Nothing affects Real Estate more in Alberta than the labour market. Without the foreign investment that Toronto and Vancouver have, it’s the strength of the labour market that affects our industry most.
We saw this in 2008/2009, during the Global Economic Crisis. Property values in Alberta dropped, but no where near as deep or as long an impact as what we have seen in the last two to three years. Why? Because the Global Economic Crisis did not have the same impact on jobs as when oil priced tanked.
The most recent down turn was much more local and, as a result, we’ve seen a much bigger impact on the Real Estate Market.
Well, the good new is we’ve had a shift recently, and it’s about time. While no one is expecting the “boom” that Alberta is know for anytime soon, the job numbers for October are encouraging. Todd Hirsch of ATB wrote Friday that there were 12,000 new jobs created in Alberta last month. All of them full-time!
How are we doing compared to our Western neighbours?
Alberta’s job market is also outpacing Saskatchewan. Saskatchewan was also hit hard by the oil price collapse. While BC is well and truly ahead on the job front, you can clearly see in the linked graph that while Alberta’s impact was deeper, we are recovering quicker than our prairie neighbour.
Now how will the Real Estate Market react?
Well, Real Estate is a lagging indicator – meaning that it takes time for strength in the labour market to show a correlating increase in Real Estate. But if the strong job creation continues, then we should see a much more stable 2018. Amazon’s new distribution centre is sure to help with that!