I have discovered something interesting while attempting to sell a home in West Kelowna, BC. The real estate market seems to be reasonably priced with homes much more affordable than Edmonton or Calgary (on west side at least). After having the home on the market for a very reasonable price with little action, I spoke to a property manager who said the rental market is very tight, and I could likely get close to $3000 per month for this basically starter home. I confirmed this to be true recently. My question is, why would there be no bites to live in this house for a $1600 mortgage payment, however people will line up to pay $3000 in rent? It seems like the perfect storm to be a real estate investor.

http://www.kelownanow.com/watercool...ntal_Vacancy_Projected_to_Increase_in_Kelowna

Answer: job prospects on Alberta are weaker and Kelowna's job prospects never all that good. A purchase is a big commitment. Far less flights to Fort McMurray. Renting is more short term allowing more flexibility. We have seen rents be flat or even rising in Alberta too while home prices have fallen.

Uncertainty is the word of the year in Alberta. Many projects on hold - and many more to come - due to uncertainty about taxes, royalties and regulations around green house gases. We have decided, too, to not buy right now in Alberta. Looking at mobile home parks in BC and assets in TX instead. And we are a small fish. Investment into Alberta is imploding right now, first due to oil now due to uncertainty . Ok to hold if you have cash flow. We reduced our investment in Cold Lake due to weaker demand. Buying pr building big risk right now in Alberta - especially with tight cash flow. That spills over to markets linked to Alberta money, like Kelowna. Some folks too might decide to move to Kelowna now that they have lost a job in Alberta. But they do not yet want to commit to buying. We cancelled one such tight cash flow acquisition a few weeks ago.

Related article: http://business.financialpost.com/n...ds-opening-shot-at-notleys-new-ndp-government

Instead of focusing on jobs or the economy or debt or low energy prices like electricity politicians are distracted by crap like this affecting 20 people while millions get negatively affected by poor economic choices , for example this bill


http://news.nationalpost.com/news/c...ecome-a-political-football-among-liberals-ndp

All of a sudden BC is conservative. Weird.

Very tight cash flow on Alberta acquisitions indeed. Some of the listings I have seen are almost humorous. Interesting perspective though, and as I travel back and forth from Edmonton to Kelowna every 2 weeks my flight is usually packed with Albertans travelling back and forth for work, so I would expect that to decrease somewhat with the slowdown in the oil patch. Uncertainly seems to be the word of the day, and so is over reacting as objectively one should at least wait until the NDP tables their first budget in the fall before passing judgement, but I think a cautious buying approach is prudent right now for sure. Likely wages are much lower in Kelowna so folks can't qualify for a mortgage. Rent control in BC also doesn't seem to help the people it is there to help, as there is little incentive to be a landlord, hence less rental units available.

I think you are far too kind on the NDP policies - prhaps due to young age, Cory !

Alberta is now run by a very very inexperienced government full of anti-oil, social activist, humans-caused-global-warming-believers, pro-union, stick-it-to-the-corporations people that have no clue about the economy and would rather not have any evil tar sands in their land. It will be ugly. Very ugly. Timid at first, then ugly in 2016 and even more ugly in 2017.

Only with oil over US$75 AND clear investment inducing oil&gas royalties AND not overly stupid CO2 emission regulations that benefit no one, likely not before 2017 will we see investment pickup at best, until then wallets will stay shut, shut shut amid uncertainty.

I expect SF homes prices to fall at least 10% in the next 2 years in Calgary, maybe a bit less in Edmonton. If you can survive that and/or don't care as you have a long term hold, hold. Otherwise sell now. Better buying opps will emerge in a year or 2. Cash-flow is paramount. All of our assets are tested for 10% lower rents and 10% vacancies (a 400% increase from 2%) to see if we are overly leveraged and can hold, and indeed: we can, but we may not hold all.

Buying a house right now makes no sense to me in AB, unless you intend to hold 10+ years. In 2019 we will have massive debt in AB, due to excessive spending on even more civil servants and stupid diversification projects like unprofitable refineries, biotech incubators, more colleges or high tech ventures. If the NDP sees they will lose in 2019 they will nail extremely generous civil servants' wages & benefit contracts to the next government leaving behind a massive wave of red ink that will take at least a decade to reduce.

A have-not province for 2 years at least, then we will see where oil is. That is the ONLY saving grace here.

As to Kelowna: house prices have recovered the last few years, but usually follow Calgary's up or down, so down for the next 2 years for sure, or maybe not as folks leave AB and settle in cheaper parts of the world like Kelowna like you did, and so many others I know of.