WHAT TO KNOW ABOUT THE BOOM

What you need to know about Canada’s booming housing market
By Christine Dobby
November 15, 2011

With sales of existing homes in Canada rising in October to the highest level since January, the Canadian Real Estate Association boosted its forecast for resale activity for 2011.

The industry group released data on October sales activity as well as a revised forecast for the year on Tuesday.

National sales of existing homes increased 1.2% from the previous month, building on a gain of 2.5% in September. Price gains however cooled to 5.5%, the smallest gains since January.

A total of 397,561 resale units have traded hands so far this year, CREA said, up 1.8% from levels in the first 10 months of 2010.

Here’s what you need to know about the booming Canadian housing market:

Ontario leads the way

Third-quarter sales activity in the province was stronger than forecast, while the rest of the country came in broadly in line with expectations, the CREA said.

It was the strength of activity in Ontario that prompted the CREA to boost its annual forecast for 2011 to 1.4%, up from 0.9%.

The industry group now predicts national sales of 453,300 for the year, compared with 446,915 in 2010.

198,000 of 2011′s residential sales are expected to come from Ontario, with Quebec and British Columbia expected to have sales of 77,000 and 76,600, respectively.

Home prices are still up but showing signs of cooling down

CREA kept its national average home price forecast for the year little changed at $362,700. That’s an annual increase of 7.0% compared with $339,049 in 2010.

Prices are expected to remain flat next year, with the CREA forecasting $362,700 again for 2012.

The industry group pointed to moderating prices in Vancouver in the third quarter compared with the first half of the year, with sales of multi-million dollar properties in that city returning to “more normal levels.”

CREA said the national average price in October rose 5.5% from a year earlier to just under $362,899, the smallest increase since January.

The balance of supply and demand is tight but the market remains on solid footing

October’s monthly rise in sales resulted in a slightly tighter balance of supply and demand, but the national housing market remains “firmly rooted in balanced territory,” the CREA said.

The national sales-to-new listings ratio, a measure of market balance, stood at 53.4% in October, up from 52.8% in September.

Low interest rates continue to bolster the market

CREA also revised its forecast for 2012 upward slightly, predicting a smaller easing than previously expected of 0.5% to 451,200 units.

The uptick is largely due to expectations that Canada’s interest rates will stay low until well into 2012, CREA said.

But domestic and global economic headwinds could put pressure on the sector

“A number of factors will keep Canada’s housing market in check as interest rates remain low,” said Gregory Klump, CREA’s chief economist.

He pointed to tightened mortgage regulations, high household debt and slower economic and job growth as possible headwinds.

However, Mr. Klump noted that persistent news of global economic uncertainty has put only minor dents in consumer confidence to date.

“How confidence evolves depends on how global turmoil plays out over the coming months,” he said.

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TRUE NORTH

In Mats Gustafson’s Stockholm living room, antique and modern mingle freely. Photographs by Magnus Marding. Styled by Jacob Hertzell.

True North
Mats Gustafson
By PILAR VILADAS
November 4, 2011

When you walk into the artist and illustrator Mats Gustafson’s apartment in Stockholm, you’re not quite sure what era you’re in. In the foyer, a turn-of-the-century painting of a bourgeois Swedish interior hangs beneath one of Isamu Noguchi’s oversize paper lanterns, and underfoot is a colorful mid-20th-century rug by Barbro Nilsson for the renowned Swedish workshop MMF. Under a midcentury nude painted by Birger Ljungquist, Gustafson’s great-uncle, sits a simple 1950s stool by the Swedish designer Carl Malmsten. Walk through an angled doorway into the living room, a high-ceilinged space with the graceful proportions and architectural ornament typical of late-19th-century buildings, and the mix gets even richer. An upholstered 19th-century Swedish bench along the window and a group of slipper chairs, all from Gustafson’s family, blend easily with sheepskin-covered wood chairs designed in the 1930s by Bruno Mathsson and tables by Josef Frank. Vases by Scandinavian Modern ceramics masters like Axel Salto and Berndt Friberg are clustered atop a traditional tiled fireplace, and the immaculate plaster walls (which are painted, aptly enough, Stockholm White) are hung with Gustafson’s spare, elegant watercolors. Venture into the apartment’s long corridor, however, and you’ll find up-to-the-minute bathrooms and a sunny, south-facing kitchen in which crisp, utilitarian cabinets provide a clean backdrop for an antique wooden table and chairs. This is an interior that’s modern and old-fashioned at the same time, and in all the right ways.

