# How's Alberta Real Estate Going?



## showmethemoney45 (Feb 27, 2015)

Hello, little bit depressed here...
We are looking to get rid of some Alberta real estate and it looks like houses are valued less than they were 10 years ago. Also, rents have gone down since 2008. I'm wondering how everyone is hanging in there with rental real estate? Or is it just me who bought these at the worst time...


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## Just a Guy (Mar 27, 2012)

Alberta has been in a recession for several years. When oil dropped, workers returned to other provinces so real estate demand dropped. Alberta has always been driven by the price of oil. If it recovers, so will the province. To be fair, if you look at the average income in Alberta, real estate is still overpriced when you look at long term affordability. Things could be a lot worse. 

If oil turns around and the pipeline goes through, Alberta will probably go through another boom like it always does. Even if the rest of the world tanks.


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## ian (Jun 18, 2016)

Prior to moving six months ago, the rent on our Calgary condo went down from $1800 to $1500. 

Depends where the property is. Edmonton seems to be not too bad. Calgary, according to some in the industry, still has an excess of rentals and condos for sale. It will take a while to come back. Many of head office oil industry jobs have disappeared permanently due to mergers, bankruptcies, or technological advances. It is a different ball game this time.

As we drive around Calgary we see many, many for rent signs.


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## new dog (Jun 21, 2016)

Hard to say what to do but if you need to sell because you can't afford the mortgage and the costs, then I would probably sell. If the rent however is mostly covering the costs and you can hold on then I would probably hang in there. 

It is a little depressing though when everyone seems to have made money on real estate and you haven't.


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## ian (Jun 18, 2016)

It is a bit like Las Vegas. People who make money gambling are usually very happy to talk it up. Those who have lost money remain silent. Real estate is similar. The one difference in real estate is that you never actually have a loss or a gain until you dispose of the property. Same with equities. It is hard lesson for some to learn.


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## AltaRed (Jun 8, 2009)

new dog said:


> It is a little depressing though when everyone seems to have made money on real estate and you haven't.


Of course that is self-selecting. You don't hear from people bragging about losing money on RE. For a dose of reality, every RE investor should re-read history on all those speculative RE investors in GTA and GVR that had their heads handed to them in the circa '89 crash that didn't recover for circa 10 years. Same with AB at least twice in the last 40 years. An RE investor needs to consider capital appreciation as a bonus, not part of the base performance of the investment. 

At best, long term RE prices should not exceed productivity growth, GDP being the proxy. That will vary somewhat region to region because some parts of this country experience more real growth than others, but that is the long term nature of RE price appreciation.


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## nobleea (Oct 11, 2013)

ian said:


> Prior to moving six months ago, the rent on our Calgary condo went down from $1800 to $1500.
> 
> Depends where the property is. Edmonton seems to be not too bad. Calgary, according to some in the industry, still has an excess of rentals and condos for sale. It will take a while to come back. Many of head office oil industry jobs have disappeared permanently due to mergers, bankruptcies, or technological advances. It is a different ball game this time.
> 
> As we drive around Calgary we see many, many for rent signs.


Edmonton is indeed doing alright. Things are selling fast, especially closer to the core. Prices are reasonable, no huge gains. I think assessments went down a percent or two but that doesn't really say much.

There's going to be a lot of high end rental condos coming online in the next year or so downtown. But there are a lot of high rise condos in the pipeline - bit of a construction boom going on.

Our garage suite rental rate has certainly not gone down. Granted, it's a bit unique, but I think we could almost raise rates if we wanted to.


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## showmethemoney45 (Feb 27, 2015)

I guess I'm specifically worried about central Alberta...Red Deer. We have sold several places in Calgary and made a good profit. Red Deer not so much.


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## AltaRed (Jun 8, 2009)

Ahhh, well Red Deer is 'oil service' country like Grande Prairie and highly reliant on the state of O&G, both boom and bust. For the most part, it is a one industry city that could suffer for years to come. I've known the city for some time and have relatives there with a house. At least they have civil service jobs and can weather the storm. I wouldn't 'invest' there.


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## new dog (Jun 21, 2016)

AltaRed said:


> Of course that is self-selecting. You don't hear from people bragging about losing money on RE. For a dose of reality, every RE investor should re-read history on all those speculative RE investors in GTA and GVR that had their heads handed to them in the circa '89 crash that didn't recover for circa 10 years. Same with AB at least twice in the last 40 years. An RE investor needs to consider capital appreciation as a bonus, not part of the base performance of the investment.
> 
> At best, long term RE prices should not exceed productivity growth, GDP being the proxy. That will vary somewhat region to region because some parts of this country experience more real growth than others, but that is the long term nature of RE price appreciation.


I agree 100 percent and have also seen those bear markets, as well as the early 80's disaster in Vancouver. Luckily for me I was able to take advantage of the mini bear market in the very early 90's in Vancouver.


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## ian (Jun 18, 2016)

You only have to drive around Red Deer and look at the lots of the oil service companies like BJ. Lots of trucks in the yard. Red Deer is hurting. But so is/was Ft. Mac. We were there over Easter. A few of the builders are starting spec home projects. Some large Capital projects are in the pipe but it will take a little time before the action hits Ft. Mac.


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## peterk (May 16, 2010)

Still holding out in fort mac... Big new houses being rebuilt after the fire, not sure who's going to live in them... I have some young colleagues who are buying and getting nice deals now for sure, 150-200k off of what an average home used to go for in 2013. But I still am waiting. Most people that I work with who are early-mid 30s like myself bought houses already over the last 3-8 years, I feel for them.


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## WGZ (Feb 3, 2017)

Sounds like it would be a really good time for a buyer. I'm a prospective first time buyer, and I'm looking around suburban South Edmonton for a place. Looks like you can get in decent detached homes for 350k that would've been 400+ during a "boom". I still have a few months before making a decision but it's nice to ponder.


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## ian (Jun 18, 2016)

I think that it is a good time to buy in Edmonton. And to lock in a mortgage for as long as you can.


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