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http://finance.yahoo.com/news/canadian-baby-boomers-stand-inherit-100000876.html TORONTO, June 6, 2016 /CNW/ - Baby boomers in Canada will inherit an estimated $750 billion over the next decade in the country's largest-ever transfer of wealth, one that is expected to alter the retirement landscape and have potentially significant economic impacts, finds a new CIBC Capital Markets report. Canada currently has just over 2.5 million people over the age of 75, of which close to 45 per cent are widowed, the report says. The number of elderly people in Canada today represents a 25 per cent jump over the level seen a decade ago. "We estimate that the coming decade will see close to $750 billion exchanging hands, almost 50 per cent more than the estimated amount of inheritance received over the past decade," says Benjamin Tal, Deputy Chief Economist, CIBC Capital Markets, who authored the report The Looming Bequest Boom – What Should We Expect? "The transfer is estimated to boost the asset position of Canadians 50-75 years old by no less than 20 per cent." There will be even more Canadians aged 75+ in the next decade, who will not only be the largest cohort of that age group on record, but also wealthiest, with an estimated total net worth north of $900 billion. He expects this shift in wealth, coming when boomers themselves are approaching retirement age, can potentially impact Canada's retirement landscape as well as many facets of the economy, including labour force participation, the real estate markets and transform income inequality into wealth inequality. -
http://instagram.com/oldmontreal Old Montreal: Preparations are made for the Bonsecours Market's "new" $621,700 dome to be lifted into place in this photo from 1977. The original dome 130 year-old dome had been gutted by fire. For more from The Gazette archives, or to follow our @OldMontreal Instagram account, visit: http://bit.ly/OldMTL
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(Courtesy of the Financial Post) Congrats to the National Bank of Canada. Singapore supposedly like the new Switzerland.
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(Courtesy of The Financial Post) Courtesy of The Economist (Courtesy of the Business Insider) -
(Courtesy of The Globe and Mail)
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China’s Stock Market Passes US as Leading Indicator Published: Wednesday, 4 Aug 2010 | 12:43 PM ET By: John Melloy Executive Producer, Fast Money China may be the second biggest economy in the world behind the US, but it is No. 1 in terms of influence over global stock markets, analysts said. “The Chinese equity market has shown signs of ‘leading’ global equity markets at turning points over the past three years,” wrote Geoffrey Dennis, Citigroup’s emerging markets strategist. “As a result, the 13 percent rally in the Shanghai Composite since early-July has been a major support for improved overall global sentiment over the past month.” It’s only natural China’s stock market would take a leading role following structural changes such as a jump in listings and the allowance of short sales. After all, the economic influence speaks for itself. Among other things, China is the biggest consumer of energy products, accounts for 70 percent of iron ore demand, and in 2009, became the No. 1 auto market, according to analysts’ reports. The Shanghai Composite Index has led the US market back from its 2010 low. It’s no coincidence that the leading US stocks during this comeback have come from the stocks in the industrial and raw material industries such as Caterpillar [CAT 71.56 -0.40 (-0.56%) ] and Freeport-McMoRan [FCX 74.61 0.54 (+0.73%) ]. Ford [F 13.04 0.06 (+0.46%) ] shares are up 30 percent in one month. “China’s rapid growth in auto sales is merely a reflection of the rise of middle class consumption patterns,” wrote Marshall Adkins, Raymond James energy analyst. “Add in increasing Chinese trucking, petrochemical and aviation consumption, and total Chinese oil demand growth in 2011 should be well north of 500,000 barrels per day and could drive over half of the global oil demand growth next year.” It’s no coincidence then that oil topped $80 this week before retreating today. The iShares FTSE/Xinhua China 25 Index [FXI 41.95 -0.08 (-0.19%) ], an ETF traded here on the NYSE, is supposed to be a direct play on the Chinese market, but it has underperformed China’s local market over the past month. The ETF contains only the large Chinese stocks that are listed as ADRs on US exchanges. What this data shows is that you may be better off buying a US index fund, industrial stocks or a broader emerging market ETF if you believe China is going higher. Citigroup sees the Chinese stock market rising five to 15 percent higher by the end of the year as fears of an economic slowdown are priced in. "Based on a 'no double-dip' scenario, solid growth in emerging markets, low interest rates 'for longer' and attractive valuations, we remain bullish on emerging market for the long-term, including Chinese equities," wrote Citi's Dennis. The closing bell of the New York Stock Exchange used to ripple through the rest of the world, dictating trading in Australia, Asia and Europe that followed it. No longer. The US traders’ day may be decided before he or she even wakes up. http://www.cnbc.com/id/38558580
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(Courtesy of KDVR Fox 31) The previous topic was written by a woman from here but was published from the Globe and Mail. I found that out when I did some research on the writer.
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Vacancy rates keep rising in third quarter for Canada's commercial real estate sector, report shows (CP) – 44 minutes ago TORONTO — The amount of empty office space across Canada continued to rise in the third quarter due to higher unemployment in white-collar industries and excess inventory in some cities, a new report shows. Vacancy rates for commercial real estate are expected to keep rising "well into 2010" as the country works through the impact of the recent recession, CB Richard Ellis Ltd. said in report released Monday. Vacancy rates rose for the third straight quarter to an average of 9.4 per cent, up from 6.3 per cent for the same time last year, said the real estate services firm. "Limited new job creation in Canada's 'white-collar' industries and the addition of new inventory in two of Canada's three largest office markets are cited as reasons for the increase," according to the National Office and Industrial Trends Third Quarter Report. Commercial vacancy rates rose most noticeably Calgary, Toronto and Vancouver, the report shows. Calgary's third quarter vacancy rate jumped to 13.1 per cent, from 4.7 per cent last year, due to the impacts of a slowdown in the oil and gas industry. "The city's oil and gas industry and commercial market remained inexorably linked, as players both large and small continue to recognize that even Calgary has not been immune to the country's new economic reality," the report states. In Toronto, the commercial vacancy rate rose to 9.1 per cent from 6.6 per cent last year. The vacancy rate in downtown Toronto is expected to climb further in the coming quarter as space becomes available in newly constructed office towers. In Vancouver, vacancy rates climbed to 8.9 per cent from 5.4 per cent for the same time last year. The report said Vancouver is one of the more stable markets in the country thanks to limited new development. Montreal's vacancy rate rose to 10.3 per cent from 8.3 per cent last year, while Halifax's rose to 10.2 per cent from 8.4 per cent. Vacancy rates also rose in the country's smaller office markets, specifically in suburban areas, but at a lesser rate, the report shows. It said cities with government office space also saw more stability in their commercial real estate markets. Ottawa had the lowest overall third quarter vacancy rate in the country of 5.8 per cent compared to five per cent for the same time last year, while Winnipeg's rate came in at 7.5 per cent up from 4.8 per cent last year. The overall vacancy rate in the Waterloo Region, home to such technology firms as Research in Motion (TSX:RIM), edged up slightly to 6.7 per cent from 6.4 per cent last year. The report predicts vacancy rates to keep rising in the fourth quarter and into 2010, "as Canada continues to grind its way out of the recession."
