Condo Pre-Sales

Sophia condo project falls into receivership.

Developer cites municipal strike, labour costs, contractors who abandoned job.

Derrick Penner, Vancouver Sun: February 29, 2008

Bill Eden, head of the company developing the upscale Sophia condominium project in Mount Pleasant, said municipal strike delays, labour costs and contractors who abandoned the job contributed to about $4 million in cost overruns that pushed the development into receivership.

Eden, in an interview Thursday, said that while construction has halted on the 81-unit, eight-storey building, pre-sale buyers "are not at risk at all" of losing their units.

They do, however, face some uncertainty over whether they might be asked to shoulder some of the additional costs to bring the project to completion. The court-appointed receiver, David Bowra of the Bowra Group, said he has just begun his assessment of the Sophia project and it is premature to speculate on whether pre-sale buyers will be asked to shoulder any additional costs.

He added that his intent is to convince the project's financiers that it makes more sense to bring the project which is 85 per cent built to completion rather than liquidating it as is. However if here's a gap between the financing and sales revenue, "We're going to have to find [the money] somewhere."

"My advice to purchasers would be to sit tight for the next week or so," Bowra said. He is due to make his recommendations to B.C. Supreme Court in the next week to 10 days.

Eden said he is cooperating with Bowra and hopes to come up with a proposal that "meets everybody's needs.
"[Buyers] can either get their deposit back or work with the ruling of the court." Eden said advance sales on the Sophia project started in the fall of 2005, and 78 were sold relatively quickly at prices of about $400 to $425 per square foot.

Since then, Eden said market prices in the neighbourhood around Main St. and Sophia St. have risen, and on paper at least, the value of the units is up between $100,000 and $200,000. "Everybody's made a lot of money on these units," he added.

As far as the Sophia's costs go, Eden said the problems started last October when he was hit with cost overruns totalling $2.2 million. He put up additional securities then, which he believed would get the project to the end of April.
However, within 60 days Eden said the project was hit with another $2 million in additional costs "we just couldn't handle. That's what put us into receivership."

A "variety of issues" pushed costs up, he added. Last summer's municipal strike caused delays that added to his interest costs on financing. In September, he told The Sun that interest was racking up at a rate of $300,000 per month. He also faced extra inspection fees during the strike, lost a couple of his trade contractors, and had difficulty securing skilled workers. In November, Eden blamed strike delays for cancelling two other condo projects before construction started.

The Sophia situation follows from another developer, Chandler Development Group Inc., being pushed into receivership on two high-profile projects, the 192-unit H+H project in Yaletown and the 108-unit Garden City building in Richmond.
Bowra is also the receiver in those cases, and said that while they faced some cost overruns, the receivership had more to do with the project financiers losing confidence in management of the development.

In his most recent report to B.C. Supreme Court, Bowra said the lenders on both buildings have agreed to finance completion of the projects, and the pre-sale buyers will be able to complete the purchases of their units at contract prices. "Given the market conditions and the fact these people are in the money, I suspect the majority, if not all, will want to complete those transactions," he added.

However, in an interview Thursday, Bowra said about 22 units appear to have been pre-sold at prices significantly below prevailing market prices at the time, and he is seeking some direction from the court on how to handle those. He said some of the buyers were "related parties" to the developer.

Bowra was also the receiver appointed to last spring's high-profile failure of the Riverbend condominium project in Coquitlam, where the developer attempted to cancel pre-sale contracts to re-sell them at higher prices when construction costs exceeded the revenue from the contract prices. But Bowra doesn't see a trend developing, noting that "there haven't been too many [failures]."

Peter Simpson, CEO of the Greater Vancouver Home Builders' Association, added that while the industry has strained under labour shortages and inflation of costs, the failures are still isolated cases.
"Over the last four years, there were 78,000 new homes and condominiums delivered a the price agreed upon without incident," he said.

CONDO CONCERNS
Project: Sophia, Mount Pleasant,
Vancouver
Units: 81
Developer: Eden Group of Companies
Status: Being evaluated by the receiver.

Project: H+H Yaletown
Units: 192
Developer: Chandler Development Group Inc.
Status: Financing committed to complete, new disclosure statement being finalized.
Project: Garden City, Richmond
Developer: Chandler Development Group Inc.
Status: Financing committed to complete, new disclosure statement being finalized.
Source: Bowra Group receiver manager

Children’s Miracle Network

RE/MAX Agents Raise $67,000 for
the Children’s Miracle Network
At Conference.

