
“Most industries are not back to pre-pandemic levels, but over the past three months we have seen notable improvement across most industries.”
The gains this quarter did not offset all of the earlier declines, but the year-to-date decline eased to nine per cent. This is a significant improvement from the first half of the year, where sales were sitting 20 per cent below last year’s levels.
New listings were also on the rise. It was enough to cause inventories to trend up from the lower levels recorded earlier in the year, but inventories remain well below the levels recorded last year.
Overall, the months of supply did tighten to levels well below the past two years. Improved supply/demand balances did support some modest improvements in prices, which trended up in the third quarter compared to the second quarter and remained only one per cent below last year’s levels.
Current conditions in the housing market are surprising, but there are several reasons to still be cautious:
The current job market: Unemployment levels remain exceptionally high and there is added concern regarding additional job losses coming in the energy sector. If this situation persists, it could result in weaker demand and rising listings.
A second wave of COVID-19 and further shutdowns: Widespread closures are currently not expected, but if they do occur, this could be problematic for many businesses that cannot survive a second shutdown.
Government support: The housing market and overall economy has benefited from significant government income support programs, and banks allowing homeowners to defer their mortgage. As these benefits end, there is a risk that some households will not be able to keep their home, causing a rise in new listings and pushing up supply levels. If this occurs, it could erode some of the recent gains in pricing.
While some schools are introducing iPads as part of their daily curriculum, and others are banning all digital devices entirely; the topic of devices in the classroom is hotly debated, especially as we enter Back To School season.
This recent article that went viral on Twitter recently demonstrates just how divisive this topic can be.
Many of us feel like the powerful folks in Silicon Valley, the ones who try and feed our kids more technology, are keeping it away from their own children.
So, are access to digital devices good or bad for helping kids learn in the classroom? Or is the answer more nuanced than that?
We took a look at the pros, cons and recent research to find out:
Why exposure to digital devices in the classroom is a good thing?
Whether we agree with it or not, technology is a big part of our lives and school-aged children today are very much digital natives: They grow up with technology rather than learning the skills as an adult (like many of us in the older generations who are more aptly named “digital immigrants.”)
Much of the world that they already have, and will, interact with is digital. This includes the inevitable use of technology in their future careers. So why not have it as part of their education?
According to a study by the IT Trade Association, educators say that developing technological skills with their students is important preparation for joining the workforce later in life.
Students need to be device and mobile literate for their careers, and the students themselves seem to concur; with nine out of ten agreeing that using technology in the classroom would help prepare them for the digital future.
Do digital devices in the classroom help kids learn?
While the argument for digital device education and experience seems strong, is this sort of technology in the classroom actually beneficial to learning?
As Vawn Himmelsbach, Education Technology writer, points out; there are seemingly lots of reasons why online digital devices help in the learning environment. Not only do students have access to a vast world of information and learning materials but that this kind of technology allows students to learn at their own pace through individualized instruction.
Also, rather than just passively learning in the classroom, kids become more much interactive with the teacher thus they become more of an advisor or coach as the kids explore their learning more independently.
Lastly, using online polls, quizzes and similar activities could help engage all students, including those who are normally shy and wouldn’t always raise their hand in class to participate.
It’s no wonder that, in a recent survey, around 75% of educators think technology has a positive impact in the education process.
While this sounds promising, and there are clear advantages to having technology in the classroom, the current research in this area suggests that we should be cautious with how we use it and that learning can just as quickly be hindered by these same devices.
In one particular study they found that, regardless of the duration, any laptop use negatively affects students learning in terms of information recollection. This is backed by the fact that multitasking and distraction devices affect our ability to study, as we outlined in our recent article on “How to stay focused while studying”.
This is certainly true when the device allows for browsing that isn’t relevant to the studies. But another study reported that, even when the device allows for relevant information browsing and school-related apps and sites, that this isn’t helpful for learning either.
Conclusion? It’s not the device, it’s the distraction.
Being able to use digital devices efficiently is an important part of education for young digital natives and there seems to be lots of good arguments for the benefits of these technologies to aid learning.
This is what drives our philosophy at reMarkable. We created a new type of device as a protest to the distractions that surround us every day. A digital tool designed to reclaim our thoughts and focus. Setting a new direction for human-friendly technology.
The Killarney project is easing regulations to allow for off-site prefabrication, and the builder believes it will be the first of many homes like it
In a backyard in the southwest community of Killarney, three shipping containers are being positioned above a two-car garage to create 480 square feet of living space for Chad Saunders and his wife, Jennifer Head. The finished residence will be the first laneway shipping-container home in Calgary.