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Calgary : Global credit crunch could affect 'The Bow'
un sujet a posté ErickMontreal dans L'actualité
H&R REIT hits a roadblock with The Bow LORI MCLEOD November 14, 2008 When H&R Real Estate Investment Trust signed on as the owner and developer of EnCana Corp.'s new head office in Calgary last year, the deal marked a milestone. At the peak of the real estate boom in February, 2007, the handshake between the natural gas producer and the real estate developer set in motion the creation of a unique, crescent-shaped skyscraper which is set to become the tallest office tower west of Toronto. At the time it was announced the project known as The Bow, became a symbol of Calgary's coming of age as a Canadian financial powerhouse in the midst of the commodities boom. Almost two years later, times have changed and the development that was to become H&R's crown jewel has hit a funding wall. "At present there are no financing arrangements in place on any of the REIT's development projects, and the current difficult economic conditions have impacted H&R's financing strategy," the trust said late yesterday in a release of its third-quarter financial results. The trust said it is considering selling assets, including The Bow, to address its funding challenges. So far, attempts to find an investor for the project have failed and are unlikely to succeed until H&R moves further along with its financing and construction efforts, said Neil Downey, analyst at RBC Dominion Securities Inc. H&R's biggest problem has been the seizure of the credit markets, which happened swiftly, unexpectedly, and before it secured a construction loan for The Bow, said Dennis Mitchell, portfolio manager at Sentry Select Capital. Labour and materials costs are rising, and the cost of the project has risen from $1.1-billion to $1.4-billion. Adding to the pain is the downturn in the financial and commodities markets, which is sending office vacancy rates up and real estate values down. While the large scale of The Bow was a bit concerning, in "heady" times it was an exciting project, Mr. Mitchell said. "In February of 2007 you were essentially in the peak of the market. You were talking about [real estate firm] Equity Office Properties being purchased in a bidding war. You had people talking about a wall of capital coming into the markets. It was a pretty heady time," said Mr. Mitchell, whose firm recently sold nearly all of the 55 million H&R shares it owned. His view in February, 2007, was that H&R would be able to sell a 50-per-cent stake in the project at a gain in about six months. As the project proceeds, over budget and in need of $1.1-billion in funding, H&R is facing some tough choices, Mr. Downey said. While it was not mentioned as an option by H&R, Mr. Downey has raised the possibility of a distribution cut of up to 50 per cent, starting in 2009 and continuing until the project is completed in 2011, he said. "This would be a Draconian move by REIT standards," he added. However, it would provide H&R with an additional $300-million in capital, which should be enough to make up the financial shortfall if it can secure a $500-million construction loan, he said. -
NEW YORK (CNNMoney.com) -- Real estate values around the nation have collapsed, and sales of foreclosed and "underwater" homes now dominate many housing markets, according to a report released Tuesday. The report, from Zillow.com, a real estate Web site, revealed that with foreclosures soaring, nearly 20% of the nation's home sales in 2008 were of bank-repossessed properties. Another 11% were short sales, in which homeowners owed more in mortgage debt than their homes were worth. Madera, Calif., had the highest percentage of these distressed sales: 54.6% of all transactions there were foreclosed homes, and another 3.4% were short sales. In Merced, Calif., 53.4% of sales were foreclosures and 4.8% were short sales. In nearby Stockton, 51.1% were foreclosures and 5.4% were short sales. "As more markets turn down and markets that were already down go deeper, the pace at which value is being erased from the U.S. housing stock is rapidly increasing," said Stan Humphries, Zillow's vice president in charge of data and analytics. "More value [was] wiped out in the fourth quarter of 2008 than was eliminated in all of 2007," Humphries said. About $3.3 trillion in home equity was erased in 2008, with $1.4 trillion of that wipeout coming in the fourth quarter alone, according to Humphries. More than $6 trillion in value has been lost since the market peaked in 2005. Those equity losses have put many homeowners underwater, where they're extremely vulnerable to foreclosure. These owners can't tap home equity for the cash they need to pay bills when they run into rough financial patches, and they often find it impossible to refinance - lenders will not loan more than the property is worth. In the United States, 17.6% of all homes are now underwater, according to Zillow, as are 41.2% of all mortgages for homes bought in the past five years. The worst-hit cities are in the once-booming Sun Belt. In Las Vegas, 61.4% of all homes are underwater. Because so many homes are worth less than their mortgage balances, an increasing number have to be sold short. But short sale transactions can take a long time to complete, because lenders have been having trouble keeping up with the flood of requests. "The speed of short sales is a function of the resources being allocated to them by lenders, and those resources are being stretched to the limit," Humphries said. That means lenders may not act on approving short sales for months. The deals cannot go forward without their approval, because the banks must agree to forgive the difference between what they're owed and what the sale brings in. As the time it takes to arrange short sales lengthens, they become harder to complete. Time and money wasted One example of how price declines can doom a short sale occurred recently in Phoenix. Curtis Johnson, a real estate broker there, worked with a health care worker whose hours were being cut and who could no longer afford her mortgage. She fell behind and decided to sell. Johnson was able to find a buyer willing to pay $183,000, and got an approval form the lender. The owner confidently moved out, got a new place and started a new life. But the lender folded and the mortgage went to a new servicer, who took six weeks to approve the deal. "Unfortunately, the buyers who were approved were no longer interested because the real estate market had dropped significantly," Johnson said. "They wrote a new offer, considerably lower then the first, and it was time to start over." Two more offers eventually fell through before a new buyer was found and the owner's bank approved the price, this time at $163,000. On the day of that closing, however, the parties discovered that the buyer's lender had run out of funds and dropped out of the deal. The home went to foreclosure auction before another sale could be arranged. The house is now on the market for $139,900. "[The house is] listed for less than what would have been received had the bank been willing to work with us, and still has not yet sold," Johnson said. Distressed sales like that depress the market for all homeowners. Regular sellers in cities dominated by foreclosures have to adjust their prices downward to compete. The percentage of homes sold for less than what their owners originally paid has leaped up in the past couple of years. In the United States as a whole, 34.6% of the sales made in 2008 were done at a loss. In Merced, 71.6% of all sales last year were for less than the seller paid. Stockton, Modesto and Las Vegas all had in excess of 68% of all homes being sold at a loss. Foreclosures beget more foreclosures by adding inventory to the market, which depresses prices, which increases foreclosures, according to Humphries.
