Edmonton Real Estate Investor: June 2009

Don R. Campbell did an interview with CHED news recently on the long-term effect of transportation on real estate values. Properties near hubs of transportation i.e. sky train stations, LRT stations or subway stations see a larger increase in values (10-20% more) to other comparable properties. Seems like clear directions on where to invest for the best R.O.I.

There is a lot of other good information why real estate is the best long-term investment for wealth building.

I stumbled on the Worthwhile Canadian Initiative blog through wordpress.com. There are some great posts here on the Canadian economy.

This one is very relative for those who are interested in real estate and afraid the Canadian market is going to follow the U.S housing market meltdown.

And as a bonus this entry on The economic impact of canoeing is really interesting.

Alberta's economy will take some hits before rebounding in 2010 according to Premier Ed Stelmach.

"It's just not oil and gas prices, but it's the value of the dollar, the manufacturing sector, and that's why we're promoting Alberta globally, because we have to find new markets for our products."

RBC says that Saskatchewan, Manitoba and Nova Scotia are expected to show economic growth in 2009. The rest of the provinces should be on track by 2010.

So basically Alberta, a province with until recently the most growth, will experience negative growth like most other Canadian provinces until 2010.

What's the good news?

"The good news here is the downturn is giving the province's overheated economy time to breathe and is allowing energy companies time to redevelop their stalled megaprojects to being more environmentally friendly."

"As an example, the Canada West Foundation mentions Imperial Oil's announcement of its $8-billion Kearl oilsands project last month: "Sign of the times: the announcement included a mention of greenhouse-gas emission targets and was realistic about the technology upgrades required to meet them. The next cycle of oilsands development should be quite different from the previous one." Read More Good News About Alberta's Economy

If you're young and time is on your side losing money on investments are a set back but you know you have time to right most financial upsets. However, when the time to earn is long gone losing your savings is a big hit and you'll probably want some payback.

A group of seniors in Germany, kidnapped, held and tortured their financial adviser for losing their life savings.

"Retirees in Germany were so upset with their financial adviser that they ambushed him outside his home and beat him with their walkers, the adviser claims. Then they taped his mouth closed and hauled him into a car.

"It took them quite a while because they ran out of breath," the financial adviser, James Amburn, told the U.K.'s Daily Mail. The kidnappers ranged in age from 60 to 74."

When you're a steward of money the responsibility of managing your client's funds is not to be taken lightly. You have to be willing to take the ups and the downs.

In this case it was a few broken ribs, cigarette burns and captivity.

Read More

If you really want to know what's going on with the economy in Canada and aren't afraid of knowing the REAL facts not the hype then you must go to this event:

Real Estate Investment Network(TM) (REIN(TM)) will host the Canadian Economic Summit on June 26th in Edmonton. Some of Canada's top economists will be providing unbiased opinion and analysis on the fundamentals of the Canadian economy (locally and nationally) and its impact on the bottom line for investors and business owners. Among the speakers will be Mary MacGregor, Chief Economist for the Government of Alberta.

Other speakers include:

Carl Gomez, Bentall Capital's Vice President, Research.

Ron Gilbertson, President and CEO of Edmonton Economic Development Corporation

Todd Hirsch, Economist and Media Commentator

Peter Kinch, Author and Canadian mortgage expert

Don R. Campbell, Bestselling author & market analyst

"The market will no longer cover up mistakes and blind guesses. Actions and investments must be better planned, and better planning comes from knowledge," said Don Campbell, President of REIN. "These experts will provide unbiased analysis of where we are heading as a country and how that will affect you and your business."

Topics on the agenda include:

- Long-term effects of high unemployment rates, cancelled capital projects and economic stimulus packages

- Today's world economies, how long will the turbulence last

- Will lending environment continue to tighten

- Positioning your company and investments for recovery

- Assessing the real estate market - when should you invest

- Inflation? Deflation? Recession? Depression? What the economic fundamentals really tell us and the affect on businesses, labour markets, oil prices and retail sales

Complete information at

REIN ECONOMIC SUMMIT

WHEN & WHERE: June 26th at 7:00 PM

Shaw Conference Centre in Edmonton Alberta - Hall D

Contacts:
Real Estate Investment Network
Kelly Marvetz-Todd
604 856-2825
kelly@reincanada.com

Do criminals suffer in the credit crunch? No, they don't. Their businesses adjust and adapt to the ups and down of the economy. From the MLM structure of drug dealing to the multinational business structure used in the Mafia. Criminals are always profiting.

Obviously I'm not promoting crime!

Listen to BBC Radio Scotland digital radio download

The elite of Edmonton bankers made their way to Toronto to lure finance specialist and, hopefully, more capital to Alberta.

"Alberta is going to be generating a lot of investment potential in the next 20, 30 years, so we think it's important to have a homegrown financial services industry," says Ron Gilbertson, president and chief executive of Edmonton Economic Development Corp.

