The Edmonton metro area created a staggering 10,000 new full-time jobs in the last month according to an article in the Edmonton Journal. To put that in perspective, the U.S. (with 300 times more people) created 80,000 jobs in the same time period, Calgary lost 1,200 and Alberta lost 8,600.
Could be a one month blip, but we are up 3.9% year over year (26,000 jobs) while Alberta as a whole is up 2.7%. 23,000 of those jobs were full time, with big increases in health care, construction and retail.
Edmonton’s unemployment rate now stands at 4.4% — compared to 8.6% in Toronto, 6.4% in Vancouver, and 4.8% in Calgary.
“Edmonton’s gains have been significant,” says Vincent Ferrao, a Statistics Canada labour analyst. “Wages are some of the highest in the country and employment is booming.”
Calgary, says John Rose, the City of Edmonton's chief economist, is making a slower economic recovery, because it has traditionally serviced the southern Alberta energy sector. With more energy investment focused on the booming north, Edmonton’s traditional bailiwick, he says, the metro region is reaping the benefits.
“These are full-time, well-paid jobs and that bodes very well for economic growth in Edmonton, because now these people will be going out and buying cars and buying clothes and eating in restaurants,” he says. “The key constraint for Edmonton right now is people. We’re generating jobs much faster than people can move into this community to take advantage of it. We’re starting to run out of people.”
He didn't mention buying houses of course, but the real estate market tends to lag behind the job market by at least 6 months.
Builders are starting to feel the pinch when it comes to finding trades people, lets hope that doesn't get out of hand.
About Sara MacLennan
Sara MacLennan is the Director of Marketing at Liv Real Estate and a licensed Real Estate Associate. The bulk of Sara’s experience and wealth of expertise lies in on-line technology and marketing both for agents and consumers. Sara is the former National Director for Interactive Marketing for Coldwell Banker Canada where she was responsible for an extensive training program traveling to offices across the country training agents and brokers on marketing and technology. Find Sara on Twitter @edmontonblogger.
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Theres a lot of now hiring signs everywhere in Edmonton.
Garth Turner predicts Edmonton will crash by 25%. Bob’s real estate blog has a good post up today about the hypocrisy of Turner. link to bobsrealestateblog.com
The worse the doom and gloom, the more books he sells. If he can sell a million books with a 25% correction prediction, then a 50% correction prediction should sell 2 million books.
LOL. People don’t buy books because they are telling the truth. Just check out the subscription numbers of typical academic publications.
Instead, people buy books to fill a psychological need. Look at the sales number of Harry Potter. Turner is trying to make money by filling that same need. The only difference is that the Harry Potter series never pretended to be about facts.
Remember guys increased economic activity is not an argument towards the housing market. These housing prices have been built on debt and silly lending rules, some of which are slowly being reversed to their original state.
I would agree with a 20% correction in Edmonton over the next few years…. I think other cities will be hit much worse.
If you can understand that the housing market is built on mortgages, why would you predict falling prices? The interest rate has nowhere to go but lower in the next couple years. The recent term change from 30 years to 25 years has just paved the path for a rate reduction.
I predict this, as I truly believe “my mentality” is the way of the future.
Here I will explain myself…..
I am 27 years old well educated and currently employed with a good salary “roughly $130k a year before taxes”.
I have a family 2 small children and a wife who brings home a modest income of roughly $30k-$40k a year.
When I was younger I fully admit I did not pull the plug on purchasing a new home due to being heavily in debt…. now I am debt free and have approximately $80k in savings. I am currently renting a large townhouse for my family in the riverbend area for $1200 a month.
I look at my some of my friends purchasing homes over the years 0% down, 5% down …. hearing them brag about all the equity they are compiling.
My humble opinion is were the US housing market went wrong similar to us, is all of this is allowing buyers with no money to raise prices for people like myself using cheap and easy money.
It’s human nature if you go to the bank and they are willing to place you in your dream home all of which without truly working for it, its easy to get into a bidding war and spend $400k for a condo because its not your money …. its the Tax Payers money….
Getting back on point I truly believe that my approach to home ownership is the future. That unless you can afford 20% down, you should not be buying. What this will do is lower home prices for all the folks like myself who are new to the market… which in turn will make home ownership affordable…
I know a lot of you with homes hate the idea of losing equity, well think of your children who are now getting out of college and want to get into the housing market… They are faced with prices that are damn near double they were 10 years ago, without the wages to support it.
Going head over heals into Debt should not be the only option… Debt = Slavery.
I will end this long winded rant with a statement I think we should all think about.