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Metal prices fall further than during Great Depression The price of key industrial metals has fallen further over the last four months than occurred during the worst years of Great Depression between 1929 and 1933, according to research by Barclays Capital. By Ambrose Evans-Pritchard Last Updated: 7:29AM GMT 03 Dec 2008 Kevin Norrish, the bank's commodities strategist, said the average fall in the price of copper, lead, and zinc has been roughly 60pc since the peak in July this year. All three metals were traded on the London Metal Exchange in the inter-war years so it is possible to make a comparison. Prices for the three metals fell 40pc from their highs in 1929 before touching bottom in 1933, with the bulk of the fall in 1930 as the slump spread worldwide. "Lead and zinc have already lost more than they did in the 1930s," he said. Copper was hit hardest during the Depression, despite the electrification drive in the US and the Soviet Union, falling 70pc at one stage before creeping back in the mid-1930s. The reason was an 85pc fall in US construction, then the biggest user of the metal. Barclays Capital said the broader equity markets are already discounting the sorts of "savage declines" in corporate profits that were last seen in the Slump. It said (trailing) price to earnings ratios are actually lower now than they were the early 1930s, with moves in credit spreads that suggest investors are anticipating depression-era levels of economic contraction. The credit markets continued to exhibit signs of extreme stress yesterday. The iTraxx Crossover index measuring default risk on low-grade European bonds punched above 950 for the first time. The investment grade index hit 188. The spreads are now flashing the sort of danger signals seen before the collapse of Lehman Brothers in September. Each episode of the financial crisis over the last eighteen months has been preceded by a big jump in the iTraxx indexes.
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Ottawa boosts mortgage buyout by $50B Eoin Callan, Canwest News Service Published: Wednesday, November 12 TORONTO - After a sustained lobbying campaign by Bay Street executives that culminated in a breakfast meeting with senior government officials in Toronto Wednesday, Ottawa agreed to the most pressing demands of Canadian banks squeezed by the credit crisis. "We had asked for four things and we got all four," Don Drummond, a senior vice-president at TD Bank Financial Group, said after Ottawa unveiled co-ordinated measures to buy up to $75-billion worth of mortgages, facilitate access to capital markets, provide extra liquidity and loosen reserve requirements. Jim Flaherty, the Finance Minister, said the moves meant Canada was making good on a pledge he made during talks with his international counterparts to collectively bolster the banking system ahead of a summit on the financial crisis this weekend in Washington. The actions were a sign of the "commitment" of Ottawa to ensure the country's financial system remained strong, said Gerry McCaughey, chief executive of Canadian Imperial Bank of Commerce, which, along with TD, is thought to be among the main beneficiaries of new looser rules on minimum capital requirements. But executives who participated in the process cautioned state interventions to ease the credit crisis had proven to be more art than science, as the United States Wednesday ditched an earlier plan to buy up toxic assets at the same time Ottawa was expanding its own scheme to buy mortgage-backed securities by $50 billion. Executives said it remains to be seen if the interventions finalized at Wednesday morning's meeting would succeed in lowering the premium banks pay for medium-term financing, which is about five times higher than before the credit crisis. In a bid to ease funding pressures, executives persuaded the Conservatives to reduce to 1.1 per cent from 1.6 per cent the fee to be charged if banks invoke a special new government guarantee when they borrow money in international capital markets. Banks argued the previous higher rate had actually encouraged lenders to nudge up the premium they were charging banks at a time when other countries were offering more generous terms. The Finance Minister said he would resist new global initiatives that might put Canadian institutions at a competitive disadvantage during the weekend summit in Washington. But he said Ottawa's ability to influence the outcome was being undermined by the absence of a federal securities regulator in Canada, which is alone among major industrialized nations in not having national oversight of financial markets. "It is difficult for us to go abroad and say governments should get their house in order when there is a glaring omission at home," he said. Flaherty said a key objective of the moves announced Wednesday was addressing "concerns about the availability of credit" for business borrowers, adding that "the government stands ready to take whatever further actions are necessary to keep Canada's financial system strong among external risks." The Bank of Canada also said it would boost the availability of affordable credit in the banking system by $8 billion, using new rules that mean institutions can bid for cash using almost any form of collateral. Banks also welcomed a move late Tuesday by the Office of the Superintendent of Financial Institutions to allow them to top up their capital reserves with securities that are a hybrid of debt and equity. The regulator clarified Wednesday that a related measure on treatment of money lent by banks to other financial institutions under the government guarantee of interbank lending "would have the effect" of "increasing their regulatory capital ratios, all else being equal", but would "not count as regulatory capital." Bank analysts said the interventions were positive for Canadian banks, but warned they would be squeezed further in the coming months as the global economic slowdown hit home and losses on bad loans mount. Ian de Verteuil, an analyst at BMO Capital Markets, cited as an example how falling demand for coal could by next year jeopardize more than $10 billion in bank loans made to finance the acquisition by Teck Cominco of Fording Canadian Coal Trust. Royal Bank of Canada, Bank of Montreal and CIBC each have about $1 billion in exposures, while TD and Scotiabank each have $400 million of exposures to the deal, which the companies expect will be viable. But bank executives remained bullish Wednesday, with TD chief executive Ed Clark saying he was still on the hunt for U.S. acquisitions.
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Montreal's BPR buys France's Saunier Engineering firm boosts international presence The Gazette Published: 9 hours ago Montreal's BPR engineering group is boosting its international presence with the acquisition of France's Saunier & Associés, a Paris-based firm specializing in energy and environmental work and building design. The merged company will have annual revenue of about $250 million and a staff of 2,400 in North America, Europe, South Africa and the Caribbean, chief executive Pierre Lavallée said yesterday. "This deal opens up the French and European markets to BPR and allows Saunier to market its specialized engineering services in Quebec, across Canada and in the U.S.," he added. BPR, which began 47 years ago in Quebec City with three engineers, grew steadily into a design, engineering, procurement and construction management firm. It moved its headquarters and main operations to Montreal in 2000, while retaining its offices in Quebec City and the Saguenay and taking on projects in Ontario and the U.S. Lavallée said BPR's focus is on heavy industry, mining, metals and petrochemicals, water, waste management, roads, bridges and other infrastructure, hydro and nuclear energy, and office buildings. "We're involved in the upgrading of Petro-Canada's Montreal refinery and Ultramar Canada's Quebec City refinery to produce the new low-sulphur diesel fuels," he said. "One of our strengths is instrumentation for industry." Saunier will add specialized skills in the energy and environmental sectors, such as the transfer of heat generated from waste processing to serve buildings, and other technologies for industry and municipal infrastructure. It has 19 offices across France. "We got to know each other when we were working on a massive waste water management upgrade in Paris," Lavallée said. "We were responsible for the design and were strangers in France. Now Saunier's technologies, experience and consulting skills can be applied here ... we'll both benefit from the synergies stemming from our alliance." CEO Bernard Saunier said the merger will provide Saunier with access to new markets and new opportunities for its engineers and technicians. "The alliance comes just at the right moment and it will help us accelerate our development, especially in energy."
