- Joined
- Sep 15, 2007
- Messages
- 62
Hi folks,
A while back we released a market research report on Grande Prairie. Seeing as much of the information in this report is outdated now, I figured I`d post an update for those of you who might find it useful. This information will be available in a formal report in several weeks on our site as well. Here`s what`s going on:
Industry:
Grande Prairie is driven primarily by forestry, oil and gas exploration, oil and gas services/maintenance, agriculture, and retail that services the Peace Country region. I`ll go over each individually:
1) Forestry is going through a rough patch at the moment. Between the pine beetle, high Canadian dollar, low US housing starts, and high cost of doing business (labour and power), this industry is not performing as well as it has in the past. Keep an eye on the US as an indicator of future performance of this industry, as the major employers in GP are exporters. The main businesses are Canfor (lumber), Ainsworth (OSB), and Weyerhauser (pulp).
2) Oil and gas exploration has also declined, in part due to the Royalty Review and in part due to high levels of natural gas inventories and low prices. However, with the cold winter, natural gas inventories in Canada and the US have been reduced. This area is already looking up as BP announced $1B of new activity in NE BC, which will have a ripple effect on GP.
3) Oil and gas services/maintenance is still robust. There are many existing wells that are in full operation that need people to run them. This sector is strong.
4) Agriculture is mainly canola-based. The canola produced here is very high-quality and this industry is doing well.
5) Retail is also strong. We surveyed some of the main restaurants in town and at the very worst, they reported a drop in business by roughly 15%. Compare this with 2004 or 2005 and you`d likely be looking with an actual increase.
To put things in perspective. GP is a diversified market and that is the source of it`s continued stability. That`s why Don says to invest here. It`s not a 1 pillar economy town.
Population Growth:
The city is still growing, just not at the torrid pace it was in 2006. The last study put GP at 5.8% in 2006. This year, things are looking more moderate at approximately 3%. This will give the City a much needed breather to catch up on infrastructure.
Housing Market:
Right now is a buying opportunity ladies and gentlemen. For the first time in ages, there is actually a good supply of inventory on the market. There are approximately 600 active listings, or 5-6 months of supply. A balanced market has 3. This means there is fear in the hearts of sellers, hence the rumours that you`re hearing. What does this mean? You have an opportunity to negotiate great deals! I smell things like VTBs, long closes, under market purchases, bulk deals from panicking developers.
The future? This level of inventory will not last long. Demand is still strong. 150-200 sales per month, no different than previous years. But, here`s the key...housing starts are way down, and builders have stopped working. As soon as this inventory is absorbed, there will be a housing supply crisis all over again. This will mean it`s a sellers market once again and prices will start to rise sharply. The opportunity to buy is now while there is fear and oversupply in the market.
Here`s another motivator for you: Forecasts are pointing to excellent growth in GP for 2008 and 2009. CMHC`s report places GP at the top of the chart for the entire Prairie Region with 14.1% average MLS price growth anticipated in 2008.
Rental Market:
The rental market is suffering from oversupply at the moment as well. This is because several major developers and a whole bunch of sellers who can`t sell their homes have listed them on the rental market. These unsophisticated landlords don`t care about cash-flow, so they`re just looking to break even and hurting the rest of us in the process. This issue will resolve itself as soon as the inventory is reduced, but in the meantime there are ways to contend with it. I know several savvy REIN members in town that continue to get top rents for their units. The difference? Marketing and closing skills. They`re not using property management firms, who are next to useless in this town. Use Don`s Solid Oak marketing strategy to write your rental ads, look up Russel`s post on this site for marketing ideas. Use tools like rental incentives, upgrades and renos, pet friendly units, extras like LCD TVs or wi-fi internet. Keep in mind your tenant profile too. The demographic in GP is very young. The average age is under 30! Remember this and play to their interests and needs.
Hope this helps. If anyone has any further questions, just shoot me a message or post back. Cheers!
A while back we released a market research report on Grande Prairie. Seeing as much of the information in this report is outdated now, I figured I`d post an update for those of you who might find it useful. This information will be available in a formal report in several weeks on our site as well. Here`s what`s going on:
Industry:
Grande Prairie is driven primarily by forestry, oil and gas exploration, oil and gas services/maintenance, agriculture, and retail that services the Peace Country region. I`ll go over each individually:
1) Forestry is going through a rough patch at the moment. Between the pine beetle, high Canadian dollar, low US housing starts, and high cost of doing business (labour and power), this industry is not performing as well as it has in the past. Keep an eye on the US as an indicator of future performance of this industry, as the major employers in GP are exporters. The main businesses are Canfor (lumber), Ainsworth (OSB), and Weyerhauser (pulp).
2) Oil and gas exploration has also declined, in part due to the Royalty Review and in part due to high levels of natural gas inventories and low prices. However, with the cold winter, natural gas inventories in Canada and the US have been reduced. This area is already looking up as BP announced $1B of new activity in NE BC, which will have a ripple effect on GP.
3) Oil and gas services/maintenance is still robust. There are many existing wells that are in full operation that need people to run them. This sector is strong.
4) Agriculture is mainly canola-based. The canola produced here is very high-quality and this industry is doing well.
5) Retail is also strong. We surveyed some of the main restaurants in town and at the very worst, they reported a drop in business by roughly 15%. Compare this with 2004 or 2005 and you`d likely be looking with an actual increase.
To put things in perspective. GP is a diversified market and that is the source of it`s continued stability. That`s why Don says to invest here. It`s not a 1 pillar economy town.
Population Growth:
The city is still growing, just not at the torrid pace it was in 2006. The last study put GP at 5.8% in 2006. This year, things are looking more moderate at approximately 3%. This will give the City a much needed breather to catch up on infrastructure.
Housing Market:
Right now is a buying opportunity ladies and gentlemen. For the first time in ages, there is actually a good supply of inventory on the market. There are approximately 600 active listings, or 5-6 months of supply. A balanced market has 3. This means there is fear in the hearts of sellers, hence the rumours that you`re hearing. What does this mean? You have an opportunity to negotiate great deals! I smell things like VTBs, long closes, under market purchases, bulk deals from panicking developers.
The future? This level of inventory will not last long. Demand is still strong. 150-200 sales per month, no different than previous years. But, here`s the key...housing starts are way down, and builders have stopped working. As soon as this inventory is absorbed, there will be a housing supply crisis all over again. This will mean it`s a sellers market once again and prices will start to rise sharply. The opportunity to buy is now while there is fear and oversupply in the market.
Here`s another motivator for you: Forecasts are pointing to excellent growth in GP for 2008 and 2009. CMHC`s report places GP at the top of the chart for the entire Prairie Region with 14.1% average MLS price growth anticipated in 2008.
Rental Market:
The rental market is suffering from oversupply at the moment as well. This is because several major developers and a whole bunch of sellers who can`t sell their homes have listed them on the rental market. These unsophisticated landlords don`t care about cash-flow, so they`re just looking to break even and hurting the rest of us in the process. This issue will resolve itself as soon as the inventory is reduced, but in the meantime there are ways to contend with it. I know several savvy REIN members in town that continue to get top rents for their units. The difference? Marketing and closing skills. They`re not using property management firms, who are next to useless in this town. Use Don`s Solid Oak marketing strategy to write your rental ads, look up Russel`s post on this site for marketing ideas. Use tools like rental incentives, upgrades and renos, pet friendly units, extras like LCD TVs or wi-fi internet. Keep in mind your tenant profile too. The demographic in GP is very young. The average age is under 30! Remember this and play to their interests and needs.
Hope this helps. If anyone has any further questions, just shoot me a message or post back. Cheers!
