Last week we had invited a market analyst from Genworth Canada (A mortgage insurer and CMHC’s main competition) to speak to a crowd of about 50 of Red Deer’s top realtors and builders to discuss our economic climate in the Red Deer area along with a snapshot of Alberta and where we are headed.
Firstly he showed us where we’ve been, by showing the migratory patterns from across Canada to our province, then showed us how that affected growth in housing along with its values, and that’s where our housing boom was essentially born.
Simply put, the more robust our resource sector, the higher the migration from other provinces to Alberta, thus a higher value for our homes as the demand for them increases.
He noted that during the end of 2008 and 2009 provincial migration to Alberta slowed, thus slowing our housing industry, but again that had to do with a decline in the demand for our resources. 2010 and 2011 will show us very similar years as we return to growth in our economy and interprovincial migration returns to Alberta as our economy recovers from the negative growth years.
Forecasts for the housing sector in the coming years show that we’ll see modest growth, similar to those in the few years prior to 2005 which is that of a more normalized pattern. But he did state that there are some factors that may influence a higher rate of growth, such as natural catastrophes like that of Japan and New Zealand as a demand for our resources spike in those times along with instability in the Middle East.
Housing values across our region for 2011 and 2012 will also be stabilized with values increasing in the 2-5% range.
Housing starts for the beginning of 2011 are a little off of the forecast pace, but he also said that a lot of projects are usually sold in the March, April and May periods and the starts should closely match what was projected.
MLS sales are showing that we are ahead of the projection as many people bought ahead of the 35-year amortization change, but also noted that many could have bought based on the small increase in interest rates.
The forecasts are still showing that we should have modest gains in the 2-5% level.
Unemployment in Alberta is another key factor and we are quite fortunate here as our unemployment has been more stable than that of the federal level.
We did see an increase in unemployment much like the federal level, but we’ve always been lower than the national rate. Companies are hiring again, as they look at their needs for the next six to 18 months and beyond.
Overall the picture for Red Deer and our great province of Alberta looks quite positive, and even though the increases look nominal, many people have prospered in the times as it’s easier to predict small gains than it is for huge gains.
Please note that the above are forecasts and predictions based on more than what’s listed here and this is a short synopsis of what was discussed.
Jean-Guy Turcotte is an Accredited Mortgage Professional with Dominion Lending Centres-Regional Mortgage Group and can be contacted for appointments at 403-343-1125, texted to 403-391-2552 or emailed to jturcotte@regionalmortgage.ca.