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Europe Works to Contain Crisis Article Tools Sponsored By NYC Times By CARTER DOUGHERTY, NELSON SCHWARTZ and FLOYD NORRIS Published: October 6, 2008 European nations scrambled further Monday to prevent a growing credit crisis from bringing down major banks and alarming savers as Sweden followed Germany, Austria and Denmark in offering new protections for bank deposits. As troubles in financial markets spread around the world, some governments are eager to act to avoid the mistakes of the 1930s when authorities sat on their hands during the Wall Street crash and its aftermath, Julian Chillingworth, chief investment officer at Rathbone Unit Trust Management in London, said. Sweden became the latest European country to offer protection for bank deposits, after the German government offered blanket guarantees Sunday to all private savings accounts. Austria and Denmark also did the same. Britain’s government on Monday scrambled to find ways to help the country’s ailing banking sector and even considered a partial nationalization of the industry. The chancellor of the Exchequer, Alistair Darling, continued to consult with advisers on Monday on ways to stabilize the banking sector, which may include a recapitalization financed by taxpayers, said a person at the Treasury who declined to be identified because the discussions were private. Stocks fell sharply on Monday in London, Paris and Frankfurt. New bailouts were arranged late Sunday for two European companies, Hypo Real Estate, a large German mortgage lender, and Fortis, a large banking and insurance company based in Belgium but active across much of the Continent. Under the agreement, BNP Paribas will acquire the Belgium and Luxembourg banking operations of Fortis for about $20 billion. The spreading worries came days after the United States Congress approved a $700 billion bailout package that officials had hoped would calm financial markets globally. The crisis in Europe appears to be the most serious one to face the Continent since a common currency, the euro, was created in 1999. Jean Pisani-Ferry, director of the Bruegel research group in Brussels, said Europe confronted “our first real financial crisis, and it’s not just any crisis. It’s a big one.” Britain is coming under increasing pressure to act. Some investors criticized the government for failing to set up an American-style rescue fund and for its piecemeal approach to deal with each problem. “The government needs to get on their front foot and get control of their own destiny,” Mr. Chillingworth said. “We could well be in a period where we see a quasi-nationalization in the banking sector, where taxpayers are taking equity stakes.” Britain partly nationalized Bradford & Bingley last week after the mortgage lender struggled to get financing and brokered a takeover of HBOS by Lloyds TSB after its shares lost most of its value. From Tuesday, the government will also increase the amount of retail deposits it guarantees to £50,000, or $88,600, from £35,000. Some analysts said guaranteeing deposits might reinstate client confidence but would fall short of bringing back the trust among banks that is desperately needed to encourage them to lend to each other. British banks remain burdened by their exposure to worthless mortgage assets, but the larger problem remains their unwillingness to lend to one another — even after an injection of £40 billion by the Bank of England. “Liquidity is drying up,” said Richard Portes, a professor of economics at the London Business School. “The authorities have to deal with this paralysis in the money markets.” The European Central Bank has aggressively lent money to banks as the crisis has grown. It had resisted lowering interest rates, but signaled on Thursday that it might cut rates soon. The extra money, aimed at ensuring that banks have adequate access to cash, has not reassured savers or investors, and European stock markets have performed even worse than the American markets. In Iceland, government officials and banking chiefs were discussing a possible rescue plan for the country’s commercial banks. In Berlin, Chancellor Angela Merkel and her finance minister, Peer Steinbrück, appeared on television Sunday to promise that all bank deposits would be protected, although it was not clear whether legislation would be needed to make that promise good. Mindful of the rising public anger at the use of public money to buttress the business of high-earning bankers, Ms. Merkel promised a day of reckoning for them as well. “We are also saying that those who engaged in irresponsible behavior will be held responsible,” she said. The events in Berlin and Brussels underscored the failure of Europe’s case-by-case approach to restoring confidence in the Continent’s increasingly jittery banking sector. A meeting of European heads of state in Paris on Saturday did little to calm worries, though officials there pledged to work together to ensure market stability. President Nicolas Sarkozy of France and his counterparts from Germany, Britain and Italy vowed to prevent a Lehman Brothers-like bankruptcy in Europe but they did not offer a sweeping American-style bailout package. The growing crisis has underlined the difficulty of taking concerted action in Europe because its economies are far more integrated than its governing structures. “We are not a political federation,” Jean-Claude Trichet, the president of the European Central Bank, said after the meeting. “We do not have a federal budget.” Last week, Ireland moved to guarantee both deposits and other liabilities at six major banks. There was grumbling in London and Berlin about the move giving those banks an unfair advantage. But Germany proposed its deposit guarantee Sunday after Britain raised its guarantee. The German officials emphasized that the guarantee applied only to private depositors, not to the banks themselves. But on Monday, Mr. Steinbrück said the government was considering an “umbrella” to protect the banking sector. Unlike in the United States, where deposits are now fully guaranteed up to a limit of $250,000 — a figure that was raised from $100,000 last week — deposits in most European countries have been only partly guaranteed, sometimes by groups of banks rather than governments. In Germany, the first 90 percent of deposits up to 20,000 euros, or about $27,000, was guaranteed. Even before the Paris meeting began it was becoming clear that two bailouts announced the week before had not succeeded and that UniCredit, a major Italian bank, might be in trouble. UniCredit announced plans on Sunday to raise as much as 6.6 billion euros. Fortis, which only a week ago received 11.2 billion euros from the governments of the Netherlands, Belgium and Luxembourg, was unable to continue its operations. On Friday, the Dutch government seized its operations in that country, and late Sunday night the Belgian government helped to arrange for BNP Paribas, the French bank, to take control of the company for 14.5 billion euros, or about $20 billion. In Berlin, the government arranged a week ago for major banks to lend 35 billion euros to Hypo Real Estate, but that fell apart when the banks concluded that far more money would be needed. Late Sunday night the government said a package of 50 billion euros had been arranged, with both the government and other banks taking part. The credit crisis began in the United States, a fact that has led European politicians to assert superiority for their countries’ financial systems, in contrast to what Silvio Berlusconi, the prime minister of Italy, called the “speculative capitalism” of the United States. On Saturday, Gordon Brown, the British prime minister, said the crisis “has come from America,” and Mr. Berlusconi bemoaned the lack of business ethics that had been exposed by the crisis. Many of the European banks’ problems have stemmed from bad loans in