The short and long-term expectations for Calgary’s homebuilding industry are on a positive trend, according to the Conference Board of Canada.

In releasing its monthly housing starts data on Friday, the board said the seasonally-adjusted annual rate of starts was 13,152 in January for the Calgary census metropolitan area which was up from 8,771 a year ago.

The board said its short-term expectations are based on residential permits data while its long-term expectations are based on demographic requirements.

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Alberta will outpace the rest of the country in economic and employment growth for the next two years, says a new report published Thursday.

According to the BMO Blue Book by BMO Capital Markets Economics and BMO Commercial Banking, GDP growth in Alberta will be three per cent this year followed by 3.1 per cent in 2013. Employment growth is forecast for 2.7 per cent this year and 1.8 per cent in 2013.

For Canada, economic growth is forecast for two per cent in 2012 and 2.5 per cent in 2013 while employment growth is expected to be 0.7 per cent this year and 1.2 per cent next year.

“High oil prices are fuelling activity in the energy sector, which in turn is driving strong labour market performance,” said Robert Kavcic, economist with BMO Capital Markets. “Strength in the energy sector has rekindled in-migration and helped firm up the labour market. Net interprovincial in-migration was the highest since early-2008 in the first three-quarters of 2011. Meantime, employment growth was a robust 3.9 per cent year-over-year in January, well above the 0.8 per cent year-over-year national pace, and the jobless rate has fallen to 4.9 per cent.”

Bill Hogg, district vice-president of commercial banking for Alberta and NWT for BMO Bank of Montreal said the bank’s commercial clients in the province continue to show rising levels of optimism and confidence.

“Our customers tell us that while 2012 will be a strong year, 2013 will be even better,” he said. “Albertans are spending at record levels and showing the confidence to buy big ticket items.”

Last week, a special report by TD Economics, which looked at provincial economic growth for the 2016-2021 period, said it will take three to four years for the Canadian economy to heal from the 2008-2009 crisis.

But “Alberta is expected to retain its position at the top of the provincial leaderboard, with annual average real GDP growth of 2.5 per cent (in that longer-term period). Saskatchewan should follow close behind with 2.3 per cent,” said the report by Derek Burleton, vice-president and deputy chief economist, and Sonya Gulati, economist, for TD Economics. The Canadian average for that period is forecast for two per cent.

TD Economics said resource-based provinces are expected to lead the way over the forecast horizon of its report, but their tenure as leaders depends on resource extraction schedules. “Based on provincial government documents and industry organization publications, Alberta is not expected to deviate from the fairly labour-intensive oilsands extraction process until after 2021,” said the report.

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A one-month pop in gasoline prices propelled Canada’s annual inflation rateup two notches to 2.5 per cent in January, reversing a recent trend toward moderating consumer price increases.

Pump prices climbed 2.8 per cent last month, partly due to political instability in the Middle East, contributing to upward pressure on both the monthly and annual indexes tracked by the Statistics Canada.

The agency said consumer prices overall were half a point higher in January on a seasonally adjusted basis than they were in December, almost totally reversing last month’s sharp 0.6-per-cent decline — both movements coming mostly from fluctuations in the price of gasoline.

As well, underlying core inflation — which excludes volatile items such as some fresh food and gas — rose to 2.1 per cent, one tick higher than the Bank of Canada’s target.

Analysts had expected the monthly and annual measures to rise, but not as sharply as occurred.

Besides the climb in gas prices during January, economists were expecting the one-point increase in the Quebec sales tax that went into effect on Jan. 1 to provide a small boost.

Another key contributor to inflation remains food, which in January cost 4.2 per cent more than a year ago, although food prices continue to moderate.

Excluding those two items, inflation would be a tepid 1.6 per cent, the agency said.

That is likely to give the Bank of Canada comfort that inflation remains well in control despite the persistent above-target readings. The central bank forecasts inflation to fall to about 1.5 per cent by mid-year.

Overall, seven of the eight major price components that Statistics Canada tracks registered increases in January, the lone exception being recreation, education and reading.

Transportation rose 3.7 per cent on an annual basis, shelter costs increased by 2.1 per cent, household operations were higher as were clothing and footwear, and alcoholic beverages and tobacco. The rising cost of food was punctuated by a 9.9-per-cent annual increase in bread, 8.3 per cent in fresh vegetables and a 6.5-per-cent hike in meat prices.

Not all items cost more in January, however. Furniture cost 3.6 per cent less last month than a year ago and video equipment dropped 9.7 per cent. Mortgage interest costs and travel tours were also slightly less expensive.

Most of the inflation occurred in Ontario and Quebec, at about half a point each, with the other provinces seeing relatively flat pricing.

Regionally, annual inflation was highest New Brunswick at 3.2 per cent last month and lowest in British Columbia, at 1.7 per cent.

A burgeoning population will spark another real estate cycle in Calgary with increased demand fuelling more MLS sales and more new home construction.

But industry experts don’t expect the next cycle to mirror the boom of a couple of years ago which experienced a frenzy of activity and fast-rising house prices due to a lack of supply.

Instead, a stable, steady growth is expected in Calgary’s real estate market.

On Wednesday, Statistics Canada reported the Calgary census metropolitan area had the highest rate of population growth in the country at 12.6 per cent between 2006 and 2011 and is now more than 1.2 million for the region.

