Alberta Cities Come in 1st and 2nd for Best Places to Invest in Canadian Real Estate PLUS Edmonton Real Estate Forecast 2009 and 2010 Outlook

According to an article in the Canadian Real Estate Magazine, Edmonton takes first place in the best areas to invest in real estate in Canada. Whether oil is $50 or $100, Edmonton’s underlying economy is poised to be a national leader over the next decade. Calgary followed closely behind. Second in corporate head office locations in the country, lowest in unemployment and highest in average income, Calgary will challenge Edmonton as leader of Canada’s economy. Five Year Cycle: In Canadian real estate investing, you’ve got to be able to hold onto a property. It’s not like buying a stock that you sell a few days later because it went up a few dollars. I use a five year cycle, because that seems to be the time frame when you can trade up or move on. According to the Canadian Real Estate Magazine, the outlook for Alberta real estate is promising: The economy will grow by just 1.2% in 2008, as output has declined in goods-producing industries such as manufacturing, construction and mineral fuels. With these industries expected to rebound, Alberta is forecast to generate real GDP growth of 2.6% in 2009.

Edmonton Real Estate Forecast 2009

According to the Canadian Real Estate Magazine, Edmonton Real Estate forecasts for 2009 are very promising. A growth rate of 4%, according to the Conference Board of Canada, in part due to oilsands development in the northeast parts of Edmonton, construction and infrastructure activity, is making forecasts for Edmonton real estate 2009 a key player for property rental returns. According to Don R. Campbell, president of REIN, Calgary, “With over $200 billion of investment pouring into Northern Alberta in the next vie years we will witness a dramatic growth in jobs, which will attract people from across the country and around the world, each and every one of them requiring housing either rental or purchase in Edmonton real estate 2009.” In addition, the completion of the LRT route from Health Sciences Station to Century Park central Edmonton real estate at the end of 2009 is expected to bump up the 2009 forecasts for Edmonton real estate values by ten to even twenty per cent says REIN. In 2008, the average price of an Edmonton condo was $228,750 according to Royal LePage, which is one the most affordable and undervalued real estate markets in all of Canada. CMHC figures show the average monthly rental income for a two bedroom Edmonton property was sitting at about $1,000 per month. 2009 Edmonton real estate investors forecast such as Bill Briggs, a local realtor for Re/Max Real Estate Central Branch says that property investors in Edmonton tend to purchase mid to lower priced single family homes as well as apartments and condos to achieve good cashflow. The forecast for 2009 in Edmonton real estate values is that cashflow will continue to be a great positive for the markets while property values should stabilize by mid year. “Proximity to the University of Alberta, the Northern Alberta Institute of Technology and Grant MacEwan College provide a huge number of prospective home renters,” he says. Edmonton condo forecast for 2009 might be the best opportunity for cash flow because these units tend to rent faster and are expected to see a 12.2% increase in rent by the end of 2009, according to CMHC.

The 2010 Outlook for Edmonton Real Estate

According to many experts, now is a great time to purchase Edmonton property. There are several factors that result in this conclusion. Firstly, mortgage rates and lending are at all time lows in the history of this country. With BoC lending rate at 1% as of February 2009 and an expected drop by 0.25% to 0.5% in the upcoming Bank of Canada announcements, the variable rate mortgages that are tied to the BoC lending rate to some point, will possibly hit the lowest point ever in the coming month. The 2010 outlook for Edmonton real estate is that the rebound in commodity prices such as oil and gas will have a very positive effect on the Alberta economy in general, with Edmonton property prices in 2010 outlook and forecasting expecting a high single digit gain through the year. Variable rate mortgages are very low right now, and waiting even 6 months may mean a difference in one or two per cent over a course of a five year term. Any drop in Edmonton real estate prices in 2009 or 2010 will be offset by the increase in mortgage interest rates, so there would be no real advantage to wait if you, as a homebuyer, are ready to make a new Edmonton home purchase. Secondly, the Edmonton real estate outlook 2010 and beyond is that with many home buyers waiting it out to see where the market goes this year, and with forecasts for 2009 and 2010 in Edmonton real estate calling for a big dip in sales volume and a small decrease in sales price, there will be many more people looking to buy a home in Edmonton property market in 2010. with an increase in homebuyers, comes competition again, meaning that the new Edmonton home of your dreams may have multiple offers and possibly bidding wars for lower priced houses and condos. Why go through the tense wait of bidding wars when you can submit a single offer in 2009 Edmonton real estate outlook and forecast and end up with a great home that you love. Thirdly, oil and gas make up a big part of the Edmonton economy and is a driving force for the province of Alberta in terms of revenue, infrastructure, business and population growth. As commodity prices are at their all-time lows in the past 20 years and with the rise and growth of both China and India coupled with the insecurity of other gas and oil producing nations, Edmonton real estate forecast for 2010 and 2009 is much better than what most headline news portrays. With a growing demand in these developing nations, it is important for Edmonton to make sure that it gains the respectable relationships with these nations and to promote other clean energy sources for the future of Alberta. With a rebound of oil and gas prices expected in late 2009 and through 2010, the Edmonton real estate outlook and forecast is very good as property prices here have always had a direct relationship to commodities. With more people moving into the Edmonton area in 2010 and with an increase in the number of jobs coupled with a stagnant home building industry for the last two years, there will be a shortage of rental and owner occupied housing in Edmonton real estate in 2010 again. For all of these reasons, Edmonton real estate outlook 2010 and beyond is for a strong and stable market for both buyers and sellers.

