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June 9, 2011
PROPERTY LAGGARDS REAL HOUSE PRICES (2011Q1, Y/Y % CHANGE) Sweden Italy* Japan** Australia U.K. U.S. Spain -10 -5 0 5 10 15 *2010Q4; **2010Q3
Global Real Estate Report is available on: www.scotiabank.com, Bloomberg at SCOE and Reuters at SM1C
June 9, 2011
One of the more positive developments in domestic property markets this year has been the continuing resurgence in office market activity. Rising leasing demand helped push the national central office vacancy rate to just 6.9% in 2011Q1, down from 7.3% in the prior quarter and a cycle peak of 7.5% in mid-2010. The turnaround is broadly based regionally: vacancy rates in most major centres across the country are moving lower while rental rates are either stabilizing or once again moving higher. Rising leasing demand mirrors the resilience in hiring in traditional office-based occupations, including finance & insurance and professional, scientific & technical services. The latter, which includes lawyers, accountants, engineers, consultants and software developers, has enjoyed particularly strong employment growth in recent years. These industries escaped the 2008-2009 recession with few job losses, and have been one of the leading creators of new jobs since.
June 9, 2011
10
EMPLOYMENT 115 index Jan 2008=100 110 Professional, Scientific & Technical Services
105
100 Total Employment 95 2008 2009 2010 2011 Statistics Canada, Scotia Economics
June 9, 2011
Housing Starts
160 140 120 100 80 60 40 90 92 94 96 98 00 02 04 06 08 10 Source: CMHC Multiple-Unit Single-Unit units, thousands, annualized
250
200
25 20 15 10 5 0
Mortgage Rates
5-Year Conventional
1-Year Conventional
90 92 94 Source: CMHC
00
02
04
06
08
10
Housing Starts
Canada (000s units, sa) 2006 2007 2008 2009 2010 2011ytd 2011f 2012f (units, nsa) 2006 2007 2008 2009 2010 2011ytd 227 228 211 149 190 179 175 175 Vancouver 18,705 20,736 19,591 8,339 15,217 17,107 B.C. 36.4 39.2 34.3 16.1 26.5 25.9 25 26 Calgary 17,046 13,505 11,438 6,318 9,262 6,746 Alberta 49.0 48.3 29.2 20.3 27.1 21.6 22 28 Edm onton 14,970 14,888 6,615 6,317 9,959 7,997 Sask. 3.7 6.0 6.8 3.9 5.9 6.3 6 5 Toronto 37,080 33,293 42,212 25,949 29,195 35,129 Manitoba 5.0 5.7 5.5 4.2 5.9 4.8 5 5 Ottaw a 8,808 9,294 10,302 8,930 9,133 5,894 Ontario 73.4 68.1 75.1 50.4 60.4 62.4 60 56 Montreal 22,813 23,233 21,927 19,251 22,001 20,304 Quebec 47.9 48.6 47.9 43.4 51.4 47.6 46 44 Halifax 2,511 2,489 2,096 1,733 2,390 2,386 Atlantic 12.0 12.4 12.2 10.9 12.8 10.7 11 11 St. Johns 1,275 1,480 1,863 1,703 1,816 1,284
Source: Canadian Mortgage and Housing Corporation (CMHC), Scotia Economics calculations and forecasts. Year-to-date data are expressed at annual rates.
June 9, 2011
Housing Costs
600
10 8 y/y % change Owned Accommodation
500
6 4
200
200
-4
Vancouver Calgary Edmonton Ottaw a Montreal Toronto Halifax Avg. Price Units Avg. Price Units Avg. Price Units Avg. Price Units Avg. Price Units Avg. Price Units Avg. Price Units 2006 2007 2008 2009 2010 2011ytd 509,876 570,795 593,767 592,441 675,853 793,241 36,479 38,978 25,149 36,257 31,144 38,418 346,675 414,066 405,267 385,882 398,764 401,721 33,027 32,176 23,136 24,880 20,996 22,278 250,915 338,636 332,852 320,378 328,803 322,561 21,984 20,427 17,369 19,139 16,403 15,966 352,388 377,029 379,943 396,154 432,264 455,242 84,842 95,164 76,387 89,255 88,214 89,490 257,481 273,058 290,483 304,801 328,439 338,291 14,003 14,739 13,908 14,923 14,586 14,127 235,623 250,213 259,050 271,724 292,964 296,388 39,141 43,666 40,441 41,754 42,347 48,639 203,178 216,339 232,106 239,158 253,610 263,234 6,462 7,261 6,472 6,062 5,944 5,862
Source: Canadian Real Estate Association (CREA), QFREB, Scotia Economics calculations. Year-to-date data are expressed at seasonally adjusted annual rates, except for Montreal which are not seasonally adjusted.
June 9, 2011
Industrial Markets
06
07
08
09
10
11
Building Permits
Building Permits
400 index: 1999Q1 = 100 300 Institutional & Government Commercial Residential
Total
Res.
Indust. Com m .
200
(C$ billions) 41.1 4.5 14.4 45.5 5.0 17.0 40.9 5.1 16.7 34.7 3.9 13.8 43.5 5.1 15.4 42.3 5.4 13.5
Source: Statistics Canada. Year-to-date data are expressed at seasonally adjusted annual rates.
June 9, 2011
1.0 0.8
Single-Unit
0.6 0.4
West
Midwest Northeast
$, thousands, 3MMA
Housing Starts
Total Singles Multiples West South Midw est North East 0.167 0.143 0.121 0.062 0.071 0.071 Total
Permits
Single Multiple
(millions of units) 0.335 0.444 0.910 0.309 0.321 0.681 0.284 0.196 0.453 0.109 0.117 0.278 0.116 0.120 0.297 0.166 0.106 0.316
(millions of units) 1.839 1.378 0.461 1.398 0.980 0.419 0.905 0.576 0.330 0.583 0.441 0.142 0.605 0.447 0.157 0.559 0.398 0.161
Source: U.S. Census Bureau, Scotia Economics calculations and forecasts. Year-to-date data are expressed at seasonally-adjusted annual rates.
June 9, 2011
Housing Costs
6
8 Consumer Price Index, y/y % change
Avg Price Months North Total ($000s) Supply East (million units, saar, unless otherwise noted) 2.563 1.483 1.086 1.049 303.5 6.4 2.235 1.327 1.006 0.769 308.8 8.4 1.865 1.129 0.849 0.482 288.9 10.7 1.914 1.163 0.868 0.374 268.2 9.0 1.860 1.076 0.817 0.322 271.5 8.0 1.953 1.095 0.785 0.303 264.3 7.2
Source: National Association of Realtors (NAR), U.S. Census Bureau, Scotia Economics calculations. Year-to-date data are expressed at seasonally-adjusted annual rates.
June 9, 2011
300
300 Spain
200
France Italy
100
300
200 Switzerland
Germany
100
Canada
United States
100 Japan
So urce: OECD, A ustralian B ureau o f Statistics, Canadian Real Estate A sso ciatio n, Statistics Canada, INSEE, Irish Department o f the Enviro nment, Heritage and Lo cal Go vernment, Euro stat, B ank o f Italy, Istat, Japan Real Estate Institute, Japanese M inistry o f Internal A ffairs and Co mmunicatio ns, B anco de Espana, Instituto Natio nal de Estadistica, Statistics Sweden, Riksbank, Swiss Natio nal B ank, Statistics Switzerland, U.K. Office fo r Natio nal Statistics, U.S. Natio nal A sso ciatio n o f Realto rs, U.S. B ureau o f Labo r Statistics, Sco tia Eco no mics.