Europe, and Fortis got into trouble in part by borrowing money to make a major acquisition. But activities in the United States have played a role. Bankers said Sunday that the need for additional money at Hypo came from newly discovered guarantees it had issued to back American municipal bonds that it had sold to investors. The credit market worries came on top of heightening concerns about economic growth in Europe and the United States. “Unless there is a material easing of credit conditions,” said Bob Elliott of Bridgewater Associates, an American money management firm, after retail sales figures were announced, “it is unlikely that demand will turn around soon.” Henry M. Paulson Jr., the United States Treasury secretary, hoped that approval of the American bailout, which involved buying securities from banks at more than their current market value, would free up credit by making cash available for banks to lend and by reassuring participants in the credit markets. But that did not happen last week. Instead, credit grew more expensive and harder to get as investors became more skittish about buying commercial paper, essentially short-term loans to companies. Rates on such loans rose so fast that some feared the market could essentially close, leaving it to already-stressed banks to provide short-term corporate loans. Europe’s need to scramble is in part the legacy of a decision to establish the euro, which 15 countries now use, but not follow up with a parallel system of cross-border regulation and oversight of private banks. “First we had economic integration, then we had monetary integration,” said Sylvester Eijffinger, a member of the monetary expert panel advising the European Parliament. “But we never developed the parallel political and regulatory integration that would allow us to face a crisis like the one we are facing today.” In Brussels, Daniel Gros, director of the Center for European Policy Studies, agreed. “Maybe they will be shocked into thinking more strategically instead of running behind events,” he said. “The later you come, the higher the bill.” While the European Central Bank has power over interest rates and broader monetary policy, it was never granted parallel oversight of private banks, leaving that task to dozens of regulators across the Continent. This patchwork system includes national central banks in each of the euro zone’s 15 members and they still retain broad powers within their own borders, further complicating any regional approach to problem-solving. “The European banking landscape was transformed fairly recently,” Mr. Pisani-Ferry said. “When the euro was first introduced, the question of cross-border regulation didn’t really arise.” Optimists say one potential long-term benefit from the current turmoil is that it often takes a crisis to propel European integration forward. “Progress in Europe is usually the result of a crisis,” Mr. Eijffinger said. “This could be one of those rare moments in E.U. history.”
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Bank economists warn of something worse than recession for Canada
un sujet a posté ErickMontreal dans L'actualité
Bank economists warn of something worse than recession for Canada October 06, 2008 By David Friend, The Canadian Press Economists from Canada’s Big Five banks say they expect little or no growth in the near future and they warned today that the domestic economy’s current gloom will likely deepen into something worse than a recession. The word “recession” wouldn’t describe the deep structural problems affecting everything from the U.S. housing sector to the Canadian oil industry, said Bank of Nova Scotia chief economist Warren Jestin. “You have to invent a new word to describe what we’re in now,” he said after the banks presented their perspectives at the Economic Club today. “It’s being driven through the financial markets into the real economy. All of those things suggest that it’s entirely different than what you might expect from a typical recession.” In their most recent economics forecast, Scotiabank economists predict recessions for both the U.S. and Canada, economic slides that will require central bankers in both countries to cut interest rates by at least a full percentage point. All agree that a slide in commodity prices bodes ill for the Canadian economy, which is heavily dependent on the production and export of oil and gas, metals and minerals. Drops in oil and metals prices have hit the already teetering Toronto Stock Exchange hard. The TSX took an agonizing 1,200-point fall this morning before recovering somewhat to sit around 700 points in the red as oil dropped to trade around the $90 US mark. And Bank of Montreal economist Doug Porter said prices will continue to take a beating over the next year, dragging Western Canada’s formerly booming economy in particular down with them. “You’re going to be seeing Western Canada come back down to the rest of us with a thud, especially if commodity prices keep doing what they’ve done in the last three months,” he said. “It’s almost as if the markets are pricing in a much harder landing for commodity prices. I think that’s reasonable if you don’t get some thawing in the credit markets relatively soon.” Porter said the direction of Canada’s economy depends on whether the financial-sector troubles in the United States start to settle down. “At this point, if this kind of volatility keeps up, I think we’re looking at a much more serious downturn than the mild recession that most of us are talking about,” he said. “Over the next month, that’s what bears watching.” The cautious outlook was echoed by Don Drummond of TD Bank, who said the Canadian economy won’t see any growth until late 2009. Drummond told the Economic Club audience that even at that point there will be only a gradual recovery. “I think the credit system is going to be mucked up for quite some time, even if it improves somewhat,” he said. Jestin remained on the more optimistic side of the loonie’s direction, predicting that it will hold above the 90-cent threshold as it weathers the financial downturn. “I still think the fundamentals on the Canadian currency — those that initially drove it through parity and kept it quite strong by recent history — are largely intact,” he said, pointing out that Canada’s trade numbers still look favourable compared to many other developed countries. Craig Wright, chief economist at RBC Financial Group, held a more pessimistic view on the dollar, predicting it would slide “just under” 90 cents by the end of next year. The loonie was down 1.78 cents to 90.68 cents US this morning and closed slightly higher at 90.98 cents US. “For Canada, exports are going to be a continued challenge by weakness in the U.S., but we’re still relatively bullish on the Canadian economy,” he said. Porter told the audience that it’s tough to provide an accurate outlook on the economy given the unpredictability of capital markets. “Trying to do an economic forecast in this kind of turmoil is a bit like trying to put a value on your house while the kitchen is on fire,” he said. “You just don’t know how long the fire is going to go on for, or how much damage it’s going to do.” -
