WINTER SUNRISE IN CALGARY
Yes, March is definitely rolling in like a lion in Calgary today! But the symbolism of the strength of a lion is quite fitting for our economic fundamentals. Our underlying philosophy of “keeping it positive and keeping it real” is going to diverge a bit. This week is heavy on the positive, next week will be heavy on the real side of new home building.
What are we loving about Calgary these days? In a nutshell, the diversification and growth that we are seeing. But let’s explore a bit deeper.
GDP
- Canada’s Q4 GDP has been reported at an annualized rate of 0.99%. And the Q3 GDP was revised to -0.5% (contraction). The estimate for January is 0.4% growth.
- This compares to the USA, with Q4 GDP growth of 3.2%. In contrast, both the UK and Japan fell into a recession in the last 2 quarters of 2023.
- We don’t yet have current provincial GDP numbers for Alberta.
- Looking forward, global GDP is expected to be 2.5% in 2024, while Canada is currently predicting 0.8% growth for 2024.
- In Alberta’s new budget, the province is anticipating GDP growth for 2024 at 2.9%.
Did your eyes glaze over all these stats yet? For real estate investors, we’re looking at more upside than downside in our provincial and local economic indicators. We’re simply sharing the broader perspective.
POPULATION
- Our provincial population predictions were also outlined in yesterday’s budget. Alberta is forecasting 3.7% population growth for 2024. We think these numbers bring both opportunities and challenges for rental housing providers. The Royal Bank of Canada has recently been quoted saying, “it has never been harder to rent in Canada.” Unfortunately, this remains true in Calgary, as in many other cities. https://thoughtleadership.rbc.com/its-never-been-harder-to-rent-in-canada-vacancy-rates-fall-to-35-year-low/
TOURISM
- One of the areas we’re really excited about in Calgary is the growing tourism. The BMO Convention Centre is due to open in June of this year. It boasts more than 1,000,000 square feet overall, and can host conventions of over 10,000 delegates, making it one of the largest in Western Canada. The ripple effect of jobs from this new venue will be astounding!
- The next large capital project with major tourism implications is the Calgary Event Centre, due to start later this year. This project is currently budgeted at $1.2 Billion, including infrastructure upgrades. That’s a significant number of jobs to build, followed by thousands of jobs as Calgary is able to attract better concerts and other sporting events.
- Even before either of these venues are functional, we’ve had a phenomenal February with a Cross Country Skiiing World Cup event in Canmore, The Scotties Tournament of Hearts in Calgary, and now the Winter Canadian Special Olympics in Calgary. Hotels and restaurants are booming! All of this before Stampede mayhem descends on Cowtown!
We are aware that our national media sometimes believes that what happens in Ontario and Quebec is what is happening across the entire country. We share our weekly/monthly blogs to quietly suggest that Calgary and Alberta are a little different.
For out-of-province real estate investors, this means adjusting assumptions, and even questioning media reports. Just like so many other areas in life, the decades of boom-bust are changing dramatically.
We’re not economic experts, but we love that Alberta is paying down provincial debt, planning a budget line for disasters and emergencies, and even offering a tax credit of $5000 for skilled trades workers who move to this province. Know anyone who’s interested? Send them our way!
