MONTHLY CHECK-IN
“Why are you so obsessed with the stats?” Someone recently asked us this question. Huh. What makes them think that we wondered? Apparently, it’s because once a month we post about the economic fundamentals. Huh.
Please allow us to clarify. Yes, we discipline ourselves to pay attention to the economic fundamentals. Once a month. The rest of the month is spent focused on property management, marketing, searching for new deals, working with lenders, etc…. Why would we care once a month? Because real estate investing has been proven to have a very predictable relationship with the local, provincial and national economic conditions, as well as some well known influencers (like inflation and interest rates). So here’s this month’s overview.
- Nationally the GDP was up 0.6% for January, 0.1% for February, and the early data suggests it was down 0.1% for March https://www.bnnbloomberg.ca/after-economy-posts-strong-start-to-2023-new-data-suggests-slowdown-has-begun-1.1913567
- Provincially, the GDP numbers tend to come out a bit slower, so we are just now learning that the Alberta GDP for 2022 was up 5.1%. Food, forestry and fuel all showed impressive increases. https://www.atb.com/company/insights/the-owl/gdp-estimate-for-2022/?fbclid=IwAR3Q1-W3s6GWqzIL1cumZ024TZEJgoj2IeqECxVQ63VKAdbaEc38FG3CDyI
- Canada continues to have an unemployment rate of 5.0%. Alberta’s unemployment rate is up slightly to 5.9% in April (from 5.7% in March) https://financialpost.com/news/economy/canada-job-gains-beat-expectations
- Wages are up nationally by 5.2%.
- Check out page 4 of the Calgary Real Estate Board’s Quarterly forecast for a fabulous infographic about population and employment trends: https://www.creb.com/-/media/Public/CREBcom/Housing_Statistics/Quarterly_Reports/Q12023ForecastReport.pdf?fbclid=IwAR14ItxskfhZ3bn2MRf1Q-EyWvZGXoZhiL3sKCcaP7yfMhjra5MgLSMNRPA
- Rental demand remains very strong in Calgary, and still shows dramatic year over year rate increases: 1 bedroom rates are up 23.3%, 2 bedroom rates are up 25.1%. https://rentals.ca/blog/rentals-ca-march-2023-rent-report
- More office buildings are being converted to multi-family units, but it remains to be seen how this will affect rental supply.
- The real estate market is so far a very different story than last year: number of sales are down, new listings are down, supply is very low at only 1.2 months, and prices continue to edge up slowly: https://www.creb.com/News/CREBNow/2023/May/Prices_reach_new_record_high/
We think Q2 and Q3 will be quite, um, interesting? Some people will need to move. The provincial election may produce some interesting ripple effects on the economy. We may start to see a national recession, but continue to see growth in Alberta. And personally, we’re not anticipating much movement on interest rates just yet.
We encourage our colleagues and friends to spend a bit of time each month on their own research into both the real estate and rental housing markets. Then it’s off to pursue our financial freedom with whatever investments we choose!
@mtnedgedevelops https://mountainsedgedevelopments.com/
