I have been a long-time lurker on this blog... and have been quite amused by some of the comments...
"Once we get a real government in place real-estate values in Edmonton will rebound...." hmm Maybe Commercial real-estate...
Regarding Residential a UCP win will temporary deflate the real-estate balloon with several expense reductions taking place resulting in less city employees, etc.
Edmonton real-estate is only going one direction, and I am fearful an over-reaction is on the horizon.
So many sellers have their home on the market for multiple months, and refuse to price it at market. The longer it's on the market the lower it's market value, and the more debt the seller accumulates trying to carry the mortgage cost...
In my opinion we will not see bottom until 18-24 months from now... in the meantime if real-estate is your thing. There are some STEALs out there in the commercial market....
Edmonton may suffer as the bloated governmental waste is trimmed. But Alberta as a whole will be booming again once the communists are booted from office.
You can only support your economy with government expenditure for so long. Sooner or later you have to create real wealth or you're doomed.
"You can only support your economy with government expenditure for so long. Sooner or later you have to create real wealth or you’re doomed."
Good Point and with economic conditions as they are in this province, this government has had no choice but to borrow and spend in an attempt to stimulate the economy when the oil industry collapsed.
I'm curious know, with a rather modest forecast for the oil industry, what will be the economic driver that will create this new wealth?
Canada's inflation rate rises to 3%, highest level since 2011
Thanks to minimum wage rise, inflation getting higher. Mortgage rate will go higher since saving interest is higher.Posted by Sharon on Friday, August 17th, 2018 at 6:05am
Ok well, so the NDP's are spending to stmulate the economy, but all the money's coming from taxes, is that it?
It's actually called deficit spending and if you think Harper did better, remind me to avoid your economics class..
Anyways that wasnt the question.
The question was, when the NDP's get banished to the gulag, what is going to be the new economic driver for the next government?
(Which everyone seems to think will be the PCs, who don't actually exist anymore...)
Well, I guess the proof is in the results. See lower taxes and balanced budget anywhere on the horizon from the NDP? The federal conservatives managed to do it in the midst of the worst world wide recession in the last 80 years. I totally see your point about the lack of a huge economic driver. There is nothing else in this province to replace the massive amount of capital spending and high wages of the oil and gas sector. Which begs the question. How long can we spend 9 billion we don't have each and every year waiting on 100 dollar a barrel oil. Simple answer is somebody (UCP) is going to have to be the bad guy and put the books right before they start looking like the broke, high tax, jurisdictions the rest of the provinces in this country are.Posted by Itchy on Saturday, August 18th, 2018 at 1:46am
Hi Nick. By commercial you mean office, retail and industrial or multi-family residential like apartment buildings?Posted by Wally on Saturday, August 18th, 2018 at 4:04am
Yes we are on the same page, sort of.
I would not count on the UCP to balance the books, first of all they are an unknown entity. Sorry but Jason Kenney does not inspire me as a leader at all.
It's going to take years to pay down the current deficit, which means years of austerity budgets which nobody really wants, just ask Greece Italy, Portugal, Spain and Ireland..
As for Harper, him and his buddy Carney came up with a great plan. ..instead of borrowing the money to stimulate the economy, let's lower interest rates to next to nothing, get everyone to buy houses at inflated prices and create the greatest personal debt levels ever seen in this country!
Statistically no one saves enough in this country, and when the austerity hits and a lot of people lose their jobs with the tightening, who's going to pay those bills?
I know this comes off as very cynical, but that's the way it is.
You don't stimulate the economy by increasing spending and raising taxes. It's akin to sucking and blowing at the same time. The way to juice an economy is to spend like mad for a couple of years and cut taxes to stimulate consumer demand and stimulate business formation and hiring. The template that works is pretty clear. It's what Harper did, and it worked great. The NDP has imply done what the NDP does any time it gets into government, spend like mad, raise taxes on everything that moves or takes up space and massively increases the size and scope of government. They will likely be gone after one term, which means the result will likely be government job losses around the province generally, and in Edmonton in particular. So between that and rising interest rates, the outlook for Edmonton real estate is likely somewhat negative over the next 2 or 3 years. If you're buying a house with the intention of staying in it for 10 years or more, the next couple of years may present some interesting deals for you to buy.