Jeremy Johnson, founder of the Calgary-based builder responsible, Modern Huts, believes it will be the first of many.
“Since the containers were put in position a couple of weeks ago, we’ve had a lot of inquiries on costs and timescales,” Mr. Johnson says. “Killarney is a community which is pretty open to density and innovation and people are interested and excited to see something like this come to Calgary.”
“Most container companies are building laneway homes fully modular and then moving the completed units into position, which is a very efficient and economical way to build, but we’re having to site-build for this project because of the city’s inspection process. They want to see all the processes as the build unfolds,” he says.
This has meant Mr. Johnson and his team will be on site for approximately three months, rather than the five days which would be required were they permitted to complete the build off-site.
Since starting the project, Mr. Johnson says this particular inspection process has been revised and the city will allow container homes to be built fully prefabricated in future.
“Until now, you could use modular building techniques but the city was sticky on anything that was fully prefabbed and delivered, even with modular homes,” he says. “Laneway – and specifically container homes – are still very new to Calgary so the city has been pretty cautious, but we’re seeing that change now, which is good news.”
Despite the challenges, Mr. Johnson says the build, which is his company’s third container home, is going well. He expects the entire one-bedroom suite, including the two-car garage underneath, to come in around $130,000.
“The cost to build will be similar to a stick-frame build but it will be quicker, even without building off-site, more durable and will result in a far more energy efficient building. The R-values we’re reaching are really high and we’re hopeful of achieving Passive [House] standards someday,” he says. (Passive House is a standard for ultralowenergy efficiency.)
“The exterior of the suite is being left largely as metal, so will require virtually no maintenance, and we’re also generating a lot less garbage,” Mr. Johnson says. “We have eight bags of garbage on site right now and drywall starts this week. With a stick build, at the same stage, we’d have a full bin of waste leaving the site already.”
Upon completion in March, Mr. Saunders and Ms. Head will move into the container suite with their eight-year-old son while Mr. Johnson renovates their 1950 bungalow. Mr. Saunders has owned the property on the corner of 32nd St. and 26thAve. S.W. for 19 years. He bought it as a starter home but, as the years passed, he and his wife started talking about paying off the mortgage and renovating, rather than moving.
“When we started to approach builders about doing a renovation, most of them said we’d be better to knock the house down and built from scratch, but we really weren’t interested in building a monster house,” he says. “When Jeremy suggested we include the old garage in the reno, that’s when we started to think about putting in a suite. We’ve always liked the idea of shipping-container homes – what they stand for from an environmental perspective and also how they look.”
The couple have no firm long-term plans for their garage-top property yet but Mr. Saunders, who works in the arts, says they could end up letting it out to an artist in residence.
“If we find the perfect renter, then great, but we’re also considering options with organizations like Alberta Ballet which need temporary accommodation for artists from time to time. We think that could be a really fun and interesting way to use the space,” he says. “We actually hope to engage a local artist to create a mural on the side of the container which faces into the yard when it’s finished, too.”
Mr. Saunders also sees long-term value in having a second residence on the family property.
“We know from relatives how expensive care facilities can be and how challenging that is for seniors. We figure that maybe in 30 years, if our family needs a caregiver, someone could move into that house. It doesn’t hurt to think ahead and have options,” he says. “We’d rather diversify the land we have now than build a huge house that we’ll struggle to take care of in the future.”
Mr. Johnson says caregiving is one of the main motivators for clients inquiring with his company about laneway homes.
“When we finish this project, we move onto another shipping container laneway home in Silver Springs. It’ll be a four-container suite providing 640 square feet of living space and two bedrooms for a daughter and her son who are moving back onto the family property to provide care to her parents,” he says. “Silver Springs is a neighbourhood where you find a lot of retirees and we’ve had other inquiries for the same kind of project from that community.”
Other projects planned for summer include a laneway office for a client in Mount Royal and a solar-powered, hydroponic greenhouse for a client in Briar Hill who’s interested in year-round growing. Both would be fashioned from a single shipping container.
Mr. Johnson says in time he’s like to start to prefabricate shipping container suites and have them shipped across Canada. But, for now, he’s focusing on the local market in Calgary where laneway homes are becoming more common and, he says, there’s “virtually no competition for small-scale, backyard shipping-container projects.”
