Calgary housing boom poised for bust on oil prices
The oil that fueled Calgary’s housing boom has created the conditions for a bust.
Genworth MI Canada Inc., the country’s largest non- government mortgage insurer, said last week it’s preparing for more losses this year and into 2016. Home Capital Group Inc. The largest non-bank mortgage lender, is tightening standards in the oil-rich province of Alberta to reduce the risk to the company of falling housing prices.
For those who attended my
Jan @reincanada discussion on Oil's future, you knew this: Oilsands keep
growing
Calgary’s housing market is the hot topic of conversation these days not only in the city but across the country.
The once-sizzling real estate sector has cooled tremendously thanks to a precipitous decline in oil prices and that has people, from economists to realtors to homeowners and potential buyers, speculating and wondering what that will do to housing prices.
Predictions are hard, especially about the future of oil prices — even for someone as oracular as Warren Buffett. He didn't see crude's collapse coming either, and got stuck with almost $4 billion of Exxon Mobil stock that he just unloaded.
Billionaires, they're just like us! And I mean that in the least snarky way possible. Nobody thought oil would fall like it did. When the price was $105 a barrel, forecasters thought it would go up to $108; when it was $100, they thought it would go up to $104; when it was $90, they thought it would go up to $100; when it was $85, they thought it would go up to $90; and when it was $65, they thought it would go up to $80. It's $59 now. You can see just how murky this crystal ball has been in the chart below from Gavyn Davies.
Alberta oil-sands boomtown of Fort McMurray dealing with job loss
The pain of crude’s collapse is beginning to bite in Alberta, from the oil-sands boomtown of Fort McMurray to the corporate boardrooms of Calgary.
As the C$340-billion ($270 billion) petro-economy confronts an oil market meltdown, a decade-long investment spree is being reversed, layoffs and spending cuts are in full swing at companies such as Suncor Energy Inc., and everyone from oil drillers to real estate agents is feeling the pinch.
Alberta’s economy always bounces back, Rhys Chouinard promised at Tuesday’s economic development breakfast.
Based on the province’s recovery from the last recession, the city’s corporate analyst promised a rosy outlook for the future of Alberta’s and St. Albert’s economy.
The Alberta government will run a $465-million surplus for the 2014-2015 fiscal year, Finance Minister Robin Campbell announced Tuesday – less than half of what had been budgeted almost a year ago.
Only the second surplus posted by Alberta in seven years, it could be the last one the province sees for a long time, Mr. Campbell said.
Investment in Calgary retail sector balloons in 2014
The strength in Calgary’s economy last year drew significant investment in retail properties, totalling $360 million in investments of $2 million or more, says a new report by commercial real estate firm Avison Young.
That’s was a 70 per cent hike over the $212 million invested in 2013.
