There has been a ton of talk about a recent report from BMO about the housing market in Alberta. "Alberta Bound... For Another Housing Boom" lays out all the reasons we should see a very strong real estate market in Alberta this year. Some of the facts in the report are staggering:
- Every province in Canada is now seeing a net out flow of migrants to Alberta
- Alberta's population growth has surged to the highest level we've seen in over 30 years
- Our GDP growth forecast is 1.2ppts ahead of the national average for 2014 - the only province expected to have growth over 3%
- Employment growth is 3.8% higher than last year (compared to basically no growth in the rest of the country)
- Retail sales growth are more than twice the nearest competitor
- Nearly 50,000 interprovincial migrants moved to Alberta last year
When you look at it that way... holy crap! In reality, this is information we've known for quite awhile, and have shared it on the blog over the past few months, but not collected into one report.
The BMO report suggests that people are moving to Alberta for two reasons: to get a job, or to get a better paying job. The wage gap between Alberta and Atlantic Canada is the highest its been in decades, and the lower tax burden in Alberta creates a compelling reason to stay even if things down east improve. Of course, even with housing prices on the rise, affordability in the province is still better than the national average.
Essentially point the report makes is that Alberta’s (and more specifically, Calgary’s) housing market is quickly heating up again. Assuming there is no sudden drop in oil prices, home prices are going to rise, and builders are going to get busier. They don't expect a repeat of 2006/07, instead we have solid economic and demographic fundamentals in our market, not a bubble emerging.