Someone else IS going to buy that house before you do.

Mark Herman’s MARKet Update Winter, 2011

86,ooo new jobs, 14,ooo less people on E.I. & 16,ooo new immigrants in Alberta. Someone else IS going to buy that house before you do.

• The Canadian economy is the strongest of the G7 and recovering. When the recovery takes hold, rates and prices are expected to rise. Alberta will maintain the strongest economic growth in Canada and America.
• Mortgage rate 110-year low was 3.79%, is now 3.39%! Variable is at Prime -0.3% = 3%-0.3% = 2.7%.
• 5% down and 0% down still exist but for how long?

National Data Points

World oil consumption hit an all-time record high of 87.4 million barrels a day in 2010, driven by a surge in demand from emerging nations; primarily led by China, who has overtaken the U.S. as the world's largest energy consumer.

World energy demand grew 11.2% in 2010 and Chinese oil consumption grew by 860,000 barrels a day. Since 2000 China's oil consumption has grown 90%.

The OECD, a leading international think-tank, says Canada will lead the G7 in economic growth. Canada is expected to grow because of Western Canada’s resource sector and continued strength in the housing market in most parts of the country.

Canada’s solid recovery has supported a recovery in the labour market. Since July 2009, employment has increased by more than 460,000 jobs, more than offsetting all of the jobs lost during the recession.

Canada has had the highest growth in real income per capita of all G7 countries (1999-2009).

Canada is on track to return to a balanced budget by 2015-2016. Current federal deficit is only $55 billion.

Canadian household finances are not as terrible as previously suggested and won’t hurt consumer spending in 2011-BMO Capital Markets study. The negative focus has purely been on household debt reaching a record level of 140% of household income, but totally missed the fact that family wealth has risen to 6 X disposable income.

• The global recovery remains fragile and high government debt levels in Greece, Portugal, Ireland and Italy is concerning.
• Global imbalances in trade continue and a strong Canadian dollar make it difficult for exporters.

• As of Sept. 7, 2011 energy companies spent a record amount on land. Provincial crown land sales were $2.71 billion; 4 times their level in 2009 and the highest since 2003.
• Alberta recovers from its severe recession with real GDP growing at 4.3% in 2011, says RBC Economics. In 2011, RBC projects Alberta's economic growth will be second only to Saskatchewan, the fastest growth seen since 2006, due to the booming energy sector and increased job creation which brought down the stubbornly high unemployment rate.
• "Improvements in the employment market helped increase in -migration from other provinces," said RBC. "These are the kinds of turnarounds that will spread the recovery more widely throughout Alberta.”
• • Alberta's employment is leading the country with a rise of 2.3% in 2011, and creation of 37,000 jobs, the highest total of new employment since 2007. With interest in developing Alberta's oil sands growing ever higher, the gush of capital spending on megaprojects is expected to continue.

Calgary Economy

• • "Calgary home prices rose at their fastest rate in more than a year." Says an RBC study. "Firmer market conditions and higher prices had only limited impact on Calgary's affordability, which remains among the most attractive of Canada's major cities." RBC's latest report said sales grew for the 3^rd consecutive period in the 1^st half -the most growth since the middle of 2009 -helping to remove market slack.
• Calgary downtown office vacancy rate fell to 6.4% over the fall, down from 9.1% 4 months ago and 15% only a 18 months ago; companies are locking-in space while they can.
• CMHC 2011 Consumer Survey: 86% of homebuyers agree homeownership is a good long-term investment which adds to the quality of life for you and your family.
• • Calgary is #3 on a score card that ranks prosperity in a number of cities around the world, besting all other Canadian cities. Strong population growth, a young workforce, disposable income, affordable housing and clean air helped boost the city to the #3 spot behind Paris and San Francisco. The Conference Board of Canada results included commute time, income equality, gross domestic product and productivity to compare 24 major cities. “Calgary’s success comes from a combination of solid fundamentals in both (economy and labour attractiveness), not just from a robust economy. With the fastest population growth of all metros, Calgary proved that it was an attractive place for people seeking work. “Calgary’s housing affordability and clean air provides further evidence of its livability.”

Mortgage Rates: Slowly retracing back to previous long term averages

The Bank of Canada plans to increase interest rates as soon as the recession is over to combat expected inflation.

Today the 5 year fixed is at all-time lows, about 3.39%, and the variable is about Prime -.30%.

Getting a pre-approval to buy at these rates or re-mortgaging with other debt rolled into your mortgage would be a very smart move.

• • Mortgage rates are back at historic lows and holding until the recovery finds a stronger foot hold.
• Expectation: fixed mortgage rates will begin to rise late-2012 to just over 6% by end of 2013.
• 5-year rate review: May ’08, 5 yr =7.25%, April ‘09 = 5.25%, June ‘10 = 4.39%, Nov ‘11 = 3.39%

The Mortgages are Marvellous Advantage

Please feel free to call for mortgage advice, a rate hold, or a free 5-minute mortgage check-up.

Remember: the banks pay us, your rate is usually always lower than you can get at the bank, and you can usually be placed at your own bank. We also answer our phones and work on your schedule.

Why not take advantage of the skills, years of experience, and non-biased advice of a dedicated, top-broker with access to all of the banks for the largest purchase you can make?

Mark Herman, AMP, B. Comm., CAM, MBA-Finance 1 of the Top-10 brokers of 1,700 at Mortgage Alliance Direct: 403-681-4376 Accredited Mortgage Professional | Mortgage Alliance - Mortgages are Marvelous Toll Free Secure E-Fax: 1-866-823-1279 E-mail: mark.herman@shaw.ca | Web: http://www.markherman.ca/