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July 2009

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Construction Starts on Squamish Seniors Housing - July 23, 2009

The governments of Canada and British Columbia, along with community partners, broke ground today on a $14-million, 84-unit housing development for seniors and persons with disabilities in Squamish, creating close to 141 direct and indirect jobs.

The funding was made available as a result of a $365-million joint investment under an amendment to the Canada – British Columbia Affordable Housing Agreement, which includes funding through Canada’s Economic Action Plan and by the Government of British Columbia. As part of this joint investment, the Seniors’ Rental Housing (SRH) initiative will provide $123 million to develop up to 1,000 new affordable rental housing units, which will help to stimulate local economies in smaller communities across B.C.

For this new seniors project, the Government of Canada and the Province of British Columbia are contributing $4.35 million for 30 affordable housing units to Squamish Riverstones Developments Ltd. The project as a whole is also receiving financing in the form of a $7.8-million CMHC insured mortgage and interim construction financing provided by the Province.

In addition, the District of Squamish will amend its bylaw to waive development cost charges and will not require off-site and frontage servicing costs, which are, in total, valued at approximately $521,000. This will reduce the overall capital cost, making the project possible.

“Our community will benefit from this much-needed rental housing for our seniors, the accessibility-challenged and families. We will also benefit from the jobs that will be created from construction,” said Greg Gardner, mayor of the District of Squamish. “We recognize the value of partnerships in creating affordable rental housing and believe partnerships are even more important when creating housing in a rapidly growing community like Squamish.”

Sea to Sky Community Services Society (SSCSS) will operate the 30 units through an agreement with the Province, with the remaining 54 units being leased from the developer for 40 years.

“Through the operation of this housing development, our role in the Squamish community will continue to expand and grow,” said Shawn Jones, president of SSCSS. “We’re pleased that we will be able to support and assist Squamish seniors and people with disabilities and make a difference in their lives.”

Bethel Lands Corporation, a local developer, through Squamish Riverstones Development Ltd., is providing developer cost reduction valued at approximately $1.4 million.

“This development is breaking ground today because of the power of partnerships,” said Michael Hutchison, president, Bethel Lands Corporation. “We need to acknowledge the hard work and effort of our federal, provincial and municipal leaders and of the community of Squamish in making this development a reality.”

The development is part of an overall $14-billion capital infrastructure program supported by the Province that will create up to 88,000 jobs and help build vital public infrastructure in every region of the province.

Last fall, the Government of Canada committed more than $1.9 billion over the next five years to improve and build new affordable housing and help the homeless. Canada's Economic Action Plan builds on this with an additional one-time investment of more than $2 billion over two years in new and existing social housing and lending of up to another $2 billion to municipalities for housing-related infrastructure.

Through Housing Matters BC, the Province is addressing a range of housing needs, from homelessness to affordable rental housing and homeownership. In 2009, the provincial housing budget is $469 million, more than four times as much as in 2001.

Non-Res Construction Continues Fall in West - July 14, 2009

Investment in non-residential building construction amounted to $10.6 billion (in current dollars) in the second quarter of 2009, a 2.8% drop from the first quarter and the second consective quarterly decrease. This was the result of declines in commercial and industrial building construction.

Investors spent $6.3 billion on commercial projects, down 4.1%, while in the industrial component, investment fell 7.9% to $1.2 billion. Spending in the institutional component continued to rise, up 2.1% to $3.1 billion.

Provincially, the largest contributions to the quarterly decrease (in dollars) occurred in Alberta (-7.4% to $2.5 billion) and British Columbia (-5.2% to $1.3 billion). In both provinces, the decline was mainly due to lower spending on commercial projects.

Saskatchewan posted the largest increase, as a result of higher spending in all three components.

Investment fell in 19 of the 34 census metropolitan areas. The largest drops were posted in Calgary, Vancouver and Montréal, and were mainly due to declines in commercial construction projects.

In Barrie, investments rose 21.2% to $132 million, the result of advances in the institutional component.

Decline in the commercial component

Investment in the construction of commercial buildings declined for the second consecutive quarter, mainly as a result of lower spending on the construction of office buildings and retail and wholesale outlets in Alberta and British Columbia.

Overall, six provinces and two territories recorded decreases in commercial investment. The most significant drops (in dollars) occurred in Alberta (-9.8% to $1.6 billion), British Columbia (-7.0% to $863 million) and Quebec (-4.4% to $985 million).

Ontario and Saskatchewan posted the largest increases, the result of higher spending on the construction of office buildings.

Decrease in the industrial component

Spending in the industrial component declined for a fourth consecutive quarter, as a result of decreases in all industrial building categories.

Provincially, the largest contributions to the quarterly decline (in dollars) occurred in Alberta, where investment fell 15.8% to $265 million, and in Ontario, where it was down by 7.6% to $392 million.