Kelowna, BC (February 25, 2008)
RE/MAX associates once again showed their generosity and compassion, raising $67,000 with the silent and live auctions at the annual “Breakfast of Champions” in support of the Children’s Miracle Network and its affiliated hospitals. The event was held on February 9th during the RE/MAX of Western Canada 25th Annual Conference in Vancouver, BC, February 7-9, 2008.

“In coming together to celebrate our accomplishments from the previous year, we take advantage of the synergy and enthusiasm that a conference creates to accomplish a different, more rewarding goal that is dear to our hearts; saving the lives of sick and injured children in our communities”, said Marie Sheppy, Senior Coordinator, Corporate Affairs (Children’s Miracle Network liaison). Stories of children recovering and receiving successful treatment were shared with the over 700 RE/MAX delegates in attendance at the breakfast fundraiser. “Many of us in attendance have been touched by a child requiring treatment at one of the Children’s Miracle Network affiliated hospitals or foundations in our region. We take pride in knowing that we can give back so substantially to such a worthy cause.”

Many items were donated by RE/MAX affiliates, including a RE/MAX-Children’s Miracle Network dual balloon stained glass piece, vacation packages, gold and diamond jewellery, sports memorabilia and a myriad of other valuable items.

RE/MAX sales associates have helped raise more than $4 million for the Children’s Miracle Network 14 member hospitals and foundations across Canada in 2007, helping the 2.5 million children who are treated each year. Since 1992, Canadian RE/MAX associates have raised over $30 million towards this worthy cause.

The Children’s Miracle Network is an international non-profit organization dedicated to raising funds and awareness programs for the benefit of children served by its associated hospitals, health centres, and foundations.

RE/MAX is Canada’s leading real estate organization with over 17,000 Sales Associates in 679 independently-owned and operated offices. The RE/MAX franchise network is a global real estate system operating in over 65 countries. More than 7,000 independently-owned offices engage nearly 115,000 Sales Associates who lead the industry in professional designations, experience and production while providing real estate services in residential, commercial, referral and asset management. For more information, visit: www.remax.ca.

First Time Home Buyer's

The threshold for the First Time Home Buyer's program - which exempts those buying their first home from paying the property transfer tax - was increased to $425,000 from $375,000.

In addition, buyers will no longer be required to have a mortgage of at least 70 per cent of the purchase price to qualify. As an added bonus, owners who leave home for up to two taxation years for travel, work or schooling will still be eligible for the homeowner grant or low-income grant supplement.

Market Review

Residential real estate markets across Canada post solid gains over past decade, says RE/MAX.

Kelowna, BC (February 21, 2008)

Pent-up demand, population growth, tight inventory levels, and the longest economic expansion since World War II collectively fueled one of the best decades on record for residential real estate in Canada, according to a report released today by RE/MAX.

RE/MAX Decade in Review 1997 - 2007 found that major housing centres across the country experienced strong consecutive growth between 1997 and 2007. Average price spiraled upward while unit sales climbed in tandem as more and more Canadians bought into homeownership. Nationally, average price almost doubled in the 10-year period, rising from $154,606 in 1997 to $307,265 in 2007, for a 7.1 per cent annually compounded rate of return.

Home sales across the country increased just over 57 per cent from 331,092 units in 1997 to more than half a million sales last year. Edmonton led the country in terms of percentage increase in average price. The city saw a 203 per cent upswing in housing values - or an 11.7 per cent increase annually - with average price rising from $111,587 a decade ago to $338,636 in 2007. Prince Edward Island experienced the highest percentage increase in unit sales, with the number of homes sold up 119 per cent in the 10-year period.

“Immigration and in-migration have played a serious role in jumpstarting residential housing markets, particularly in British Columbia, Alberta, and to some extent, Saskatchewan over the past decade,” says Elton Ash, Executive Regional Vice President, RE/MAX of Western Canada. “At first, there was an influx of American buyers, especially in Canada’s coastal regions and recreational hot spots, as our southern neighbours took advantage of the almighty US greenback. Then the European and Middle Eastern purchasers flooded the market, buying up real estate considered ‘cheap’ by international standards. In recent years, there have been a growing number of purchasers from Mainland China. From a global perspective, there’s no question that Canadian real estate brings good value to the table.”

