# What happened to the anticipated boom in Alberta?



## chloev (Nov 26, 2012)

Since I have recently invested in a condo unit just outside of Edmonton, I am very curious as to what happened to the highly anticipated boom in Alberta. Lucky for me Don Campbell answered my question in his recent blog and here's a recap I found online for people who don't want to read the entire blog: http://www.viproperties.com/blog/why-the-alberta-market-isnt-booming-yet 

I'm quite happy with my investment so far and the rent covers management fees and mortgage for me so I'm not stressed over payments and stuff. I do wish to sell it in 2-3 years though. 

Any opinions and thoughts on the market in Alberta?


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## none (Jan 15, 2013)

chloev said:


> Since I have recently invested in a condo unit just outside of Edmonton, I am very curious as to what happened to the highly anticipated boom in Alberta. Lucky for me Don Campbell answered my question in his recent blog and here's a recap I found online for people who don't want to read the entire blog: http://www.viproperties.com/blog/why-the-alberta-market-isnt-booming-yet
> 
> I'm quite happy with my investment so far and the rent covers management fees and mortgage for me so I'm not stressed over payments and stuff. I do wish to sell it in 2-3 years though.
> 
> Any opinions and thoughts on the market in Alberta?


From what I've read from numerous posters on this board residential real estate in Canada can go no where but up, Up, UP!!!! The real estate trends observed all over the world don't apply to Canada because it's different here. 

This condo is going to be bar none (ha!) the single best investment you will ever enter into. God speed!

The great thing though is if the impossible happens and the condo actually goes down in price it doesn't matter because you bought it as a 'home' so that makes it all ok. Shiny.

But seriously: The Alberta market is actually on better footing compared to the majority of large markets. Here's a good summary of Cowtown: http://www.theeconomicanalyst.com/content/canadian-housing-and-economic-trends-good-bad-and-ugly


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## Sampson (Apr 3, 2009)

The ever present real estate bear. Not all markets are created equal.

Where outside of Edmonton? and what did you think would drive the housing prices up in that specific community?

I certainly think there are signs of this recent (past 2.5-3 years) mini-boom in Alberta, but no Alberta boom is going to benefit all markets equally. For example, Lethbridge, Medicine Hat have been largely sheltered fro mall the benefits over the past 6-7 years, but the reasons are obvious. They are a long ways away from the economic hub (Calgary), or from all the work up in Central/Northern Alberta.

And how do you expect the boom to manifest itself in the housing market? Look at what is happening to listings and sales rates, and average or median closing prices on sales. Alberta has been sheltered from the recent declines in other markets. This evidence, along with all the jobs data over these few years tells me our Province is still doing pretty well. But that is just MHO.


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## chloev (Nov 26, 2012)

Sampson said:


> The ever present real estate bear. Not all markets are created equal.
> 
> Where outside of Edmonton? and what did you think would drive the housing prices up in that specific community?
> 
> ...


My current investment is in Stony Plain and I'm also thinking about purchasing another condo in St Albert. I did a lot of research before I put the down payment so hopefully everything pays off in the end! I haven't run into any problems yet with my investment because the company I invest through takes care of tenants and management.


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## dogcom (May 23, 2009)

Your costs are covered and the market hasn't boomed which is good because it will be unlikely that you would see a big bust. The big problem in Alberta is getting product to market with all the pipeline and environmental concerns. But even so you hold and someone else pays the bills so there is nothing wrong with that.


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## dogcom (May 23, 2009)

None I really have not heard all that much bullish talk on Canadian real estate . In fact most posters figure that Vancouver and Toronto markets have been to high. Most posters I believe feel it is important to be able to afford the home you buy and will do fine holding and paying it off in the long run.


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## Jon_Snow (May 20, 2009)

As Garth Turner mentions ad nauseum, Real Estate is LOCAL. Places like Richmond B.C. are already a disaster, while other places may see nary a blip. I own a nice condo with a teeny mortage, and have some nice acreage on an island smack dab between Vancouver and Victoria, paid for. 

I really don't have a rooting interest in what happens to Canadian housing, but damn, is it fascinating.


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## dogcom (May 23, 2009)

Jon Snow what do you mean that Richmond BC is a disaster. Price drop seems normal after a huge run up. If however you are talking about the mayor of Richmond then yes it is a disaster. He allows Chinese only signs everywhere, shark fin soup is no problem, dumping on farmland again no big deal and if he could make love to something it would be a condo. I do not think you can have to many condos in his eyes.


