Comedy, Tragedy and Plenty of Drama

COMEDY, TRAGEDY AND PLENTY OF DRAMA

Imagine with me for a moment?  What if we were watching the current events on a movie screen or in a theatre.  Maybe even popcorn in hand?  We would laugh at the absurdity of imposing tariffs on an island inhabited by … penguins!  We would cry at the thousands of people losing their jobs at the whim of one man’s evil economic plot.  I wonder what costume we would give the bad guy if this was a Marvel comic?

Alas, in this case, life is truly stranger than fiction.  Many real estate investors are perplexed.  And the economic fundamentals are changing faster than a hamster wheel.

But how will we track the possible recession, then recovery, if we don’t pay close attention to the data.  Yes, it may seem historical or outdated by the time it is published.  But it’s still rational, measurable statistics and numbers—rather than the emotional beliefs, lies and misinformation that fly around.  So as real estate investors, we continue to pay attention.

1. GDP: Year-over-year, Canadian GDP rose 2.2% in January 2025.  That is 0.4% growth in the month of January (before that guy—wink, wink—really got rolling).  https://thoughtleadership.rbc.com/canadian-gdp/.  Per capita GDP had finally improved for 2 consecutive months.  Economic forecasters are now posting optimistic, base case, and pessimistic forecasts like the most recent predictions from ATB.  And honestly, that’s an incredibly tough job these days!!  https://www.atb.com/company/insights/the-twenty-four/alberta-economic-outlook-march-2025/.
2. Job growth? Um, no.  And these numbers are mostly from before the recent tariff mayhem.  Canada lost 33,000 jobs last month, for an unemployment rate of 6.7% in March, compared to 6.6% in February.  https://www150.statcan.gc.ca/n1/daily-quotidien/250404/dq250404a-eng.htm.  Strangely, Alberta lost 15,000 jobs in March (largely from manufacturing/wholesale/retail trade), for an unemployment rate of 7.1% in March, compared to 6.7% in February.  Edmonton’s unemployment rate now sits at 7.2%, up from 7.1% in February.  Calgary’s unemployment rate is currently also 7.2%, down from 7.3% in February.  And Lethbridge’s unemployment is 5.1% in March, compared to 5.0% in February.  ATB is predicting that Alberta’s unemployment may settle out around 7.6% this year.  https://www.atb.com/company/insights/the-twenty-four/atb-economics-the-seven-april-4-2025/.
3. Population growth: Canada’s overall population grew by 0.2% in Q4 of 2024, clearly slowing down, but also a seasonal slow-down (moving in winter?  Who wants to do that?). https://www150.statcan.gc.ca/n1/daily-quotidien/250319/dq250319a-eng.htm.  Over 3 million non-permanent residents remain in Canada as of January 1, 2025, but this number declined by 28,341 people over the 4^th  Statistics Canada notes that this may also be seasonal as some permits expire December 31 of each year.  Overall, Canada had a growth rate of 1.8% in 2024.  As for interprovincial migration, Alberta saw a net gain of 5,292 people in Q4, for an annual growth of 36,082 in 2024.  This compares with a net gain of 42,243 people from inter-provincial migration in 2023.  International migration into Alberta was 69% of our total growth for 2024; many people believe this province is more attractive based on affordability. https://www.atb.com/company/insights/the-twenty-four/net-interprovincial-migration-to-alberta-by-province-2024/.
4. Rentals: Calgary saw one and two bedroom rental rates come down approximately 7.5%, year-over-year.  This compares with a 4.8% drop in the national average rent.  https://rentals.ca/national-rent-report.  Edmonton rentals saw an overall increase of 2.9%.  It’s a cautionary time for refinancing multi-family projects in some cities and provinces, based on rental income.
5. Property sales and values: Luckily there are geniuses at the Calgary Real Estate Board that track every detail you could possibly want to know.  And they are kind enough to share it with us every month:  https://www.creb.com/News/CREBNow/2025/April/March_2025_stats/.  The bottom lines, in our opinion, are that property values remain stable, but sales are slowing, leading to dramatic increases in both inventory and months of supply.  We remain in a balanced market in Calgary, but will it tip towards a buyer’s market soon?
6. Wild Card: some homes are now being declined by insurance providers in Calgary due to recent hail storms.  Just google that one for multiple news articles.

The media is all over the real estate numbers across this beautiful country.  However, as we watch the stock markets today, we are brought back to a theatrical drama of almost unbelievable storytelling.  Except for that inconvenient truth thing.  How many trillion disappeared today?  Not our homes.  We’re sure grateful for real property assets during these turbulent times!  Keep calm, if you can, my friends!  Hope you make time to enjoy some gorgeous warmth and sunshine this weekend!!