Why all the Gloom Surrounding Alberta?
There really has been a lot of talk lately surrounding the booming economy of Alberta. But still, some economists are gloomy about things such as the housing market. But it’s Alberta. And you can bet that if it rains on your bail of hay one day, the sun will come out and dry it all out again the next. That’s the case, says one expert, when it comes to a somewhat stagnant housing economy this sector is currently seeing.
What’s wrong with Alberta? Yes, homes have been going up at a rapid pace, and there certainly is a flurry of activity. And yes, they even managed to keep that whirlwind pace up when the rest of the housing markets across the country started to cool off. But even with all the activity, housing prices have plateaued, with a single detached home in Edmonton currently costing $401,000, and not yet surpassing the climax that 2007 saw.
That despite the fact that while the rest of the country has been cooling, housing prices have increased nearly across the board. And despite the fact that Alberta’s population has expanded by 116,000, or 3.04 per cent, in 2012. That’s nearly three times the national growth rate.
So, why all the gloom surrounding Alberta?
Don Campbell, senior analyst and founding member of the Real Estate Investment Network, says that, like the rest of Canada, it’s partly due to the tighter mortgage rules that have made it more difficult for certain individuals to buy a home. Without the demand, Campbell says that buyers simply can’t raise their prices any more than they are.
He also says that some buyers purchased during that 2007 era, at the height of the boom, and were bitten badly when things started to soften. They are also hesitant to come back in now, and that too, is keeping demand at bay.
But, Campbell also says that this plateauing is nothing to worry about. And that the demand will come back.
“Alberta’s population is growing substantially, especially with that younger age cohort. They come out here to get a job and make $80,000 instead of $30,000 back home. And once they’re here, they discover Alberta is a pretty cool place to live,” he says.
“But it takes awhile that to kick in, often about two years. So I’m very bullish on the direction that the market is going to be taking over the next portion of the cycle, say the next three, five or seven years.”
It’s clear that Albertans have nothing to worry about; and that, even when they seem to be leveling off, they still manage to find a way to climb to the top.