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The federal government's stabilizing influence on Ottawa's commercial real estate market couldn't fully immunize the market from a sharp decline in investment seen nationwide in the first half of 2008, according to a recent study by CB Richard Ellis.

Investment levels across all sectors in Ottawa plunged to $322 million from $618 million a year earlier, with the multi-residential category seeing the largest drop. The office sector showed the only increase, climbing to $134 million from $89 million in the first half of 2007.

The National Capital Region experienced the second-steepest decline among the nine Canadian markets surveyed, all of which experienced double-digit percentage drops in investment, except Vancouver.

n innovative way to promote local Real estate Properties worldwide is being launched in the regional Cariboo Real Estate market. John Lovelace Corporation of Vancouver and local Realtor Freddy Marks of Landquest Realty Corporation has reached an agreement to bring Canadian Real-Estate TV to the region.

When we analyzed buyer trends in ranches, farmland and waterfront in the Williams lake area, we found that buyers were coming from all over Canada and the USA said Lovelace Corporation spokesperson Tiffany Chesley.

So the Internet is the logical place to reach buyers who would find it virtually impossible to come up here and tour all the properties in region, she added. In fact, recent statistics have shown that up to 75 per cent of real estate transactions now involve the internet.

The average price of a residential property sold through the Multiple Listing Service was $316,052 last month, a year over year drop of 5.1 per cent and the most since 1996, according to figures released by the Canadian Real Estate Association yesterday. Sales across the country were also down a deep 19 per cent.

"The report underscores the current shift in the Canadian housing market, as the tone of activity moves slightly closer to a buyer's market," said Millan Mulraine, economics strategist for TD Securities in an economic note yesterday.

In August, the city of Toronto also recorded a slight 1 per cent decrease in housing prices the first negative number in more than a decade.

Canada's housing market continues to face strong headwinds from declining confidence, low affordability and an upward trend in new listings, said BMO Capital Markets economist Robert Kavic.

Is the real estate bubble about to burst? A new study from UBC's Sauder School of Business predicts home values in many Canadian cities are about to plunge. This comes on the heels of a report last week which indicated home sales in B.C. were already in decline.

The report says homes in most urban centres except Toronto and Edmonton are overvalued. However, Vancouver is not the most overpriced according to the study, with the Vancouver market being 11% overpriced. Winnipeg, Regina, Montreal and Ottawa are priced up to 25% higher than they should be to balance with rents--given interest rates, holding costs and historical rates of price appreciation.

Study author Tsur Somerville says the decade-long boom in Canadian markets is over and homeowners should brace for anything from a rapid price drop to a long, flat market. He also says the effect will be most pronounced in cities that have a large supply of unsold inventory, such as Vancouver.

In Ottawa this weekend for Century 21 Canada's annual national conference, Mr. Lawby intends to tell the 600 or more real estate brokers and sales representatives who will be attending that he expects a reduction in housing sales as affordability becomes an issue.

"Right now, local economy is what is driving consumer confidence," Mr. Lawby notes.
More than half of 69 Century 21 brokers surveyed last week suggested that consumer confidence in their area markets was weaker compared to six months ago and more than two-thirds said it was weaker than a year ago. More than three-quarters of brokers interviewed report that the number of home listings in their markets has increased, while 85 per cent say homes are taking longer to sell and 57 per cent say asking prices have decreased.
Yet while the numbers slump in general, the housing market in Ottawa has done very well over the past four years and is expected to continue to do so.

Many of our readers have been a bit concerned about the rise in inventory (homes available for sale) in Torontos real estate market. The principal question on most peoples minds is; with supply on the rise and demand on the decline, is Torontos real estate market on shaky ground?

A couple of weeks ago I wrote a post that cautioned readers against comparing current inventory levels to the levels we saw in 2007. Inventory levels in 2007 were significantly lower than levels weve seen in recent years making it a bad year to use as a benchmark. (See Toronto's Real Estate Market - Are Things as Bad as They Seem?)

