MARKET UPDATES
“Extra extra, read all about it!” That’s what people used to yell in the streets when something really important was going on.
Now, very few of us read newspapers. And the news is blaring what appears to be crisis information all the time. How does a real estate investor pick out the stats, trends and numbers that we need?
We’re going to endeavor to provide some quarterly updates for those of you who want to filter out the drama, and just get the facts. We’ll be focusing on the Calgary and Alberta markets. Investors can benefit most from real estate stats, rental market information, and the big picture economic information. So here we go!
Big Picture:
- The Conference Board of Canada is forecasting Canada’s real GDP will rise 6.1% in 2021, and 3.5% in 2022. They are predicting a 7.2% rise in real GDP for Alberta in 2021, and 5.6% for 2022. Just for reference, an average year sees GDP rise 1.5%-3%. Yes, we have a lot of catching up to do.
- Alberta’s unemployment continues to trend downwards to 8.7%, while Calgary also trends down (even in the Third Wave?!) to 8.7%. For reference, Canada’s unemployment is at 8.2% and Edmonton’s unemployment is at 10.2%.
- Albertans have benefitted from the highest average weekly earnings in the country—even during the pandemic! Currently Albertans make $1208 on average (AB economic dashboard, Stats Can and ATB Owl reports). The weird thing is that this stat has been very consistent—for decades!
Rental Market Picture:
- ca’s May 2021 Report shows Calgary 1 and 2 bedroom rental rates to be flat (month over month, and year over year). However, many anecdotal reports from the smaller landlords have been suggesting small increases in rent rates of $25 to $100/month. No one is offering rental incentives any more.
Real Estate Market Picture:
- When looking at Calgary real estate numbers, the go-to source is usually Ann-Marie Lurie, the chief economist with the Calgary Real Estate Board. A quick search can pull up endless stats about the Calgary real estate market.
- Also, most Calgary investors are using caution in interpreting Year over Year numbers, because, well, 2020=Covid—need we say more? Year over Year stats are somewhere between unusual and skewed.
- So for now, we’re focused on trends: Listings are up, Sales are up, Prices are up, and Days on Market are down.
- As Calgarians, we understand that the detached market has now recovered to 2014 levels. This is a real and important stat—that is mind-boggling for some of our friends in ON and BC. Recovery is a great place to start!
- It is very important in Calgary to look into the stats for your property type (condo, townhouse, detached) and your neighbourhood. And then there are the surrounding communities (Airdrie, Cochrane, Okotoks, Chestermere, Strathmore, etc…).
- Word on the street: the market appears to be slightly cooling for June 2021, but it is still a seller’s market, with healthy demand.
- Bottom line: momentum continues, slowly but surely.
Is your mind swimming with numbers yet? How do we interpret all the data?
We are excited to see strong evidence that Calgary and Alberta are entering the recovery phase of the Real Estate Cycle. As strategic investors, we love properties with cashflow, and limited downside risk. We love the increasing diversity in jobs that we’ve seen coming to Calgary and the surrounding communities. Can any Albertan promise the huge passive appreciation rates seen in other provinces? No one knows. But for savvy, long-term wealth creation through real estate, we think Alberta is a fantastic place to be in 2021!