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## Just a Guy (Mar 27, 2012)

You want signs of a boom? Walk into any retail/fast food store. Are they hiring or not? A few years ago, people were getting laid off, now we're importing workers to fill the need (sorry Toronto, as someone said all of Canada isn't created equal). When jobs at the low end are scarce, it means people are working. Importing people creates a demand on housing (have you checked the rental rates on kijiji? Are they high or low?). This will tell you if there is a boom coming.


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## kcowan (Jul 1, 2010)

chloev said:


> I haven't run into any problems yet with my investment because the company I invest through takes care of tenants and management.


Mostly I would focus on how much this company plans to take of any real returns you receive. You might find those fees to be worse than any MERs you would pay on traditional investments.


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## Charlie (May 20, 2011)

If you 'recently' bought, and are planning on selling in 2-3 years, you're speculating. You'll need a great run up to cover your transaction costs. If all this is being done with a management company and an investor group, you'll need to cover their fees too.

It might work out for you, but it's high risk with that kind of investment timeline. Too risky for my comfort, but I don't know Edmonton, and am typically not a gamblin' man.


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## Berubeland (Sep 6, 2009)

The reason why Alberta Isn't Booming like Don Campbell says it's going to is because despite the REIN mantra, that pretty little graphic they use all the time to try to predict the future doesn't work. http://blogs.calgaryherald.com/2011/11/06/calgary-housing-market-poised-to-show-strong-price-growth/

However if they admit that their "system" doesn't work then they won't be able to sell memberships to their little real estate club and seminars. That is big business and very lucrative, much more lucrative than real estate right now. If they can sign up even one more person they make $200 per month for a minimum of 17 months. 

I just want to point out that Don Campbell is not an economist and he doesn't write his own books and for all I know he doesn't even own real estate. He doesn't publish any list that I've seen. For a while there was an article online pointing out that Don Campbell did not finish his high school.

Alberta Real Estate isn't booming because as you pointed out investors aren't making money owning it and other people don't want to buy it at constantly rising prices. 

I also want to point out that people who are good at making money in real estate go out and do it. They don't waste their time flogging books and selling cd's and dvd's.


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## Just a Guy (Mar 27, 2012)

Actually Don made me quite a bit of money in real estate. A few of us picked up a bunch of foreclosure properties that used to be owned by his followers. They all bought at rediculous prices and lost their shirts. I should publish a book "Make money off of Don's REIN system, buy when reality sets in on over extension."


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## Berubeland (Sep 6, 2009)

I'm pretty sure that isn't what "making money with REIN" is supposed to mean...

:rolleyes2:


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## Just a Guy (Mar 27, 2012)

Works better than Don's way...unless you are Don that is.


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## SuperGrover (Oct 24, 2011)

Natural gas prices still haven't recovered. Oil is at a good price, that why Alberta is still going but to truely boom, gas prices need to rise.


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## Arshes76 (Jul 5, 2013)

chloev said:


> Since I have recently invested in a condo unit just outside of Edmonton, I am very curious as to what happened to the highly anticipated boom in Alberta. Lucky for me Don Campbell answered my question in his recent blog and here's a recap I found online for people who don't want to read the entire blog: http://www.viproperties.com/blog/why-the-alberta-market-isnt-booming-yet
> 
> I'm quite happy with my investment so far and the rent covers management fees and mortgage for me so I'm not stressed over payments and stuff. I do wish to sell it in 2-3 years though.
> 
> Any opinions and thoughts on the market in Alberta?


Here's what my experiences/thoughts with RE in Edmonton (I live in Millwoods BTW) 

I personally dont think prices are going up anytime soon. I know that the job opportunities are great here due to the oil sands and wages here are good, but the reality is that prices arent gonna go up because people who can afford to buy a home, already own one. Eventually sellers out number the new buyers (who push the market forward) and prices fall. I've also read (i dont remember where though) the RE prices for Edmonton are being skewed because before 2009 or 2008, home prices were Edmonton and Area, now just its Edmonton, So prices in the outer areas where prices have fallen more aren't being reflected in averages. 

I have a cousin who sold her townhome i think around 2008. She saw her neighbour sell theirs for $280,000 approx. so she decided to sell her home too, but wanted to do some renovations first, mostly minor and cosmetic, to get a better price. So she hired a guy, who would the work at a good price, but it was only him, so it took a while. By the time she sold she got $250,000-260,000. I think she thought she would get $300,000 easy. After a search on google, i found a townhouse in that exact same complex listed for $217,700 http://www.edmontonhomesweb.com/listing/e3332031-924-lakewood-rd-n-nw-edmonton-ab-t6k-3x1/ The same layout and number of rooms and bathrooms. 