Edmonton, Alberta already has $135 Billion, no not million, being managed out of the city. The city has already attracted a lot of capital but now needs savvy professionals to handle and grow it.

"We have the whole ball of wax," Mr. Mowat says. "All of the opportunity is there."

Read More

Today evidence came that Edmonton house sales are seeing a small increase.

We tried to get an inspection done and were told it would be at least one week before that was possible. They are being "swamped" with inspections and "it seems like everyone is buying".

It's partially seasonal, warm weather means more sales, partially the "W" effect- where the market will go up and down for the next 18 months and probably a lot to do with the record low mortgage rates and low house prices.

People know a good thing when they see it.

Turbo charge your portfolio. Stylish 5 bedroom 2.5 bath suited home has over 1178 sq ft of rental space plus a triple detached garage. Separate 2 bedroom suite with separate entry pulls in extra cash flow.

Comes complete with great tenants making this a totally turn-key property for you. Convenient area with nearby access to the new Ring Road and access to refinery row. Excellent neighborhood and HUGE upside potential due to the great purchase price, strong economic fundamentals and the mature area of Edmonton's North East neighborhoods.

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I think this little parable is going viral. I really liked it and it was forwarded to me today. Thought I would share.

This is something to think about when negative people are doing their best to rain on your parade. Remember this story the next time someone who knows nothing and cares less tries to make your life miserable.

A woman was at her hairdresser's getting her hair styled for a trip to Rome with her husband.. She mentioned the trip to the hairdresser, who responded: " Rome ? Why would anyone want to go there? It's crowded and dirty.. You're crazy to go to Rome . So, how are you getting there?"

"We're taking Continental," was the reply. "We got a great rate!"

"Continental?" exclaimed the hairdresser. " That's a terrible airline. Their planes are old, their flight attendants are ugly, and they're always late. So, where are you staying in Rome ?"

"We'll be at this exclusive little place on Rome 's Tiber River called Teste."

"Don't go any further. I know that place. Everybody thinks its gonna be something special and exclusive, but it's really a dump."

"We're going to go to see the Vatican and maybe get to see the Pope."

"That's rich," laughed the hairdresser. You and a million other people trying to see him. He'll look the size of an ant. Boy, good luck on this lousy trip of yours. You're going to need it."

A month later, the woman again came in for a hairdo. The hairdresser asked her about her trip to Rome .

"It was wonderful," explained the woman, "not only were we on time in one of Continental's brand new planes, but it was overbooked, and they bumped us up to first class. The food and wine were wonderful, and I had a handsome 28-year-old steward who waited on me hand and foot.

And the hotel was great! They'd just finished a $5 million remodeling job, and now it's a jewel, the finest hotel in the city. They, too, were overbooked, so they apologized and gave us their owner's suite at no extra charge!"

"Well," muttered the hairdresser, "that's all well and good, but I know you didn't get to see the Pope."

"Actually, we were quite lucky, because as we toured the Vatican, a Swiss Guard tapped me on the shoulder, and explained that the Pope likes to meet some of the visitors, and if I be so kind as to step into his private
room and wait, the Pope would personally greet me.

"Sure enough, five minutes later, the Pope walked through the door and shook my hand! I knelt down and he spoke a few words to me."

"Oh, really! What'd he say ?"

He said: "Who messed up your hair?"

We have a few prime -x% mortgages, they are hard to find now, and we are seeing mortgage rates as low as 1.65%. This is historic people in my generation and probably all across the board have never seen mortgage rates this low. Ever.

For first time buyers there couldn't be a better time to buy. Alberta's market is about as soft as it's going to get. Though seasonal rises in prices are sure to be a factor, prices and sales are starting to increase. This is even truer for those who are able to invest in property. People are definitely seeing the silver lining to the economic cloud.

Many economist believe that the recession in Canada will start to reverse near the end of this year. I wouldn't expect prices to rise quickly but why not try to buy at the bottom of the market rather than in a rising one?

PM Stephen Harper's June 2009 economic progress report - -Some signs of stabilization have been appearing in the world economy. And Canada's economic performance, though pulled down by the global recession, remains the best among all major developed countries.

-These measures are creating and protecting jobs, building infrastructure, easing the tax burden on families, supporting Canadians who have lost their jobs, helping threatened industries, and laying the foundations for our future prosperity.

-Combined with the actions taken by provinces and territories, Canada's economic stimulus this year and next is proportionally the largest of any country in the G7!

Canada was never completely pulled under by the recession in fact our banks were a model of safe banking practices effectively side-stepping most of the major crash.

Alberta consumers optimistic about economy: report - "Despite an economic downturn, half of Albertans say now is a good time to buy big-ticket items while a quarter expect their household income to increase in the next year.

Consumers in Alberta are in an unexpectedly optimistic mood, according to a confidence survey of 900 Albertans sponsored by PricewaterhouseCoopers LLC and conducted by Leger Marketing Inc. released Monday."