Total inventory alone is an important measure, but if we are to gain any insight into the overall health of our market we need to consider the total inventory (or supply) in the market relative to the existing demand for houses. Is demand keeping up with the changes in supply? Does the demand still outweigh the supply in the market? At what point is demand and supply balanced?

Theres a difference between house and home. The former is just a structure, a construct of wood and concrete, insulation and siding, shingles, nails and glue, something picked over by inspectors and showcased by realtors. Its an early stop on the often expensive, always exciting and potentially defining continuum of personal success that typically fulfills itself through property ownership.

A home, meanwhile, is still a house, still has those fundamental characteristics. But its a house in full. Embellished by décor, charged with life and aglow with the resulting experience, a well managed and responsibly purchased home is a reflection of its inhabitants, a vehicle for their commune and sanctum for their happiness.

Jill and Dave Daniels are making their way down that spectrum. Theyve been in their home at the foot of Garibaldi Highlands for a year, but have owned it on paper for only a couple weeks. Together, with their 17-year-old son and their dog Kona, they made their way to Squamish from Ontario, renting at first and then wading into an explosive housing market, striking up a personal bond with their realtor and zeroing in on their $300,000 piece of the family dream. Theyre not sure if theyll stay, what with Davids career path lush with transfer opportunities, but, just the same, they make up a portion of Squamishs shifting demographics, a good chunk of which are owed to the housing boom of the past several years.

Montreal has been voted the most expensive property to buy in a new international version of Monopoly, edging out major tourist destinations like London, Paris and New York.

The capital of Latvia, Riga, was chosen as the second most expensive property, capturing the other sought after dark blue real estate spot.

The new board game, called "Monopoly Here & Now: The World Edition," is using cities rather than streets. Montreal and Riga will take the place of the highly-sought Boardwalk and Park Place properties.

MONTREAL - The new owner of Hudson's Bay Co. has hired a unit of Brookfield Asset Management Inc. to shop some of its flagship downtown Bay stores and former headquarters to potential real estate buyers.

HBC spokeswoman Hillary Marshall confirmed the 338-year-old retail giant, bought by NRDC Equity Partners of Purchase, N.Y., last month, has engaged Brookfield Financial Real Estate Group to do a "big-picture analysis" of HBC's real-estate portfolio with an eye to selling it if values are good. The portfolio consists primarily of six downtown Bay stores and the 32-storey Toronto building that rises from its flagship 900,000-square-foot store and, until recently, served as its head office.

Brookfield Financial recently advised Canadian National Railway on the $355-million sale and leaseback of its down-town Montreal headquarters.

Last week we released our Q1 2008 Move Smartly Housing Report which offers a detailed summary of real estate sales by neighbourhood. Readers can subscribe to the report at www.realosophy.com

The average sale price for a home in Toronto for the first quarter of 2008 was $410,862, a 3.3% increase over the same period last year. The median price increased by 6.1% to $330,000. The big news in 2008 has been the significant drop in the number of homes sold. Sales have declined by 20.9% over the same period last year.

Sales volumes showed very little growth between 2004-2006. Sales increased suddenly by 13.5% in 2007 with much of the increase being attributed to the 40 year mortgage.

If you've always wanted to buy some Alberta real estate but felt it was too expensive, Desjardins Securities may have found a backdoor solution in Melcor Developments Ltd.

The Edmonton-based company has 8,865 acres of undeveloped land in key Alberta markets, which Desjardins analyst Jeff Roberts suggests is worth more than triple its recently estimated value of $247-million. Mr. Roberts believes the shares are trading below book value, considering the historical price of real estate in the province and Melcor's income-producing portfolio.

"Clearly, Melcor's current share price offers an opportunity to buy Alberta land at a significant discount to value," Mr. Roberts wrote in a note to clients last week.

Mr. Roberts estimated the company's book value - the value of its assets minus its liabilities - plus its income-generating properties is $13.37 a share. Yet, the company closed trading last week at $13.30.

Fewer houses are being sold in Toronto but home prices are still on their way up, according to a recent report by the Toronto Real Estate Board.

The report, released Friday, said resale home prices in Toronto went up four per cent in the first two quarters of 2008, compared with homes sold during the same period last year. The average price in the first two quarters of 2008 was $427,198.