Well, I have to agree with you Itchy. I think the housing price is declining faster than expected. Rising interest rate, inflation, housing over supply, and most likely the coming change in AB government, will for sure affect many Albertans. housing prices will be first to get hit followed by a large deficit. It will take 2-3 years post election to stabilize. I am selling my house now and I am willing to take 90% of the asking price. It is better than waiting and most likely sell for much less. Welcome to capitalism!Posted by Scratchy on Saturday, August 18th, 2018 at 6:15am
Re your question "The question was, when the NDP’s get banished to the gulag, what is going to be the new economic driver for the next government?"
The next driver should be generated by the free market economy. The next government's role should be stop wasting money and only focus on the essential service. Stop wasting money on alternative energy scams, such as the $1.4B spent to inject CO2 into the earth (under PC's rule).
Pretty vague there WSN.
The only thing that will balance market is debt, sooner or later but debt should be paid no matter what kind of government we have.Posted by Andrii on Sunday, August 19th, 2018 at 2:38am
The economic driver will be businesses coming back to Alberta that were chased away by the NDP government.
By the way, adding Harper into the conversation every time does nothing to forward the conversation. Harper was federal. Nutley is provincial. We're talking provincial here. Best not to talk federal, as we have one of the most inept fools in power currently federally. He's alienating just about every country on earth and driving away investment on a massive scale.
Ok, I guess that solves it then!
I will look forward to all these businesses rushing back to Alberta, though I can't think why.
By the way, what business were chas ed out of Alberta that you can directly attribute to the NDP government?
As an aside as soon as anyone startsname calling I dismiss your comment out of hand due to being ignorant.
Housing markets, most realtors will tell you, are local. When it comes to residential real estate, Edmonton is nothing like Vancouver or Toronto, so one cannot generalize, but they all share. Common factor: the Canadian dollar and interest rates.
Each housing market reflects the realities of its community: Prices for the most part reflect what people are earning, and how much they can get a mortgage for.
But what if this system were to break down? What if housing markets began to behave like stock markets ( which is happening now in Vancouver and started in Edmonton ) their movements no longer reflecting the economic reality of the community, instead rising and falling on the whims of the investor class? The Canadian dollar and interest rate. This is something many of us in Canada suspected was happening as we watched the influx of foreign investors into Toronto and Vancouver (and now, it seems, Montreal, Calgary, and Edmonton)
Simply put, what's going on in a local economy may no longer be reflected in the price of housing. And that could be a real problem, because unlike other assets like stocks and bonds, housing is also a basic necessity of life. The decoupling of living costs from local economic realities could create massive disruption to households' quality of life. Are we going to feel this soon in Alberta, The answer is yes, within one year or so
Picture a situation where Canada's economy slows down and households are in a tougher financial situation. But foreign investors keep pumping money into housing, raising prices and making an already dire affordability situation even worse.
Or, conversely, picture a situation where everything is going along smoothly in Canada, but a recession in Asia reduces the flow of cash into the housing market, causing a housing bust — and resulting in a recession in Canada.
"Policymakers cannot ignore the possibility that shocks to house prices elsewhere may affect domestic markets," we have to face declining housing prices is here and to stay for a while. Vancouver is already feeling this day now it is creeping into Edmonton and Calgary.
Spot on.Posted by GPC on Tuesday, August 21st, 2018 at 8:35pm
LOL, the comments.
Thinking the UCP is going to bring rainbows and unicorns to the real estate market is some delusion.
Thinking the NDP caused everything to go wrong (or right) is also delusion
The real estate market sucks. It will continue for quite sometime because although the economy is starting to do well, we can't seem to build new housing fast enough here.
Supply is outpacing demand.