Archive for April, 2009

Job Losses In Canada

Tuesday, April 14th, 2009

March saw Canada lose 61300 jobs which means jobs are disappearing at rates not seen since the early 1980’s. For the first time in 7 years the unemployment rate is 8%. Since October’s peak we have seen employment fall each month for a total of 357000 jobs lost, which is 2.1% of the work force. During the 1991 recession the contraction was not as strong but it equals that of the 1982 slump, but it was the level that was expected in the budget and programs and money has been allocated to help deal with this problem (this refers to the budget’s $40 billion over 2 years stimulus plan)

The good news? March’s losses weren’t as bad as January and February when 129000 and 83000 jobs were lost respectively and March’s losses were what one would expect in the middle of a recession.

One of the problems though is that a lot of Canadians are falling through the cracks as EI mandates that 700 hours of accumulated work is needed to qualify for benefits, but under the current circumstances some are asking that that be cut in half says Erin Weir of the United Steelworkers. He also says that his previous experience with recessions that unemployment rates will continue to be up even after the Canadian economy starts to bounce back as employers hold off on hiring until the recovery is for real.

Last month BC lost 22600 and Alberta lost 14900 workers, whereas Ontario only lost 11000 (but they still lead the country in jobs lost with 171000 over 5 months)

One of the hardest hitting sectors is Canadian manufacturing with auto and forestry leading the way as they have let go 6.8% of their workforce. Construction has been hit with 99000 jobs lost since October and we see evidence of this in the Saskatoon new housing market as our new housing starts have declined drastically.

Canada’s unemployed number is now 1,456,600 with 16,838,100 still working. Youths 15-24 are at 14.8% unemployed, 7.5% of men 25+ are unemployed, in the same group women are at 5.7%.

Saskatchewan and Newfoundland were the only 2 provinces to stay the same from February to March at 4.7% and 7.4% respectively. Saskatchewan and Manitoba have the lowest unemployment rates with 4.7 and 5.1 respectively.

Out of the major cities the unemployment rate in Regina is the lowest at 3.9%, a close second goes to Quebec City and Saskatoon’s unemployment rate, #3, is also low at 4.8% with Winnipeg, Edmonton and Ottawa in 4th with 4.9%.

Windsor, Ontario has the highest unemployment rate at 13.7% followed by Kitchener, Ontario at 9.6% and Saguenay, Quebec at 9.3%.

Kari Calder
Saskatoon Real Estate Agent
Century 21 Conexus Realty Ltd.

Canadian Companies Affected by Recession

Tuesday, April 14th, 2009

Some of Canada’s oldest and largest companies appear to be in big financial trouble. One of the ways that is used to see if a company is likely to fall into bankruptcy is the “Z” score which weighs 5 ratios-equity to debt, return on total assets and sales, working capital and retained earnings to total assets, any score below 1.8 is not good news for employees, investors and other stake holders.

There are 5 that have been analyzed that fit that bill but, where there are losers there are inevitably winners and there are seven that came out on top.

The top 7 are:

Goldcorp (Mining)
Gold topped $1000US in February. Even though it didn’t remain there long it shows that, even during a global economic slowdown, gold’s role as a safe haven is still intact and Canada is home to some of the world’s largest gold companies such as Barrick and Kinross. All of these are expected to do well in 2009.

SNC-Lavalin (Infrastructure)
Canada’s largest and highest profile engineering and design firm is in a good spot with governments around the world pumping money into infrastructure to help boost economies. This company has been around for 100 years so it has lots of experience, as well as money, to take on projects all over the world.

EnCana (Oil and Gas)
Although energy prices may be dropping there is still a lot of growth potential in this sector. This company is a leader in the natural gas field in terms of technology, operational effectiveness and strategy and has almost $400 Million in cash and a lower debt to capital ratio than other senior energy and petroleum producers in Canada.

Royal Bank of Canada (financial services)
When looking for a Saskatoon mortgage broker I have a great guy at Royal Bank in Saskatoon and I am pleased to see RBC on the top 7 list of companies poised to do well. Canada was the envy to US banks by avoiding the same pitfalls and mistakes and risks the US banks made. RBC is poised to gain market share while some of their competitors struggle. They are also in a position to build global capital market franchise with the failure of many global competitors such as CitiGroup, Lehman Bros, Merrill Lynch, etc.

