Calgary housing market soars to new average sale price record for January

CALGARY — Calgary’s resale housing market had its best January for sales since 2008 as average prices also climbed to their highest level ever for the month.

According to the Calgary Real Estate Board, total MLS sales in the city in January were 1,230, up 15.17 per cent from a year ago while the average sale price rose by 12.34 per cent cent to $439,671.

The previous record high for the average sale price in any January was in 2008 at $413,271.

“In today’s Calgary real estate market there are a number of significant factors that influence our housing sector. The growth within the energy sector is significant along with consumer confidence in the marketplace as well as steady economic performance,” said Kaitlyn Gottlieb, realtor with Century 21 Bamber Realty Ltd. in Calgary. “While these factors continue to increase home sales, should inventory continue to decline, pricing may continue to increase steadily, yet moderately. Although it is early in the year to make market predictions, if 2013 continues to bring good economic activity there is a great possibility that 2013 will exceed our expectations both in the Calgary real estate market and in Calgary’s outlying areas. While 2013 growth may be modest, we can still expect a positive market for this year.

“Alberta continues to fuel growth as a commodity-rich province and is expected to continue to support moderate price growth as we saw in 2012. The increased prices we have seen on single-family homes can partially be attributed to the record number of luxury homes sales we saw last year.”

In the single-family home market in Calgary, sales during January of 879 were up 15.20 per cent from last year and the average sale price rose by 12.74 per cent to $496,579.

The average sale price was the fifth highest ever for any month in the single-family market. The peak was $506,670 set in July 2007.

In the condo apartment category, sales of 204 for January were up 13.97 per cent from a year ago while the average sale price jumped by 13.09 per cent to $280,273. The condo townhouse sector saw sales increase by 16.67 per cent from a year ago to 147 transactions and the average price rise by 7.61 per cent to $320,590.

“Prices have improved in the Calgary market but as always it is important to keep some perspective on this,” said Ann-Marie Lurie, CREB’s chief economist. “While January’s year-over-year increase seems significant, price recovery occurred in the spring months of 2012 under tighter market conditions and home prices leveled off for the remainder of the year.”

CREB also tracks the prices for what it calls typical properties sold. The overall benchmark price in the city rose by 8.35 per cent to $392,000. The single-family home benchmark price jumped by 9.01 per cent to $436,900. It rose by 7.49 per cent in the condo apartment category to $251,300 and it was up by 4.85 per cent in the condo townhouse category to $283,400.

“The employment gains achieved in previous years along with rising income, low mortgage rates and robust net migration levels has sustained demand for housing,” said Richard Cho, senior market analyst in Calgary for Canada Mortgage and Housing Corp. “Many buyers have benefited from Calgary’s growing economy, giving them opportunities to move into homeownership.


“Some of the resale activity will have likely come from renters as well. As the rental market has tightened with average rents moving up, some renters may have decided to purchase a starter home and take on a mortgage instead of paying rent.”

mtoneguzzi@calgaryherald.com

CALGARY DREAMIN'

Why Calgary is an entrepreneur’s dream
By: Jameson Berkow
Financial Post Oct 14, 2012

CALGARY — Naheed Nenshi, the mayor of Calgary, thinks he knows why his city’s entrepreneurial culture is becoming so robust, despite the cold winters Calgarians endure.

“The line I usually use when people ask me why Calgary has fostered such an entrepreneurial culture is this is a place where nobody cares who your daddy is or where you went to school. I say it so often that it sounds a bit trite, but I don’t think it is true everywhere,” he said, gazing briefly at the September sunshine bathing his private city hall veranda to reflect on his answer before continuing.

“It is also a very interesting and weird unintended consequence of the way our downtown has been built,” he adds, referring to Calgary’s Plus-15 network of elevated walkways connecting the city’s skyscrapers.

The walkways allow office dwellers to attend meetings in other buildings without having to brave the city’s bitter prairie winters. “Our built environment has actually in some ways molded our business culture,” Mr. Nenshi said.

Calgary’s entrepreneurial culture is even easier to spot than the hundreds of steel and glass connections crisscrossing the city’s core. It hits new Calgarians like myself almost instantly; that infectious feeling of limitless raw potential, of broken barriers to success and endless possibilities.