Percentage increases in home sales varied across the country, with Prince Edward Island experiencing the greatest upswing over the past decade, followed by St. John’s at 106 per cent, Kelowna at 84 per cent, and Saint John at 77 per cent. Most markets (12 of the 19 surveyed) reported increases between 40 and 60 per cent. Average price has also seen substantial escalation over the 10-year period, with posted gains ranging from a low of 54.4 per cent in London-St.Thomas to a high of 203 per cent in Edmonton. Appreciation in Western Canadian markets surpassed all others between 1997 and 2007, with Calgary ranking second in terms of price appreciation at 189 per cent, Kelowna at 179 per cent, Saskatoon at 137 per cent, Winnipeg at 118 per cent, Victoria at 114 per cent and Greater Vancouver at 99 per cent.

In 2006, homeownership rates in the country were the highest on record at 68.4 per cent. Population growth has contributed to heated market conditions – especially in Calgary (+31.4 per cent), Edmonton (+20 per cent), Toronto (+20 per cent), and Vancouver (+15 per cent) where percentage increases have hovered in the double-digit range. Overall, Canada’s population rose to almost 33 million in the 2006 census, up approximately 10 per cent from 1996 figures.

“The non-cyclical nature of the decade comes as some surprise,” says Michael Polzler, Executive Vice President and Regional Director, RE/MAX Ontario-Atlantic Canada. “Never before have we seen such a continuous run up in Canadian real estate. Clearly, strength in all markets has been directly linked to solid growth in local, provincial and national economies. Low interest rates, job security, and consumer confidence have all served to further bolster home-buying activity across the nation.”

Robust economic performance in Western Canada has also drawn job seekers from across the country, looking to capitalize on employment opportunities.

As demand for housing increased across the country, the supply of homes listed for sale began to contract. Multiple offers were commonplace in many areas, some with sales-to-listings ratios as tight as 80 to 90 per cent. Nationally, 1997 marked the first year since 1988 that the sales-to-listings ratio hit 50 per cent. The sales-to-listings ratio would remain above 60 per cent from 2001 onward – rising to as high as 68 per cent in 2002.

The decade was not without its obstacles – the high-tech meltdown, a US recession, 9/11, SARS, Mad Cow, a blackout that affected the entire Northeastern seaboard, natural disasters such as ice storms, hurricanes, and forest fires and more recently, the credit crunch south of the border. Given the continuation of sound economic fundamentals, it’s expected that residential real estate markets across the country will continue to experience healthy activity, albeit at a more moderate pace.

RE/MAX is Canada's leading real estate organization with over 17,600 sales associates in more than 650 independently-owned and operated offices. The RE/MAX franchise network is a global real estate system operating in over 65 countries. More than 7,000 independently-owned offices engage nearly 115,000 member sales associates who lead the industry in professional designations, experience and production while providing real estate services in residential, commercial, referral and asset management. For more information, visit: http://www.remax.ca/

Market Review

February 18, 2008.

British Columbia Real Estate Association (BCREA) reports residential sales dollar volume on the Multiple Listing Service® (MLS®) in BC climbed 8.8 per cent to $2.25 billion in January, compared to the same month last year.

Residential unit sales dipped 5 per cent to 4,949 units during the same period. The average MLS® residential price in the province reached $453,648 in January, up 14.5 per cent from January 2007.

“BC home sales edged down in January for the first time in nine months,” said Cameron Muir, BCREA Chief Economist. “The combination of fewer home sales and an increase in active listings is pulling the BC housing market toward balanced conditions. This means upward pressure on home prices is less severe than a year ago.”

“While unit sales are no longer breaking records,” added Muir, “they still reflect strong consumer demand for housing.” The 4,949 units sold last month in the province were well above the ten-year average of 4,230 units for the month of January. “The provincial economy is continuing its expansionary phase,” noted Muir. “While weak demand for BC lumber and exchange rate parity with the US is negatively impacting some resource-dependent communities, strong employment growth and rising wages in other sectors are helping to underpin housing demand in the province.”