Then there's my cousin out in Beaumont, bought around 2008-2009?? Their house is worth less that what they bought it for (I dont know the numbers though)

Then there's my other cousin who has a home in the South East of the city around 111 street, newer home, i think the place is less than 8 years old? He got married and the wife wanted a newer and bigger house, but the old one, is has fallen in value. So now they rent it out. 

Then there's Century Park, the condos near the LRT extension. Was supposed to be 4 small condo towers and 4 taller condo towers. Right beside the LRT, safeway, td bank, etc. Apparently the other towers are now cancelled/on hold and a lot of the unsold units are now rentals. 

And while looking for the current value of the townhouse my cousin sold, I see townhouses are listed cheaper than apartment style condos!!!! http://www.edmontonhomesweb.com/millwoods/200000-300000/?sortorder=ASC-ListingPrice Some of these condos are listed for $10,000-$20,000 more than a townhouse, with a backyard, basement and no neighbors below or above!  There's one listed for $239,900 in a condo complex where i rented before (from my BIL) where on one night after i went to bed i could ACTUALLY HEAR the neighbor below flick on the bathroom light!!!! Back when i was renting there (2008/2009) condo prices were $250,000 or more!


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## w0nger (Mar 15, 2010)

Calgary vs Edmonton ... Edmonton is a blue collar town IMO, more transient renters... Calgary is more white collar, fewer renters, but usually higher quality and longer lasting...

then again, this above opinion is completely unfounded and has no statistical background... but it is something that i personally believe in. i own income properties in Calgary and Vancouver... guess which ones are doing better...


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## Hawkdog (Oct 26, 2012)

chloev said:


> Since I have recently invested in a condo unit just outside of Edmonton, I am very curious as to what happened to the highly anticipated boom in Alberta. Lucky for me Don Campbell answered my question in his recent blog and here's a recap I found online for people who don't want to read the entire blog: http://www.viproperties.com/blog/why-the-alberta-market-isnt-booming-yet
> 
> I'm quite happy with my investment so far and the rent covers management fees and mortgage for me so I'm not stressed over payments and stuff. I do wish to sell it in 2-3 years though.
> 
> Any opinions and thoughts on the market in Alberta?



Pretty sure you missed it. It happened when the oil sands was just starting to take off. Now there are big concerns with how they are going to ship the oil, all the pipelines are full combined with the fact that the US is now an oil exporting nation.


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## Chris L (Nov 16, 2011)

The REIN charts can't predict the future, they only predict the present. I other words, if REIN says prices are booming and every boom leads to a bust, then never buy in a boom market. I tried to explain this to RE buyers, but it didn't wash. REIN says you should always buy. But really you should only buy in a bust or rising market, never a boom. We've been in a boom or peak for quite some time now, however, the fundamentals measured by REIN says buy anyway. It's not a leading indicator.


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## fraser (May 15, 2010)

We sold in Calgary last year and travelled. We are now renting a condo. Not certain what we will do-so far we like renting and we like the condo.

Apart from the appreciation issues, the 'condo economics' for us are not working. It could be the condo that we are renting. It has a value of approx. $525K. Net to the owner after condo fees and property tax is 2.3 percent. That assumes 100 percent occupancy. The condo is undergoing some remedial work-units like ours were assessed a $35K improvement fee. And there could well be another. That 35K takes up about three years of that 2.3 percent return. This assumes no mortgage fees. The condo was listed in 2007 for $507K but did not sell. It was built in 2003/4-not certain what the sale price was at that time. 

These numbers have changed how we view the buy decision. Our investment portfolio-very conservative, is returning just over six percent net of all fees as per our review last week. We are getting 1.9 percent just on our ordinary high interest daily savings accounts. So we keep asking ourselves...why do we want to buy in this market. And to top it all off, our agent showed us a listing for a high rise condo. It was listed at $669. The agent said that it was purchased for something like $ 735. in the pre construction phase. That surprised us and made us a little gun shy. This was at variance to what we expected.

We have been very fortunate, we realized significant gains on our past homes in Vancouver and on our Calgary home that we sold last fall. I have always been a proponent of buy vs. rent. But our children are gone now and we want to travel. This opens up more questions. Either I am missing something basic about the condo equation or more investigation/shopping is required on our part.


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