Loyal followers, clients and friends. As some of you may have noticed, change is in the air! With a new year, brings new challenges and opportunities. Being a successful Realtor is one of my life’s greatest accomplishments, mostly because of the connections I make, relationships I foster and dreams I help make a reality the moment I hand over the keys to what is likely your greatest investment. your home. I have worked at CIR as a realtor for nearly a decade, growing my business and taking full advantage of the opportunities that were presented to me. I have nothing but respect, and admiration for the brokerage that helped to build my career. Those who know me best know that my ambitions are great, and I have to consistently set new goals. Professionally I have decided to move my business under a new roof with Re/max First. A reputable and respected brokerage that can offer me international exposure under the Re/max brand. My excitement is palpable, and I am thrilled to get my new signs up on some lawns in the coming weeks.
I have taken January to rebuild my brand, be mindful of my decision, and ignite the fire inside me that is going to kill it in this Calgary Real Estate Market for 2018. You will see me donning the Blue and Red. Nothing more has changed but that. My clients can rely on the same honest, patient and loyal service you have all grown to refer and respect!
Onward and Upward!
Special thanks to Dave Anderson and the team at CIR, you have been a great leader and a tremendous support throughout my transition
Special Thanks to Rick Campos, Cliff Stevenson the team at Re/max First who have welcomed me, and supported my business.
Canadians are increasingly putting it on plastic, but those in the recession-riddled oil patch are also increasingly having a hard time paying it off.
Ninety-day credit card delinquencies soared by 23 per cent in Alberta in the fourth quarter of 2016, compared to a year earlier, credit bureau TransUnion said Wednesday. They were up 22.7 per cent in Saskatchewan.
TransUnion had earlier warned that the job slump in some western provinces would result in double-digit increases in credit card delinquencies, “a risk that current data confirm has indeed been realized,” the company said in its report.
A larger number of Canadians are using credit cards, and the total balance on those cards rose 3.3 per cent in the past year, to a total of $94.2 billion in the fourth quarter of 2016.
But the number of credit cards in use in Canada actually declined by some 814,000 over the past year, to 43.4 million cards. TransUnion suggested this has to do with greater customer loyalty to their existing cards.
“Some lenders appear to be increasing credit lines to their customers to capitalize on this loyalty effect,” TransUnion’s VP for product innovation and analytics, Chris Dias, said in a statement.
“We may expect more lenders to evaluate increasing credit lines to cardholders in response to this higher demand.”
Overall, TransUnion described Canadians’ non-mortgage debt situation as “sound,” but noted there is a risk of interest rates rising.
“However, this scenario has yet to deter the Canadian consumer, and we believe the far majority of them will be able to weather the impact of these increases,” TransUnion said.
Homes provide shelter and refuge, but they are also most Albertan homeowners’ single largest investment. Housing represents 47% of total assets for the average Alberta family – much higher than stock market investments and pension plans combined (29%). Why is this important? Because homeownership benefits the economy as a whole, as well as individual homeowners. Let’s look at this in the context of the most recent stats on Alberta’s real estate, reported by the Canadian Real Estate Association.
Investing in housing in Alberta is better than buying stocks
Over the last 18 years, house price appreciation in Alberta has outpaced Toronto stock market returns. Between 1999 and 2016, with average annual residential sales of roughly 57,000, house price growth in Alberta (6.6%) outpaced yearly returns on stocks traded on the Toronto Stock Exchange (6.4%).
Average residential prices up 3.1% in Alberta in January
Total residential sales across the province were up 17.7% year-over-year, totalling 2,679 resale transactions in January 2016. Roughly 3.4 out of every 10 newly listed homes were sold, translating into a sales-to-new listings ratio (SNLR) of 34%. And the average residential sales price rose 3.1%, to $383,040.
Increased home equity = increased net worth
What’s so great about house prices being up? Rising house prices mean homeowners are building equity in their homes. Home equity represents the current market value of the house, minus any remaining mortgage payments. Equity is built over time as the homeowner pays off their mortgage and fluctuates with the market value.
Rising home equity benefits homeowners individually, and the Alberta economy as a whole. By how much? More than $40 billion in 2016.
Calculating Returns to Equity
Using Statistics Canada’s data on Alberta homeowners’ mortgage balances (Surveys of Financial Security), we calculated equity shares by age group. Equity shares multiplied by user costs (average two-bedroom apartment rents used as proxy) provided the income generated (returns to equity) per homeowner, by age class. The annual income generated by homeownership was then derived by multiplying the number of homeowners by age group in Alberta with returns to equity per homeowner.