Market Review

Metro Vancouver records $7 billion in building permits in 2007
Record amount driven partly by new activity and partly by rising costs to build

Derrick Penner
Vancouver Sun
Thursday, February 07, 2008

Metro Vancouver set a record in 2007 for the value of new construction started in the region, driven partly by new activity and partly by costs to build new buildings that simply kept rising, according to Statistics Canada's latest report on building permits.
The agency reported Wednesday that builders took out permits worth just over $7 billion in 2007, six per cent more than the previous year.

"Obviously, there is an inflation component built into [the numbers]," said Keith Sashaw, president of the Vancouver Regional Construction Association. "But I can tell you our guys are busy. Their order books continue to be full, and there's still strong optimism in the Metro Vancouver area."

Sashaw said builders started work on a higher number of housing units in 2007 than during the previous year, and 2007 was the fifth year in a row that the amount of commercial construction increased.
The Vancouver Regional Construction Association compiles its own report on building activity using the Statistics Canada figures that encompass a wider area than Metro Vancouver. Within that wider region, the association counted permits issued worth $7.8 billion. Within that, institutional and industrial construction dipped a bit, but was more than made up for by substantial increases in commercial construction and residential permit values.
Peter Simpson, CEO of the Greater Vancouver Home Builders' Association, said that the cost to build new housing increased in 2007 on continually inflating prices for land and labour. However, he said builders are trying to control unit costs by designing smaller housing units."Maybe more homes are at the lower end [of the price scale]," he added.

The City of Vancouver issued 5,087 permits in 2007, which is almost 1,000 fewer than those issued in 2006. However, the 2007 permits still added up to a record $2.6 billion, despite a three-month municipal strike.
David McLellan, Vancouver's deputy general manager of community services, said the development of southeast False Creek was the biggest generator of permits, and that some 5,400 dwelling units were covered by the permits issued in 2007. In 2006, McLellan said, the higher number of permits covered only 3,600 new dwelling units.

Provincewide, municipalities issued $12.5 billion worth of building permits, a 13-per-cent increase from 2006 and a new record for B.C.

Residential permits worth $8.6 billion, up 13 per cent from the previous year, accounted for most of the activity.
And nationally, permit values were up 12 per cent to a record $74.3 billion, Statistics Canada said in its report, with the gain spread more or less evenly across the country.

In 2006, the report said, the increase in permits was fuelled mostly by "the tremendous demand in Western Canada."
Records were set for both the value of residential and non-residential construction.
New homes, with permits valued at $45.6 billion, accounted for most of the building activity, Statistics Canada said.
"Higher construction prices for new dwellings contributed significantly to the gain," the report added, as permit values in 2007 increased by 11 per cent while the number of dwelling units increased by only two per cent.

TOTAL VALUE OF BUILDING PERMITS BY CENSUS METROPOLITAN AREAS:
Area / 2006 / 2007 / %change
Kelowna / $618 million / $900.1 million / +45.6%
Abbotsford / $354 million / $306.5 million / -13.5%
Vancouver / $6.6 billion / $7.0 billion / +6%
Victoria / $776 million / $914 million / +17.8%
All B.C. / $11.5 billion / $12.5 billion / +8.7%
Residential / $7.6 billion / $8.6 billion / +13%
Non-residential / $3.9 billion / $3.9 billion / 0%
Source: Statistics Canada

TOTAL VALUE OF BUILDING PERMITS IN THE CITY OF VANCOUVER:
2002 $1.31 billion
2003 $1.06 billion
2004 $1.73 billion
2005 $1.6 billion
2006 $2.04 billion
2007 $2.57 billion
Source: City of Vancouver

Miracle Home Program

RE/MAX Agents raise over
$4 million.

Kelowna, BC - February 5, 2008.

Housing sales and average price weren’t the only records being shattered across Canada in 2007. RE/MAX agents also set a new benchmark in charitable giving, raising over $4 million for the Children’s Miracle Network. The 2007 donation surpassed the agents’ 2006 contributions by more than 14 per cent. Since 1992, RE/MAX sales associates nationwide have contributed close to $30 million to the cause.

The 2007 break-down of contributions saw over $654,000 donated to the BC Children’s Hospital Foundation in Vancouver, over $322,000 raised for the Alberta Children’s Hospital Foundation in Calgary, over $327,000 contributed to the Stollery Children’s Hospital Foundation in Edmonton, over $65,000 towards the Children’s Health and Hospital Foundation of Saskatchewan in Saskatoon and over $150,000 given to the Children’s Hospital Foundation of Manitoba in Winnipeg. "What many don’t realize is that the corporate and private sectors play a vital role in making miracles possible,” says Marie Sheppy, Senior Coordinator, Corporate Affairs, RE/MAX of Western Canada.