Only Prince Edward Island, British Colombia and Saskatchewan posted advances in the second quarter, mainly due to higher spending on the construction of manufacturing plants.

Growth in the institutional component

Spending in the institutional component advanced for a sixth consecutive quarter, principally as a result of higher investment in health care and educational buildings.

Second-quarter increases were recorded in six provinces and the Northwest Territories. Quebec recorded the largest gain in dollars, followed by Alberta, as a result of significant spending on health care and educational buildings.

After seven consecutive quarters of increases, Ontario posted the largest reduction in dollars. This was the result of lower spending in several institutional building categories.

BC Housing Starts Up Significantly - July 9, 2009

The seasonally adjusted annual rate of housing starts increased to 140,700 units in June from 130,300 units in May, according to Canada Mortgage and Housing Corporation (CMHC).

“The increase in housing starts in June is broadly based, encompassing both the singles and multiples segments,” said Bob Dugan, Chief Economist at CMHC. “In addition, Western Canada experienced an increase this month.”

Housing starts are expected to improve throughout 2009 and over the next several years to gradually become more closely aligned to demographic demand, which is currently estimated at about 175,000 units per year.

The seasonally adjusted annual rate of urban starts increased 9.5 per cent to 120,100 units in June. Urban multiple starts increased 11.3 per cent to 67,000 units, while urban single starts also moved up by 7.3 per cent to 53,100 units in June.

June’s seasonally adjusted annual rate of urban starts increased 59.4 per cent in the Prairies, 25 per cent in British Columbia, and 3.1 per cent in Ontario. Urban starts declined 6.3 per cent in Quebec, and 3.9 per cent in Atlantic Canada.

Rural starts were estimated at a seasonally adjusted annual rate of 20,600 units in June.

Housing Becoming More Affordable in BC - July 8, 2009

The pace of improvement in housing affordability for British Columbia significantly accelerated in the first quarter of this year, which has contributed to setting the provincial market on a healing course, according to the latest housing report released today by RBC Economics.

"The cumulative decline in the cost of homeownership during the past year has been the biggest in B.C. since 1991," said Robert Hogue, senior economist, RBC. "After one of the sharpest housing market corrections in decades, encouraging signs are now pointing to a rebound in market activity. Sales of existing homes have picked up vigorously from historical lows during the November to January period and prices have showed hints of leveling off after a general decline last year."

According to the report, the pace of homes being put up for sale and construction of new housing has slowed significantly. Combined with rising demand for housing, this should help rebalance what had been very weak supply-demand conditions.

The RBC Affordability measure for British Columbia, which captures the proportion of pre-tax household income needed to service the costs of owning a home, improved across all housing segments in the first quarter of 2009. Affordability of detached bungalows in the province moved to 59.0 per cent, the standard townhouse to 46.6 per cent, the standard condo to 32.7 per cent, and the standard two-story home to 65.3 per cent.

The year-over-year home affordability improvements in Vancouver - during the first quarter - were among the highest in Canada, ranging from 8.9 percentage points for standard condos to 14.7 percentage points for standard two-storey homes, according to the RBC Affordability measure.

"Despite a soft economy and increasing unemployment, resale activity has rebounded in Vancouver over the past few months," noted Hogue. "The rebound is
coming off particularly depressed levels, but it does appear that the market is on its way to finally turning the corner."

RBC's Affordability measure for a detached bungalow for Canada's largest cities is as follows: Vancouver 62.6 per cent, Toronto 45.9 per cent, Ottawa 39.1 per cent, Montreal 36.5 per cent and Calgary 35.1 per cent. The report also looked at mortgage carrying costs relative to incomes for a broader sampling of cities across the country, including Victoria and Vancouver. For these cities, RBC has used a narrower measure of housing affordability that only takes mortgage payments relative to income into account.

The property benchmark for the Housing Affordability measure, which RBC has compiled since 1985, is based on the costs of owning a detached bungalow. Alternative housing types are also presented including a standard two-storey home, a standard townhouse and a standard condominium. The higher the reading, the more costly it is to afford a home. For example, an Affordability reading of 50 per cent means that homeownership costs, including mortgage payments,
utilities and property taxes, take up 50 per cent of a typical household's monthly pre-tax income.

Building Intentions Looking Favorable - July 7, 2009

In May, the value of building permits surpassed the $5.0-billion mark for the first time since October 2008. A report released this morning by Statistics Canada shows that construction intentions were up 14.8% from April, as a result of gains in both residential components and two of the three non-residential components.

Provincially, the main contributing factors were increases in multi-family dwelling permits in Ontario and institutional permits in Alberta and Ontario.