Agrium (Agriculture)
Even when there is a recession people still need to eat so the fertilizer company is virtually recession proof. This is good news for Alberta but also Saskatchewan’s Potash Corp. The edge goes to Alberta’s Agrium because of its acquisition strategy and they are currently in the process of a hostile takeover of CF Industries which would increase its market position in nitrogen to #2 (currently it is #3) and in phosphate to #3 (currently #5)

Canadian National Railway (Transportation)
CN is one of the most efficient railway companies in North America as its operating costs as a percentage of revenue are the lowest among its peers. CN is not immune to the slowing economy but they are in a better position then their competitors once business does recover. CN also has an edge due to the ability to soon bypass Chicago which was a huge bottleneck for transport during a quick economy, they acquired tracks just outside of Chicago in January.

Onex (Private Equity)
Onex specializes in acquisitions that require less than $1 Billion in debt financing and has more than $500 million in cash and no debt and $3.6 Million US to spend in its private equity fund. With a few more smart purchases, such as the purchase of Cineplex from Chapter 11 earlier this decade, Onex could come up big as the economy recovers.

Canadian Real Estate Investment Trust (Real Estate)
Despite the whole scare of plummeting real estate prices this sector has differentiated itself by boasting the most conservative accounting policies and lowest payout ratios in the industry. CREIT has high quality assets, diverse income stream, solid distribution and  a conservative payout history.

Research in Motion (Technology)
The Crackberry is on of Waterloo’s best/worst kept secrets and has about 21 million subscribers which is tiny compared to the 4.7 billion mobile devices that will be in use this year.

Shoppers Drug Mart (Retail)
Besides just needing meds, Shoppers Drug Mart has a growing cosmetics business that helps customers beautify without breaking the bank. Shoppers had a 3.6% increase in the 4th quarter which included one of the worst month-to-month Canadian retail sales declines in 15 years.

Now Time for the Bad

Air Canada (Air line)
Eroding market, rocky relationships with employees, up to their windows in debt, and perilously close to violating debt covenants and not enough cash…this could spell disaster. But, if they had a dime everytime someone complained about their services they would be rolling in it!

This company isn’t expected to run away and die as the government will likely bail them out, even after they didn’t get smart after the first time this happened.

Can West Global Communications (International media company)
They bit off more than they could chew with acquiring the National Post but neglecting to pay off the debt and instead went on an international expansion tour. Although they gained some valuable assets they didn’t manage their debt very well and, as I read my online paper, I can understand how the National Post barely turns a profit which doesn’t help the debt issue.

Nortel Networks (Telecommunications equipment manufacturer)
Overspending on bad acquisition, seismic accounting scandals, overpaid CEO’s ($20M US for the current one!) and poor and outdated technologies all contributed to this one being in the ‘bad’ category.

General Motors (Automobile Manufacturer)
Subsidiary of America’s largest auto manufacturer. Enough said. In December it already secured $3 billion in bailout loans from the federal and Ontario governments, funds it later declined to draw on, to now negotiate a larger sum. Lenders are not giving out car loans to anyone with a pulse now after the economic melt down so this translates to less new cars needed which left all manufacturers scrambling to cut production.

Kari Calder
Saskatoon Real Estate Agent
Century 21 Conexus Realty Ltd.

Housing Stars Fall Dramatically – 85% from 2008 First Quarter

Tuesday, April 14th, 2009

Saskatoon real estate should tighten up again with the dramatic housing start decrease in 2009. Regina real estate will also see the same thing as they also had a huge drop in housing starts. Not only are Saskatoon realtors trying to juggle the overabundance of listings, Saskatoon home builders are also dealing with their high inventory. The decreases were fully expected announces Paul Caton, CMHC market analyst in Saskatchewan, but they do expect an increase in 2010. What is happening in the current Saskatoon real estate market is there are a lot of resale houses for sale in Saskatoon. This means less work for the home buyer and often times less money for an ‘almost new’ house for sale in Saskatoon. Saskatoon builders have only started 77 single-detached houses this year which is down from 284 new home starts in Saskatoon just last year…down 73%. In March these starts fell 75% to 32 units down from 128 new housing starts in Saskatoon in March of 2008, but keep in mind that March 2008 was one of the strongest months on record for new housing in Saskatoon to be started.

