February 2015 Alberta Economic Fundamentals

Ally

Research Assistant
Registered
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.

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Ally

Research Assistant
Registered
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.

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Ally

Research Assistant
Registered
Why everyone - even Warren Buffet - got oil prices wrong

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.

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Ally

Research Assistant
Registered
Falling oil prices unnerve Edmonton home buyers and sellers, but little sign of major downturn yet

EDMONTON - Ryan Henry wants to buy a house in Edmonton, but he’s not sure he should.

The exercise physiologist has been looking since 2013 to invest in a rental property, but oil prices have plunged more than 50 per cent since June.

Read the full article here.
 

Ally

Research Assistant
Registered
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.

Read the full article here.
 

Ally

Research Assistant
Registered
Alberta to release 3Q budget numbers covering period of oil price collapse

EDMONTON – Alberta’s finance minister is expected to deliver more bad news today when he presents an update on this year’s budget.

Robin Campbell is releasing third-quarter numbers, which will take into account the collapse of oil prices into the US$40 a barrel range.

Read the full article here.
 

Ally

Research Assistant
Registered
Alberta's economy will "bounce back"

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.

Read the full article here.
 

Ally

Research Assistant
Registered
Alberta to run a surplus despite low oil prices

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.

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Ally

Research Assistant
Registered
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.

Read the full article here.
 
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