“With public coffers stretched to the limit, it’s a fact that organizations like RE/MAX fund a significant portion of the required cost to treat sick and injured children in pediatric facilities across Canada. We work so hard because we know our donations mean more than dollars and cents - it's an opportunity for healthy, happy childhoods and hope for promising futures. There really is nothing more rewarding than watching kids just be kids.” RE/MAX realtors generate donations through the RE/MAX Miracle Home Program®, whereby a portion of their commission earned on the purchase or sale of each home is given to Children's Miracle Network affiliated hospitals.

Children's Miracle Network supports 14 children's hospitals and foundations across Canada. Donations are often maximized through additional fundraising events including golf tournaments, gala evenings with silent auctions, casual Fridays and much more. Funds raised in each community stay in that community to be invested in the local Children's Miracle Network hospital. “It’s amazing what can be accomplished when people work toward a meaningful cause,” says Christine Martysiewicz, Director of Internal and Public Relations, RE/MAX Ontario-Atlantic Canada. “The synergy, commitment and enthusiasm of the RE/MAX network are truly phenomenal. However, what’s more amazing is that the charitable efforts undertaken by our realtors are 100 per cent voluntary. Supporting Children’s Miracle Network is a chance to make a real difference in the lives of local children and families in their own communities. That type of involvement is something that’s been woven into the fabric of the RE/MAX organization since its inception. The way we see it, we don’t just serve and work in these communities, we truly are a part of them, and we care—it’s that simple.”

In Canada, the funds raised on behalf of Children’s Miracle Network help support outreach programs and fund advancements in critical research, as well as upgrades to medical facilities and equipment. “The outstanding generosity of RE/MAX Associates has helped more than 2.5 million Canadian children in 2007 alone – that’s 1 in 4 kids nationally,” says John Hartman, Chief Operating Officer – Canada, Children’s Miracle Network. “RE/MAX has made Children’s Miracle Network hospitals a vital part of what they do and continue to put giving back at the top of their agenda. Since 1992, RE/MAX has been a strong supporter of Children’s Miracle Network. Their dedication, passion and enthusiasm for the kids and families in their communities across Canada is outstanding. They continue to give and give more. We are very proud to be affiliated with RE/MAX. The progress being made thanks to contributions, like that from RE/MAX, has been nothing short of astonishing. While care and outcomes have improved significantly, it also remains a reality that the need has never been greater.”

In Canada, the children's hospitals/foundations receiving funding from Children’s Miracle Network are: BC Children's Hospital Foundation in Vancouver, Alberta Children's Hospital Foundation in Calgary, Stollery Children’s Hospital Foundation in Edmonton, Children’s Health and Hospital Foundation of Saskatchewan in Saskatoon, The Children's Hospital Foundation of Manitoba in Winnipeg, SickKids Foundation in Toronto, Children's Health Foundation in London, McMaster Children’s Hospital in Hamilton, Children's Hospital of Eastern Ontario Foundation in Ottawa, Operation Enfant Soleil (St. Justine’s Children’s Hospital, Montreal Children’s Hospital, Centre hospitalier universitaire de Québec (CHUQ) , IWK Health Centre in Halifax, and Janeway Children's Hospital Foundation in St. John's.

As a supporter of the Children's Miracle Network, I am pleased to make a donation to the B.C. Children's Hospital in the name of my client's for each home they purchase or sell.

For more information, visit: http://www.childrensmiraclenetwork.ca/.

RE/MAX is Canada's leading real estate organization with over 17,600 sales associates in more than 650 independently-owned and operated offices. The RE/MAX franchise network is a global real estate system operating in over 65 countries. More than 7,000 independently-owned offices engage nearly 115,000 member sales associates who lead the industry in professional designations, experience and production while providing real estate services in residential, commercial, referral and asset management. For more information, visit: http://www.remax.ca/.

Market Update

New listings rise to start the New Year

Vancouver, B.C. - February 4, 2008

The Real Estate Board of Greater Vancouver (REBGV) reports that residential attached, detached and apartment property sales totalled 1,819 in January 2008, an increase of 0.7 per cent over the 1,806 total residential sales in January 2007 and a 5.5 per cent decline from the 1, 924 sales recorded in January 2006.