Gustafson, a Swede who moved to New York in 1980 (and who now lives in a 19th-century farmhouse in Sag Harbor), had kept a small apartment in this building — an imposing structure in Stockholm’s Sodermalm neighborhood — since the 1970s, but when a two-bedroom apartment became available, he couldn’t resist. “I needed a more mature place,” he said, one that would give him a space to work, and which would also provide comfortable living quarters for him and his partner, the jewelry and product designer Ted Muehling. Gustafson treasured the Old World graciousness of the space and wanted to make it more functional while protecting its considerable charms, “not to make it into something it wasn’t,” he explained.

His allies in this effort, as they were in the renovation of the smaller apartment and the Sag Harbor house, were the husband-and-wife architects Neil Logan and Solveig Fernlund of the New York firm Fernlund + Logan. Gustafson and Fernlund, a fellow Swede, have been friends for years. They come from similar backgrounds — they both grew up in the countryside; his mother designed rugs and hers was an art historian — and Gustafson’s 1989 watercolor portrait of Fernlund hangs in the new apartment’s living room. The architects are known for their aesthetically obsessed clients, including artists like Rirkrit Tiravanija and the textile manufacturer Michael Maharam, as well as Muehling, whose new Manhattan shop they recently completed.

The Stockholm apartment had been occupied for decades by Hilding Linnqvist, a painter who died in 1984, and his wife, and the rooms were in need of renovation. The kitchen was small, with a separate entrance, and there was a maid’s room, as well as lots of storage that had been added awkwardly throughout the apartment. Fernlund and Logan reorganized this part of the space, enlarging the kitchen and adding a doorway at each end to connect it visually and functionally to the rest of the apartment, getting rid of the maid’s room and adding a laundry room and a modern bathroom (one of two). As Fernlund explained, “The goal for everything we did was to add things we need to live now, without making them feel cut off from the apartment.” Wiring was replaced, woodwork was stripped (and repainted with an oil-based paint to bring out its details), and what had been the service hallway was cleared of its cabinets to make a central corridor that connects the apartment’s studio, living room and master bedroom (which are enfilade, with generous doorways between) with the kitchen, bathrooms and guest room. It was important to the architects that the subtlety of natural light be felt in every room. “Without shadows,” Fernlund said, the light becomes flat and lifeless, “adding that there is no built-in or recessed lighting in the rooms because Gustafson and Muehling prefer the glow of lamps and candles.

Once the spaces were completed, it was time to decorate, and Gustafson had plenty to work with. In addition to his own collections of Scandinavian Modern furniture and decorative arts (which he bought at thrift shops and junk stores before they were rediscovered), he had antiques and paintings from his parents’ house and saw no obstacle to mixing periods. “Rather than get ‘new’ old things,” he said, “I’d reuse these. There’s more of a connection.” Both he and Muehling believe that decorating is layering: “It’s not about perfection. This is very much our territory,” he added. And Muehling brought a touch of humor to the serene rooms with the addition of pieces like a Royal Copenhagen blue-and-white vase painted with ships, which he describes as “kitsch, or bordering on it. It’s different from the extreme good taste that we both tend to do.”

The apartment’s palette consists mainly of grays, browns and ochers against the cool white walls, and though it’s tonally restrained, it’s texturally complex. Gustafson said that his idea of the apartment was less “Fanny and Alexander” and more Vilhelm Hammershoi, the Danish painter known for his monochromatic, nearly empty, ethereally lighted interiors. “The Swedish sense, even if 19th century,” he suggested, “is more homespun — a little drab, if you want — but it is a Nordic thing. It’s not silk and velvet, let’s put it that way.”

http://tmagazine.blogs.nytimes.com/2011/11/04/true-north/

SHABBY TO CHIC!

Say yes to renos a fixer-upper can save on the overall cost of the house
National Post
Nov. 12, 2011

Don't pass by that shabby house just yet. With the average price of Ontario homes on the rise to almost $360,000, the Ontario Real Estate Association (OREA) recommends looking beyond move-in-ready properties. "Everyone wants a house or condo that will be perfect the minute they move in," says Barbara Sukkau, president of OREA. "But with the price of houses continuing to rise, and some buyers looking for a family home in a seller's market, it may not be an option for all buyers. Buying a property that needs work can be a way to save on the overall cost even when you factor in the cost of an extensive renovation," she says. OREA recommends identifying properties with your realtor that will build equity after improvements are made but still remain in budget, and make sure the neighbourhood you invest in is worth it.