For those under 35, the income generated by homeownership reached $11,000 a year per homeowner
Over the past five years (2012-2016), the annual income generated by homeownership averaged roughly $57,000 per homeowner (all ages) in Alberta. Returns on equity per homeowner ranged from annual income generation of $11,000 for homeowners under the age of 35 (generally considered as first-time buyers), to roughly $14,000 for those above 65 (annual average).
REALTOR® Tip: First-time buyers build equity in their home as they pay off their mortgage – roughly $11k a year!
Collectively, annual returns on equity (ROE) for all homeowners in Alberta reached roughly 38 billion dollars, or 12% of GDP
Thirty-eight billion dollars a year represents roughly 12% of Alberta’s nominal GDP and 85% of Government of Alberta’s annual revenues. When people build equity in their homes, they borrow against that equity through a home equity loan, or home equity line of credit. An increase in the value of their homes increases the amount of collateral available to households, leading to higher credit. Rising house prices, which imply higher housing equity, may encourage consumers to borrow more, causing a rise in consumer spending. Looking at the data, we know this to be true.
The increase in consumer spending following a rise in in house prices has been referred to as the marginal propensity to consume (MPC) from housing wealth. We found that, for every $1 increase in average residential prices, Albertans raise their personal spending by 6.7 cents, which collectively amounts to roughly $5 billion a year (2012-2016 average).For every $1 rise in housing prices, Albertan homeowners raise their personal spending by 6.7 cents – collectively $5 billion a year
Five billion dollars a year is 1.5% of provincial GDP, and 11% of government revenues. This is a significant boost to Alberta’s economy. A 3.1% price gain, like the one we just saw in Alberta this January, equals an average increase of $11,420. The associated rise in consumer spending that could come out of that is $868 per homeowner per month, or $10,415 per homeowner per year, or a collective increase of $616 million a year.
Calgary is awash in newly built homes that remain unoccupied — hitting levels not seen in 15 years — as an influx of condo projects comes at a time of muted demand, according to housing data.
The surge in supply has not scared off all developers in the city, with a number of new projects on the horizon. But some are converting their condo proposals into rentals, which they view as a better investment as the economy slowly turns the corner on a prolonged slump.
The city had about 1,500 newly constructed housing units that were vacant in December, a stunning glut not seen since June 2001, according to the Canada Mortgage and Housing Corp. More than half of the current stockpile, about 800 units, were apartment-style condos.
“Very pricey homes have taken a beating,” said Brian Kernick, president of Greenview Developments, which plans to break ground in the coming weeks on a 65-unit low-rise condo building in Inglewood.
“There are still areas of the market where there is demand, even though the economy has taken a hit lately.”
Highrise condo projects that were planned pre-recession have been finished in the rout, driving up supply during a period of weak demand.
Smaller projects “don’t get over-built like highrise condos do, because they don’t take as long (to build),” Kernick said.
Canada’s national housing agency expects fewer new apartment and row-house projects will get off the ground this year as the focus turns to selling existing inventories of new homes.
“Later in 2017, these inventory levels should be moving lower,” said Richard Cho, analyst at Canada Mortgage and Housing Corp.
Many prospective buyers have been nervous about putting their money down for new housing at a time of high unemployment and low commodity prices, said Chris Pollen, director of sales and marketing at Battistella Developments, which is planning a condo tower for East Village in 2018.
The City of Calgary received 27 development permit applications for condo projects worth more than $10 million in the last six months of 2016.
Four of them, including an $18.7-million apartment development in Mahogany and a $15.8-million building at Legacy Park, have been approved so far.
“Demand is low but it’s not gone,” said Calvin Buss, who specializes in designing and marketing large condo projects in Calgary.
Several developers that have approached his company recently have found they couldn’t charge high enough prices for condos in the current market to build their projects economically.
Three out of four condo projects that have come across Buss’ desk in the past few months have converted to rental developments. The theory is that builders would have to sell condos at a loss now, or they could build rental apartments and take a loss on rents — but only until the economy recovers.
“If you build a tower and you have to rent it out for two years at 15, 20 per cent below market value, you eat it for those two years, and in the next 20 years, you make it all up again,” Buss said.
Millennials appear to be buying into the Canadian housing market with new zeal and the beleaguered Calgary and Edmonton markets are prime beneficiaries of a boost in first-time buyer purchases, new tax data shows.
The survey from TurboTax examines the use of the first-time homebuyer credit — a non-refundable tax credit of up to $5,000 calculated at 15 per cent and worth up to $750 in actual savings. The company won’t reveal the size of the survey for competitive reasons, but says it is “statistically significant.”