As for multi-family dwellings in Saskatoon only 12 have been started this year, down 96% from 2008 and the lowest number since 1991. Last year 306 multi-family units were started in the first quarter.

Regina is much the same with Regina builders only breaking ground on 42 new houses in Regina in March, down 40% from last March. There are only 117 new houses in Regina that have been started in the first quarter and multiple units were down 90%.

Saskatchewan in general is down 73% with 257 units from 948 units last year for the first quarter.

What does this mean? House prices should remain stable and strong and we should only see a modest decrease this year and potentially some increases in house prices in the next year in some Saskatchewan real estate markets.

For more information on the Saskatoon real estate market be sure to contact me!

Kari Calder
Saskatoon Real Estate Agent
Century 21 Conexus Realty Ltd.

U.S. Home Prices Rise For First Time In A Year

Tuesday, April 14th, 2009

January saw US house prices rise by 1.7% compared with December, 2008. Over the past year US house prices have been down 6.3% and down 9.6% from the peak in April 2006 and in December the year-over-year decline was 8.8%.

There have been some stronger sales in some markets in the beginning of this year which is contributing to the increase.

Of course a turnaround in the US house price cannot yet be determined as there must be several consecutive months of increase to call it a turnaround.

Led by the pacific side of the US with a 21.1% decrease house prices were down in all 9 regions of the country last year. The smallest decline was the 0.4% drop in the West South Central (Texas, Oklahoma, Arkansas and Louisiana)

I can’t help but wonder if some of this increase has to do with Saskatchewan real estate savvy buyers who have been buying properties in the US. Many Canadians have been going to the US in the past year to purchase real estate with the equity they have gained in their Saskatoon houses.

The pacific states still registered a decline while the other 8/9 regions showed either a constant or an increase in prices with a rise of 3.9% in the East North Central Region (Great Lakes region) and 3.6% in the South Atlantic region (Delaware to Florida).

Kari Calder
Saskatoon Real Estate Agent
Century 21 Conexus Realty Ltd.

Beyonce In Saskatoon

Saturday, April 4th, 2009

I have been fortunate to see quite a few concerts in Saskatoon and I recently went to see Beyonce in Saskatoon. This was, by far, the best concert I have seen in my life! Beyonce was incredible with many wardrobe changes (albeit some of her choices were not my favorites!) and incredible energy, vocals and dance moves. I wasn’t expecting to enjoy myself so much and it honestly snuck up on me…but I wouldn’t hesitate to go back to see her again and again as the entertainment value was unbelievable.

She played all of my faves and even a few tributes to Canadian singers like Sarah McCloghlin and Alanis Morrissette.

You can tell she is passionate about what she does and she puts so much energy and love into her performance that it was absolutely contagious. I looked hard to see if she was lip synching as I didn’t think any singers voice could sound that amazing live…and if she was pulling a Brittany Spears I sure as heck couldn’t tell! She had the crowd dancing and singing and it was overall a very good atmosphere of people having fun.

It is so nice to see huge names coming to Saskatoon to perform. We have had some really big names in the past year.

I know the Eagles concerts in early March brought in people from all over this part of Canada/US and I am sure our enthusiasm and appreciation will keep bands like this coming back for more. Now that Saskatoon is getting bigger hopefully more big names will keep coming to our great city and bringing us their music and acts.

Kari Calder
Saskatoon Real Estate Agent
Century 21 Conexus Realty Ltd

Government To Help Pay For Renos!

Saturday, April 4th, 2009

Spring has sprung in Saskatoon believe it or not (the snow lately would make us believe otherwise!) which means that Home Depot and Rona in Saskatoon are busier than ever with people getting the itch to renovate their homes in Saskatoon. With the current global economic slowdown another area that has been suffering is home renovations in Saskatoon and across the world. The Government has recognized that this area is also suffering so they are assisting this industry. For all home renovations between January 27, 2009 and February 1st, 2010 the government is offering a 15% rebate.

