Thursday, April 28, 2011


East Village

Calgary Herald April 28, 2011
After years of planning, the time has come for East Village to fly.

Envisioned as an amenity-rich, mixed-use, mid-rise urban neighbourhood a stone’s throw from the downtown core, once complete the more than 19-hectare EV will be home to an estimated 11,500 Calgarians, all of whom will have one thing in common: they’ll be living in one of the most unique inner-city redevelopments ever attempted in Canada.

“The future is unfolding in East Village,” says Susan Veres, senior manager of marketing communications for Calgary Municipal Land Corp. “From 2007 to the end of last year, the focus has been on putting in place the critical utilities, services and roads for this new urban village.”

Now, with the revised road network nearing completion and land use bylaws squared away, comes the exciting process of development. Already, more than $600 million of development investment has been committed to the EV, with 50 per cent of available land east of 3rd Street S.E., north of 9th Avenue and west of Fort Calgary already sold.

Bosa Development Corp. and Embassy Development were the first to commit to the urban village vision of the EV, partnering on a deal to build 700,000 square feet of multi-family residential and retail.

In February, Ontario-based Fram+Slokker Real Estate Group signed a deal to build another 750,000 square feet of mixed-use residential and retail, including approximately 650 condominium units.

“The most exciting thing is there will be residential product for sale here starting in late 2011 or early 2012,” says Veres, adding a sales centre for condos could be up and running this year.

This is a major milestone for the EV, which is envisioned as a vibrant inner-city community linking downtown with historic Inglewood to the east and the expanded Stampede to the south.

A new road link south of 9th Avenue is under construction and will increase road and pedestrian access to the EV, which will also be home to a new 110,000-square-feet National Music Centre.

“We’ve turned a corner for private investment and the vision for this urban village is resonating with many developers and community partners,” says Veres. “The whole focus in the East Village is on it being pedestrian-oriented, and it is coming to life right now. We’re looking at some of the most-prime riverside parcels in the city, with 40 acres of protected land to the east at Fort Calgary.”

With Phase 1 of the RiverWalk promenade and pathway now open, a master plan on the way for the future of nearby St. Patrick’s Island, and more development announcements expected in the near future, “this is a great time for people to become familiar with the East Village master plan,” says Veres.


The 'thrill' of buying a house
William Hanley, Financial Post
Apr. 21, 2011

You walk into the open house, take one look and say to yourself: This is it. It’s the house I have to live in. Where do I pay? A bidding war? I’m in.

Over my years of buying houses, I never bought one that did not have that frisson moment, that thrill of finding a place so suited to my wants. Indeed, I have in the past decided that I wanted to buy a house in what seems, in retrospect, to be nanoseconds. (By contrast, I’ve taken weeks to decide on the right pair of shoes.)

It is no way to make an “investment,” to be sure. But, as I’ve previously discussed in this space, buying a house is perhaps the most uninvestment-like of investments.

Just about anyone who’s purchased a property or thought about purchasing knows that it is much about gut-feel, in which the senses can conspire to trump sense.

Now, as the major real estate selling season gets under way, along comes a survey commissioned by BMO Bank of Montreal to give statistical weight to the notion that intuition carries a particularly heavy weight in the house-buying process.

The survey by Leger Marketing found that more than two-thirds of Canadians cited a “good feeling” toward the property as a reason to buy. Meantime, though, good sense is not thrown out of that gorgeous bay window and into those manicured flower beds. More than 90% of house-hunters value affordability and location over resale value.

So, the axiom that there are three important things in real estate – location, location and location – might reasonably be replaced by the Three Ps: Price, place and personality.

Nevertheless, that resale value is not a big concern to these surveyed house-hunters – people between 25 and 45 who plan to buy a home within two years – is a telling sign of the real estate times.

With some dips here and there, Canadian house prices have been rising strongly for more than a decade. Indeed, even the recession created just a downward blip in the chart of ever-growing values, with the average national price rising 8.9% last month from the previous March (but just 4.3% excluding Vancouver).

As a result, most of the house-hunters surveyed might never have been aware of a housing market that was not rising. I suspect many in this 25-to-45 demographic believe house prices basically keep going up forever, that though they downplay resale value in the survey, the expectation for solid gains is, well, a given. (Any significant drop in prices would surely shake that belief.)

In recent times, investors have been asked if they are stocks or bonds. If you’re a stock, you are prepared to take on more investment risk. If you’re a bond, you are not.

Perhaps, though, many people are probably houses when it comes to investing. A home is both partly a stock and a bond – and somehow neither.

It is a bond because over the long term it will likely produce modest returns through the enforced savings required by paying down the mortgage. It is a stock because the gains could be outsized if the investor were to buy and sell at propitious entry and exit points for market-timing gains.

And it is neither because it is an “investment” with many moving parts and frictional costs. You don’t live in a stock or a bond, but when the house leaks, it costs money and cuts into the investment. Meantime, the costs associated with buying and selling a property are becoming more daunting in many jurisdictions, with some observers reckoning that a house is often a mediocre investment at best.