Prepare for home prices to drop Most Canadian housing markets overpriced, UBC study finds With Metro Vancouver past the peak of its current real-estate market cycle, more discussion is emerging about what the cycle's downside will look like. The latest discussion points lean towards a price correction in the double digits, with one study showing current Vancouver house prices overvalued by 11 per cent on a particular measure and an economist observing that prices are falling at a rate of 10 per cent or more this year. University of B.C. real-estate economist Tsur Somerville was lead author of a study that evaluated the cost to rent a detached, mid-market home in nine Canadian cities versus the cost to own, in order to find a balanced price. The study's conclusion was that in the second-quarter of this year, Metro Vancouver's house price, of $754,500, was 11 per cent higher than the balance point. However, that is less out of balance than Regina, Winnipeg, Ottawa and Montreal, which are 25 per cent out of equilibrium, considering prices and rents in those markets. Halifax house prices are 20 per cent out of balance. Titled Are Canadian Housing Markets Overpriced? the study observes that housing affordability is a severe problem in some Canadian cities, limiting the ability of markets to continue to rise. Calgary prices showed as being seven per cent higher than balance. Only Toronto showed prices in balance with rents, and Edmonton, which has already seen price declines, would need to see prices climb again by eight per cent to be in balance. "I was surprised the Vancouver number is as low as it was," Somerville, director of the centre for urban economics and real estate at the Sauder School of Business at UBC, said in an interview. He added that the rent-versus-own measure is a narrow observation that treats homes like a financial asset and does not take other measures of affordability or valuation into account. And what eventually happens in the Vancouver market, Somerville said, will depend on a host of variables ranging from changes in mortgage rates to changes in the long-term average appreciation of housing prices and economic conditions. "What you can identify is where the pressures are," Somerville added. "How the market plays out is very different." Prices do not have to fall for the market to correct, Somerville said. Prices can simply stagnate over a period of time, like Vancouver experienced through the mid-1990s until 2001. However, Somerville added that Vancouver has built new homes at a much higher rate than household formation in the city during the up-cycle, and the inventory of unsold homes in the market has ballooned rapidly, which make Vancouver more susceptible to price declines. "Those are two big warning signs," he said. Somerville said another unknown in the declining market is what the buyers of pre-sale condominiums that are now under construction will do once the units are complete. If a significant number of investor-buyers of those condominiums decide to sell them right away, that would put more downward pressure on prices. However, at this point there is little evidence of "calamity in the housing market," said Helmut Pastrick, chief economist for Central 1 Credit Union, formerly known as Credit Union Central B.C. Pastrick said the reversal in the housing market was caused because of affordability. Too many first-time buyers were squeezed out of the market for prices to rise higher. However, "it would take nastier economic conditions," such as a recession or sudden spike in mortgage rates to cause a more serious decline in Vancouver's markets, he said. Pastrick said Vancouver's housing price index has declined four per cent since its peak in February, and in his latest weekly economic briefing, he noted that prices are on pace to drop 10 to 15 per cent this year. "I think [the decline] will be closer to 10 per cent by the end of the year," Pastrick added in an interview. "And the [decline] will be at least 10 per cent from top to bottom [of the cycle]." The inventory of unsold homes, which had grown dramatically over the summer, dropped a bit in August and Pastrick expected that trend to continue over the next several months. At some point in 2009, he believes, the real estate market will find a new balance "and we could see housing prices tread water." "I'm not suggesting [prices will be] flat," he said. "There's going to be some movement, but it could be a period of time where prices don't make large moves up or down - perhaps plus or minus five per cent a year." Pastrick said significant numbers of first-time buyers will have to be able to afford to buy homes before the market swings back up. Recent declines in prices help that affordability factor, he said, but low interest rates and solid income growth will also be needed to put the market into its next upswing. "After going through this adjustment period, which I think will run its course next year," Pastrick said, "we could be in a period of a flat market" that could last through 2010 to 2012. http://www.canada.com/vancouversun/n...7-1a4e7666c4b2
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May 20, 2008 Lodging Econometrics Reports Canadian Construction Pipeline At a High in Q1 2008 with 265 Projects/33,964 Guestrooms The Pipeline Has Now Begun to Unfold in Earnest USA – Lodging Econometrics (LE), the Global Authority for Hotel Real Estate, announced that Canada’s Construction Pipeline totaled 265 projects and 33,964 guestrooms at the end of Q1 2008, a high for the cycle. Hotel construction in Canada has been solid. The total number of guestrooms in the Pipeline grew for an eighth consecutive quarter, and is up 14.2% year-over-year. All projects included in the LE Pipeline have dedicated land parcels, are being actively pursued by developers and have been verified by the brands. The total Pipeline appears to have reached its peak, as project and room counts have held steady for the past three quarters. Those to Start Construction in the Next 12 Months, 93 projects/11,649 rooms, and those in Early Planning, 83 projects/9,975 rooms, are at highs for the cycle. Meanwhile, the totals for Under Construction, 89 projects/12,340 rooms, are down from the cyclical peak established in Q2 2007.” Several Factors Have Developers Becoming Cautious Certain dynamics have aligned to cause developer caution. The Bank of Canada instituted three consecutive decreases to its key interest rate since December 2007, down a quarter-point in both December and January, then a further half-point in February, indicating concern about a slowing in the economy. Hotel operating statistics were strong in 2006 and 2007, however, a continued decline in visitors from the United States due to the low US Dollar, higher gasoline costs and reductions in discretionary spending, along with indications that domestic travel is apt to decline as well, mean that guestroom demand is likely to soften moving forward. With these emerging concerns, it appears that hotel developers are taking a cautious approach for the moment. The number of New Projects announced into the Pipeline, 15 projects/2,038 rooms in Q1 2008, represents a 58.3% decrease from Q4 2007 for both projects and rooms. It is the smallest count seen in over three years. Construction Starts for Q1 2008 totaled just 9 projects/1,329 guestrooms. Although first quarter Construction Starts are historically slower than the rest of the year, the counts for Q1 2008 are at a very low level. Projects already in the Pipeline are proceeding at a sluggish pace, with projects backlogged in the Scheduled Starts and Early Planning stages, suggesting that developers are more conservative and taking a wait-and-see approach. LE’s Forecast for New Hotel Openings LE’s Forecast for New Hotel Openings estimates that 82 projects having 9,554 rooms will come online in 2008, while 88 projects/10,807 rooms are slated for 2009, with 12,340 rooms already Under Construction. This represents a gross growth rate of 3.5% and 3.8%, respectively, before any guestrooms are removed from inventory. Net New Supply grew 2.0% in 2006 and 1.9% in 2007. Currently, The Pipeline, growing throughout the decade, is beginning to unfold just as demand is modestly starting to soften. Development is Concentrated in Key Markets Of the 33,964 rooms in the total Pipeline, only 16% of those rooms are full-service, with 57% in the select or limited service segments. Another 27% is currently designated as Independent. Approximately 70% of those rooms in the Independent segment will choose a brand prior to opening, mostly in the select and limited service category. The bulk of hotel development is