Alberta Climate Change and the Premier Ed Stelmach Government

Alberta Climate Change

Alberta climate change is a big topic for Premier Ed Stelmach and the Alberta Government. With so much at stake in Alberta and the Canadian economy, it is a top priority for the Alberta Government to keep on top of this issue. At risk are the economic benefits to Alberta for the next few decades with the Alberta Oilsands being of such importance to the Alberta economy. Not only will being proactive in making any suggestions for Alberta climate change be vital but the Alberta Government will need to show that they are keeping the large oil companies accountable for their effects on the environment. With the election of President Barack Obama, Premier Stelmach is sending a clear signal that the Alberta Government is concerned and would like to play a key role in any decisions made about climate change. They don’t want to be blindsided like the last time when Prime Minister Jean Chretien made major changes in negotiating a climate change pact without first consulting the other provinces of Canada.

Green house gas emissions and the Alberta Government

Greenhouse gas emissions are a major concern for the world as it pertains to Alberta climate change which has a significant impact on world climate. The Alberta Government has been playing a key role in evaluating green house gas emissions and the effect that the Alberta Oil Sands has had on the environment. The main issue here is that Alberta’s energy sector has produced a large amount of greenhouse gas emissions, an amount that far exceeds their actual size. This effect will have a huge detrimental impact on what the public perceives as global warming, the premature melting of the polar ice caps, and other such effects as a result of green house gas emissions. The Alberta Government and more specifically, Premier Ed Stelmach, wants Prime Minister Harper to voice Alberta’s concerns for having a larger voice in any negotiations relating to Alberta climate change. This is of particular concern now that President Barack Obama is going to be taking a more serious look at the effects of green house gas emissions. Since the Alberta Oil Sands plays such a huge part in Canada’s economy and the world economy, it only makes sense to have the Alberta Government more closely involved in all the negotiations relating to green house gases.

Alberta Oil Sands and the US Economy

What the Alberta Oil Sands represents to the US Economy is a stable source of Oil. Despite President Barack Obama’s insistence on improving the US economy’s reliance on renewable resources, it is indisputable that Alberta Oil and specifically Alberta Oil Sands oil will continue to play a vital role for decades to come. Canada has the closest source of stable and economical Alberta oil for the US economy. Not only will Alberta Oil Sands continue to supply the US economy with an abundant supply of oil but Canada will continue to ensure that they reduce the cost of producing it. With recent improvements in converting Alberta Oil Sands into useable oil, the cost to produce has reached an economical $30 a barrel. It is the hopes of the Alberta oil companies that they can further reduce this figure so that they can remain profitable and provide the world with a source of inexpensive oil. Of course all this has to also be green house gas friendly and make a positive impact on the economies that are affected.

Alberta Infrastructure Gets a Boost from the Federal Government – Multi Million Dollar Investments in Capital Projects for 2009

According to the Journal of Commerce, January 7th, the federal government of Canada plans on injecting multi-millions of dollars into the Alberta infrastructure projects over the next four years not only to curb the recent unemployment fears, but to setup Alberta has a leading province for investment and lifestyle in the next decade. As announced last week, the Canadian federal government will be injecting funds into a wide range of Alberta infrastructure projects that include everything from water and waste systems to public transportation and roads as well as other important capital projects that require funding from the federal level. According to Bill Steward, the VP of Merit Contractors Association in Alberta, “Both the federal Canadian and provincial Alberta governments have said they will step up infrastructure spending. We have a 20 year Alberta infrastructure plan and it looks like its full speed ahead on that.”