This helps with the houses for sale in Saskatoon and keep in mind that home renovations aren’t just to make your house look pretty; renovating your houses in Saskatoon also may save you money in the long run with more energy efficient and eco friendly houses in Saskatoon. Some products that are available and that make sense to put into your Saskatoon home are: dual flush toilets/low-water consumption toilets, new windows, proper/additional insulation, high efficient furnaces, and programmable thermostats.

As with all rebate programs there are certain rules you have to follow therefore it is important to read these guidelines and confirm that your project will be subsidized. For example, furniture and accessories are not items covered in the rebate, nor are new appliances for your kitchen.

Some of the projects that will be covered are replacing old windows, any type of kitchen/bathroom renovation, and basement renovations. Even if you can do the work yourself you can claim for products, materials, and even equipment rental.

Don’t forget that the City of Saskatoon needs money too therefore building permits are required and mandatory with any type of renovation to your Saskatoon home. Not having a permit can cause delays and hefty fines. Most people prefer not to pull permits but from a real estate in Saskatoon perspective when you put your house for sale in Saskatoon you are much better off if you can prove that you have pulled permits to do your renovations. These permits are also eligible for the 15% rebate.

You can claim a minimum of $1000 and a maximum of $10,000 and you claim it when filing your income tax return. For specifics you should contact the Department of Finance Canada and ask about your eligibility for HRTC at 1-800-O-Canada

If you need some help with your home renovations in Saskatoon I know a few people who are great so feel free to contact me for a referral!

Kari Calder
Saskatoon Real Estate Agent
Century 21 Conexus Realty

Century 21 Conexus Realty Wins 2008 #1 Firm Award!

Saturday, April 4th, 2009

During our Century 21 Awards Gala in Saskatoon on March 6, 2009, it was announced that Century 21 Conexus Realty Ltd has won the #1 firm award in Canada for both production and units. This is the third year we have won this award.

Rod Spence, Vice President of Real Estate, is proud of his team of agents and employees. “As experts in the industry, our agents and employees are committed to providing professional service and knowledge to each of our customers,” says Spence. “Aside from our dedicated agents and employees, our success can be attributed to our unique partnerships,” continues Spence. “With training support from CENTURY 21 Canada, we have developed the skills needed for achieving our goals. Through our parent company Conexus Credit Union, we are able to meet all the real estate needs of our customers. From mortgages and investments to home insurance, we offer customized solutions.”

Century 21 Conexus Realty Ltd currently has 7 offices and over 200 real estate agents across Saskatchewan. Century 21 Conexus in Saskatoon has shown a lot of strength across the country and world and Century 21 has a heritage of professionalism, dependability and customer understanding. Century 21 can be found world wide and is the world’s largest residential real estate sales organization.

Kari Calder
Saskatoon Real Estate Agent
Century 21 Conexus Realty

New Home Prices Rise In Saskatoon Despite The Recession

Saturday, April 4th, 2009

According to Statistics Canada the price for a new home in Saskatoon and area rose by 0.8% from December 2008 to January 2009. The federal agency’s new housing price index report also showed that from January 2008 to January 2009 that Saskatoon new home prices dropped 2.7%. Nationally new home prices dropped 0.6 % from December to January. Despite no month to month change on new home prices in Regina, the prices rose by 21.7% from January 2008 to January of this year.

Consumers do need to be aware that average house price in Saskatoon can be a bit deceiving as this reflects all areas of the city as well as all types of houses, but new home prices from area to area aren’t as drastic. Although, from Hampton Village to Willowgrove consumers may see a $30,000-$50,000 price difference favoring Willowgrove for its east side location away from the airport. So keep in mind with average house prices in Saskatoon that one month may see a lot of low priced condos sell while the following month there may be many high end homes in Saskatoon that have sold.

Read the star phoenix article here.

Kari Calder
Saskatoon Real Estate Agent
Century 21 Conexus Realty Ltd

First Time Home Buyers – Now Is Your Opportunity

Saturday, April 4th, 2009

During the past year market conditions have improved vastly for first time home buyers in Saskatoon. While last year it was very hard to get into the market for first time buyers, this year it is easier to buy a house in Saskatoon as well as to get a good mortgage rate when buying a house in Saskatoon.