in the Central and Western regions. Ontario leads the Central provinces in terms of pipeline counts, with 94 projects/14,072 rooms, while Quebec has 25 projects/3,800 rooms. In the Western Region, Alberta, with 61 projects/6,457 rooms, and British Columbia, with 44 projects/5,430 rooms, have the largest provincial pipelines. Ten markets have the significant share of the Pipeline. In these markets, there are 123 projects/18,902 rooms, or 56% of the total Pipeline. In Ontario, Toronto leads with 34 projects/5,946 rooms, with Niagara Falls second at 13 projects/3,013 rooms. In Quebec, Montreal’s pipeline stands at 11 projects/1,786 rooms. For the Western Region, Vancouver, at 19 projects/2,628 rooms, Edmonton, at 13 projects/1,526 rooms, and Calgary, at 10 projects/1,486 rooms have the largest pipelines. All other markets have six or fewer projects. Global Brands Lead the Way Global brands currently make up 72% of projects within the total Pipeline. InterContinental leads with 55 projects/5,626 rooms, with 40 Holiday Inn Express’ and 9 Holiday Inns. Marriott International has 28 projects/4,115 rooms under development, 15 of which are Residence Inn and Fairfield Inn properties. Hilton Hotels follows, with 24 projects/3,701 rooms, then Starwood Hotels & Resorts with 15 projects/3,021 rooms. Super 8 accounts for 31 projects/2,184 rooms of Wyndham Worldwide’s total pipeline, most of which are being developed by master franchisor, Superior Lodging Corporation. It’s a Time of Transition After rapid growth mid-decade, the Construction Pipeline may be at its cyclical peak. The economy appears to be moderating and lodging demand slowing, yet New Openings flowing from the Pipeline will be accelerating throughout 2008 and 2009. Developers have sensed the economic transition and turned cautious, as both New Project Announcements and movement within the Pipeline are slowing. It’s early in the transition. More time will be required to assess trends for the near term. :thumbsup: :thumbsup: This info comes from http://www.lodgingintelligence.com/2008/Canada%201Q08/1Q08CanIndustry.htm
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Canada's housing boom is over, bank says VIRGINIA GALT Globe and Mail Update June 26, 2008 at 10:44 AM EDT After a long run of rapidly-rising prices, the Canadian housing market has cooled to the point that it is no longer a sellers' market, Toronto-Dominion Bank said Thursday. “The long-awaited end of the Canadian housing boom has occurred, reflecting more moderate demand and increased supply of properties for sale,” TD economists Craig Alexander and Pascal Gauthier said in a report. “The year-over-year price growth for existing homes in Canada's major markets fell to only 1.1 per cent in May, down from 8.6 per cent just four months earlier,” the TD economists wrote. “The trend has been broadly based, but is has been particularly sharp in some of the markets that had experienced the most dramatic price growth. Calgary and Edmonton home prices in April and May fell to below year-earlier levels.” The TD economists said they had expected the slowdown to occur before now, but “housing remained stronger for longer than we had anticipated, largely due to increased affordability through new financing options, such as no money down or extended amortization.” Regional economic strength related to the commodity boom also helped to fuel “unsustainably elevated home price growth in the west,” they wrote. Last month, the Canadian Real Estate Association reported that resale home listings across Canada rose by 17.7 per cent in April from a year earlier – pushing the number of home listings to the highest level on record. At the time, Bank of Montreal economist Douglas Porter noted: “For the first time in a long time, sellers are not in the drivers' seat any more. I'm not necessarily saying that buyers are in the drivers' seat either, but what we've seen truly is a return to a balanced market.” The TD economists concurred in their report Thursday. “Most of Canada's major housing markets have moved out of sellers' territory to more balanced markets.” Mr. Alexander and Mr. Gauthier forecast modest national average price growth of 2 per cent this year and 3.5 per cent in 2009, “down substantially from the 10 per cent annual pace of the last six years.” However, the Canadian housing market remains fundamentally strong, unlike the U.S. market, where the National Association of Realtors reported Thursday that median home prices continued to fall. The median price of an existing U.S. home sold in May was $208,600 (U.S), down 6.3 per cent from a year earlier – fallout from the subprime mortgage crisis. In Canada, the TD economists forecast an average existing home price of $313,300 (Canadian) in 2008, up 2 per cent from last year's average. Canadians, the TD economists said, are “cashing in, not foreclosing. “... It should be stressed that the rise in listings does not reflect homeowners of principal dwellings desperate to sell, and this is the dominant difference between the Canadian and U.S. experience,” they wrote in their report, Canada's Housing Boom Comes to an End. “Indeed, the U.S. has been characterized by an abnormal rise in delinquencies and foreclosures or large negative equity positions. In Canada, speculators may be quickly dumping properties on the market to get out while the times are good, but individuals that have a principal dwelling are not under financial duress. “Canadian consumers are nowhere nearly as leveraged through their home equity as American consumers are.” Throughout the rest of this year and 2009, most regional housing markets in Canada “will see low to mid single-digit gains, but Saskatchewan and Manitoba will continue to post double-digit gains in the near term, followed by a significant cooling in 2009 – with the risk of a mild price correction in the major cities that have recently experienced extraordinary price growth,” the TD economists said. “Alberta will have further weakness in the near term, as Calgary and Edmonton will likely see prices continue to fall for another three or four quarters, dropping 8 per cent to 10 per cent from their peak, after which prices should stabilize and start rising at a low single-digit pace.” http://www.reportonbusiness.com/servlet/story/RTGAM.20080626.whousing0626/BNStory/Business/home
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Canada's housing market cools Home prices are still rising but much more slowly.Tyler Anderson/National PostHome prices are still rising but much more slowly. Resale price growth lowest in seven years Garry Marr, Financial Post Published: Friday, June 13, 2008 More On This Story TORONTO -- The Canadian real estate market is being flooded with homes, causing prices to start falling in some key markets, according to the Canadian Real Estate Association. The average price of a home sold last month in the country's top 25 markets was $337,071, an all-time record. But that record price was only up 1.1% from May, 2007 -- the smallest year-over-year increase in seven years. "The record number of new listings means more opportunities for buyers," said Gregory Klump. chief economist with CREA. "The resale housing market has evolved in just a few short months." CREA said there were 67,628 new units on the market in May, a 7% jump from last year. It was the second straight month that a record number of houses has gone on sale. The impact on prices is being felt most keenly in Alberta. The average price of a home sold in Calgary last month was $418,881, a 2.4% drop from a year ago. Edmonton sale prices averaged out at $340,499, down 4.8% from a year ago. Unit sales in both Alberta cities are also plummeting. Calgary homes sales were off 34.2% from a year ago while Edmonton sales were down 34.8% during the same period. The home sales are dropping across the country. CREA said on a national basis sales were off 16.9% in May from a year earlier.