The Province of Alberta Dives into the Federal Gas Tax Fund for Funding Municipal Projects

Recently, the Alberta government announced that it would dip into the federal Gas Tax fund itself and invest more almost $800 million dollars into the provincial Alberta infrastructure that includes many projects in its largest two metropolitan areas: Edmonton and Calgary. With an extension in place by the federal government of Canada, the Alberta infrastructure projects will be funded covering four years until 2014 which will provide not only stable federal funding of these capital Alberta projects but also long term stability in investment in infrastructure of Edmonton and Calgary in Alberta. The range of eligible Alberta infrastructure projects includes local roads, community energy, public transport industries, water, waste water management and solid waste infrastructure improvements. Lastly, the Canada federal government boost will also include funding for the Alberta long term planning. Funding from the federal Gas Tax fund will be immediate and can be used to fund many municipality projects going forward in 2009. Phase 1 of the Canada Gas Tax fund will support modern Alberta infrastructure projects that will help the province stay competitive in the long-term. Over the next five years, Alberta will benefit from an injection of nearly $476 million from the federal Gas Tax fund from the government and more than $258 million has already been transferred into municipalities to support over 567 Alberta infrastructure and capital projects. $176 million from the federal Gas Tax fund will be going to smaller towns of 100,000 or less people throughout Canada. The federal Gas Tax fund is actually a part of the Building Canada initiative, a long term Canada infrastructure program that will see through the development of environmentally sustainable infrastructure projects throughout Canada in order to clean the air and water and to reduce greenhouse gas emissions.

The 20 Year Strategic Capital Plan for Alberta

Last year in 2008, the province of Alberta announced the 20 Year Strategic Capital Plan that included a $120 billion cash injection from the provincial government into infrastructure in order to better deal with the growing problems with population/economic growth and infrastructure/building. The 20 Year Strategic Capital Plan for Alberta is a plan that covers the next two decades and will heavily lean towards the northern part of the province including new roads and transportation routes between Edmonton to Fort McMurray, hub of the Alberta oilsands projects. Other parts of the funding will help with the 20 Year Strategic Plan of Alberta for an increase and assistance with hospitals, clinics, affordable housing, technical schools, colleges, universities and other major projects.

Canadian Federal Budget 2009 - What Can Canada Afford to Advance Infrastructure Projects for the Provinces like Alberta?

The top infrastructure projects throughout Canada are now being discussed by Parliament for the January session. So what exactly do the provinces want from the federal government, especially Alberta, which has several capital projects on the go and many more planned. Do these Alberta infrastructure projects take a back seat or is there a green light to go ahead as planned. With the current global economic crisis, Canada's federal government has a dilemna. Spend more to stimulate the Alberta economy (and that of Canada as a whole) through infrastructure spending, or wait out the global recession and plan for the intiation of capital infrastructure projects in the future? Right now, it seems as though the Canadian federal government is not providing the funding required to complete or even initiate many of the Edmonton and Calgary Alberta infrastructure projects. However, as the global economic crisis deepends, the federal government in Canada has leaned towards providing more funding for the completion of hospitals, roads, and water treatment plants in Alberta, and namely the major centres in Edmonton and Calgary. So in order to stimulate the Canadian economy, here are some of the top infrastructure projects that have been talke about in Parliament. According to ReNew Canada, here are the top five Canadian infrastructure projects asking for federal funding in 2009:

5. Clipper pipeline (Alberta) - $2B
4. Spadina subway Extension (Ontario) - $2.63B
3. Eastmain project at James Bay (Quebec) - $5B
2. Bruce A nuclear plant (Ontario) - $5.25B
1. Romaine Hydroelectric project (Quebec) - $6.5B

Here is a breakdown by province on major provincial capital infrastructure projects asking for Federal assistance this year in Western Canada:

British Columbia - Vancouver Infrastructure Spending

B.C. Premier Gordon Campbell might be looking for tax reductions in the federal budget, but he also has $3 billion potentially tied up in his own gateway project infrastructure vision — essentially large highway improvements such as the $1.6 billion Port Mann-Highway One upgrade. In addition, Port Moody, in the riding of Tory Heritage Minister James Moore, is worried that the downturn in the economy might delay or even kill its $1.4 billion private-public partnership to link this Vancouver bedroom community with the downtown core.

Alberta Infrastructure Projects

Premier Ed Stelmach has a "Port Alberta" project, a strange name for an infrastructure proposal when you realize that Alberta is one province away from the Pacific Ocean. In fact, located at Edmonton’s International Airport, this is another "gateway" which would make the province more attractive to business. It is part of the Alberta infrastructure government’s plan to spend about $6 billion annually for the next 20 years on capital projects.

