CIBC ranks Canadian cities for economic growth and today announced Toronto leads the country with Edmonton coming in a close second place. Toronto lead the country for the second year in a row, showing the fastest economic momentum with strong population growth, employment and housing starts.
Edmonton ranked second in CIBC's measure or economic momentum, up from 11th in the 2011 Q1 report. The ranking reflects the city's strong labour market with overall employment rising by almost eight per cent year-over-year in the third quarter—the fastest pace among all of Canada's top cities. "The city also enjoyed one of the lowest unemployment rates in the nation (5.7 per cent as of the third quarter of 2011) while the quality of employment is relatively elevated (ranked 4th among all cities)," notes Deputy Chief Economist Benjamin Tal.
"As well, Edmonton's population is now rising by a year-over-year rate of 1.7 per cent—well above the national average, while the numbers of consumer and business bankruptcies are among the lowest in the nation."
CIBC Metropolitan Economic Activity Index (2011 Q3)
Rank CMA 3Q Moving Average
1. Toronto 23.0
2. Edmonton 20.0
3. Kitchener 18.0
4. Halifax 16.8
5. Vancouver 15.5
6. Ottawa 15.2
7. Montréal 14.9
8. Regina 13.8
9. Calgary 13.1
10. Trois-Rivières 11.7
11. Québec City 11.5
12. Winnipeg 11.1
13. St. John's 11.0
14. Hamilton 10.7
15. Sherbrooke 9.5
16. Kingston 7.5
17. Saint John 7.1
18. Sudbury 6.7
19. Saskatoon 6.4
20. Victoria 5.9
21. St. Catharines-Niagara 5.6
22. London 5.2
23. Windsor 0.4
24. Saguenay -1.8
25. Thunder Bay -3.4
Average of 25 CMAs 10.2
About the CIBC Metropolitan Economic Activity Index
Using 9 key macroeconomic variables, CIBC's metropolitan index of economic activity is structured in a way that approximates the change in each city's level of economic activity. With data going back in history, the index monitors not only the current performance of a given city but also tracks its cyclical behaviour against the national economy and other census metropolitan areas (CMAs). The focus is on the 25 largest CMAs in Canada.
The macro variables used to develop the index are:
Population growth; Employment growth; Unemployment rate; Full-time share in total employment; Personal bankruptcy rate; Business bankruptcy rate; Housing starts; MLS Housing resales; and Non-Residential building permits. The complete CIBC World Markets report is available at: http://research.cibcwm.com/economic_public/download/metro_monitor.pdf
Okay…
Let’s hear it from all the doomsayers out there.
(you know who you are)
I know you’re just dying to put a gloomy spin on this, so have at ‘er!
Ok, so you tell me why isn’t real estate booming even after such spectacular economic activity and ultra low interest rates ??
Well Jill, the media is a powerful influence even though they go more for sensationalism than reality. There has been no positive outlooks on the Edmonton real estate markets (my opinion). Even the EREB release in January and the media attention after, showed more of blaise scenario for 2012. 2% increase in prices, sales relative to 2011, etc. Considering real estate prices in Edmonton were mostly negative last year, I would expect better than a 2% increase.
If they came on the news and said real estate was heating up and sales were booming, watch what would happen in the market. Considering they are saying the opposite, people are still sitting on the fence. After all Doug Singleton said people have lots of time because there are lots of options.
Edmonton came from 11th place in the first quarter of 2011 to 2nd in the 3rd quarter so maybe we are the little engine that could. The spring market could catch everyone by surprise, sellers and buyers depending on what scenario plays out.
Well if anything is wrong , blame the media. Both sides do it.
Media people are just stooges and they will print even if you put the moon for sale. Most people don’t look at the media or the projections or EREB releases to make their decision on homes. They see affordability. When banks used to give mortgages like candy, they felt their affordability rose and hence the prices rose. Now that the banks are making it difficult, the prices are softening. Most likely the finance minister will further tighten the mortgage rules ( maybe 7% downpayment ). So I think trend is the opposite even if it takes longer because of the cheap money.
Because the economy is a lagging indicator for real estate. The economy has to improve first, then people move to the region for jobs and lastly, the house prices increase.
Why does it have to be boom or bust? Why can’t we look at steady sales and modest price increases and see that as a good thing? A boom is really only good for some people, and many people suffer because of it (cost of living, inflation, rental rates, interest rates etc. etc.). I look at last year’s market in Edmonton and see a good market – buyers could buy a home at an affordable price, and owners who lived in their homes for five or more years could get a pretty good return on their investment.
Anyway, with all the positive economic indicators, the main reason our market stayed steady instead of taking off was a good supply of homes on the market. There was good demand, but still more supply, and there is a fair bit of inventory left to churn through this year.
That’s a good comment !
I have no problem with the idea that we live in one of the best performing economies in the world. I have been telling my under employed friends in Ontario and BC for years of the opportunities here in Edmonton.
Interesting fact though that many people would rather have a terrible low paying job than move here. Though I like Edmonton, when I no longer need to work I will not stay….we all know why….been outside lately? The above will always temper real estate value here.
The trouble with the report I have is in the numbers. Calgary at 13 and Edmonton at 20 implies we are looking at least 1/3 better than thay are, which is highly unlikely.
So this article, posted on a real estate blog will have the bears dancing and buying spec condos. They won’t ask important questions about the rankings or even see where we were rated for the last four years while house prices have been dropping.
So, my dear dancing bears make sure you read this:
http://www.calgary-mortgages.com/mortgage-real-estate-news/?p=48
before you put too much stock in this kind of report. The report from 06, and Tals prediction about economics and house prices here and in Vancouver could not have been more wrong.
Turns out we had a score of 22.2 back then. Know anybody who bought a spec condo in 06? I do….
Of course, all references to Bears should read as Bulls in the above comment…oops, need more coffee!