The Future Of Alberta Real Estate 2011-2015
The Future Of Alberta Real Estate 2011-2015


During The 2007 Boom Days,

 

Investors ASKED For Another

Pre-boom Buying Window…

Is It Here, Or Not?

How Are You Deciding?

Greetings blog subscribers, 

It is time for me to be a little bit blunt and I apologise in advance. This weekend changed me, it changed me because of the research I was doing, it changed me to the point that I had to write this unscheduled post.

In the 1990's Albertans thought it was too late to get into the real market (the downturn had just occurred).  In the 2000's, Albertans thought it was too late to get into the real estate market (the downturn had just occurred). At each point there seemed to be as many reasons NOT to invest, as there were reasons TO invest.  Yet the market took off and the brave investors did incredibly well.

During both those periods, people outside of Alberta were the first to see its opportunity and they snapped up the cash-flowing deals long before most Albertans themselves awoke to the fact that they were living right in the midst of what would prove to be the next economic boom (job growth, population growth, real estate demand increases).

In other words, those outside the province ate many an Albertan's cash-flow lunch. It was only after the momentum was at full speed that many did awaken to try and get into the market.

This blog entry is a wake-up call. I do not sell real estate, nor do I profit if someone buys a property. My job is to analyze what's really going on by peeling away the confusing messages, and when windows of opportunity open, to point them out to savvy investors.

So let me get to the point… as of this weekend I have not seen the Alberta economic fundamentals pointing to this strong of long term momentum in all the years I have been studying them. And this factors into the turmoil that is occurring around the world, the strong Canadian dollar, the huge debt being created in the US, and the potential for a longer term world economic doldrum. 

 

Those outside the province are already seeing it, and are jumping in with both feet (just like the last two times). My wish is that Albertans aren't the last to see it again.

Here's a very quick  snap shot of what's happening right in your back yard. And why March 19, 2011 is such an important date for investors across the Alberta

Real Estate Market Numbers are Exactly

The Wrong Places To Look When You Want

To Predict What's Going To Happen

Here's what you use to predict the real estate market future: The Momentum Graph,  which shows exactly the progression of an economy and how it eventually impacts the Real Estate Market.

The Economic Formula to Predict The Future

Real Estate Formula

In a nutshell this graph states the following:

GDP growth >> Job growth >> Population growth >> Increased rental demand (12 months later) >> Increased rents >> Property purchase demand (18 months later) >> and eventually leads to property price increases.

So where are we on this chart for Alberta?:

GDP Growth- The Foundation of it All:

 

Alberta Economy Set for Solid Growth in 2011: RBC Reports 4.3% hike in GDP forecast for this year >> article here.  Plus the Conference Board of Canada states Alberta will lead country in growth in 2011.

As well, as you can see on the graph below, Calgary and Edmonton are forecasted to lead the country in GDP growth for major cities for the next 3 years.

Major Cities GDP Growth Forecasts
Canadian GDP Growth

Good growth is  3%, yet they are predicting a whopping 4.3% growth for Alberta.  This GDP growth leads to.

Job Growth:

Alberta leads the country in employment gains  in February.  Close to 14,000 jobs created in February. To read the full article >> click here.

But even more important to you, look at the projected number of Construction Jobs being created over the next 8 years. You can see where we are today – compare that to 3 years in the future and you start to see what I am talking about. 

We all remember how things were going in Alberta for the years 2006- 2008.  Check out the future forecast for 2012- 2019 and you can see it easily surpasses that period.

Alberta Construction Job Forecast
Construction Job Forecast

I hope that you are seeing what I am seeing. It is coming over the next 24 months for Alberta – the momentum is beginning and  sophisticated investors know how to get out in front of the cycle.

This is not speculating – this is true investing. Doors like this open every so often, your job is to step through them.

I hope to see you at an upcoming REIN™ event!

Signature

Don R. Campbell

Real Estate Investment Network™

 
  • Owen Shaw

    Great post Don, thank you for sharing. This is the real deal information that makes it possible to work through the tougher times by hanging onto the vision of what’s to come. The last ride was a wild won, looking forward to the next one!

  • http://www.vanderveenteam.com Rachel Vanderveen

    Wonderful news for Albertans!

  • Randi

    The construction forecast for trades looks more dramatic than the actual numbers – from 135,000 in 2011 to 155,000 in 2017 is about a 15% increase over five years. The bar graph make it look like it’s going to more than double.

  • http://www.prestprop.com ThomasBeyer

    Right on Don !

    Alberta had prices drop from 2007 to early 2010 .. and we sold quite a few of our Alberta properties in 2007 .. into the boom .. some at insane profits .. and we have been sitting on the sidelines for almost 3 years in Alberta waiting for prices to stabilize and rise again .. which happened tepidly in 2010 ! We bought 2 assets .. one near Edmonton and one in Calgary .. our biggest purchase ever for $14.6M for 120 units near the expanding airport & LRT extension .. and we’re poised to buy more in 2011 as the prices are still reasonable .. but I expect a severe tightening in vacancies later this year into 2012 .. and that is when rents & prices in multi-family assets will start to move upwards dramatically as even less motivated sellers can be found !

    NOW (2Q 2011) is a great time to BUY in Alberta !!

    Keep up the excellent research we and so many others rely on !

    Thomas Beyer, President & Diamond REIN Member
    Prestigious Properties group
    http://www.prestprop.com
    Become a Landlord – Without the Hassles (TM)

  • Cdcpanthers

    FYI – Don and his REIN team has been calling these Alberta appreciations now for the last 3 years – in that they were supposed to have already occurred. 12% appreciation in 2008? Whoops.

    I guess that if you throw enough darts at a dartboard, eventually one will strike the bulls-eye.

    Buyer beware.

  • Patrick Mccabe

    Hey Don,
    Great news for a home owner in Calgary.  I have a quick question for you.  Twelve years ago I bought a fifty year old bungalow on an R2 lot in the Marda Loop/Altadore area.  In my neighbourhood many developers are knocking down old bungalows and building two “in-fills” or a duplex.  I’m thinking of doing the same thing.  Do you have any advice on the risk or timing of the project or any other advice for that matter.

    Thanks,
    Affraid to Pull the Pin

  • Wendy

    Hi, I have a rental property worth approx $400k with $150k remaining on the mortgage its up for renewal in Oct/11 and currently getting $1500 rental income, I also live in a condo worth approx.
    $160k  and still owe $100k, payments are $1000/mo incl. condo fees, Ive recently heard Real estate is going to take a huge tumble because of the U.S. debt crisis and because of the baby boomers al set to retire in the next few years, and have been suggested to sell both as quickly as possible and hold my cash until prices bottom out on real estate, please share your thoughts on that prediction??

  • http://jerrycharlton.com/ Jerry Charlton

    Real estate is looking good in Alberta esp. in Calgary. Buyers have been busy buying real estate last February. MLS listings have also included rental properties. This will be a good year.

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