Saskatchewan Infrastructure Plans

The province has a five-year capital plan in place to lay new asphalt on highways all over Saskatchewan, like the twinning of the infrastructure highway from north of Saskatoon to Prince Albert. The 2009 bill for Saskatchewan’s first tranche of highway building is about $170 million.

Manitoba Infrastructure Projects

Winnipeg has about $4.5 billion of projects on its infrastructure wish list, including road and terminal improvements to make that infrastructure city’s international airport an "inland port." Then, once you get outside Manitoba’s biggest city, the province is spending another $400 million annually on a 10-year road improvement scheme, which upgrades infrastructure highways in places such as Brandon and Gimli.

'Money will flow very slowly'
The 2009 Canadian federal budget revealed that about $12 billion in new money would be set aside for capital infrastructure projects like roads, bridges, railways, universities, recreation centres and other infrastructure over the next two years. The federal government is promising $4 billion over the next two years for infrastructure projects beginning construction in the 2009 and 2010 building seasons. The Canadian government said it would approve provincial, territorial and municipal infrastructure projects, and cover up to 50 per cent of eligible costs. But Toronto Mayor David Miller criticized the budget for creating a time-consuming application process for municipalities, in which "money will flow very slowly, if at all." "Municipalities are already investing in infrastructure," Miller told CBC News from Toronto. "We were hoping our federal partner would support us by investing in the projects we're already doing, so we can expedite them." That concern was shared by Edmonton Mayor Stephen Mandell. While Mandel was pleased to see more money for Edmonton infrastructure projects, arts and recreation centres, he raised questions about how the money for these major Alberta infrastructure projects will be handed out. "It's exciting. There's going to be $12 billion for infrastructure," he said. "But I don't know what the terms and conditions of it are. There's concerns about the flow of money: What are the terms and conditions of it? How much do we have to put into it? "Is it going to be directed a lot more towards eastern Canada, because maybe they have a few more problems than we do?"

Global Economic Crunch Will Temporarily Slow Down the Alberta Oilsands Boom – What Does This Mean To You?

Alberta Oilsands in Trouble?

There have been recent reports that many Alberta oilsands projects will be either delayed or cancelled this year. From the Calgary Herald to the Edmonton Sun and from the Financial Post to the Globe and Mail, the latter part of 2008 and for the most part the beginning of 2009 has brought about negative publicity and news regarding the growth (or lack there) of the Oilsands projects in Alberta. Obviously, the slowdown in the development of the Alberta oilsands will impact significantly employment in the northern part of Alberta, namely Fort McMurray, but also will have residual impact on the economy in the bustling engines of Edmonton and Calgary. The trickle down effect will be a stabilization of jobs and maybe an slight increase in unemployment which will make a dent into the Edmonton real estate market as well as the once fire hot Calgary property markets. According to the Canadian Association of Petroleum Producers, also known as CAPP, the Alberta oilsands northeast of Edmonton will likely reduce the barrels of production until the economic gloom and doom has ended. CAPP also expects that the spending in the Edmonton and Calgary oilsands projects in Alberta will be cut significantly by about twenty five per cent over 2009 from a projected estimate of $20 billion to $16 billion. Other projcts such as the East Coast Offshore projects in the Alberta oilsands indicate some troubling times ahead as well, cutting spending from $50 billion in 2008 down to $43 billion in 2009. Leading Alberta oilsands exploration, gas and oil companies have also slashed budgets and spending during the 2009 fiscal year during these times of economic uncertainty. Petro-Canada, Nexen, Canadian Natural Resources as well as Suncor and EnCana Corp have already announced budget slashes as the oil prices per barrel have landed between the low $30 to mid $40 US range.

Survival for the Edmonton/Calgary Oil Sands

It is widely speculated that the break even point for new Alberta oilsands projects is a target of $44 US per barrel, while the break even point of existing Edmonton oilsands projects is in the low $30 US per barrel, a price that oil has already touched on several times in the past quarter. So are the Alberta oilsands projects in trouble and will existing Edmonton and Calgary economies remain more stable than the rest of Canada through 2009? Well, with the recent headline news that BA Energy Inc which is the developer of the Heartland Upgrader $4 billion project near Edmonton real estate, there is no safe place in the world during this global economic crisis. With cash flow shortages, tighter credit laws and an angst against possibly losing money, the Alberta oilsands new developments have been temporary put on hold until the economic environment improves. The most recent Financial Post headline news story from January 15th explains that spending on the oil sands in Alberta may actually drop more than 50% compared to the spending during 2008. A reduction in oil and natural gas prices as well as the lower demand for these commodities have driven many Alberta oil sand projects off the table for now.