New listings for detached, attached and apartment properties climbed 14.9 per cent in January 2008, compared to the 4,067 units listed in January 2007. In contrast to January 2006, new listings from this January rose more dramatically, up 34.7 per cent.

“With new listings outpacing sales increases to start the year, it appears the market is heading toward more balance,” says REBGV president Brian Naphtali. “The result will be welcome for consumers looking for more time to undertake due diligence before making a buying or selling decision.”

Sales of apartment properties in January 2008 rose 11.7 per cent to 860, compared to 695 sales in January 2007. The benchmark price, as calculated by the MLSLink Housing Price Index®, of an apartment property increased 13.8 per cent from January 2007 to $378,336.

“It was clearly on the strength of apartment sales that overall residential sales figures increased in January,” says Naphtali. “There’s clearly been a trend over the past decade toward growth in the high density condo market. Townhome sales have continued to be steady, and detached homes remain a popular choice. But more and more consumers are purchasing apartments.”

Attached property sales in January 2008 declined 6.7 per cent to 318, compared with the 341 sales from January 2007. The benchmark price of an attached unit increased 12.4 per cent from January 2007 to $462,627.
January 2008 sales for detached properties decreased 7.8 per cent to 641, from the 695 detached units sold over the same period in 2007. The January benchmark price for detached properties rose 15.7 per cent from January 2007 to $742,490.

Bright spots in Greater Vancouver in January 2008 compared to January 2007:

DETACHED:
South Delta .............up 57.8 per cent (30 units sold up from 19)
Port Moody/Belcarra .. up 70 per cent (17 units sold up from 10)

ATTACHED:
New Westminster......up 200 per cent (12 units sold up from 4)
Port Coquitlam........up 53.8 per cent (20 units sold up from 13)

APARTMENTS:
Burnaby ...................up 14 per cent (98 units sold, up from 86)
Coquitlam ..............up 72.7 per cent (57 units sold, up from 33)
North Vancouver ..... up 21.2 per cent (63 units sold up from 52)
Richmond............. up 30.1 per cent (121 units sold up from 93)
New Westminster ...up 17.4 per cent (54 units sold up from 46)

CMHC Housing Market Outlook

Housing Starts to Fall Slightly in 2008

OTTAWA, February 4, 2008.

Housing starts reached 228,343 units in 2007, an increase of 0.4 per cent from 227,395 in 2006, according to Canada Mortgage and Housing Corporation's (CMHC) first quarter Housing Market Outlook, Canada Edition report. In 2008, residential construction will decline to about 211,700 units, given higher mortgage carrying costs. Nevertheless, Canada's housing market remains strong and 2008 will mark the seventh consecutive year in which housing starts exceed 200,000 units.

“Despite some global financial instability with regards to the U.S. housing market, Canada continues to experience robust employment levels, ongoing income gains and low mortgage rates,” said Bob Dugan, Chief Economist for CMHC. “This has strongly supported Canada's housing markets. However, housing starts are expected to decrease in 2008 mainly due to recent increases in house prices, which will push mortgage carrying costs higher for home buyers.”

Existing home sales, as measured by the Multiple Listing Service (MLS®)1, are poised to experience a very strong year with about 520,000 units in 2007, a 7.6 per cent increase over 2006. In 2008 the level of MLS® sales is expected to fall by 3.9 per cent to 499,650 units, while 2009 will see an additional decrease to 488,300. Growth in the average MLS® price has remained high at 10.6 per cent in 2007, mainly because of continued strong price pressures in Canada's western provinces. However, as most resale markets move toward more balanced conditions, growth in average MLS® price is forecast to slow to 5.2 per cent in 2008 and 3.8 per cent in 2009.

At the provincial level, British Columbia's housing starts, which have been above historical averages, are expected to decline in 2008. It is anticipated that a continuing tight labour market, robust income growth and high levels of consumer confidence will help to offset the dampening effect of rising mortgage carrying costs on the demand for new and existing homes in British Columbia. Housing starts should decline from 39,195 units in 2007 to 33,250 in 2008 and 31,700 in 2009.

The average MLS® price in British Columbia will grow by 12.1 per cent in 2007, 6.0 per cent in 2008 and 5.0 per cent in 2009. This moderation is due to increased listings and fewer resales bringing more balanced supply and demand conditions to existing homes.

