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Archive for May, 2011

May 31st, 2011

Window on the Market

Posted by Joan McGuigan
 The Importance of Tracking Consumer ConfidenceThe vitality of the residential real estate market is influenced by three main factors: 1) performance of the labour market; 2) changes in mortgage rates; and 3) consumer confidence. This last factor reflects consumers’ perceptions about current and future economic conditions. In Canada, the Conference Board of Canada publishes an index that measures these perceptions using a monthly survey among households from different provinces across the country. The survey consists of four questions regarding households’ views about the labour market, their personal finances and their feelings about making a major purchase. This last aspect is particularly relevant for forecasting the evolution of the real estate market, as households are asked to answer the following question: “In your opinion, is now a good time to make a major purchase, such as a home?” Here, we are interested in the proportion of households that responded affirmatively to this question. For example, in April 2011 (see the whole document)

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 Despite a Declining Market, Sales of Luxury Homes are Increasing in the Montréal Area Between January and April 2011, sales of single-family homes in the Montréal Metropolitan Area fell by 14 per cent compared to the same period last year. However, the number of homes sold for more than one million dollars increased by 13 per cent since the start of the year. There were 108 MLS® sales in this price range, including 97 on the Island of Montréal. This trend did not carry forward to the luxury condominium market, as the number of condominiums sold for more than $500,000 decreased by 4 per cent in the Montréal area in the first four months of the year, at 180 sales.

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 Côte-Nord: Announcement of the Largest Private Investment in Québec in More Than 12 YearsThe ArcelorMittal mining company announced on May 20 that it is investing $2.1 billion in the Côte-Nord area of the province. This is the largest private investment since the construction of the Alcan aluminum smelter in Saguenay, which began in 1998. Some 8,000 direct and indirect jobs will be created and several economic benefits are already being felt – and will continue being felt – mainly in Fermont and Port-Cartier, the two towns that will benefit the most from this investment. We can therefore expect a certain buoyancy in the real estate market in the coming years, particularly since housing is already a rarity in this area. Between 2005 and 2010, the median price of properties in the Sept-Rivières and Caniapiscau RCMs, where the towns of Fermont and Port-Cartier are located, increased by 64 per cent (to $155,750 in 2010), which is higher than the provincial increase for the same period (33 per cent) .

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 Affordability Decreases in Québec According to RBCAccording to the Royal Bank of Canada (RBC), housing affordability decreased slightly in Québec in the first quarter of 2011, due primarily to the increase in property prices. In the last two quarters of 2010, affordability had improved thanks to decreases in interest rates, but this was not the case in the first quarter of 2011. The RBC anticipates that increases in interest rates during the year may further increase the cost of homeownership and therefore slow buyer demand. The RBC’s housing affordability measure is based on the proportion of median income before taxes that a household wanting to become homeowners must devote to the mortgage, property taxes and other public services. In Québec, in the first quarter of 2011, this proportion was 35.6 per cent for a standard bungalow, 43.2 per cent for a standard two-storey home and 28.9 per cent for a standard condominium. Click here to read this study.

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 Many Canadians Buying Properties in the United StatesAccording to a study by the National Association of Realtors, Canadians were the most active foreign buyers on the U.S. residential real estate market for a fourth consecutive year. Canadians accounted for 23 per cent of property purchases made by foreigners in the United States in the period from April 2010 to March 2011. The Chinese came in second at 9 per cent. Canadian buyers were especially active in the states of Florida and Arizona. The strength of the Canadian dollar compared to the U.S. dollar, the affordability of properties and property value appreciation possibilities were the main reasons behind this phenomenon. To read this study, click here.

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 Canada‘s Inflation Rate Stayed High but Stable in April According to Statistics Canada, consumer prices rose by 3.3 per cent in Canada over the 12-month period ending April 2011, matching the increase recorded in the previous month. Note that the inflation rate increased from 2.2 per cent in February to 3.3 per cent in March 2011 to reach the highest rate since September 2008. Rising energy and food prices were the main contributors to price increases in April. Energy prices advanced 17.1 per cent during the 12 months to April 2011, particularly because of the 26.4 per cent increase in gasoline prices. Finally, Canadian consumers paid 3.7 per cent more for food in April 2011 compared to April 2010.