How Does The Drop in Oil/Gas Affect You in Alberta?

There are many things that will happen in the next year and during the last two quarters of 2008 and the first month of 2009, a hefty drop in oil and gas prices have basically stalled the once booming Alberta economy. Much of the economy is based on oil and gas in Alberta, and with the recent decade worth of boom times, both Edmonton and Calgary real estate markets saw substantial increases in value. Property prices skyrocketed while wages also increased in order to keep up with the cost of living, and therefore, everything was offset. However, during the recent drop in oil and gas prices, employment has staggered and layoffs have started. What this brings is a drop in wages and jobs available in the Alberta oil sands projects and other industries that depend on the oilsands in order to survive. With unemployment rising (the most recent tally is a loss of 16,000 jobs in Alberta in December), less people can afford property and to buy their homes. The most recent drop in the Edmonton real estate market (both pre-sale and resale homes) as well as the once hot Calgary property market and everything in between in Fort Saskatchewan and Red Deer as well as Fort McMurray is a cause for concern for those who purchased at the peak of the market. It is widely speculated that both the Calgary and Edmonton real estate markets have crashed about 17% from its peak already within one year. Spending has also decreased as more people are saving their money in the bank. With deflation a thing creeping into the Alberta economy, many people and consumers are waiting for the best deal that may come next month and postpone spending their hard earned cash until they spot the best deal in town. What this does is it stagnates the economy and makes things even worse. All of this is because of the most recent boom that happened too quickly and the sudden drop in oil and gas prices around the world. The Alberta oilsands delays and cancellations will have a profound effect on the Alberta economy in 2009 and with the recent royalties imposed on the gas and oil companies, the recovery period may take a while longer.

Our Perspective on the Calgary and Edmonton Real Estate Bust and the Oilsands Future

Headlines is headline news. It’s main purpose is to sell more articles, magazines and newspapers. With so much negative news about the Alberta oilsands, we take things in perspective. The Alberta oilsands has been the top discovery of commodities, oil and gas in recent memory and with it came an incredible boom time for Albertans. Everyone enjoyed something from the oilsands projects in Alberta, whether it be blue collar or white collar jobs working in Fort McMurray, or real estate investors who saw their properties double in value in less than a year or even to people living outside of the oil sands areas like Edmonton and Calgary that had to build infrastructure to house the many people moving into the province through in-migration. Having the lowest unemployment rate in Canada (close to the low 3% at one time and now only creeping up over 4% .. still the lowest in Canada), Alberta has seen a boom time that has not been rivaled by any other province, not even close. With the sudden increase in housing prices throughout Edmonton real estate as well as the Calgary marketplace, people forgot to due their due diligence and ran with the dream of making a big fortune by flipping or buying/selling huge numbers of properties. Although the economic outlook is grim and the demand for Alberta oil and gas has diminished, Alberta has a great thing going for it. With the world’s largest deposits of investable oil, the oilsands of Alberta will be key to the turnaround of Canada’s economy. Enjoying the highest GDP per capita and a growing population, the Alberta oilsands will become the economic engine for Canada in not too distant future. As the US has embraced self reliance on energy, oil and gas, Canadians have to agree that the Alberta oilsands near Edmonton house more than enough oil to keep the country going for decades to come. Yes, there is a lot of money being pumped into alternative energy sources in North America and in Europe, but the two developing nations in India and China will continue growing at an astronomical pace and their demand for oil will certainly skyrocket. Each with a population greater than 1 billion (yes, that is more than North America and Europe combined in one single country) and with a 2009 GDP growth estimated at 5% and 7.5% respectively (revised this month in January 2009), India and China have had talks with the Alberta oilsands to make sure that they can claim a stake in the oil and gas in the future. The demand for oil has slowed down, but it is temporary. So instead of a moderation in spending and oil production in the Alberta oilsands through to 2020 (and a stabilization of housing prices through that period in the Calgary and Edmonton real estate markets), we now see a period of delays and cancellations of oilsand projects in Alberta (and a subsequent drop in Edmonton and Calgary housing prices). Once the demand for oil and gas increases again, we predict another huge boom that will be triggered by an onslaught of new Alberta oil sands projects starting and existing oilsands projects working at full capacity. Employment will again skyrocket, followed by jobs, minimum wages, spending and of course, another increase in the housing prices of both Edmonton and Calgary and everywhere in between. It is not yet known how long this economic crisis will last, but rest assured, another boom time will be coming maybe in a year, 5 years or 10 years. Hold tight, enjoy life and stop speculating, because speculators will never will all the time. True investors always win in the end.