Well if you are a regular follower of my column, you’ll likely notice that I’m an eternal optimist and this year will be no different. I expect that we will be going through another year similar to those of the past few.
Our Alberta economy is one that will still be humming along and our housing market will follow suite with the price of oil, as long as the spread between our oil and the WTI price of oil doesn’t increase from where it currently is.
A few oil companies that halted their research/drilling budgets in 2012 came back online and helped with the drilling reports. Without any super catastrophes or new wars we should see the same price ranges for oil. It would be nice to see a resurgence of the price of natural gas, but on the flipside, it is cheap to heat the house.
Depending on the economist that you speak with, Canada’s economy is forecasted to grow between 2.0%-2.9%, which is stronger than most of the G20 countries. Alberta is one of the leading factors of that target and we are expected to clock in at economic growth above the 3.5% level, continuing with 2013 figures. Thus far in 2013, we’ve led the country with a growth rate of 3.8% .
According to RBC index, Albertans currently enjoy the best housing affordability in Canada and are expected to see much of the same going forward. According to the Alberta Treasury Board and Finance our average weekly earnings keep climbing while we started the year at $1,035.75/week and at Dec. 13th report we were up to $1,114.95, an increase of 9.2%.
With regards to home values, we’ve seen the average MLS listed Alberta home rise from $352,700 to currently at $381,300.00- but noted that month to month prices vary, and that we should expect gains more in the 4-5% growth range. New home starts in November rose to 42,200 which haven’t been seen since 2007, but many of those can be counted due to the major flooding in southern Alberta.
The Alberta population grew by 136,000 people in from Jan. 1 – Dec. 13. These new folks are obviously coming for the job growth opportunities and are also creating a lot of opportunities for revenue property owners as rental vacancies hit extreme lows. These folks want to buy homes, but just aren’t able to just yet as they don’t qualify as they don’t have the job stability required to qualify for a new home just yet.
All in all, 2014 should be a pretty normal growth year for us in Alberta, unless there’s some major shifts around the globe, I don’t think we’ll see much action that changes our current direction. Of course there may be a few bumps along the road, but these are all minor timelines relative to our long-term growth.
Jean-Guy Turcotte is an Accredited Mortgage Professional with Dominion Lending Centres Regional Mortgage Group.