This is a city of risk takers, of dreamers and of visionary builders. All of these enviable traits have, however, been relatively unknown in the rest of Canada, until now.

In a survey by Canadian Federation of Independent Businesses for the Financial Post, Calgary ranked as the 13th most entrepreneurial city in Canada this year. Not exactly a statistic to brag about, although it is a dramatic jump from No. 35 last year.

“The story on Calgary is getting out,” said Mike Fotheringham, research manager at Calgary Economic Development. “People across the country are starting to understand what is going on in this city.”

Bankruptcy rates here are among the lowest in the country at just 1%, and have fallen every year since 2002. Retail sales growth also tends to be more than double the national average of 3%, reflecting Calgary’s growing affluence.

“There is a sense that if you’ve got an idea, this is the place to make it happen and I think the stats reveal exactly that,” Mr. Fotheringham said.

What the statistics do not reveal is another sense, of the opportunities here being as rich and thick as the bitumen that powers Calgary’s massive oil towers. The sense is not only that such opportunities exist, but that achieving even the loftiest of them can be done without the vast support networks required elsewhere.

One of the largest buyout deals in Canadian corporate history — the $19-billion Suncor Energy Inc. takeover of Petro-Canada — was struck by four men sitting in a small conference room in a posh downtown hotel.

“Other steps in the acquisition had to be taken, but things were essentially wrapped up in that meeting in the Palliser, working out the details with no lawyers, accountants, advisors or second guessers anywhere in sight,” Rick George, longtime Suncor chief executive, wrote in his newly released memoir Sun Rise. “I honestly don’t believe an agreement of this magnitude could have proceeded as it did … in any other city. The city of Calgary has a tradition of openness and trust, placing as much value on a handshake as on any multi-page contract.”

That tradition extends well beyond the gargantuan oil and gas players. When Victoria MacLean co-founded Startup Calgary a little more than two years ago, she counted 45 small technology-focused companies in the city. Her latest count totaled 162.

“The people here get great exposure to big data, to enterprise-level data, so they can really start to see and identify solutions for big problems here,” said the outgoing president of Startup Calgary.

Ms. MacLean is leaving to focus full time on BeauCoo, her latest startup which seeks to build a social network for women of similar body types to share style and shopping information. The company raised a $1.1-million seed funding round from Calgary-based Zinc Ventures last month and plans to launch its mobile app in a few days.

Ms. MacLean considers herself lucky, because early-stage funding is still an issue for Calgary startups with most of North America still standing between them and Toronto, where most of the country’s sources of venture capital and angel investors remain.

“Entrepreneurs will always complain about a lack of angel investors because that is just a translation of ‘nobody likes my idea,’ ” said Mayor Nenshi, who was a business professor at Mount Royal University before entering politics. “The real issue is the second and third rounds of financing.”

That has long been the issue for startups nationwide and remains one of the primary reasons why many Canadian small businesses end up being acquired by larger foreign entities before they reach their full potential. Yet it is precisely that constant struggle for recognition — and the cash that comes with it — that helps Calgary entrepreneurs to stand out and pushes them to achieve.

“There is something of an insecurity complex that runs through the city,” said Alex Middleton, chair of TEDxYYC, the local chapter of a global organization famous for hosting world-class discussions in world-class cities. “That allows you to have more of a clean slate here than in other cities. You really can come to Calgary and reinvent yourself in that ‘maverick’ sense.”

Despite its growing stature, Calgary is still not Alberta’s most entrepreneurial major city. Edmonton scored 8th in CFIB’s 2012 rankings of Canada’s most entrepreneurial cities and even in 2011 it was 11, still two spots higher than its southern neighbour’s most recent title.

“Calgary culture-wise is moving towards a big city mentality, whereas in Edmonton you have more of an independent vibe,” said Ken Bautista, co-founder and chief executive of Startup Edmonton. “It isn’t about being a big city though, it is about being a great one.”

Photo By: Portraitsteve

BIG PLAYERS, BIG MONEY!

Calgary magnet for big players
Claudia Cattaneo
Financial Post; Sept. 26, 2011

Like the rest of the country, Calgary has seen its ups and downs over the past decade, but what hasn't changed is its ability to attract corporate headquarters.

