Retail Sales Canada February 2016

Real Estate Market North America March 2016By: Paul Young, CPA, CGA

DisclaimerThis presentation discuss Retail Estate Market for North America

Paul Young - Presenter

BioCPA/CGA25 years of experience in Academia, Industry and Financial solutionsYoutube Channel - https://www.youtube.com/channel/UCAArky1bAXPSuV2NLtUnyLg

AgendaHousing StartsHousing Market USAHousing re-sale marketRetail Sales / CanadaRetail / USAHQ RelocationsClean Energy

4

Housing Starts

Scotia Bank/TD Bank/Stats Canada/BEA5

Housing - USA

http://www.gbm.scotiabank.com/English/bns_econ/retrends.pdf6

Canada Housing Re-sale MarketCanadian existing home sales rose by 1.5% m/m in March, and were up a strong 12.2% from last year, with sales breaking previous monthly records. Listings fell 1.4% in the month, pushing the sales-to-listings ratio up to 61.7% in March, up 2.2 percentage points from the prior month, and above the 60% threshold often considered a sellers' market. The rising degree of bargaining power held by sellers has helped push average existing home prices up 15.7% year-over-year. Ontario and British Columbia housing markets continued to drive the national narrative. Almost all of the markets currently in seller's territory (which make up just under half of Canadian activity) are found these two provinces. While sales in Greater Vancouver and Greater Toronto edged down slightly from February as activity was pulled forward by changes to mortgage insurance regulation, they remain near all-time highs. In fact, the MLS HPI rose 23.2% in Vancouver and 11.6% in Toronto from the year prior, building on gains from the previous month. By contrast, Calgary homes continue to devalue, down 3.7% from a year ago. Likewise Saskatoon prices slipped 2.7% from the same time last year.

https://www.td.com/document/PDF/economics/comment/CanadianExistingHomeSales_Mar2016.pdf7

Retail Sales Canada (Household Focus)

Stats Canada

8

Retail Sales USA (Household Focus)

Stats CanadaUS BEA

9

HQ - relocations

1. http://www.us.jll.com/united-states/en-us/Research/north-america-cow.pdf?0439a3f9-8e98-4e2b-b08a-bfa9d50cf9fb10

Clean Energy / OptionsSolar Windows - http://www.bloomberg.com/press-releases/2016-03-01/solarwindow-enters-into-third-phase-of-technology-development-agreement-with-u-s-department-of-energy-s-national-renewableResidential Trends -http://www.homes.com/blog/2016/03/residential-solar-trends-2016/Microgrid - http://microgridknowledge.com/dc-linked-microgrid/

Issues Real EstateSoftwood Lumber - During the duration of the SLA, Canadas market share went from 34 per cent in 2006 to just over 28 per cent by around the time of its expiration. During that same period, the U.S. lumber industrys domestic market share grew from 61 per cent to 71 per cent. So why wouldnt our neighbours to the south be supportive of keeping the agreement as it was? Slow economy - Canada 1.5 to 2.2% range and USA 2.1% to 2.6% rangeSlow wage growth - Economists said falling oil prices would amount to a pay cut for Canadians, and the latest data on wages could be the proof. Average weekly earnings in Canada for January were up a paltry 0.4 per cent over the prior 12 months, a recentStatistics Canada releaseshows. Thats far slower than inflation. Theconsumer price indexshows prices were 2 per cent higher in January than a year earlier. This suggests inflation-adjusted wages have fallen by some 1.6 per cent over the past year.New down payment requirements for insured mortgages between $500K and $1 million kicked in on February 15th. As such, we expected that the jump in February sales numbers in Vancouver and Toronto might be slightly overstated, as people rushed to purchase before rule implementation. We saw a very modest pullback in these markets in March, in line with our expectations, but the rule changes had little effect nationally as they were targeted at a small share of the market. Low interest rates will continue to support the housing market, helping offset the slight rise in national unemployment which we expect will nudge up to 7.5% by mid-year. Regionally, the divergence among the Canadian housing markets is expected to become even more pronounced throughout 2016. The weak economic conditions likely to prevail in the Prairies will feed through into a broadly weakening housing market. On the other hand, low financing costs will be the key driver in markets that are more fairly balanced, like Montreal and Halifax, helping to absorb built up inventories. Deterioration in housing affordability in Toronto and Vancouver continues to erode the benefits of cheaper financing experienced in other regions. We expect affordability and new lending rules will temper demand and be leading factors in determination of future price growth. Overall, we expect Canadian home price growth to slow to below 3% y/y this year, but prices in Toronto and Vancouver should continue to grow well above that pace, though will decelerate for the remainder of the year. Over the longer-term, rising interest rates will gradually weigh on demand.Generation Y are now entering the housing market as such US experts strong Housing starts from 2016 through to 2030.

http://www.woodbusiness.ca/industry-news/first-cut-march-april-2016-3119http://www.huffingtonpost.ca/2016/04/04/inflation-outpacing-wage-growth-earnings-shrinking_n_9611794.htmlTD Bankhttp://www.gordcollins.com/real-estate/us-housing-market-looking-strong-2016-to-2020/12

Other Sources:Commercial - http://www.us.jll.com/united-states/en-us/Research/north-america-cow.pdf?0439a3f9-8e98-4e2b-b08a-bfa9d50cf9fb Canada Retail Sales - http://www.slideshare.net/paulyoungcga/retail-sales-canada-february-2016USA Retail Sales - http://www.slideshare.net/paulyoungcga/retail-sales-usa-march-2016Nearshoring - http://cerasis.com/2016/04/04/nearshoring-and-reshoring/