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TSX Group looks to U.S. for next CEO Talks with ex-CBOT chief; risks backlash by overlooking former head of Montreal Exchange BOYD ERMAN From Wednesday's Globe and Mail May 28, 2008 at 4:10 AM EDT TSX Group Inc. [X-T] is close to hiring a U.S. executive to run the company now that the merger with Montreal Exchange Inc. is complete, passing over former MX head Luc Bertrand in a decision that's sure to be controversial in Quebec. Sources said TSX is in talks with Bernard Dan, former president and chief executive officer of the derivatives-focused Chicago Board of Trade, though a contract has yet to be signed. Mr. Dan lost his post at CBOT after the company's 2007 acquisition by Chicago Mercantile Exchange Holdings Inc. (CME). Mr. Bertrand, who built the Montreal Exchange into a force in derivatives, had been long viewed as the likely successor to Richard Nesbitt at the helm of TSX Group. Under the merger agreement, Mr. Bertrand was slated to be deputy CEO with Mr. Nesbitt in the top job, but those plans were thrown into flux when Mr. Nesbitt unexpectedly announced his resignation in January to become CEO at CIBC World Markets. A dark-horse candidate was Rik Parkhill, the head of the markets division at the TSX and one of the company's interim co-CEOs after Mr. Nesbitt's departure. Bernard Dan Both Mr. Parkhill and Mr. Bertrand were among the final candidates, but sources said the TSX board deadlocked over whether the CEO should come from TSX or MX and that contributed to the decision to go with an outside candidate. Passing over Mr. Bertrand may rekindle a controversy that arose last year even before the merger, when Quebec's Finance Minister said an early round of talks about a TSX-MX combination broke down because some on the TSX board weren't happy with the idea that a Montrealer might run the company. "Even though there were no guarantees that Luc would get the job, it's going to be perceived as a slap in the face," said Dundee Securities analyst John Aiken. That may lead to a backlash from Quebec investors, he said. Still, going with Mr. Dan may have some advantages, Mr. Aiken said. Whoever takes over TSX will have to know derivatives, because buying the MX gives the combined company dominating positions in that business as well as stock trading. Also, the TSX is facing a surge of new competition from alternative trading systems (ATS) for shares, a trend long established in the United States. "Canada with all the ATS's is going to more a U.S.-style exchange environment, and nobody domestically has seen that yet," Mr. Aiken said. "The question is how quickly will this individual adapt to the peculiarities of the Canadian market." TSX spokesman Steve Kee would not comment on the names of any candidates, and declined to confirm the talks with Mr. Dan. "The board process is not complete," Mr. Kee said. "We don't have a deal with any candidate." Mr. Kee said TSX plans to have the new CEO in place in time for the June 11 annual meeting. Previously, the company had a May 30 target. As head of CBOT from 2002 to 2007, Mr. Dan oversaw one of the biggest U.S. markets for agricultural and financial derivatives - contracts tied to price movements on everything from bonds to beef. He also won plaudits for CBOT's expertise with electronic trading, which helped to fuel the company's growth. Electronic trading is a focus at the TSX as the company rolls out its new system, known as Quantum, and tries to integrate the MX's Sola system. TSX GROUP (X) Close: $43.01, down 92¢ http://www.reportonbusiness.com/servlet/story/RTGAM.20080528.wrtsxceo28/BNStory/SpecialEvents2/home
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Je pense que ça va vous faire plaisir... LORI MCLEOD Globe and Mail Update April 16, 2008 at 1:43 PM EDT Montreal has edged ahead of midtown Manhattan to create an all-Canadian list of the top five office rental markets in North America in the first quarter of 2008, according to a study released Wednesday by real estate brokerage Cushman Wakefield & LePage. Canada's five largest cities had the lowest office vacancy rates of the 15 major leasing markets in North America in the first three months of the year, according to Cushman Wakefield's data. Downtown Montreal took fifth spot on the list with a vacancy rate of 5.8 per cent, but posted the largest year-over-year drop at 3.5 percentage points due to strong demand and a lack of new supply. This caused it to squeak by midtown Manhattan, the strongest market in the United States, with an office vacancy rate of 6 per cent. “Montreal has experienced years of virtual stagnation in the office leasing market. But slow and steady economic growth and a lack of new development over the past decade have transitioned Montreal from a tenant market to a landlord market,” Colum Bastable, president and chief executive officer of Cushman & Wakefield, said in a statement. At a vacancy rate of just 2.6 per cent, Vancouver had the tightest downtown office rental market of the 15 cities included in the study. This was followed by Calgary at 3.6 per cent, Toronto at 3.9 per cent, Ottawa at 4.1 per cent and Montreal at 5.8 per cent. The city with the highest downtown office vacancy rate was Dallas at 28.7 per cent, far greater than the next on the list, Los Angeles, at 13.5 per cent. The sharpest rise in vacancy rate occurred in Calgary, growing to 4.5 per cent in the first quarter from a low of 1.4 per cent in the same period of 2007. Vacancies remained tight in Class A downtown buildings in the city at a rate of just 1.8 per cent. Despite a weakening provincial economy and three new office towers under construction, Toronto's vacancy rates continue to decline, Mr. Bastable said. The study also measured vacancy rates in suburban areas, where Canada's market was again tighter than that of the U.S. Toronto's suburbs had the lowest vacancy rate of these markets in the first quarter at 7.2 per cent, followed by those of Calgary at 7.4 per cent, Ottawa at 7.5 per cent, Vancouver at 9.3 per cent and Montreal at 11.2 per cent. The suburbs of Dallas had the highest vacancy rate at 21.5 per cent, followed by those of central New Jersey at 20.3 per cent and Chicago at 19 per cent. “All of Canada's major markets are well positioned to weather an economic downturn. Years of conservative and prudent development, along with low interest rates, will work to keep supply and demand in relative equilibrium even as the economy and demand slacken,” Mr. Bastable said. source: http://www.theglobeandmail.com/servl...tory/Business/
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Ottawa sells buildings in $1.64B lease-back deal Aug 20, 2007 04:48 PM Canadian Press OTTAWA – The federal government has sold nine office properties to a Vancouver-based real-estate company for $1.64 billion, but will lease them back for the next 25 years. Larco Investments Ltd. made the purchase after what the government called "an extensive open, transparent and competitive process" involving properties in Vancouver, Edmonton, Calgary, Toronto, Ottawa and Montreal. Public Works Minister Michael Fortier says the government sought independent advice from Deutsche Bank before making the sale, concluding it is a fair deal for taxpayers, particularly since markets were favourable at the time. A government statement says the deal makes good sense because it transfers ownership risk for major capital costs to the private sector and ensures the buildings are properly maintained. It says the conditions of the leases are fair and stable, and Ottawa will maintain the right to name the buildings. Fortier says office space is a commodity and government does not need to own it to use it. The transaction increases the percentage of leased properties in the Public Works portfolio from to 47 per cent from 43.
