photo: courtesy of cbc.ca
Alberta Housing Outlook
Two industries will be major influences in the house market within the next two years. These will be the Oil and Manufacturing industries. As oil production and refinery will witness a decline of demand in their corresponding states, the economic conditions will become affected. More specifically, the world’s oil price will be lesser which should affect the lucrativeness of the oil producing provinces’ housing areas. This includes Alberta.
The redeeming factor would, however, involve Manufacturing as lower overhead, and raw material costs will serve as a profit advantage for companies. With lower costs of goods sold, their corresponding provinces which include British Columbia and Ontario will have better chances of household prospects. Eventually, Alberta will rebound from the oil price challenge, and this is expected to happen in 2017.
The oil price challenge inevitably affected the energy industry as lay-offs resulted from the low demands of gas production. As a result, migrations and pending power will decrease from 2015 to 2017. When it comes to house formats, both Single and Multiple Family home formats will
Witness much lower unit demands in Alberta. Their prices will then be on the buyer’s favor given the market conditions.
It is expected for unemployment figures to rise due to the shift of Alberta’s industry employment rates. The unemployment rate will specifically increase at 5.9% and eventually decline to 5.7% in 2017. As a result, migration flow will slow down with an estimated at 37,200 in 2016.
However, since it is forecasted for the Canadian economy to eventually grow, it would perhaps be a good idea to consider a home in Edmonton in the middle of a buyer’s market. This way you have a chance to have a house in a good location, right when the market eventually picks itself up. Prepare your budget within a price range of $373,600 and $409,600 in 2016, while you can expect to pay $379,000 and $419,800 in 2017.
Trends That Will Influence Housing in Alberta
In reference to the decline of the World’s oil prices, it is expected for the Canadian economy to improve within a span of two years. Within 2015 to 2017, the labor market will be at a stable pace, if not on a percentage increase when it comes to wages. Hourly earnings will also rise up at 2.7 per cent. These should further engage workers to prospect their options on homes/houses. Certainly, the provinces’ gross domestic product will be on the rise despite the oil challenge.
Furthermore, Canada’s GDP will remain resilient with a 1.1% growth during 2015 and 2% in 2016. The rates were much lower than the usual 2.4%, but the redeeming bounce back in 2017 will achieve a rate of 2.6%. According to Bank of Canada, the economy will leap back within two years and will continue to run in full capacity.
As the whole economy rebounds in 2017, home buyers must expect mortgage packages to be competitively priced, although they will not also lower at that time. Rates will, in fact, increase, so discretion is required for investors given these market conditions.
More detailed information can be found at cmhc.ca
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