Housing: city attractive for investors from West
Khalid Malik
Telegraph-Journal
SAINT JOHN - The anticipated growth of Saint John as an energy hub and the fact investors from Western Canada are looking at real estate in Atlantic Canada as a good investment are two of the reasons behind a strong resale housing market in Saint John.
Royal LePage Real Estate Services, in a report this month, said the growth of the energy sector in Saint John is expected to create an abundance of jobs and maintain the buoyancy of the housing market, compensating for the significant loss of tradespeople who have flocked to Alberta.
Dave Cochrane, manager of Royal LePage Atlantic in Saint John, said Thursday the refurbishment of Point Lepreau, the prospect of a second nuclear reactor, the proposed construction of a second oil refinery and the construction of the LNG terminal are creating a lot of jobs. The construction of the refinery alone would result in 5,000 jobs and the refinery would employ 2,000 people once in operation.
"LNG is the largest independent trades employer right now," he said.
He also said investors from Western Canada are starting to buy properties here because the prices here are "very reasonable." These investors live in Alberta. "They are not coming to live here," he added.
The tradespeople who would come the city to work, will live here, Cochrane said. "That's why western investors are buying here."
He said the buyers are "not overly concerned" about the slight increase in interest rates this week.
"Interest rates are still very reasonable compared to 10 to 15 years ago," said Cochrane, who has been in real estate business for 14 years.
"We don't want to see them go up, but it is not a major concern right now," he said. "I have never seen economic optimism like it is in Saint John right now."
Gino Romanese, vice-president of Royal LePage Real Estate Service, said "ironically, the market will become more active because of the recent hike in interest rates."
The people who are expecting to buy in the next six months or so will decide to buy sooner because of the fear of the rates going up further, he said.
"But no one expects the rates going up too high," Romanese said.
"Things are definitely rosy in Saint John," said Angela Beyea, executive officer of the Saint John Real Estate Board. "Sales are up considerably from this time last year."
She said 328 units were sold in May, which is up 20 per cent from the same month last year. In April, 201 units were sold, up 17 per cent from April 2006.
"This indicates the market is doing very well. Across-the-board residential buying is up," Beyea said.
The average price of a house that sold in May was $137,535, six per cent more than last May. The May average price is one per cent lower than in April this year, but the sales volume was up by almost 50 per cent, she said.
"It is useful to look the average price over a period of time, but the increase of six per cent over last year shows that the pricing trend is up," she said. Beyea said the increased sales are a result of more jobs in the area. She said 5,700 new jobs were created in Saint John over the first quarter of this year. This figure is up by 400 from the first quarter last year.
"Consumer confidence is high and that helped to push up the housing market in Saint John," Beyea said.
She also said the Canadian Real Estate Association is forecasting that housing prices are going to rise over the next two years. "There is increased economic activity going on in Saint John and the city will reflect the same increase in housing prices," Beyea said.
Nationally, the resale housing market finished the second quarter on strong and steady footing; surprising many by its strong momentum, Royal LePage said.Healthy and robust conditions are expected to prevail through to year's end as all regions are poised to experience a rise in average house prices, with double-digit gains forecast for Edmonton, Calgary, Winnipeg and Regina, it said..
Echoing the growth and activity experienced in all Canadian markets in the first half of the year, the national average house price is forecast to rise by 9.5 per cent, passing the $300,000 mark for the first time, to $303,300. Home sale transactions are projected to rise by eight per cent to 522,306 unit sales by the end of 2007, the report said.
"The momentum from the year's extraordinary start spilled into the second quarter, compounding typically busy spring market activity and stimulating solid price appreciations in almost all regions of the country. These conditions will certainly be an impetus characterizing Canada's real estate market through to year's end," said Phil Soper, president and chief executive officer, Royal LePage Real Estate Services.
"As we move into the second half of the year, we continue to expect areas of aggressive price appreciation in the west, and modest, mid-single digit price increases in Central and Atlantic Canada."
Royal LePage said its survey of Canadian house prices is the largest, most comprehensive study of its kind in Canada, with information on seven types of housing in over 250 neighbourhoods from coast to coast.
According to Statistics Canada, investment in non-residential construction in Saint John was up by nearly 23 per cent in the second quarter of this year to $33 million from $27 million in the first quarter.
According to the figures released this week, overall, eight provinces showed increases in commercial investment in the second quarter. The largest contributions (in dollars) occurred in Alberta, where investment rose 15 per cent to $1.5 billion, and in Ontario, where it increased 3.5 per cent to $2.1 billion. Both were all-time highs.
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AIRPORT SETS ONE-MONTH RECORD FOR PASSENGERS
16 July 007
John Buchanan, President & CEO, Saint John Airport Inc. is pleased to report that the passenger numbers for the first half of the year are up 21.2% over the same period last year. In fact, the Airport broke their single-month passenger record in June – with numbers up a staggering 39.6% over last June.
“We are obviously thrilled with these results”, says Buchanan, who was quick to add that the growth can be attributed to extra summer flights offered by Air Canada, as well as the start-up of WestJet daily direct service to Toronto, and introduction of seasonal flights this past spring by SunWing Vacations to Punta Cana and Cancun.
WestJet Airlines recently announced that they will be staying year-round, as a result of the strong support they have seen for the summer flights.
