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Real estate transactions: Home prices continue to drop in Canada

Property prices are continuing to decline. In fact, they're dropping so much in Canada that February's real estate transactions set a record for the heftiest decline in years in a non-recessionary time. The price index used by the National Bank of Canada indicated that prices fell by 0.4 per cent in February over the same time in 2018.

Analysts say it isn't the greatest start to the year, especially since these numbers are the lowest since this particular index has been utilized (apart from a listing in 2009). Most of the volatility is centred around larger urban centres in Canada's most populated provinces, but the fallout is being felt in all areas of the country. The Teranet House Price Index (Teranet HPI) used by the Bank of Canada, gets its information from land registry data on sales that have closed. 

Investment company heats up real estate transactions

One the nation's leading property investment companies continues to heat up the market with its high-end acquisitions. Fiera Properties Ltd. has been involved in a number of real estate transactions in Alberta and across the country recently and it has no plans on stopping to build its portfolio. The company set a record last year for acquiring property.

The company goes after properties valued at between $20 million and $200 million. Fiera also purchased an 80 per cent share of the United Kingdom-based Palmer Capital late last year, giving the company additional assets of more than $1 billion. The overseas deal is the company's first outside of Canada. Last year Fiera's transactions amounted to $600 million, adding six portfolios to its roster and translating into 33 properties at about 3.5 million square feet. 

Land transfer tax won't help real estate transactions in Alberta

A well-known economist believes that imposing a land transfer tax isn't the way to generate revenue. The Alberta financial expert says Alberta would be better off instating a provincial sales tax or increasing property taxes. A land transfer tax, he says, might hurt the already shaky economy even further by curtailing real estate transactions in the province. 

Alberta's $7.5-billion deficit would be better downgraded through other means of raising revenue rather than imposing a 1 per cent land transfer tax on Albertans, the expert believes. A land transfer tax could raise more than $1 billion a year for provincial coffers. The economist suggests that such a tax may prohibit people from engaging in real estate transactions and its volatility makes it an unreliable source of revenue.

Commercial real estate rallies in Alberta capital region

The real estate market in Wild Rose Country has been pretty bleak. But there's some good news on the horizon for the commercial real estate sector in Alberta, especially for the capital region. A recently compiled report from a commercial real estate company lists positive numbers when it comes to office vacancy rates in Edmonton.

The office vacancy rate is expected to drop to 14.5 per cent -- 1.2 per cent lower than it was in 2018 and 1.4 per cent lower than it was in 2017. The industrial sector is faring just as well, according to the report. There were a number of commercial builds completed in the capital city last year while those vacancy rate numbers continued to improve. In fact, Edmonton's downtown core has seen an addition of more than 1.5 million square feet of premium office space since 2016.

Residential real estate prices continue their downward trend

The Western Canada real estate market is in the doldrums. Residential real estate transactions in Alberta have fallen significantly and if experts are right, they'll continue in a downward trend. But a real estate investment adviser believes the month-over-month downward trend is indicative of a market correction and even so, most homes remain unaffordable for many Albertans, especially those wishing to buy their first homes.

The expert believes that prices will continue to fall before the correction comes to a standstill. A primary indicator of this downward movement are mortgage loans. Prior to 2017, they were at 7 per cent, while that number is between 2 and 3 per cent currently. Home prices are down in Calgary by 2.8 per cent and down in Edmonton by 2.4 per cent.

Real estate transactions: Rentals move into top spot

The real estate market is in transition. In Alberta where the oil industry has been sluggish, unemployment rates are escalating and the federal mortgage stress test has been a nemesis to many would-be homebuyers, real estate transactions have also been fewer. Alberta residents -- especially those in urban centres like Calgary -- are choosing to rent, rather than to buy, at least for the time being.

The latest report from the Canada Mortgage and Housing Corporation (CMHC) indicates that Calgary is most profoundly affected by the issues surrounding the real estate market. The unemployment rate in Cow Town is higher than in most areas of Alberta. In fact, builders have been pulling back on new builds since many new homes are sitting vacant.

Residential real estate: Opposition wants stress test shelved

Alberta's Conservative Opposition Leader Jason Kenney wants Alberta residents to be able to opt out of the federal government's mortgage stress test. Kenney took Alberta NDP Premier Rachel Notley to task for not being more outspoken against the test, which makes it difficult for many Alberta residents to buy residential real estate. The stress test means that potential homebuyers must qualify for mortgages at interest rates offered by the Bank of Canada even if they are able to secure a lower interest loan.

Since the economy in Alberta has been lagging for quite some time, and critics of the stress test say that it makes matters worse in that such a test has the potential for hindering home sales and further depressing the market. Notley said the stress test is something the government could explore, but there are positives about the test as well. She said the test might prohibit Albertans from creating more debt for themselves -- debt they can't afford. 

Real estate transactions: Alberta woman to give mansion away

Apparently, many Canadians would love to live in a mansion. A woman from Millarville decided to run a lottery with the winner getting her luxury Alberta home worth $1.7 million. She is asking those who would like to take over the digs to write a letter as to why, along with a $25 entry fee. In terms of potential real estate transactions, that's pretty cheap.

The woman is looking to get about 65,000 entries and it looks as though she could meet her goal since she has received thousands so far -- some from as far away as China. The woman, who suffers from back problems, said it was time for her to move into a smaller home rather than continue to live in one that's 5,000 square feet. The first day alone, the woman received 900 letters, the best of which will be judged by an independent panel to come up with the winning story.

2018 Central Alberta real estate transactions mirror 2017

It's the same old, same old where real estate in the central part of Wild Rose Country is concerned. Apparently, real estate transactions in central Alberta last year pretty much mirrored those in 2017, according to the latest statistics from the Central Alberta Realtors Association (CARA).  The relatively flat market trend is expected to continue.

In Sylvan Lake, there were 295 transactions in 2018, nearly spot on to the 302 in 2017. Lacombe transactions showed a slight increase last year with 194 homes changing owners -- an increase from the 177 sold in 2017. Meanwhile, Red Deer trends were much the same -- 1,331 home sales in 2018 and 1,397 in 2017. 

Residential real estate weathering economic trends in Canada

The economy has been a bit dramatic over the past few months. The residential real estate market has weathered the storm and by all accounts is rallying across the country. The average price of a home in Canada in the last quarter of last year rose 4 per cent compared to the same time in 2017. That puts that average home in the $631,000 range.

The only place in Alberta where real estate prices dipped is in the Fort McMurray area – down more than 9 per cent. The strained oil industry and lower oil prices didn't seen to affect the rest of the province. Experts don't think oil prices will much affect the Alberta market in 2019 either. But it's true that the industry is undergoing a correction in all areas.

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