October 15 2014 – Market Update
Red Deer Market Update – Sales to the middle of October are predictably down a little from the same period in September, although we see a very strong number of pending sales compared to last month. Pending sales are the result of the past two week’s activity and suggest we could finish the month with a surge. The number of active listings is up from last year but down from last month and are low enough to keep the market slightly in favour of sellers.
A strong real estate market is a function of a strong economy. Oil prices are down which is not good, but the dollar is down as well which means oil company revenues and government royalties stay relatively high. The new premier is spending lots of money on construction and will continue to spend until the election in 2016. All in all the future looks bright.
Housing construction continues at strong pace – Todd Hirsch, Chief Economist, ATB Financial – Home builders in Alberta ended the summer of 2014 on a high note when construction started on a near record number of new homes. The Canada Mortgage and Housing Corporation reported yesterday that housing starts in Alberta totaled 47,105 in September. This figure is adjusted for seasonality, and represents starts on an annualized basis—that is, the number of new homes that would be started if the pace set in September was maintained for twelve months.
Housing starts in Alberta are up 6.6 per cent from August. Over the last twelve months, they’ve risen by an astounding 17 per cent compared to the previous twelve month total. It’s also the second highest month for housing starts since the end of the last big construction boom hit the province in 2006-2008. The only other month that has seen higher numbers was June of this year.
The surge in housing starts is in response to strong demand, much of it driven by in-migration to the province. It is also consistent with the strong demand for existing housing, which is reflected by the sales and prices of homes on the market over the past year. For now, Alberta’s economy is creating enough new jobs—and keeping wages high enough—to sustain this pace of home construction. There is little to suggest that builders are creating a real estate bubble by putting too many homes onto the market.
Job market roars back to life in September – Todd Hirsch, Chief Economist, ATB Financial – After shedding jobs over the summer, Alberta’s labour market was back in high gear at the beginning of fall. The 21,200 jobs added last month marked the highest monthly increase in over three years and one of the biggest jumps on record for the province. About two-thirds of the new jobs were full-time positions. (All figures are seasonally adjusted.)
Alberta’s unemployment rate fell to 4.4 per cent, a drop of half a percentage point from August. The unemployment rate in the province has fluctuated between four and five per cent, representing a healthy, balanced job market. Alberta has added over 54,000 jobs over the last twelve months, most of these in manufacturing, educational services and construction.
The jobs report also had good news for the country. Canada’s economy added 74,000 jobs, the majority of them full-time. Ontario, which has suffered from very slow job growth over the last year, saw the largest increase with almost 25,000 new positions. Saskatchewan also added 7,000 new jobs. The national unemployment rate fell two-tenths of a percentage point to 6.8 per cent—the lowest it’s been since December 2008. Alberta’s strong job results last month more than made up for the large number of jobs lost over the summer. With over 11,000 jobs shed in August, some may have worried about the health of the province’s economy. But one month of data is never a trend. Taking the last several months into account, Alberta still appears to be the place to be for job seekers.