The current President of The United States moved out of a home worth $800k before moving in to the Whitehorse…. what makes you think just a nobody like me in comparison should be owning a house for $500k… something which is very common with my peers bringing in a similar salary.
Once again this is all my opinion… and I don’t think ANYONE truly knows whats going to happen…
P.S I hope Oil doesn’t get any cheaper either…. because we all know what happens than as we all have lived through it.
Sorry for the spelling mistakes “Whitehorse” lol, I should not be typing this while on a conference call.
It’s hard to go through such a long post but here are the main post:
1) making 130k – nothing to do with 20% correction
2) 2 kids – nothing to do with 20% correction
3) should not buy without 20% down – been that way when it’s up 300% or down 50%, so still nothing to do with 20% correction
4) president of USA – nothing to do with 20% correction
You might as well say you dreamed it.
Lol, fair enough it was a bit of rant…
What I am trying to get at is these housing prices are built on debt not income.. Meaning if all people actually had to put 20% down housing prices would be no were near where they are today.
I will end my rant for today with a few points once again about why I feel a 20% correction is coming one way or the other:
1) Interest rates hikes which may be delayed ARE COMING at some point…
2) Baby boomers whom have been using their houses a retirement plan will start flooding the market looking to either downsize or get out all together.
3) New housing rules will absolutely destroy the Canadian Condo Market….
My humble opinion is were the US housing market went wrong similar to us, is all of this is allowing buyers with no money to raise prices for people like myself using cheap and easy money.
Then why are some new home builder going broke in Alberta? If it was just cheap money and 20 somethings with nothing down driving up housing prices that would mean all new home builder would be drowning in cash and bankruptcy would be the last of their worries.
In case you didn’t know, the resale market prices are set by new home prices, with the exception of prime location areas.
wsn: “The interest rate has nowhere to go but lower in the next couple years.”
This is really an irresponsible comment, designed to confuse the uneducated. Do you work for a bank?
Are you referring to education by 7pm TV news?
It’s amazing how most people have that sheep mentality. If it’s said in the news that the interest rate will go up, it must be true.
I have many friends and co-workers who believe that crap and locked in 5-year-fixed mortage at 4%+. They have lost $10k~$20k in interest over the past five years. I always use variable. My previous mortgage was at P-0.5 (2.5% now); my current one is at P-0.9 (2.1% now).
Use your brain, people! The US of A won’t raise rate until 2014. Canada’s rate is already 1% higher than the US. They simply won’t raise it any higher for the sake of Ontario manufacturing jobs. And it still have a 1% room to go lower if more bad news comes from Europe.
Just as my previous post predicted the rate could go lower, today I have already learned that the mortgage rate (not central bank rate) did go lower. The lowest 5-year-fixed is now 2.99% (from a big five). Take that!
US fed reserve has extended the freeze on rate hikes until 2014 at least.
There is little chance BOC would increase rates (especially given the current Europe fear) in the short term.
I agree with Sarah and Sheldon that the new mortgage rules will have small effect on the market here (especially on single family homes).
My prediction (unlike Renting and proud) is a modest and slow increase (2-5%)
in the next little while.
Sadly, the credit card and other store card’s rate remain 19%-29% and that’s the real problem here.
When prime rate is 1% or 2% it should be a crime to charge 20% on credit cards.
Maybe a reasonable 5%-6%?
I wonder how long it takes for the Finance Minister to wake up?
Canadian indebtedness will remain the same after this change in mortgage from 30 to 25 years.
And most people use credit card because the low wages they earn.
It just not enough for a living.
Many jobs pay wages that was good in the ’70-’80.
Now, in 2012.
High taxation on every level and low wages are much more problem than 30 years mortgages, what the Finance Minister addressed.
For starters, don’t use cards that have %19 to %29 percent rate!!!! Also don’t use credit cards if you can’t pay them off every month. If you’ve already buried yourself deep in debt, call a credit councilling service.
Some people learn about credit early and use it properly, but I would say most people need to be kick in the head by it, before they learn anything.
charlie “I wonder how long it takes for the Finance Minister to wake up?”
Why don’t you wake up and start your own credit card company and offer a rate at 6%. That way you will become a billionaire in no time, because your competitive rate absolutely crashes all your competitors. Sounds like a win-win to me.
Actually, my Capital one charges 5.99% as long as I pay in time every month.
But some others the rate is 23.9%
What I’m saying is credit card debt in the canadian household probably is a bigger problem than mortgage debt.
So when the Minister of Finance can rule that noone can take mortgage longer than 25 years ammortization period, the same way he should rule that no interest rate charge should be higher than prime+ 5%.
The reason is very simple: At that rate everyone would be able to actually pay back the debt but at 20+% it is not possible.