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Port Authority Reports on mid year Port traffic
July 20, 2007
Port Authority Reports 10% gain in Mid-year traffic and Increased East-side Activity
Saint John (NB) – Saint John Port Authority released overall mid-year traffic results today reporting an increase of 3% in total port traffic and a 10% increase at Port Authority facilities.
“Increases were realized in most of our cargo categories compared to this time last year,” explained Captain Alwyn G. Soppitt, President & CEO of the Saint John Port Authority. Recyclable metal provides the only exception to the rule with total of cargo handled in this commodity coming in at less than the previous year, a result of timing of shipments.
The port has seen significant increases in cargo and ship activity at all of its facilities over the past six to eight months. The East side in particular has been more active with potash and salt exports at Barrack Point Potash Terminal, lumber and project cargoes at Lower Cove, and an extended five-month layby of the “Kiowa Spirit” at Long Wharf. The cruise season kicked off at Pugsley Cruise Terminal with a great start last month with the Royal Carribean’s Grandeur of the Seas and with the inaugural call of Carnival’s exclusive cruises to Saint John and New Brunswick.
The cruise sector will really heat up as the Port of Saint John heads into the traditionally busy Fall schedule. On two consecutive September days (September 25 and 26), the Port is expecting triple calls of cruise ships on each day. This will bring over 17,000 passengers and crew through the City in a 48-hour period and will see an increased use of Long Wharf as a quality cruise facility.
This East-side activity in cargo and cruise joined continuous and ongoing activity at West-side operations in forest projects, containerized cargo along with the anticipated start-up of the FPC Inc. operation in Shed D.
“The first half of 2007 has also seen increases in forest products and in containers,” concluded Captain Soppitt, “and we are confident that growth will continue overall through the balance of the year. We expect a record year in cruise business, further imports of sugar and limestone, the introduction of petroleum coke imports through the port and continued exports of lumber.”
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PotashCorp Announces New Potash Mine and Mill Expansion at New Brunswick
July 20, 2007
PotashCorp Announces New Potash Mine and Mill Expansion at New Brunswick
Potash Corporation of Saskatchewan Inc. (PotashCorp) today announced plans for a new 2-million-tonne potash mine and expanded milling operations in New Brunswick, which will raise the company's projected total annual potash capacity to 14.9 million tonnes by 2011. The four-year construction project will begin once necessary regulatory approvals are obtained and has an estimated cost of US $1.6 billion, which includes US $100 million for additional upgraded granular production capability.
"This major expansion prepares us for the next step in the growth of our company," said PotashCorp President and CEO Bill Doyle. "By continuing to invest in our Potash First strategy, we will be well positioned to meet the expected growth in potash demand around the world."
Expansion at New Brunswick is strategically and logistically important, as this PotashCorp facility is located close to the company's existing terminal at the Port of Saint John, with the shortest shipping times to key Latin American markets like Brazil, where substantial long-term growth in demand for upgraded potash products is expected. New Brunswick's existing milling, distribution and port facilities can be leveraged to maximize the benefit of the company's investment. Additionally, as the company experiences higher but stable brine inflows at the existing mine, mitigation costs there are expected to remain high over the long term. Water inflow is not expected to be an issue in the new mine. Substantially increasing production in Eastern Canada also further diversifies the sources of PotashCorp's growing potash capacity.
Using conventional underground methods, the new mine will draw on the company's large, high-quality Picadilly deposit, which contains potash ore grades similar to those found in Saskatchewan deposits. This relatively flat deposit contains two potash seams, each varying in thickness to a maximum of 60 feet, and will allow for a stable, long-term, low-cost source of potash. Once fully developed, the new mine will replace the existing underground operation, while the current milling facility will be expanded by 1.2 million tonnes, including 750,000 tonnes of additional compaction capacity.
Because this new mine will be built adjacent to the company's existing New Brunswick property and use some of its facilities, construction can be completed in less time than the five to seven years typically projected for a greenfield potash operation, at a per-tonne-cost 33 percent below the current estimate of $2.22 billion needed for 2 million tonnes of new production in Saskatchewan. Plans are to keep the existing mine and mill fully operational throughout the construction and new mine development process. The construction phase is expected to generate the equivalent of 2,500 person-years of employment, and 140 new full-time positions will be created upon completion. The project will be financed out of free cash flow and existing credit facilities.
The New Brunswick development is in addition to previously announced debottlenecking and expansion initiatives underway at the company's Lanigan, Patience Lake and Cory operations in Saskatchewan, which are expected to increase PotashCorp's productive annual capacity from 10.7 million tonnes today to 13.7 million tonnes by the end of 2010.
"Our goal is to be the lowest-cost supplier on a delivered basis to all key world markets," Doyle said. "By expanding our existing operations in New Brunswick, we are capitalizing on the logistical advantages there, further strengthening our leadership position in potash for the benefit of our customers, investors and other stakeholders over the long term."
PotashCorp is the world's largest fertilizer enterprise producing the three primary plant nutrients and a leading supplier to three distinct market categories: agriculture, with the largest capacity in the world in potash, third largest in phosphate and fourth largest in nitrogen; animal nutrition, with the world's largest capacity in phosphate feed ingredients; and industrial chemicals, as the largest global producer of industrial nitrogen products and with the world's largest purified industrial phosphoric acid production capacity.
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