The hero of this story is a phoenix: a mythical bird that lives forever, going through cycles that resemble lives. Time and time again, the phoenix rises from the ashes of its previous demise.
For some Albertans, the past 7 years have been part of a tough real estate and life cycle. GDP was down, jobs were down, people left the province in search of something better. Just when things were looking up in 2020, Covid sent the province into a deeper trench. The gorgeous Phoenix from 2014 slowly died.
Quietly, slowly and a little under the radar – our beloved hero is rising again. Anyone interested in the evidence of the recovery phase for our hero?
Did you know that Calgary just had it’s best October sales record ever recorded?! EVER! Bet you don’t hear that on the national news! The housing market remains strong in and around Calgary, with a Benchmark price of $460,100—that’s up 8.9% year over year. Demand is strong, and inventory remains low in the city and the surrounding smaller towns. Even apartments are finally improving with more sales activity. And the average rent for a 2 bedroom in Calgary is $1555, up 5.4%–that’s a far cry from offering free tv’s to anyone who would rent a place in 2016!
Our evolution from the depths of the Alberta recession, and the depths of the pandemic, continue with the recent job numbers. Alberta’s official October unemployment rate is down to 7.6% (from 8.1% in September), Calgary is down to 8.0% (from 8.9% in September) and Edmonton is down to 8.0% (from 8.2% in September). Yet another “battle of Alberta cities” is seen in these recent job numbers!
GDP is a murky stat these days. TD Economics reports a 0.4% increase in GDP for the Canadian economy (month over month, for August 2021). They are also predicting no growth for September – but we won’t see those numbers for a little while longer. Supply chain issues and a complex labour market are expected to slow the overall recovery. But over here in the rebel province, Alberta’s Economic Outlook is forecasting 6.7% growth in GDP for 2021. The TD provincial economic forecast from Sept 22 suggests a more modest 5.3%; it is important to note that these are ever evolving market conditions. Currently the global demand for oil and gas is a rising tide as more and more countries re-open and recover from Covid. Truly, we are watching the rising tide (trend), more than the specific stat.
Investors are already noticing. Commercial and industrial properties are seeing increasing competition for purchase. On the residential side, the affordability in Alberta cannot be underestimated as a HUGE advantage these days. Based on average income and average purchase price, it only takes about 6.5 times the average Albertan income to purchase a home here. In BC that’s 17 times, and Ontario that’s 16 times the annual average income to be able to purchase a home.
As the Alberta economic phoenix is born again, where do you want your real estate investment plans to go? We know, everyone loves the hot & sexy markets! But there is real financial wealth to be grown in these early stages of recovery. What will your personal financial re-birth look like?