My opinion is capping credit card interest rates across the board would be very bad policy.
The primary reason why credit card interest rates are as high as they are is because the default rates on credit card debt are very high. It is very risky, unsecured debt. If a company charged 6% rates long-term to its entire customer base, it would not remain viable.
Credit card issuers use low teaser rates to entice borrowers to bring their balances (and future borrowings) to them, which then reset to a much higher (and economically viable) rate after a period of time (e.g. 6 months).
Some credit card products targeted to individuals with very good credit ratings and otherwise identified as very safe borrowers of unsecured debt may be charged relatively low rates long-term, but this is the exception and not the rule.
Capping credit card rate would effectively bar a large segment of the population from accessing this area of the credit market. I would consider that a violation of those people’s economic rights.
Your statements are not correct. You can still get more than 25 years amortization, the rule is for those insured by CMHC. There are many lenders who will give you more years.
When I am selling a service, who is to tell me how much I can charge for that? If you don’t want my service (borrow money at that rate) go elsewhere. What is next? asking the government put a cap on the price of bread, or how much I should charge to do you hair at a salon?!
People who pay interest on credit cards will not (and should not) be a home owner. You need a minimum amount of financial discipline to own certain things (like a home).
Renting and Proud,
Just want to bring up one point for discussion…
You stated:
1) Interest rates hikes which may be delayed ARE COMING at some point…
The only reason that interest rates will be increased is if inflation is becoming a problem. With inflation will come an increase in most items, one of which will likely be house (and rent) prices.
If inflation really starts to get out of hand, then yes, interest rates will be much higher. But with high inflation you could easily see that $500,000 house selling for over a million dollars (which will seem like $500,000 in todays currency).
If I am one of the people with a 5% down mortgage, I have just been freed from my debt slavery by the inflation. My debt will be (relatively) reduced to almost nothing in comparison to the price of other things, salary hopefully included.
Thoughts?
No, there should not be 20-30% interest, period.
Should be a crime to charge that and be outlawed.
Where is the government to intervene?
Or just move to North Korea, where making a commercial loan is a crime.
If I was making 130k at the age of 27 and debt free, I’d buy instead of rent for sure, but that’s just me.
Well… perhaps that’s why he’s debt free.
Not to be doom and gloomy, but whoever is thinking that interest are going to go lower are crazy. I mean, do people not understand what caused the rise in prices to begin with??
If the government still feels that they have not popped the bubble, then they will continue to implement policies to do so.
Might be in six months, maybe a year. But they know that the current model is unsustainable. Hell, they created it. The moment they have a decent opportunity to increase rates they will. If they don’t, a US style correction is on the way. Hopefully, it’s not too late.
Sheldon/Sara
Can you still qualify for 30 years or longer amortization if you pay down more than 25% of the price?
The way I understand is that you can not take out mortgage for longer than 25 years insured by CMHC.
But you only need CMHC insurance when your deposit is less than 25%.
It 20% and yes if you avoid a CMHC insured mortgage you can negotiate with any lender on the terms of your mortgage.
renting and proud,
Edmonton’s market is definitely based on fundamentals. The biggest one is income. Alberta has the highest income in the country yet the prices are pretty conservative compared to the other major cities. (Vancouver and Toronto and even Calgary). While Vancouver and Toronto have income to price ratios of 10 and 7 respectively, Edmonton is still at a respectable 3.5.
Edmonton is the definition of a market based on fundamentals.
Guys, you don’t get it.
If the government can cap the amortization rate at 25 years, why not cap credit card interest rate of a maximum of whatever %?
You want to regulate, than regulate everything, especially what hurts most people:the sky high interest rates?
Or do not regulate anything at all.
Market will decide which way to go.
Prices and sales already started to come down in Vancouver and Toronto before the Feds intervention.
They should have waited for the market to work out itself.
You’re right.
Any time the government sticks its dirty hands into something they mess it up far worse than if they had just left it alone.
For example, they’re building “affordable housing” left and right, screwing up the rental markets. Landlords take a chance buying rental properties, then the government comes along and gives it away to thousands of people, screwing up rents.
And don’t get me started on how they’ve ruined healthcare, with their queue jumping for themselves and year long (or longer) waits for the unwashed masses.
Bev Oda is just the very tiny tip of the iceberg.
Three percent is basically full employment. Alberta is a province where people abuse the welfare system thus unemployment rates will always stay low because workers who actually work for a living have to migrate from other provinces.
Alberta is where people abuse the welfare system???
Have you been to Newfoundland, where they are required to work for 13 weeks to qualify for full UI benefits year after year?