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 Main Economic Indicators – April 2011
 (1) Proportion of people who responded “Yes” to this question.
Note: Green arrows indicate good news and red arrows indicate bad news. The two arrows indicate stability.
Sources: Bank of Canada, Statistics Canada, Conference Board of Canada and CMHC.
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© 2011 Québec Federation of Real Estate Boards. All rights reserved.
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May 26th, 2011

Canada housing prices risk slide, report finds

Posted by Joan McGuigan
  • Article rank
  • 26 May 2011
  • The Gazette
  • Peter O’neIl Postmedia News euRoPe coRResPoNdeNt
  • ParIS – Canada’s housing market faces a risk of sliding prices, according to a report released Wednesday that warns the current global economic rebound from the 2008 crisis could falter.

    The Organization for Economic Co-operation and Development’s twice-a-year economic outlook report said the world economy is in an uneven recovery and confronting far more “downside” than “upside” risks.

    The negative risks include the possibility of an inflationary rise in oil and other commodity prices, a deeper slowdown in China’s economy, continued deficit problems and housing market weakness plaguing the United States and Japan, and mounting sovereign debt problems facing Europe.

    “A concer n is that, if downside risks interact, their cumulative impact could weaken the recovery significantly, possibly triggering stagflationary (high inflation in a stagnant economy) developments in some advanced economies,” Pier Carlo Padoan, the OECD’s deputy secretary-general and chief economist, said in his introduction to the report.

    “All this suggests that the global crisis may not be over yet.”

    The Canadian economy, which has consistently scored near the top of the class in OECD analyses since the 2008 crisis, is given a relatively rosy outlook.

    Canada’s “vigorous” rebound over the winter is expected to moderate in the near term due to the impact on global trade of the Japanese tsunami and nuclear disaster, combined with reduced spending from heavily indebted households dealing with softening housing markets.

    But the economy “will speed up again as unemployment recedes and the global recovery gains traction,” said the OECD, a Paris-based social and economic policy think-tank funded by 34 Western industrialized member countries, including Canada.

    Plans by Prime Minister Stephen Harper’s government to slash the deficit are expected to include a reduction in wages for publicsector workers, which will “weigh on household income,” the OECD said.

    Household debt, at a record 149 per cent of Canadians’ disposable income in late 2010, will also dampen consumer spending.

    The quiet satisfaction of watching real-estate values rise steadily is also expected to come to an end.

    Risks faced by the Canadian economy include fiscal belt-tightening in more indebted countries, especially the U.S., which could trim demand more than expected from Canada’s key trading partners.

    The OECD economists recommended that Bank of Canada governor Mark Carney’s “highly stimulative” policy of keeping interest rates at or near rock-bottom levels should end in order to preempt rising inflation.

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    May 26th, 2011

    Real-estate career now tougher, more costly

    Posted by Joan McGuigan
  • Article rank
  • 26 May 2011
  • Allison lAmpert alampert@
  • Preparatory courses, cost of exam both more difficult and expensive than in 2010

    At one time, recruiting new real-estate brokers in Quebec used to be as easy as waiting for a prospective agent to walk through the door.

    But higher fees and a tough new entrance exam stemming from a change last year in the law governing Quebec’s real-estate industry are turning new real-estate brokers into increasingly rare commodities, some agencies say.

    Fees have more t han doubled, discouraging parttime brokers from staying in the profession, agencies say, even as the success rate of the real estate licensing exam has plummeted from 78 per cent before the new law, to 42 per cent today.

    As a result, agencies are working harder and offering more incentives to lure recruits in a province that’s gaining the reputation of being the toughest place to become a real-estate broker in the country.

    “Before, franchise owners could just get interviews with prospective brokers,” said Dominic St-Pierre, director of Royal LePage Quebec. “This is not the case anymore. It (the new law) has discouraged people from becoming real estate brokers.”

    Lorraine Brien, owner of a Century 21 in Brossard, said she now offers goodies such as increased home staging services to brokers who join her agency.

    “We have to offer a lot more gifts now than before (to new recruits),” Brien said. “The negotiation period is much longer.”

    This week, Royal LePage and Via Capitale parent company Brookfield Real Estate Services Inc. reported a net organic attrition of 106 brokers during the first few months of the year, primarily from its Quebec network, following the introduction of the Real Estate Brokerage Act in May 2010.

