Daily Market Update

by REP26 Feb 2015
MLS sales drop affecting smaller markets in Alberta
A sharp drop in MLS sales occurred in Alberta’s major centres at the beginning of this year as the impact of the oil price collapse began to take hold in the provincial economy. According to the Calgary Herald, Canadian Real Estate Association stats, from real estate boards across the province, show several markets throughout Alberta saw steep year-over-year declines in sales during the first month of 2015. “I expect the rest of the year to be stable, as activity is actually picking up, and we are never hit quite as hard as Edmonton and Calgary. Most of the region is cautious but optimistic,” said Mike Dewing, president of the Realtors’ Association of Lloydminster and District. Don Campbell, an analyst with REIN, said, "the only way to judge the real strengths or weaknesses of these markets is to look at six-month trend lines and compare them to the same time lines previously. Moving forward, if oil stays below $60 for a minimum of three more months, we can expect the statistics in these real estate markets to show a much worse picture than in the major centres.”

Lender boost financing for condo projects
According to BNN.ca, the Bank of Nova Scotia is among lenders boosting loans to condominium developers as regulators become less vocal about housing-market risk, according to Canada’s third-biggest bank. Scotiabank is financing as much as 75 percent of a condo project’s value and others are doing the same, according to Chris Milne, vice president of real estate lending at the bank. That’s up from about 70 per cent in the past, when banks were concerned “there may be a meltdown” and regulators were more vocal about residential market risk, Milne said. "The banks are back out there lending in the condo sector,” Milne said at a Toronto real estate conference Tuesday. “There is a hole that the banks are looking to fill. The regulators were really pounding them a year and a half ago and now it’s quiet.” Banks are boosting financing to condo developers even as the number of unsold units in Canada’s largest city reached a 21-year high in January. There are about 1,600 unsold units on the market following a record number of completions in January, according to a report from Sal Guatieri, senior economist at Bank of Montreal.

Real estate developers banned 
A British Columbia Securities Commission panel has fined and ordered bans against two real estate developers for illegally distributing securities. One of them, a former mutual fund salesperson, was also sanctioned for committing fraud and breaching a BCSC order prohibiting him from engaging in certain conduct in B.C.'s capital markets. Discussing the harm to investors caused by the accused, Michael Knight and Jeffrey Wiegel, the panel wrote, "The respondents' misconduct has resulted in significant harm to investors. The investments in 835 Ltd. and Local 1661 have been lost. The losses for each investor are generally significant in that many of the individual investors lost amounts between $50,000 and $100,000." See more on the MarketWire report.

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