With stores offering incentives to buy and many people realizing, "Hey I read about the recession but my life hasn't changed THAT much", stores are going to start seeing improvements in sales.

Confidence in housing market a 'good sign': economist -Despite a stream of negative economic news, most Canadians who've recently bought a home have confidence in their decision, according to a survey by the Canada Mortgage and Housing Corporation.

A national consumer survey released Tuesday said 90% of recent home purchasers believed that a house is a good long-term investment. Almost 70% of respondents also said they felt that this is a good time to buy a home.

BMO economist Robert Kavcic said he's not surprised that consumers might feel this way. "We've seen house prices come down across the country, and mortgage rates are bouncing around record lows," he said. "The cost of having a home right now looks very low relative to the past five or six years."

If you are in a position to buy a house as an investment then now is the time to do so for all the same reasons.

Today headlines screamed "Edmonton Jobless rate a 12-year high" the jobless rate is almost double what it was last year this time at 6.6%. This is due to summer job seeking students and possibly an influx of new Albertans looking for work in what many think is the best place in Canada to get a job.

"The sharply rising labour market is a reflection that Alberta is still enjoying an inflow of interprovincial migrants. Canadians from other provinces are still regarding Alberta as one of the better places in the country to be looking for work." ATB Financial senior economist Todd Hirsch

However, this seemingly scary number is actually a recognized indicator that the recession may be coming to an end.

"The job market is a lagging indicator, and history tells us that the peak of job losses typically corresponds to the official end of a recession. Judging by that, we are increasingly hopeful that Canada and Alberta have already turned the corner on this nasty recession."

It's interesting to note that although Alberta's jobless rate is at a 12-year high it is still the third lowest in Canada. Proving that it's all how you look at it.

Highway Improvements to Create Jobs in Alberta - "Stimulating our economy and keeping people working during these tough economic times is a top priority for our Government," said Minister Merrifield. "The strong relationship between our two governments enables us to work together to help Alberta communities remain competitive and prosperous, while contributing to the long-term economic growth of our country."

"Our Government is fulfilling the commitments we made in Canada's Economic Action Plan," said Minister Ambrose. "By investing in roads and highways, we will help give our economy the boost it needs, while also creating opportunities to keep Albertans working throughout these difficult times."

Another reason why Alberta is the place to invest for the long term. Systematic building of infrastructure to prepare for the next upswing of the economy.

End is at hand for downturn: Expert- Hype over the economic meltdown has inspired unnecessary panic, as recessions are part of the ebb and flow of a healthy economy, chamber president Martin Salloum said, adding that speculation among members indicates the downturn will reach cessation within 18 months.

“Edmonton’s economy is diverse enough to weather the storm,” he told Metro, adding that proof of the Alberta advantage is omnipresent.

The biggest misconception, Salloum said, is that oil is Edmonton’s economic lifeblood.

“We’re not just a one-trick pony,” he said. “We’re much more diverse than people think.”

Alberta was the first province to experience the economic down-turn and is showing signs of being the first to come out of it. The economy is strong and diverse enough all we have to do is wait for demand to increase and Edmonton will go off.

Home sales reverse course - The number of resale homes sold through MLS in May rose 18.7 per cent over the same month last year, said the Realtors Association of Edmonton on Tuesday.

It's the second straight month of year-over-year increases in Edmonton-region home sales. April's residential sales were up 1.1 per cent over the previous month.

It follows six consecutive months --from October to March--when sales were down between three and 40.5 per cent from the year before.

Association president Charlie Ponde said the two-month turnaround, along with monthly sales increases since January, show the market is recovering, although some of the increase may be seasonal. "Now it has shown that it looks like a trend,"Ponde said.

Down-turn or not people still need a place to live and there are still a lot of jobs to be filled in Edmonton; new employees need a place to live - rent or buy.

Alberta cities score high on economy - Cowtown is Wowtown but Edmonton isn't far behind, says a report released yesterday that gave Calgary a top-of-the-class grade on a global scorecard for overall economic prosperity.

Calgary was the lone metropolis in a survey of international commerce heavyweights to earn an A grade in the Calgary Economic Development-commissioned Conference Board of Canada report.

Edmonton was third. Dallas was sandwiched at second between Alberta's two major centres in the 23-city ranking.

Such results aren't surprising for Calgary, which accounts for 5% of national gross domestic product, despite a local economy cooled by the recession, said Cowtown Mayor Dave Bronconnier.
Edmonton has the same potential as Calgary but with lower house prices and higher affordability. We know where Calgary is economically with Edmonton following you are going to get great returns on housing investments. Buying now with the incredible rates and soft prices is like being at the sale of the decade.

Don R. Campbell, Canadian real estate expert, investor, bestselling author and mentor, answers real estate questions on CBC Saskatchewan. Get almost 50 minutes of Q&A with Canada's leading real estate dude!

Click here *requires RealPlayer