Alberta continues to experience very low unemployment and continuing overall prosperity. Despite these positives, the province is expected to face a drop in net migrants between now and the end of 2008 due to the growing difference in provincial house prices and improved labour market conditions in other provinces. These factors will combine to reduce housing starts from 48,336 units in 2007 to 39,500 in 2008 and 37,750 in 2009. Following an unprecedented 30.7 per cent gain in 2006, and a forecasted strong 24.4 per cent rise in 2007, the average MLS® price is expected to climb by 3.9 per cent in 2008 and 5.4 per cent in 2009.

During 2007, Saskatchewan experienced steady economic growth, a healthy employment situation and gains in net migration. This contributed to strong housing demand. Total housing starts reached 6,007 units in 2007, the highest level in 24 years. However, escalating costs will push housing starts down to 5,600 units in 2008 and 5,300 in 2009. The average MLS® price in Saskatchewan will rise by 31.7 per cent during 2007, 26.4 per cent in 2008 and 8.2 per cent in 2009.

Manitoba is one of five provinces whose economic growth is expected to exceed the national average for 2007. This success has contributed to a five-year high in job creation, which has increased net migration to levels not seen since 1982. These factors will contribute to healthy levels of new home construction through 2008. Total housing starts reached 5,738 units in 2007, the best performance in 20 years. Starts will edge up slightly to 5,800 units in 2008 and 5,900 in 2009. The average MLS® price in Manitoba will rise by 12.5 per cent in 2007, 9.8 per cent in 2008 and 5.7 per cent in 2009.

The Ontario economy is expected to improve slightly during 2008 and this will help sustain housing demand across the province. New home construction activity will be moderate between now and the end of 2008. Housing starts are expected to move up from 68,123 units in 2007 to 69,150 units in 2008, while a more modest economy in 2009 will push starts down somewhat to 67,150 units. The average MLS® price in Ontario will rise by 7.6 per cent in 2007, while 2008 and 2009 should see increases of 6.2 per cent and 2.9 per cent, respectively.

Solid job creation and steady economic growth in Quebec during 2007 pushed housing starts up by 1.4 per cent to 48,553 units. A moderation of the economy will cause a slight shift downwards in 2008 to 46,500 units and 45,375 in 2009. A reasonably healthy resale market will also fuel average MLS® price growth in Quebec; 6.6 per cent in 2007, 3.8 per cent in 2008 and 3.0 per cent in 2009.

In New Brunswick, rising mortgage carrying costs, a slower economy and more choice in the resale market will result in lower levels of new home construction. Housing starts are forecast to decline from 4,242 units in 2007 to 3,925 in 2008, a decrease of 7.5 per cent. Moving into 2009, starts are expected to fall to 3,650 units. The average MLS® price in New Brunswick should rise by 8.1 per cent during 2007, 3.6 per cent during 2008 and 2.8 per cent during 2009.

Nova Scotia will experience slower employment and population growth during 2008, causing new home construction activity to be more restrained. Housing starts are forecast to stabilize from 4,750 units in 2007 to 4,550 in 2008 and 4,500 in 2009. The average MLS® price in Nova Scotia is expected to rise by 7.5 per cent for 2007, while 2008 and 2009 will see growth of 4.4 per cent and 2.6 per cent, respectively.

Prince Edward Island's economy is expected to undergo modest economic growth through 2008. As a result, housing starts will slowly decline from 750 units in 2007 to 700 in 2008 and 675 in 2009. The average MLS® price in Prince Edward Island will rise by 6.0 per cent in 2007, 3.4 per cent in 2008 and 3.3 per cent in 2009.

In Newfoundland, a strong export-driven economy has pushed housing demand up. However, it is expected that higher homeownership and construction costs and lower employment growth will dampen housing demand in 2008. Housing starts for 2007 were up 18.6 per cent to 2,649 units. For 2008, minimal change is expected at 2,650 units.

Meanwhile, 2009 will see an additional increase of 0.9 per cent to 2,675 units. The average MLS® price in Newfoundland will rise by 7.0 per cent in 2007, 7.2 per cent in 2008 and 6.3 per cent in 2009.

SOLD

I am pleased to announce the sale of # 511 - 2988 Silver Springs
Boulevard, Coquitlam, B.C.

For further information please visit:

www.danmcarthy.ca