WRAPPING UP THE (mostly) BEFORE TRUMP FUNDAMENTALS
Usually, we love the before and after pictures. Next March, if we remember, we’ll try to re-visit this post. I wonder what a full year of chaos, uncertainty and trade war will look like in Canada? The intention of this blog is simply to document where we were before the Americans tried to economically destroy/annex our beautiful and independent country. With executive orders changing daily, if not hourly, we believe it is impossible to predict the next year.
Looking backwards, where have Canada’s economic fundamentals been up to now?
- The fourth quarter GDP for Canada came in at 2.6%, and the third quarter was revised up to 2.2%, https://economics.td.com/ca-real-gdp. Way to go consumers and a GST holiday?
- Employment for most of the country was stable, with only 1100 jobs created. Unemployment remained steady at 6.6% nationally, 6.7% provincially. Calgary’s unemployment rate improved from 7.7% in January to 7.3% in February. Edmonton’s unemployment rate improved from 7.2% in January to 7.1% in February. Lethbridge seems to always have jobs! Their unemployment improved from 5.2% in January to 5.0% in February. Red Deer has the unfortunate distinction of having the highest municipal unemployment in Canada, with 9.6% for February 2025. Wages were up 3.8% on average, nationally. https://www150.statcan.gc.ca/n1/daily-quotidien/250307/dq250307a-eng.htm. From this same research data, Statistics Canada, population “Growth in February 2025 (+47,000; +0.1%) was less than half that recorded 12 months earlier (+97,000; +0.3%), and the slowest since April 2022.”
- From a different branch of StatsCan, “Population growth slowed in the third quarter of 2024 to 0.4%, or approximately 176,699 people, nationally.” https://www150.statcan.gc.ca/n1/daily-quotidien/241217/dq241217c-eng.htm. From a provincial perspective, “Alberta’s population expanded by 3.9% (from the year prior) on October 1, 2024, far surpassing the national increase of 2.3% and leading all provinces.” Calgary’s population jumped up by 6%, and Edmonton saw 4.7% growth in the same time—to July 1, 2024. (https://www.atb.com/company/insights/the-twenty-four/alberta-subprovincial-population-update-2024/.
- According to https://rentals.ca/blog/february-2025-rentals-ca-rent-report, rents are coming down in Canada, on average by 4.4%. There are both dramatic rent increases and decreases to be found in the report. Overall, rents in Alberta rose by approximately 2%. Lethbridge saw rents rise 11.7%, Medicine Hat saw rents rise 11%, Edmonton saw overall rents rise 3%, and Calgary is now on the downturn with an average -6% drop. Three bedrooms are down 9% in Calgary! There was a dramatic increase in purpose-built rentals that were released (completed) into the market in 2024. There could be more drama as many more units are set for completion in 2025, and even more are headed to permits for years beyond 2026.
- Calgary’s housing market is also showing signs of slowing, or stabilizing, depending on your perspective. Are you sitting down? Year-over-year, there was a 75% increase in inventory for the greater Calgary area, and 117.6% increase in months of supply (this translates to 1.1 months in February of 2024, to 2.4 months in February of 2025). https://www.creb.com/News/CREBNow/2025/March/Feb_2025_stats/. Experienced real estate agents will tell us this is still a balanced market.
What does it all mean for real estate investors?
- No one is recommending purchasing pre-construction condo’s right now. The risk is real, and heart-breaking.
- Renters will be happier, landlords will probably need to set more competitive (lower) rates.
- Some of the exodus that was predicted for new Canadian residents may not materialize. AKA: population growth will slow, but may not decline as originally feared/reported by some.
- Buyers may find some deals, and have plenty of time for due diligence
- There may be some resilient pockets. I’ll be curious to see if Kevin O’Leary’s project moves forward; Grande Prairie may still see growth if the jobs are a’plenty for the build. Edmonton is on the rise for real estate; it remains to be seen how Mr. Trump’s policies will affect that city. And the new Prairie Gateway might be just in the nick of time for a country looking to improve trade between the provinces https://www.calgary.ca/planning/prairie-economic-gateway.html. That could mean ongoing jobs in Calgary’s Southeast neighbourhoods, as well as Langdon, Chestermere and even Strathmore (for those of you who can tolerate smaller towns).
- Feelings will become more relevant again, as fear and uncertainty rule the day, https://thoughtleadership.rbc.com/trade-turbulence-shakes-canadas-housing-market-foundations/. Fair enough. It will require extreme self-discipline to remain as rational and strategic as possible.
- There are fewer and fewer “experts” that will be able to translate the data and rhetoric into what it means for us as families, consumers and real estate investors. May we recommend following ATB’s Mark Parsons for Alberta related information? We’re not looking for perfection, just closer to facts, data, and the most reasonable forecasts. Here’s the latest: https://www.atb.com/company/insights/the-twenty-four/atb-economics-the-seven-march-7-2025/.
It’s going to be a wild ride ahead! Be safe, be well my friends.