“Every little bit helps. It might let you buy a new coat of paint on your house,” said Robin Taub, a spokesperson for TurboTax and a chartered professional accountant, referring to the tax break.
The data provide a glimpse into buying activity of first-time buyer thought to be key to a continuing real estate boom. The tax software company found 3.1 per cent of millennials filing their tax returns with the software were taking advantage of that credit, as of April 2016. That was up from 2.4 per cent a year earlier.
Alberta’s two largest cities, where real estate sales have been hit by the slump in oil prices appear to be benefitting substantially from the increase in first-time buyers, many of whom are thought to be millennials, generally defined as ages 18 to 34.
Three per cent of buyers in Edmonton claimed the first-time buyer credit on their 2015 return, up from 2.4 per cent a year earlier. In Calgary, 2.6 per cent of filers reported using the credit in 2015 versus 2.4 per cent a year earlier.
“I think Toronto and Vancouver for sure is where you expect the house prices to be the highest for first-time buyers,” said Taub, noting that, on a provincial basis, Alberta had the highest use of the tax credit. “Maybe house prices are coming down just enough there.”
Toronto managed a sixth place finish, with 1.9 per cent of tax filers using the tax credit in 2015, up from 1.5 per cent a year earlier — the difference possibly attributable to condominium purchases, Taub said. In Vancouver, only 1.5 per cent of filers used the tax credit, which placed it 10th on a city-by-city comparison.
Brad Henderson, chief executive of Sotheby’s International Realty Canada, said anything that makes things more affordable helps first-time buyers, and the situation in Alberta has created a buying opportunity.
“The caveat is if they continue to be gainfully employed, and that’s the major issue (in Alberta),” he said.
Henderson said he thinks millennials are working their way into the market with more family support.
“There are higher incidence of family members providing financing, whether that’s interest-free loans, grants or whatever to try and help kids get into the first-time homebuyer market because the numbers are just much higher not just in absolute terms but in relative terms to when the parents were at the same age,” said Henderson.
His comments echo, to a degree, a survey from Royal Bank of Canada that found 24 per cent of buyers 25-34 would purchase a home today with a family member, compared to 13 per cent of the general population. The same survey from RBC found that 24 per cent of young buyers would purchase with a friend compared to nine per cent of the general population.
“This speaks to some of the affordability challenges in markets like Toronto and British Columbia,” said Erica Neilsen, vice-president of equity financing at RBC. “If you are a young buyer trying to get in and you need a down payment, often times it’s easier with a family member or a friend. I don’t think that was the case five or 10 years ago, when home prices were at different levels than they are today.”
With the latest sales numbers showing no signs of improvement in Calgary’s housing market, one real estate analyst says he expects prices to fall even faster in the months to come.
Don R. Campbell, senior analyst with Real Estate Investment Network, said there is always a lag effect that keeps the real estate market from feeling the full impact of an economic downturn early on.
“It’s not until 18 months after GDP starts to drop that the economy really starts to hit the housing market,” Campbell said. “We’re now at that 18-month mark where reality and actual economics start to kick in.”
According to the Calgary Real Estate Board, March home sales in the city totalled 1,588 units — 11 per cent below the same time last year and 28 per cent lower than long-term averages for the month.
The supply of homes on the market, meanwhile, continued to rise, with 6,084 active listings in March — up 6.7 per cent and the highest level in at least two years. Calgary’s benchmark price was $442,800 in March, a 0.5 per cent decline from February and 3.5 per cent lower than levels recorded last year.
In the condo sector, benchmark prices have been trending down since late 2014. In March, benchmark condo prices totalled $281,300, seven per cent lower than levels recorded prior to the slide and 4.93 per cent lower than levels recorded last year.
After the first quarter of the year, condo sales totalled 554 units, a 17 per cent decline from the same 2015 period.
Campbell said it is almost “textbook” how the market is performing.
“There’s no timing a top or a bottom — you can’t do it in the stock market and you can’t do it in real estate,” Campbell said. “But this is a bit of an inflection point, where you are going to start to see increasingly more deals available in the condo market for those who are wanting to buy.”
Cliff Stevenson, president of the Calgary Real Estate Board, said there are no surprises in the March numbers.
“We were definitely anticipating another down month. There were no economic indicators that we would be seeing any kind of improvement,” he said.
Stevenson said it’s impossible to predict if sale price declines will accelerate from here on in, but added that prospective homebuyers seem to be taking their time, waiting to see how it will all play out.
“We are still dealing with buyers who are trying to time the bottom. They’re taking that wait and see approach and expecting further declines,” he said.