The latest one landed last week, when Aecon Group Inc., the largest publicly traded construction and infrastructure development company in Canada, opened a co-head office in Calgary to support activity in Alberta, British Columbia and Saskatchewan. It mirrors its long-standing legal headquarters in Toronto. Each office will employ 15 to 20 people.

The move, announced in the middle of another scary week in the markets, reinforces a trend that, if it continues, could see Calgary surpass Toronto in the next 10 years in terms of the number of headquarters, said Wilf Gobert, chairman of Calgary Economic Development (CED).

Calgary already boasts Canada's highest concentration of headquarters relative to its population.

The trend seems to be progressing as companies look past fears of a recession and establish roots in the city on long-term expectations that Alberta's energy-based economy will remain vibrant.

"We are involved in three basic sectors - the resources sector, the energy sector and the transportation sector," Aecon chairman and CEO John Beck said in an interview. "We don't see slowdowns in any of those sectors."

Aecon joined Brookfield Residential Properties and Native American Resource Partners in opening headquarters in Calgary this year. Universal Power Corp., Stream Oil & Gas Ltd., Petromanas Energy Inc., Osborne Interim Management made Calgary their home base in 2010.

Calgary's metropolitan area increased its headquarter count by 55.7% between 2001 and 2010 - to 123 from 79, according to figures compiled by CED from FP 500 data.

In contrast, headquarters in Toronto's metropolitan area declined by 18% over the same period - to 260 from 317.

The only other Canadian city that had a bigger growth rate was Edmonton, which grew its headquarters by 64.3% - to 23 from 14, between 2001 and 2010.

"Generally speaking there is a shift from East to West," Mr. Beck said. "We are just part of that shift. We see more growth in the West in terms of population growth, we see growth in terms of exports to Asia. Voting power is moving towards Western Canada. I would say that the normal thing that would follow that shift would be a continued addition of head offices in the West."

The growth in head-office jobs shows up in office leasing, which is moving at a record pace. According to CED, 1.5 million square feet of office space was leased in the first six months of 2011 in downtown Calgary. In contrast, in the Greater Toronto Area, where the leasing market is four times Calgary's size, 1.2 million square feet were leased over the same period.

The leasing reflects the arrival to the Calgary scene of new energy players such as China's state-controlled oil companies. While they may not be part of the head-office tally, they are setting up significant subsidiaries and buying up condos to house their expatriate workers. PetroChina, with offices in the Sun Life Plaza, has the largest presence. Sinopec is in Bow Valley Square. Cnooc Ltd. is flying people in and out, but is expected to have a large permanent office once its acquisition of Opti Canada Inc. is finalized.

The influx of Chinese money is so large there are calls for direct flights between Calgary and Beijing, bypassing Vancouver, even as British Columbia steps up efforts to establish itself as Canada's gateway to Asia.

Aecon opened a Calgary co-headquarter in the city's core to better serve its clients and further develop its business, Mr. Beck said. A third of its $3-billion in annual revenue is coming from projects in Alberta, where its clientele includes Syncrude Canada Ltd., Suncor Energy Inc. and ConocoPhillips.

Mr. Beck doesn't expect a repeat of the oil sands cancellations that resulted from the financial meltdown three years ago.

"That was at US$30-US$35 oil. We are at US$80 to US$90, so I think we are far away from that," he said. "A lot of the commitments that have been made can't be stopped. Production has to continue."

Bruce Graham, president and CEO of CED, said Calgary's exceptional headquarter growth is based on the strength of energy and other commodities and is unique in Canada.

In addition to drawing energy companies, Calgary is attracting industries that are accommodating that growth, such as procurement, finance, construction, he said.

"It demonstrates the optimism and the activity that is happening, despite the somewhat mixed signals that we are getting in the global markets," Mr. Graham said from Montreal, where he was part of a campaign last week with Calgary Mayor Naheed Nenshi to recruit workers and businesses to the city.

But, Mr. Graham said, "We are not an island. Hopefully things settle out globally because obviously we need the marketplace to accommodate the production that we are putting on stream."