In the residential sector, the value of permits has increased for three consecutive months. Residential intentions rose 14.4% to $2.6 billion, with Ontario accounting for most of the increase at the national level.

In the non-residential sector, the value of permits increased 15.3% to $2.4 billion following a 12.9% decrease in April. The gain was mainly a result of increases in the institutional component in Alberta and Ontario.

Residential sector: Intentions up for both multi- and single-family permits

Municipalities issued $1.1 billion worth of permits for multi-family dwellings in May, up 40.6% from April. All provinces (except for Nova Scotia) reported increases in multi-family construction intentions. Intentions nearly doubled in Ontario compared with April.

Single-family permits rose 1.4% to $1.6 billion, the third consecutive monthly increase. The gain was a result of higher construction intentions in seven provinces.

Following increases in the two previous months, single-family permits declined by 10.6% in Alberta in May.

Municipalities approved 13,087 new dwellings in May, up 22.1%. This was mainly a result of a 40.5% increase in multi-family units to 7,948. The number of single-family units approved rose 1.5% to 5,139.

Non-residential sector: Increases in both institutional and industrial components

After a 16.3% decline in April, the value of permits for institutional buildings increased 47.9% to $913 million. The increase came mainly from construction intentions for medical buildings in Alberta and educational buildings in Ontario.

In the industrial component, the value of permits rose 7.3% to $346 million, the third consecutive monthly advance. Quebec and British Columbia accounted for most of the increase in May, while New Brunswick and Nova Scotia posted the largest monthly declines.

Permit values for the commercial component remained virtually unchanged at $1.1 billion (-0.3%). This was due largely to a decline in construction intentions in seven provinces. In contrast, British Columbia, Saskatchewan and Alberta experienced growth in this component.

Strong increases in Alberta and Ontario

The value of building permits increased in all provinces except for the four Atlantic provinces.

The most significant increases occurred in Alberta (+48.4% to $1.1 billion), the result of advances in all components except single-family dwellings. Ontario followed with a 15.0% increase to $1.8 billion, as a result of gains in both single and multi-family permits and in the institutional component.

British Columbia, Saskatchewan and Quebec all experienced gains in both the residential and non-residential sectors.

All Atlantic provinces posted declines, mainly as a result of lower construction intentions in the non-residential sector. New Brunswick and Nova Scotia experienced the largest drops.

Metropolitan areas: Large gains in Calgary and Toronto

The total value of permits increased in 21 of 34 census metropolitan areas.

The largest gains occurred in Calgary, with all components of the non-residential sector advancing. Toronto followed with increases in multi-family dwelling permits.

In contrast, the total value of permits in the census metropolitan area of Québec declined in May, after two consecutive monthly increases. May's decline came mostly from the commercial component.

Are Housing Prices Stablizing - July 7, 2009

Canada's resale housing market recovered lost ground in the second quarter and is poised to stabilize for the remainder of 2009, after a very slow start to the year, according to the Royal LePage Market Survey Forecast and House Price Survey released today. As the economy begins to stabilize and consumer confidence improves, house prices are expected to appreciate slightly in much of eastern and central Canada. Greater than national average price declines are predicted for the western cities that saw the greatest price inflation earlier in the decade, including Edmonton, Calgary and Vancouver.

"Given the grim shape that Canada's real estate market was in this past winter, the turnaround we have witnessed in the second quarter is really quite remarkable. We believe this improvement represents a sustainable change across the country. While seasonally weaker conditions are to be expected in the fall, the plucky Canadian real estate market is stabilizing and a healthy level of activity is forecast for the second half of 2009," said Phil Soper, president and chief executive officer, Royal LePage Real Estate Services.

During the second quarter, average house prices across most Canadian markets began to appreciate, recovering from the lows experienced during the winter months. Average national prices remain slightly behind those posted during the same period in 2008. Of the housing types surveyed, the price of detached bungalows declined to $327,964 (-3.5 per cent), two storey property prices decreased to $392,378 (-3.7 per cent), and standard condominiums price points fell slightly to $236,612 (-4.0 per cent), year-over-year.

Soper observed, "With our industry's busiest quarter behind us, we feel comfortable revising our 2009 forecast to the positive. When the anticipated market decline struck last winter, it was with greater speed and intensity than predicted, but the strength of the rebound was equally surprising. If general economic conditions continue to improve, as we expect they will, 2009 will be characterized as a period of moderate housing market correction after several years of above-average price growth."

The 2009 national average house price is forecast to decline marginally by 2.0 percent, to $297,500 by end of year and unit sales are projected to fall slightly by 1.0 percent to 430,000.