Tim Logel, president and partner of home builder Cardel Lifestyles in Calgary, said the population data supports what the industry believes is happening in the market.

“What’s positive about it is that as more people move to Calgary then more of the inventory or the supply that we’ve been working on reducing gets absorbed,” said Logel. “And it gets absorbed quicker and gets us closer to being in a higher demand environment where we’re being asked to produce more new housing products of all types for the market … Over the next year with this in-migration, the extra supply will be absorbed.”

Logel said a new real estate cycle has been started in the city. The last one finished in the spring of 2007 in the Calgary market.

Ann-Marie Lurie, chief economist for the Calgary Real Estate Board, said the growing population will help support increased demand for housing in the resale market as well.

“In the resale market, especially moving forward, we think this will also help really take up some of that inventory that is in the market because we had some out-migration in the past few years. 2010 in particular, in-migration levels were extremely slow and so that impacted our housing market as well,” said Lurie.

CREB is forecasting single-family MLS sales activity to increase by 12.2 per cent this year from 2011 levels and condo transactions to jump by 5.9 per cent. Its forecast is also for average sale prices of single-family homes to rise by 2.1 per cent and by 1.7 per cent for condos.

“It’s much more of a stable growth than it was during the last boom. I just don’t see us moving there,” said Lurie. “We’re not moving into that scenario. It’s a much more stable growth and we have a good supply of inventory right now in the resale market and frankly on the new home market they do have some room to improve in some of their construction.

“They’ve got some room to grow and build more to help meet with those household formation numbers.”

Already in January some real estate data, released Wednesday, is indicating support for increased activity in the market as housing starts and residential building permits showed impressive increases compared with a year ago.

According to Canada Mortgage and Housing Corp., housing starts in the Calgary census metropolitan area totalled 786 units in January, up 52 per cent from 518 units a year ago.

In the region, 336 single-detached units broke ground in January, up 14.7 per cent from the 293 units started in January 2011.

The value of building permits in the Calgary region soared in December, according to the latest data released Tuesday by Statistics Canada.

The federal agency said permits in the Calgary census metropolitan area ballooned to $666 million during the month, an increase of 115.1 per cent from a year ago and up 100 per cent from the previous month.

In Alberta, total building permits rose to $1.3 billion, up 31.5 per cent on a monthly basis and an increase of 50.6 per cent on an annual basis.

Residential building permits in the province of $643.7 million rose by 7.0 per cent from November and jumped by 37.8 per cent from December 2010.

Non-residential building permits in Alberta increased by 69.2 per cent from November and by 65.6 per cent from a year ago to $661.9 million.

Across Canada, Statistics Canada said municipalities issued building permits worth $6.8 billion in December, up 11.1 per cent from November and up by 21.1 per cent from December 2010. It’s the highest level since June 2007.

Will van’t Veld, economist with ATB Financial, said much of the public infrastructure stimulus in Alberta is winding down so the “surge” in building activity in the province is likely related to “corporate optimism” – meaning corporations gearing up for increased activity in Alberta’s energy sector.

Read more: http://www.calgaryherald.com/homes/Calgary+building+permit+value+balloons/6113383/story.html#ixzz1mNUQyh48

A new measuring stick for Canadian real estate finds that while year-over-year values of Calgary homes grew in January, pricing is trending downward.

The new MLS home price index – introduced by the Canadian Real Estate Association and Canada’s largest real estate boards, including Calgary, showed prices here up 2.7 per cent last month.

However, short-term numbers are less positive locally, according to CREA, as Calgary’s index is down 0.12 per cent from a month earlier and 0.83 per cent from six months ago.

The Calgary Real Estate Board, in a release, said the new system measures how typical properties are valued in the market rather than relying on average and median prices.

“In January, for example, the average price declined year-over-year, but only because more homes were sold in lower-price ranges compared to the previous year when more luxury home sales occurred,” said CREB.

In CREB’s monthly MLS data for January, single-family average sale prices were down 3.34 per cent to $438,683 and condo average prices dropped by 6.86 per cent to $268,526.

CREB said the new index is calculated using a statistical model that estimates prices based on several factors, including square footage, lot size, numbers of bathrooms and features such as fireplaces or a finished basement.

The index will divide the information into different categories that include single-family homes, which are split into one-storey and two-storey homes, townhouse or row units and apartments. Nationally, the index was up 5.2 per cent in January from a year ago, and 0.27 per cent from a month earlier, based on the five markets surveyed. For now, only Calgary, the Fraser Valley in B.C., Vancouver, Montreal and Toronto are included in the survey – covering about 50 per cent of the total Canadian real estate market. Garth Turner, an author and well-known critic of the real estate industry, said he is concerned the index will be a “smoothing out of statistical data.”

“I’m just a little bit concerned that it will be easy to hide behind an index which is run through a filter and averaged over a period of time,” he said.

“That will mask some of the really important changes in the market that I think are more important now than ever because we’ve reached a position where most people think the housing market is overvalued, inflated and very susceptible to shock.

“By smoothing out the numbers, it’s possible for the real estate community to modify the bubble aspect of the real estate market. It’s also possible for them to mask a decline.”

However, Ann-Marie Lurie, CREB’s chief economist, said in a statement that the index is the best tool to determine true price trends in the market. She said the commonly-used average and median prices can be misleading as they are widely affected by the makeup of the homes sold in a specific month.

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