But most young first-time buyers and mover-uppers are not fazed by such commentary. Home ownership is a cornerstone of our culture, with 70% of the population owning properties and many of the other 30% looking to join the majority.

And the real estate industry has become far more adept at marketing and selling than in the days decades ago when I was in the market. Today, houses are often professionally “staged” to produce that frisson moment. Prices are sometimes set artificially low to produce that exciting bidding war and that extra frisson of “winning.”

A house, it is said, is not a home. And a home is not strictly an investment. But does a stock have granite counters? Does a bond have stainless steel appliances?

Tuesday, April 12, 2011


Calgary house prices decline from last year
Prices up at the national level
By Mario Toneguzzi
Calgary Herald April 12, 2011

CALGARY — Calgary house prices have declined from a year ago, according to the Royal LePage House Price Survey released Tuesday.

Standard condominiums saw the largest decrease, declining 3.3 per cent to $254,856 while standard two-storey homes declined 2.1 per cent to $423,122 with detached bungalows declining one per cent to $415,167.

“Overall, prices are down slightly from where they were a year ago due to a healthy supply of homes for sale,” said Ted Zaharko, broker and owner, Royal LePage Foothills. “This increase in inventory coupled with low interest rates has presented some attractive opportunities for buyers.

“Towards the end of March, we started to see a decrease in inventory levels compared to the start of the quarter with sales activity beginning to increase slightly especially for condominiums. This shift in the market can be attributed to the seasonal real estate cycle, which picks up activity in the spring.”

Zaharko said single-family homes at the $400,000 price point were in demand throughout the quarter.

Nationally, Royal LePage said low interest rates and a recovering economy continued to fuel activity in Canada’s housing markets over the past year, which has led to countrywide increases in average home prices. In the first quarter of 2011, the national average price of a detached bungalow rose 4.3 per cent year-over-year to $341,355, while standard two-storey homes rose 3.5 per cent to $379,388 and standard condominiums rose four per cent to $237,919.

Monday, April 11, 2011


The 10 real estate markets wealthy investors are going gaga for

Gus Lubin, Business Insider
Apr. 7, 2011

The most favored investment type of rich people around the world is property, according to the Citi Private Bank and Knight Frank Wealth Report.

True high rollers consider real estate of all kinds in all countries. Like distribution and industrials in the UAE. Or development land in Zambia.

The Wealth Report picked out 10 great international real estate investments.
1 means low risk, poor yield, low potential; 10 means high risk, high yield, high potential.

#1 Commercial real estate in emerging Asia
Risk Factor: 8
Yield Factor: 8
Capital Appreciation: 8

"We like emerging Asia for one simple reason – real-estate returns are driven by economic growth and very favourable demographics, rather than leverage and yield compression. Greater trade and industrialisation drives demand for logistics facilities; growing incomes swell the middle class, which creates opportunities in retail and leisure; an expanding services sector opens up opportunities for offices; while a young, growing population needs modern residential accommodation."

#2 Development land around Lusaka, Zambia
Risk Factor: 7
Yield Factor: 8
Capital Appreciation: 7

"Zambia has a serious housing shortage – it needs to build at least 150,000 housing units a year. Construction is a major contributor to the country’s economic expansion. Growth in the sector is expected to have reached 10% in 2010, driven by strong demand for residential and commercial developments, energy, mining and transport infrastructure."

#3 Secondary UK residential investments
Risk Factor: 5
Yield Factor: 7
Capital Appreciation: 7

"First, go for secondary stock in good locations in central London. Headline figures demonstrate the strength of the recovery in the London market, but they also mask that secondary properties, even in good residential areas, are trading at a deep discount to the best stock. They offer some of the best rental returns and improvement can often add value. Second is development stock in good regional cities, such as Manchester, Birmingham and Bristol..."

#4 Commercial property in Poland
Risk Factor: 5
Yield Factor: 7
Capital Appreciation: 6

"The Warsaw office market has avoided the overdevelopment that it experienced during previous market cycles, keeping the vacancy rate well below those of other CEE capitals, at 9% at the end of 2010. Warsaw’s rental growth prospects are among the best in Europe – forecasts say that prime office rents will increase by 3.2% in 2011 and 4.7% in 2012."

#5 Distribution and industrials in the UAE
Risk Factor: 6
Yield Factor: 8
Capital Appreciation: 5

"In some sectors values have fallen by as much as 60%, but away from high-profile offices, glittering shopping malls and alluring waterside residential schemes, the understated “shed” sector can provide robust income returns. Values have fallen along with other property assets, meaning that now could be the time to take advantage of a sector that looks undervalued, yet is supported by strong market fundamentals."

#6 Luxury new homes in prime European cities
Risk Factor: 1
Yield Factor: 2
Capital Appreciation: 5

"The smart money going into the European residential market is likely to keep a clear focus on property that offers both the very best quality, and for which there is a marked scarcity. A beautiful private home in a sought-after location will always attract interest. The appeal is to owner-occupiers and the commitment is long term. The enjoyment of ownership is equal to the performance of the investment."

