STAMPEDE MAYHEM BEGINS
With water issues resolved in the nick of time, Calgary is now officially in party mode for the next 10 days. What’s your favourite? The parade today? Mini-donuts? Rides? Chuckwagon races? The bar scene? Pancakes? Barn animals? Cowboy hats as far as the eye can see? It’s gonna be a hot one, so pack some patience with all that water! And if you’ve never been to a Calgary Stampede, how can I explain it? Sort of like Mardi Gras in New Orleans, but less beads and more horses.
Meanwhile, back at the real estate investors’ ranch, we’re updating our monthly economic fundamentals. Bet you’d rather be stampeding!
- GDP is still growing (up 0.3% in April), both nationally and provincially, but slowly (early forecast is for 0.1% in May). https://thoughtleadership.rbc.com/canadian-gdp/
- Job numbers were released today. Canada’s unemployment is up slightly to 6.4% for June, from 6.2% in May. https://www150.statcan.gc.ca/n1/daily-quotidien/240705/dq240705a-eng.htm. Of special note is that youth unemployment nationally is at 13.5%, and the “employment rate of returning students at its lowest point since 1998.” Alberta’s unemployment rate (seasonally adjusted) came in at 7.1%, down from 7.2% in May. https://economicdashboard.alberta.ca/dashboard/unemployment-rate/. Calgary had the second highest unemployment rate in the country at 8.5%, while Edmonton is a much more respectable 7.1% for June (scroll down on the Alberta Economic Dashboard for numbers by CMA). Regardless of the source, the economists continue to be worried about Canadian wage growth of 5.4%–but did anyone notice that it seems to be strike season? For example, Westjet? Employers’ choices appear to be limited.
- “Alberta’s population stood at 4.85 million as of April 1, 2024, up 49,140 in the first quarter for an increase of 1.0%.” When all the numbers are in, “it’s likely that 2024 growth for the census year (July 1, 2023 to June 30, 2024) will come in closer to 4%.” That’s a lot of new cowboy/girl hats! https://www.atb.com/company/insights/the-twenty-four/alberta-population-update-first-quarter-2024/. Projections are suggesting international and inter-provincial migration into Alberta should slow to between 1.2% and 2.2%. https://www.atb.com/company/insights/the-twenty-four/population-projections-to-2048/. But that’s still a lot of infrastructure that this province is going to need in the next 25 years or so. And we should note that not everyone sees population growth slowing as quickly as our national leaders suggest. Benjamin Tal is suggesting that Canada’s greatest population increase in 2024 may come from asylum seekers. https://economics.cibccm.com/cds?id=352931fa-f991-440f-ad2b-ac85b1b1f599&flag=E.
- Rental demand remains strong, but it appears that prices are stabilizing a bit in the Greater Calgary area. The overall rental average price hit an all-time high for Canada of $2202 in May, https://rentals.ca/national-rent-report. However, Calgary’s 1 bedroom rate only rose 6.2% year over year, while 2 bedrooms rose 6.0%. And if you look closely, there is very little change month-to-month. Personally, we’re happy to hand over the double digit rental increases to our Edmonton landlord colleagues.
- Calgary’s housing market may also be showing a few signs of slowdown. https://www.creb.com/News/CREBNow/2024/July/June_sales_decline_amid_supply_challenges_and_rising_prices/. The overall Benchmark price is currently at $608,000, an 8.5% increase from June 2023. BUT, this is only a $2700 increase month-to-month (ie from May 2024). Clearly the housing market story has many more elements, nuances and details that can be found in the article. If you’re looking at a specific product (eg semi-detached, make sure you look deep into those details).
- Inflation rose to 2.9% in May, from 2.7% in April. So everyone and their long-lost pony is speculating about interest rate cuts, or not. You can find this stat, and the connected opinions in a wide variety of media.
- Oil production in Alberta broke record levels for May https://www.atb.com/company/insights/the-twenty-four/atb-economics-the-seven-july-5-2024/.
- “Rental housing starts reached the highest in decades in 2022 and 2023 with more than 80,000 new units started each year.” (this is a national statistic) https://thoughtleadership.rbc.com/proof-point-rental-housing-construction-is-finally-picking-up-in-canada-but-will-it-be-enough/ Locally building is only expected to increase with Calgary’s new regulations set to come into effect in August 2024 (wait for it, the ink isn’t dry just yet). Many real estate investors are also moving forward with plans after CMHC released some changes, especially to their MLI select program, https://www.firstnational.ca/commercial/resources-insights/article/first-national-comments-on-key-cmhc-policy-enhancements.
- Meanwhile, back in Cowtown for a warm, dry stampede season, The Economic Intelligence Unit has just named Calgary as its 5th most livable city, https://www.calgaryeconomicdevelopment.com/newsroom/calgary-rises-in-ranks-to-fifth-most-livable-city-in-the-world-in-2024.
And now we return you back to your regular bevvy on a Summer Friday evening in the sunshine. Play safe, and plan some Big Audacious Goals for your Financial Freedom.
