October 14, 2011 – Weekly Market Report
It’s Time to Invest in Real Estate – The story below about the Alberta job market is a signal that now is a good time to invest in real estate. When jobs are being created, new people start moving here and many of them will rent for a year or two while they get established in their new jobs and maybe sell a home where they came from.
Buying a townhouse, duplex or single family home to rent out is a manageable proposition for many families and may end up being a more stable investment than the currently very volatile stock market.
The ingredients to a successful investment are all out there right now – ample supply, relatively low prices and low interest rates. Interest on any money borrowed to buy rental properties is deductible against the income and any profits realized by a gain in value are taxed at the lowest rate as capital gains. The best part… the tenants will pay off your mortgage over time, leaving you with a valuable asset and a long term, stable income.
Alberta Jobs Story Keeps Getting Sweeter – Dan Sumner, Economist – ATB Financial
Over 2011, Alberta’s job creation figures have impressed even the most optimistic observers. And according to data out this morning, the jobs picture just keeps getting better and better.
Employers in this province added a further 8,600 net positions to payrolls in September, the fifth consecutive month of positive job creation. The last time Alberta saw job gains for five consecutive months was in mid-2006. The unemployment rate also declined in September to 5.4%, matching its low mark of the current economic cycle.
Digging below the headlines, the data was even more interesting. The number of full-time jobs expanded by a stunning 21,400 positions and was offset by a loss of 12,800 part-time positions. The mighty oil and gas extraction category was the largest gainer, adding 10,600 positions in September. Although the gain is impressive, it really just reverses a loss of roughly the same number of jobs the month before, which means the gain is partly related to problems with seasonality in the data.
Nationally the jobs report was similarly positive, with Canadian employment rising by 61,000 positions and blasting through expectations of a gain of 15,000. The upbeat news on the labour market probably couldn’t come at a better time, and serves as a bit of an anchor of hope in this uncertain global economic environment.
Moving forward, it is highly unlikely that Alberta’ labour market is going to be able to keep churning out jobs the way it has in the first three quarters of 2011. Nonetheless, if fears surrounding a European financial crisis and/or US recession are realized, Alberta’s labour market will be entering that period in a strong position.