#7 Education real estate in Asia
Risk Factor: 5
Yield Factor: 0
Capital Appreciation: 8

"Investments in education real estate demand the same selection discipline and risk appetite by investors as with any other residential real-estate investments in developing countries. For longterm visions of such projects, investors should choose to work with developers who are not only locally rooted, but also understand the education needs of the community."

#8 Residential development in eastern Mumbai
Risk Factor: 6
Yield Factor: 4
Capital Appreciation: 8

"The coming decade will see most infrastructure spend and development in Mumbai to the east of the city and on enhancing connectivity with the west. Infrastructure projects, such as enhancements to the Eastern Express highway, the Versova-Andheri- Ghatkopar Metro rail project and the proposed new airport at Panvel are expected to benefit the eastern corridor more than the west. This is likely to accelerate change in residential and commercial markets in eastern Mumbai."

#9 Distressed US real estate and property debt
Risk Factor: variable
Yield Factor: NA
Capital Appreciation: NA

"The next two years could provide opportunities for investors seeking to exploit the challenges many financial institutions face. These asset dispositions should create attractive investment opportunities in underperforming and nonperforming loans. Non-performing loans can often be purchased at an attractive discount to par value."

#10 Commercial property in Sao Paulo, Brazil
Risk Factor: 6
Yield Factor: 8
Capital Appreciation: 5

"The demand for A+ and A-grade office space has been exceeding supply as newcomers are establishing activity in the country or expanding their operations. Sao Paulo is experiencing a vacancy rate of 2.8% and as of October 2010, about 105,000 sq m have been absorbed in the A+ and A-grade office market. Private equity and real estate funds have been very active, as they expect further increases in lease rates and price per sq m. Cap rates of about 11% have proved attractive to foreigners."

Photo By: PnP

Friday, April 8, 2011



Simple life in Manhattan: A 90-square-foot home

By Kirsten Dirksen
APRIL 6, 2011

The average size of the American home is shrinking -- it dropped in both 2008 and 2009 after 15 straight years of growth -- but most of us are still living larger than people in the Big Apple. Home size in Manhattan is about half the national average.

One New Yorker has taken her love of frugal living to the extreme. Felice Cohen’s apartment measures just 90 square feet, but she doesn’t see it as a sacrifice. With such a small space, she pays just $700 to live in a part of town where rents average $3,600 per month.

Her kitchen consists of a toaster oven, hot pot, and mini fridge, but she claims her backyard is larger than average: “I look out my window, and it’s New York City. I mean, that’s my backyard. Central Park is a block away. I can go into the park. I have Lincoln Center. I have libraries. I have gyms all over the place. Sometimes, I feel like you’re in college, and it’s a huge campus, and you can take advantage of everything you want to take advantage of.” Learn how Felice organizes her 90-square-foot home.

Granted, Cohen had a bit of a panic attack the first night in her apartment when she woke up in the loft bed with the ceiling 23 inches from her face, but she’s grown accustomed to the small space. Now when she goes back to her childhood home, she misses her apartment’s coziness:

“I think a lot of people have a lot of space that they’re not using. I grew up in a place where my bedroom was 17 feet by 17 feet with two walk-in closets that combined were almost the size of this apartment ... when I go home now, I go in the closet just to feel like I’m back in New York.”

Wednesday, April 6, 2011


First-time buyers back in the market
Housing prices, interest rates draw customers
By Mario Toneguzzi
Calgary Herald April 6, 2011

First-time buyers have re-entered the Calgary resale housing market with "a renewed sense of confidence," says a report released Tuesday by real estate firm Re/Max.

In the first two months of this year, 32 per cent of all sales occurred under $300,000 in Calgary, said the report.

Jennifer Upperton and her sister Helen, an Olympic bobsledder, have been in the market looking for their first home.

"We're looking for inner city for sure," said Jennifer. "We're looking for either a raised bungalow or a house that has more than one suite in it.

"One of the reasons (for entering the market now) is because I've been renting for 10 years. That's probably the biggest one. Another one is we've just finally got enough money for a solid down payment."

Upperton said low interest rates are also a reason for the two embarking on a search for a home.

"We're just excited to get a place," she said. "My sister has been travelling so much that she has never really been able to have a home.

Sano Stante, president of the Calgary Real Estate Board, said the industry is "encouraged" to see first-time buyers moving into the market because it "permeates up market in months to come."

"So it almost assures us of a sustainably slow-growing market," he said.

"Good affordability, low interest rates and lots of inventory (are the reasons why first-time buyers are moving into the market). Until the inventory dwindles perhaps near the end of the year, or prices start to come up, or interest rates start to come up, we've really got a good balanced market right now."

The Re/Max report said the average residential price in the Calgary metro area was about $410,000 at the end of February.

"The strength of the entrylevel segment is good news for the spring market as sales of starter homes are expected to have a domino effect, prompting greater move-up activity in the weeks and months ahead," said the report.

In the overall market, the number of homes sold in Greater Calgary is slightly below 2010 levels, with 3,199 properties changing hands as of Feb. 28 versus the 3,297 sales reported during the same period last year.

Photo By: Susanrudat