While last year the starting price for a 1 bedroom apartment style condo was around the $140,000 mark this year you can get into a 1 bedroom apartment style condo in Saskatoon for as little as $120,000. The house prices in Saskatoon peaked in the spring of 2008 and then went through a correction due to the high inventory of houses for sale in Saskatoon. New listings in Saskatoon went up to a record high in the summer of 2008 and due to that excess of inventory the house prices in Saskatoon dropped a bit. First time home buyers in Saskatoon should be taking advantage of the price decrease plus the incredible interest rates.

Certain communities in Saskatoon also allow for easier purchasing with first time home buyers in Saskatoon. On the west side, some of the favorable areas for first time home buyers are Mount Royal and Hudson Bay Park and on the east side of Saskatoon the favorable areas include Nutana and Avalon. These areas have more entry level homes than areas like Lakeview or Briarwood, but Nutana still has some very pricey homes due to its location close to the popular “Broadway” district and the downtown of Saskatoon.

Regina has also seen a correction in real estate prices down from 2008 and is also a favorable market for first time home buyers. A large number of houses for sale in Regina makes it a ‘buyers market’ and gives buyers the upper hand. Both Regina and Saskatoon are seeing a buyer’s market in 2009.

For more information on the Saskatoon real estate market be sure to contact me!

Kari Calder
Saskatoon Real Estate Agent
Century 21 Conexus Realty Ltd

Surplus Budget in Saskatchewan Despite Recession

Saturday, April 4th, 2009

While most other provinces in Canada are projecting deficits, the Saskatchewan economy has given us a budget surplus with tax cuts and money for roads, schools and hospitals. For home owners in Saskatchewan this also means a decrease in property taxes that means more money in Saskatoon home owners pockets…but less than Regina home owners.

The average household in Saskatoon will save $100/year whereas home owners in Katepwa (rural resort community) could save up to $1333.

The Sask Party government boasts that the $103 million cut to education portion of property taxes is the largest in Saskatchewan’s history. This is also long overdue as the government currently funds about 51% of education costs for K-12 schools and property owners have been paying for the rest. Residents and business owners have long complained that high property taxes are a burden and are preventing our competitiveness. This change would make the Saskatchewan government pay for about 63% of education funding. It is projected that our surplus will be approximately $425 million for 2009/2010 while keeping about $1.1 billion in a rainy day fund.

At least we are cautiously optimistic still and are aware that the economy in Saskatchewan is not immune to what is happening in the rest of the world. In past years it was oil and gas revenues that helped us out but with oil prices in Canada and worldwide being so low this year compared to last it is actually potash that is bringing in the money now. Potash is a pink mineral used to make fertilizer and the revenue of it is forecast to be $1.9 billion in 2009/2010 which is an increase of almost $430 million from last year. These numbers are dependent on the demand for potash of course and would change if potash were to go down like oil did so we know we are vulnerable to the rest of the world’s markets but we also know the rest of the world needs to eat.

While Saskatchewan’s economy is flourishing, others are not faring well at all. The New Brunswick government is going close to $1 billion in the red and had to cut 700 civil service jobs and had to cut programs. Ontario’s budget is expected to show a deficit of around $18 billion over 2 years. Even our energy rich neighbour, Alberta, is expected to see their first deficit in 15 years.

Saskatchewan will bump up its funding to schools by $241 million to $990 million this year. We are also going to get a boost in schools, roads and hospitals. As a Saskatchewan resident for many years I say halleluiah to the roads!! The province is also putting $1 billion toward capital funding for infrastructure on top of the $1 billion in last year’s budget and another half a billion announced in February. This spending also includes the $100 million for a new children’s hospital in Saskatoon as part of a 2-year, $200 million commitment.

Money is also being given out to help with some of the on going problems that we have been seeing such as improving the child welfare system (nearly $25 million towards this including $9.2 million to address the overcrowding issue). This comes after the announcement last month by Saskatchewan’s children’s advocate released a scathing report that Saskatoon foster homes are more overcrowded than anywhere else in the country.

Farmers and ranchers will also see more money during tough times with money going towards aid programs such as crop insurance.

But, students beware as the tuition freeze from 2005 is coming to an end, but the budget is providing $23.5 million to help universities limit cost increases to an average of 3%.

Kari Calder
Saskatoon Real Estate Agent
Century 21 Conexus Realty Ltd.