126% DECADE OVER DECADE

Calgary house prices increased 126% over past decade
Projected 2011 average cost: about $402K
By Mario Toneguzzi
Calgary Herald November 8, 2011

Strong in-migration, population growth and a vibrant oil and gas sector have pushed Calgary average house prices to an increase of 126 per cent in the past decade, says a new report published Monday by Re/Max.

The report said renovation spending and new construction have been "considerable" secondary factors propping up values throughout the city between 2000-2010.

The report also said the total value of residential building permits in the city during that period was the third highest in the country at $23.1 billion behind Toronto ($77.3 billion) and Vancouver ($35 billion).

"A few reasons I believe Calgary has seen such growth in the last 10 years is simple due to our strong economy from natural resources which has been a driving force in migration into Calgary for jobs," says Tanya Eklund, a realtor with Re/Max Real Estate Central.

"This has resulted in growing our population to well over one million, low unemployment rates, a strong GDP and the demand for housing.

"We are highly affected by inventory levels in real estate. When inventory is low and the demand is there, prices increase. . . . We had a very balanced market in this time period and saw huge economic growth which proved significant gains in the housing sector."

In Calgary, the average price rose from $176,305 in 2000 to $398,764 by year-end 2010.

The Re/Max Housing Evolution report said the average residential price in Canada rose 106 per cent in the past decade, led by Regina, which saw a hike of 173 per cent.

Regina was followed by Edmonton (165 per cent), Saskatoon (163 per cent), Winnipeg (158 per cent), Kelowna (156 per cent), St. John's (149 per cent), Greater Vancouver (128 per cent) and Calgary.

The report said investment in Canada's housing stock is at an all-time high in the 16 Canadian residential real estate markets surveyed.

"Revitalization, renovation and new construction have been largely underestimated in terms of overall impact on rising average price," said Elton Ash, regional executive vice-president of Re/Max of Western Canada. "Yet, outside of supply and demand, these have been among the foremost variables influencing real estate values.

"Population growth is a central to housing evolution, supporting steady household formation, which in turn will boost revitalization, new construction and investment in Canada's housing stock for years to come. Ultimately, a rising population bolsters the health of the real estate sector and fuels the trends that lead to continued average price growth on all fronts."

A Housing Market Outlook by Canada Mortgage and Housing Corp. said many factors that support resale housing demand in Calgary have become or remained favourable this year, including growth in full-time employment, low mortgage rates and improved net migration.

"However, competing factors such as uncertainty in the global economy has kept some prospective buyers on the fence, and will continue to temper any large increases in sales," said the CMHC.

The average price for a residential property in the Calgary census metropolitan area this year is forecast to be $402,000, up 0.8 per cent from 2010.

As the supply in the resale market moves lower and conditions become more balanced, stronger price growth is expected next year, said the CMHC. In 2012, the average price is anticipated to rise 2.2 per cent to $411,000.

BE A LAMB & BUILD IN CALGARY!

Toronto tower builder eyes three Calgary projects
‘You can feel the wealth,’ says Toronto developer
By Dan Healing
Calgary Herald November 9, 2011

CALGARY — A Toronto residential tower condominium developer is proposing three projects for Calgary, attracted by the city’s wealth and style.

Brad Lamb, head of Lamb Development Corp., said Wednesday his company will partner with Fortress Real Capital on the first project, a 30-storey, 230-unit condo at 10th Street and 6th Avenue S.W.

The project is expected to cost about $62 million to build and its residential units and ground level retail to sell for around $80 million, he said.

“I’ve been looking at Calgary for five years trying to find the right opportunity,” he said.

“And I believe now is right for Calgary.”

Lamb said he believes Calgary is the most affluent city in Canada and, furthermore, that the downtown region between the Beltline and the river is ripe for high-density development.

“You can feel the wealth in Calgary,” he said as he prepared for a meeting with potential investors on Wednesday evening.

Lamb said his second project will be a hotel and condo combination and the third will be a highrise but its details can’t be revealed as yet.

The downtown Calgary market for residential towers has come back from 2008 when the shrivelling economy dealt a death blow to the four-tower Arriva project by Torode Residential Ltd.