    There are just more than 16,500 licensed regular and chartered real-estate brokers in the province, according to statistics from the Organisme d’Autoréglementation du Courtage Immobilier du Québec, or OACIQ, which applies the real estate law.

    The OACIQ couldn’t say how many licences were issued during the first few months of 2011.

    The number of licences has risen and dropped over the years, largely in a direct correlation with the amount of activity in the market, agencies say.

    “Every time the market is a sellers’ market, people think it’s easy to become a real-estate broker,” St-Pierre said.

    But the residential resale market, while not as strong as it was two years ago, is still considered to be a sellers’ market, St-Pierre said.

    OACIQ president and CEO Robert Nadeau said the organization is not trying to reduce the number of brokers in Quebec, but rather to improve the preparation of brokers working as real-estate professionals.

    “We cannot offer discount (real-estate) licences,” Nadeau said in an interview with The Gazette.

    “Some people would come out of the school and they didn’t know how to do a promise to purchase. There was a big weakness (with the old system).”

    The old exam offered before May 2010 was multiple choice and only three hours long, Nadeau explained. Candidates could fail certain sections but still pass the exam as long as they obtained a 70-per-cent grade overall.

    The new exam takes six hours and is based on a problem-solving approach, as opposed to multiple choice, Nadeau said. Test-takers must now pass all sections of the exam.

    The new exam is also more expensive to take – $500 compared to the old one at $188 – because the process of correcting it is more labour intensive, he said.

    But even the cost of preparatory courses to take the exam, students say, has soared from less than $1,000 before the new law to thousands of dollars now, the amount depending on the college offering the necessary courses.

    Part of the challenge for students is that the colleges are adapting to the new exam, including the preparation of new pedagogical materials.

    “The colleges are also adjusting,” Nadeau said.

    He doesn’t see the exam as a barrier to becoming a realestate broker in Quebec, he said.

    “I think that a lot of people underestimated it (the new exam),” he said.

    “The people who were serious and worked hard passed the exams.”

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    May 18th, 2011

    The MSO in New York: fast, stunning and ‘in the zone’

    Posted by Joan McGuigan
  • Article rank
  • 16 May 2011
  • The Gazette
  • NEW YoRK – What do you wear to Carnegie Hall? I tried a sporty brown jacket and open collar on Saturday night because Kent Nagano and the Montreal Symphony Orchestra were closing the Spring for Music Festival, a series aimed at cultivating a new, young public with oddball programming and $25 seats.

    Imagine my surprise to discover a Carnegie crowd that looked pretty much like any other, apart from about 150 visiting Montrealers who were spinning purple MSO hankies in the air like towels at a Canadiens game.

    This was, in many respects, the oddest of the 25 concerts given by the MSO in this hallowed temple. Certainly, it was the least economically viable. Even with most of the 2,804 seats sold, the gate could not have been much north of $65,000. (Heck, I got that on me.)

    Never before has a DJ from the classical radio station WQXR warmed up the crowd. Never has a former premier of Quebec (introduced as Looshen Bouchard) provided a keynote address.

    Then there was the strange program, starting with two sonorous Gabrieli brass Canzonas, Webern’s braincramping Symphony Op. 21 and Stravinsky’s asymmetrical Symphonies of Wind Instruments, all broken up by conciliatory solo Bach Sinfonias played with drawing-room elegance on a Fazioli piano by Angela Hewitt.

    Yes, yes: very interesting. But the true novelty of the evening was Beethoven’s Fifth Symphony, perhaps the last score a New Yorker would expect to hear from the for merly French-flavoured MSO.

    Well, bingo. As hot as the iconic masterpiece sounded in Place des Arts last week, this performance was hotter. The pace was fast, the voltage was high, and the execution was stunning.

    Acoustics? Oh la la. Strings, even with vibrato limited to meet historical demands, sounded warm and urgent.

    The mix with the sturdy brass was natural. Oboist Ted Baskin filled the room with sweet loneliness. Is this how our orchestra will sound every week, starting in September?

    Nagano was an inspirational figure on the podium, his gestures ranging from heroic to minimal.

    The symbiosis of conductor and orchestra was complete. As my guest for the evening succinctly observed: “They seem to be in the zone.” Musicians concurred. “A lot of concepts are starting to cement,” violinist Marc Béliveau said outside the stage door, where a party atmosphere prevailed. “It’s really a different style from what we did before.”