"Improved affordability, driven by flat or lower home prices and inexpensive mortgage financing, has been the principle catalyst in this recovery. Pent up demand is also a factor in the lift we see in the second quarter numbers. For six months straddling the year's beginning, buyers stayed away from the market in an understandable, emotional reaction to very unsettled global economic conditions. Canadians appear to be stepping beyond these fears and are once again moving onto and up the home ownership ladder," stated Soper.

In early 2009, the precipitous drop in unit sales remains the most dramatic indicator of the recession's impact on Canada's real estate market. With spring, consumers appeared ready to believe the worst was behind them and returned to the market in force, driving increased activity across each housing type. Couple this with historically low interest rates and leveling unemployment, Canada's residential real estate market got back on track during the quarter.

Undergoing an inevitable cyclical correction, price adjustments can be seen with marked variances across Canada's provinces. As expected, British Columbia and Alberta posted the most significant price modifications, as home values in those markets retreated in the wake of several mid-decade years of unsustainable price inflation, and have now evolved to a more balanced state.

Prices appear to have stabilized and it is expected that these regions will continue to see improvements into 2010. In particular, the impact of lower home prices has improved affordability to the point that people are buying homes again on the West Coast, where sales activity has increased substantially. Vancouver's real estate market stabilized in the second quarter of 2009 following a price correction that started last fall moving towards a balance between supply and demand. Properties priced at, or below, market value are generating multiple offers from buyers. Average house prices throughout the last half of the year are expected to inch upwards, but increases will likely be in the low single digits.

Alternatively in Atlantic Canada, homes continue to appreciate due to strong local economies, which have helped to shelter the region somewhat from the turbulence witnessed in other provinces. As well, the region's generally moderate home prices have helped keep demand strong. Newfoundland, in particular, stands out as a region that continues to see significant home price appreciation, as supply cannot keep up with the demand driven by vibrant and growing industries such as those in the province's oil and gas sector.

Meanwhile, home prices in Toronto declined slightly in the second quarter, reflecting the national average trend. In the early spring, it was first-time buyers who triggered the increased activity levels, now those looking to move up are also active in the market. Similar to the situation in other large cities in central Canada, the most desirable neighbourhoods experienced supply shortages, which put upward pressure on prices.

"Looking ahead to the second half of 2009, year-over-year price comparisons will likely appear increasingly more favourable. It is important to remember that the baseline for the latter half of 2008 was unusually low, particularly in the fourth quarter when the full impact of the global financial crisis was felt. Our expectation is that most Canadian regions will experience stable housing prices through into the spring of 2010," concluded Soper.

Apprenticeship Training Works for Employers - July 6, 2009

The Canadian Apprenticeship Forum-Forum canadien sur l'apprentissage (CAF-FCA) has completed a follow-up study, "It pays to hire an apprentice: Calculating the Return on Training Investment for Employers in Canada," and the results are positive for employers! Over 1,000 employers representing 16 trades from across every region were consulted and the analysis shows a significant return for employers right across the country!

CAF-FCA completed a 2006 landmark pilot study, Building a Skilled Workforce for a Strong Bottom Line that showed a positive net return on apprenticeship training. This current study looked at various regions, trades and business sizes. The results showed consistent and increased benefits for all. The current study shows that employers receive a benefit of $1.47 for every $1 invested in apprenticeship training. This is up 9 cents since the 2006 pilot study. Investing in apprenticeship makes good business sense!

Industry was a driving force behind CAF-FCA doing the follow-up study. Michael Atkinson, President of the Canadian Construction Association states "CAF-FCA's work in this area reinforces what many employers have discovered for themselves. The very need for such a study, however, suggests that there are still too many employers out there who do not do their part to train and develop their future workforce and who are missing out on the tremendous benefits employing apprentices can provide them."

It is hoped the results of the study will encourage more employers to invest in apprenticeship. As Dan Mott, owner of Mott Electric comments, "Apprenticeship supports the bottom line. I hope my colleagues will consider apprenticeship as a viable option after learning about the results. I know from my experience it definitely pays to invest."

In the current economic climate, maximizing business performance is crucial. Apprenticeship training is working for employers right across Canada. Employers who participated in the study indicated that apprenticeship training results in benefits for journeypersons, reduced risk of skill shortages, greater overall productivity, better relations with customers, fewer mistakes and better health and safety performance.

According to Bob Blakely, Director of Canadian Affairs, Building and Construction Trades Department (AFL/CIO), "this study provides information that is essential to the development of a national construction workforce. Apprentices are the future of construction and it is invaluable to work with employers and other stakeholders to develop lasting training programs that operate efficiently, effectively and ultimately, programs that graduate skilled people. The business case has never been stronger to develop programs that build capacity."

CAF-FCA encourages employers to invest in an apprentice today. Youth, parents, and educators are also encouraged to explore information on the skilled trades. Investment in apprenticeship training provides opportunities for everyone!

 

 

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