In August, Vancouver-based Mike Bucci of Bucci Developments Ltd. said his company was shifting focus to Calgary, with two new projects, because the economy is more promising than in the company’s home town.

Canada Mortgage and Housing Corp. reported Tuesday that multi-family starts in the city are up 70 per cent for October and five per for the first 10 months compared with last year.

The numbers are being driven by the highest number of apartment unit starts since May 2008, it noted.

THE BIG BABY PHENOMENON!

Adult kids living at home? It is going to cost you
Jonathan Chevreau
Financial Post Nov 9, 2011

In Italy, they’re called “big babies.” In North America, Generation Boomerang, which is also the title of a one-hour documentary about the phenomenon of adult children still living at home with their parents. It airs on CBC’s Doc Zone Thursday night at 9 p.m. EST.

This is a far more pervasive trend than you may think: fully half (51%) of young Canadians in their 20s still live with their parents, often in the bedrooms they’ve occupied since they were children. The percentage jumps to 60% when narrowed to just those aged 20 to 24.

Social scientists say it’s a global trend not likely to fade away – at least so long as developed economies are stagnant and jobs scarce. According to Newsweek, 55% of American males aged 18 to 24 still live at home.

The phenomenon is even more pronounced in Europe. In Italy, 70% of young adults live at “casa mama.” The Italian term “Bamboccioni” means big babies. And in the United Kingdom, one in three parents are remortgaging their homes to support “Yuckies” – Young, Unwitting, Costly Kids.

A year in the making, the documentary was produced by Vancouver-based Dream film Productions and directed by long-time business partners Sharon Bartlett and Maria LeRose, both Baby Boomers and parents. Their next project addresses youth unemployment.

Thursday’s show begins with and periodically revisits Vancouver comedian Phil Hanley, who has “mined comedic gold” about living with his parents in his 30s. His opening line is “I’m not only a comedian, I’m also a stay at home son.”

If Hanley can make the leap from living at home to show business success, he can skip entry-level jobs. As Maria LeRose notes, the irony is the topic of living at home may be what ultimately gets him out of there. In fact, he’s often on the road, but the parental home serves as his base.

Other subjects in the documentary have a similar strategy, prompting Seattle-based social psychologist Jane Adams to declare this a generation that refuses to start at the bottom and pay their dues.

“There are jobs the Boomerang generation don’t consider because they don’t fit their self image, values and expectations,” she says in an interview. “They want to live in the same style their parents raised them in, forgetting it took those parents 25 years to get there.”

Perhaps that’s why Paul Lermitte in Richmond, B.C. has decreed sons Patrick and Jeremy must leave home by 25. The youngest, 23-year old Jeremy, sees home as a “harbour” while he studies to become a financial analyst. The documentary builds suspense as Patrick approaches 25. He wants to break into film but figures jobs are scarce so needs to stay home while he builds up his contacts. “I don’t want to be stuck in a job where I’m not happy,” he tells the camera.

Publicist Jeremy Katz says Boomers were an historical blip in leaving the nest early. “Their parents and their parents’ parents lived at home until they got married and started their careers/life’s work.” When Boomers came of age, jobs were plentiful and housing cheap. “They just lucked out,” says Katz, himself a Boomer.

Here in 2011, 30 looks to be the new 20. Call it extended adolescence. Some sociologists consider it an entirely new life stage dubbed “emerging adulthood.” One former Boomeranger, Christina Newberry, twice returned home in her 20s and has parlayed the experience into a book and blog: www.adultchildrenlivingathome.com.

If you’re a Boomer parent, you better believe Junior’s extended stay will cost you, even delaying your own retirement. On average, it costs $200,000 to raise a child to 18 but an extended stay into their 20s can easily add on another third. A U.S. study found parents spend 10% of their income to support their adult children. Jane Adams doesn’t think economics alone explains the phenomenon but warns Boomers can’t get on with their second adulthood if their kids haven’t got on with their first one.

I wonder if these kids are shortchanging themselves by avoiding entry-level jobs and the raw material of life experience. Every job, no matter how humble, provides life lessons and may lead to unforeseen opportunities via random encounters unlikely to occur while they’re holed up in their childhood bedrooms surfing the web.

Many of these kids appear to be aspiring writers or creative types, in which case the supposed “joe jobs” they’re spurning might furnish more comedic or creative gold than would staying at home.

Photo By: Mimi Jaffe