    The public, domestic and imported, rewarded the Beethoven with a thunderous ovation.

    We did not need the encores – Fauré’s Sicilienne and Berlioz’s Le Corsaire – even if the latter was played very, very well.

    Forget Webern and the Evolution of the Symphony. The real point of the night was the Fifth. The MSO a Beethoven band? You

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    May 18th, 2011

    Homage to Katie Malloch

    Posted by Joan McGuigan
  • Article rank
  • 16 May 2011
  • The Gazette
  • SuSan Schwartz on simplicity
  • The best things in life are simple and unadorned

    “I have gradually been divesting myself of things I don’t absolutely love.” 

    It was close to 10 as I drove home, the CBC’s Tonic on the radio, when one of my favourite Irving Berlin songs came on: What’ll I Do? It’s a haunting ballad of longing and heartbreak – “What’ll I do with just a photograph/To tell my troubles to?” – but this was an instrumental version, unembellished by lyrics. 

    The song ended, Katie Malloch’s mellifluous voice came back on the air, and she described the song with what I thought was the perfect word: unadorned. 

    I like things that are unadorned: simple food and understated clothing, spare prose and rooms that are comfortable but never showy. I didn’t always like restrained, though: for a long time, my tastes ran to the busy and the flashy. I was given to end tables cluttered with framed photographs and elaborate dinner parties with too many courses, to matched outfits and convoluted novels. 

    Credit my increasing dislike of excess and a growing determination to tread upon this Earth with as light a footprint as I can manage, but I have come to believe that less is more. “Simplicity is making the journey of this life with just baggage enough,” wrote Charles Dudley Warner, a 19th-century American essayist and novelist. 

    For a time I amassed things with enthusiasm – tableware was a particular weakness – but no longer. I have gradually been divesting myself of things I don’t absolutely love; I rarely buy anything these days and, when I do, it’s not without giving something away in its place. There’s way less to display – and dust. 

    The notion of less being more is often associated with Ludwig Mies van der Rohe, a proponent of simplicity of style – although he was a founder of modern architecture and my tastes run to the salvaged, the shabby and the worn. I like the patina age gives home furnishings. 

    Reading Fifi O’Neill’s Romantic Prairie Style (Cico Books), filled with wonderful photographs by Mark Lohman, I was all set to move into any one of the farmhouses she described. I loved their easy comfort. One of them, in northern California, is inhabited by Maria Carr, who grew up on a diary farm in Montana, her husband, Thad, and their five children. The landscape is picturesque with meadows and 200-year-old towns, and the home’s interior is decorated with rustic furnishings paired with vintage linens. 

    Carr said she likes fabrics with “irregularities and subtleties found in old French linens and European grain sacks.” With help from her mother and two sisters, they are made made into pillows, throws and table runners. 

    In the flea markets of SaintOuen in Paris, I too, was drawn to the vintage linen – specifically, to the dishtowels. They were white or coffee-coloured, with stripes or checks in red or blue or green; even though they were modest and workaday, many were monogrammed because they had been included in dowries. 

    At the table, I am happiest with simple food: find me the freshest ingredients, ideally those that have not travelled too far to my plate – and leave the plate unadorned. 

    Among the noted chefs, people such as Susur Lee and Marcus Samuelsson, and the food writers who contributed to a collection of essays on unforgettable dining experiences in Creating a Meal You’ll Love (Sellers Publishing, 2010, $18.95), several described uncomplicated dishes, unfussy food and family meals. “At home, I like to keep it simple,” wrote Louisville chef Michael Paley. 

    “I have grown to love cooking more meals that are simple and straightforward, and that I can make without the use of fancy gadgets and by using only a handful of seasonal ingredients,” food and wine writer Tracey Ryder observed. 

    Skye Gyngell, a Londonbased chef, recalled a lunch with her father one hot summer day years ago in a small trattoria just outside Florence: for dessert, they were servedpeaches–“ripe,downy and sweet – sitting on top of shaved ice … I was struck by the rightness of just one thing – one perfect ingredient, unfussed with – pure and perfect in its beauty.” 

    It was Laura Ingalls Wilder, the American author who based her Little House series of books on her childhood in a pioneer family, who observed: “I am beginning to learn that it is the sweet, simple things in life which are the real ones after all.” 

    Simple, real – and unadorned. 


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