In the 905 region, the price of resale homes went up by five per cent to $365,536.

About 8,600 homes changed ownership throughout the region in June, a decline of 18 per cent from the June 2007 total of 10,451.

Veteran small-cap manager Martin Ferguson, director and portfolio manager at Calgary-based Mawer Investment Management Ltd., says that there is considerable apathy towards small caps which is the result of the credit crisis, the slowdown in the United States and concerns about the resurgence of inflation.

"We have not seen this degree of indifference to small caps since the height of the tech bubble, when investors fled all other segments of the market to pile into tech stocks."

Canadian small caps have underperformed their big-cap counterparts for four years including 2007. "Year-to-date the underperformance has persisted," he says.

Alberta may well have the lowest percentage of cottage owners in the country, but the province also boasts recreational property prices well above the national average, says a report on recreational properties released yesterday by Royal LePage.

Seven percent of Albertans own a cottage, the survey says, compared to the national average of 9%.

The average prices of a standard waterfront cottage sits at $1.3 million in Alberta. Nationally, average prices range from $327,000 to $1.1 million.

CALGARY, TORONTO -- A Calgary developer is betting that the high end of the city's real estate boom is far from bust.

Arcus Developments Inc. unveiled plans yesterday to build a $125-million, 35-storey luxury apartment building, called the Astoria on Tenth, in the west end of the downtown core.

While the building's crown jewel will be an opulent penthouse suite, only the uber-rich need apply. Arcus has slapped a $10-million price tag on the property, making it easily the most expensive condo ever seen in Alberta.

"Calgary has really come into its own from an economic perspective," Gerry Mendyk, president of Arcus Developments, said in an interview. "The environment here is very strong, with oil and gas prices where they are at. While North American [real estate] markets are struggling, Calgary's is very robust."

MONTREAL - The latest Greater Montreal Real Estate Board's Multiple Listing Service system showed a 9-per-cent decrease in transactions last month compared to May 2007, with 4,544 sales.

That represents a year-to-date decrease in sales of 4 per cent compared to the same period last year.

But the median price of a single-family home rose by 5 per cent in comparison with a year ago.

The real estate market has run out of steam, a report from the Canadian Real Estate Association (CREA) suggests.

"Canadian housing market activity continued to slide in May, confirming that the six-year housing boom has, indeed, fizzled, and the poor winter results were not just weather- and holiday-related," Bank of Montreal economic analyst Robert Kavcic said in a commentary.

He based his comment on the CREA monthly report on 25 major markets, released Friday, which shows that volumes and prices are slowing or falling compared to May 2007.

Real estate sales in Greater Vancouver and in the Fraser Valley dipped more than 25 per cent in May compared to the same month a year ago while the number of new listings climbed.

The increase in listings combined with the slowing sales has cooled price increases which are now mostly in the single digit range across the two real estate boards. Abbotsford is the exception, where the average price for single-family detached homes rose more than 11 per cent in May compared to May 2007.

Montreal real-estate market is coming in for a smooth landing this year and next with a moderate slowdown in both resale and new construction activity, the Canadian Mortgage and Housing Corp. said yesterday.

CMHC predicts fewer resale transactions in the greater Montreal region in 2008 and 2009 compared with record levels in 2007. But sellers will remain firmly in the driver's seat and prices will rise. Condominiums will be the only segment where the number of transactions are expected to remain stable as buyers seek affordable accommodation.

In the residential construction sector, housing starts are expected to fall but remain at historically strong rates.

Here's a copy of the complete press release from the Toronto Real Estate Board:

Moderate sales and healthy price increases continued to characterize the GreaterToronto Area resale housing market during the first half of May, Toronto Real Estate Board President Maureen ONeill announced today.

With 4,422 sales throughout the GTA in the first two weeks of this month, activity has declined 12 per cent compared to the 5,003 homes sold during the first half of May 2007, said Ms. ONeill. Prices however, continue to be strong, averaging $400,817 in the GTA, up six per cent from the $377,612 reported a year ago.