Why Canada?

  • Population growing at 2nd fastest rate of G8 Countries
  • Politically stable
  • Rich in 2 resources that the world will be needing more of – Oil & Water

Why Alberta?


“Alberta is in the midst of the strongest period of economic growth ever recorded by any Canadian province”
Statistics Canada

11 Reasons Why Alberta is the best place to invest in the world

  1. The Highest income per capita in Canada
  2. The lowest Personal taxes in Canada
  3. The lowest Corporate taxes in Canada
  4. The only province in Canada with no Provincial Sales Tax
  5. The only province in Canada with no Provincial Debt
  6. The Lowest vacancy rate in Canada
  7. The Highest in-migration rate in Canada
  8. A government committed to enhancing business competitiveness
  9. Surging World demand for Energy and Alberta’s #1 industry is Energy
  10. Over $139 Billion in Capital Projects either planned or under construction
  11. The Rocky Mountains are at your backdoor!

Focus on The Fundamentals – Not on Emotions

“From a Fundamental perspective, there are few places
in the world that offer better long term investment opportunities than Alberta.”

Population Trends

More than 60,000 Canadians from other provinces plus an estimated 20,000 international immigrants have moved to Alberta in the past year.

Between July and September 2006, every province in Canada shrunk in size due to interprovincial migration. The only exceptions were British Columbia and Alberta.

B.C enjoyed moderate growth of just over 2,000 people moving there from other provinces. Alberta, on the other hand, absorbed nearly all other interprovincial migrants, receiving over 24,000 new people, more than 12 times the growth rate of #2 B.C.

Affordability

“Alberta, despite large increases in housing prices,
remains one of the most affordable places to live
in Canada.”

Although the province is experiencing housing price increases, strong labour markets and large income gains have maintained affordability.

During 2005, Alberta remained a more affordable place to live than the national average (as shown in the graph).

Personal Income

The average income of an Albertan grew 11.3% between 2006 and 2005, from $59,000 per year to $66,000 per year, the biggest gain in the nation. More income means more money to spend on houses, rent, vehicles, consumer goods, and a variety of other means that further stimulate the local economy.

Property Values

“Alberta will overtake Ontario next year as the second most expensive resale market in the country.”
Canadian Mortgage and Housing Corporation (CMHC)

The average resale price of a single family home in Calgary grew from $305,676 to $396,870, an increase of nearly 30% between December 2005 and December 2006.

This ballooning in values by almost $100,000 marks one of the single biggest growth years in Canadian history.

The average sale price of a condominium in December 2006 was $281,459, an increase of 46.28 per cent from December 2005 when the average price was $192,412.

2006 combined residential sales totaled 32,912, the highest ever recorded in MLS history and an increase of 4.53% over 2005’s year end combined residential figure of 31,485.

The December residential combined sales totalled 2,015 showing an increase of 7.52% from December 2005 when sales were recorded at 1,874.

Active Listings

Calgary has seen a lot of action this year in the real estate market.

Earlier in the year we saw sales running neck and neck, and sometimes even outpacing listings. This contributed to a shortage in available inventory, which led to countless multiple offer scenarios and massive price increases.

As 2006 progressed, more listings came on the market, while the number of buyers receded back to more normal levels. This triggered a ‘cooling’ that we saw for the past few months of the year. However, 2006 still ended off on a strong note, with sales outpacing listings once again and compressing inventory levels.

As we head into 2007, this new trend suggests that we may once again see a flurry of buyers entering the market in the spring, putting further upward pressure on prices.

Rental Market Summary

“During the first quarter of this year,
Calgary's downtown office market hit
a historical low vacancy rate of 1.2 per cent.”
CB Richard Ellis

Alberta’s vacancy rate in major cities dropped from a low 3.1 % in October 2005 down to a miniscule 0.9% in October 2006.

This led to increases in average rents in all of Alberta’s 13 major urban areas.

In Calgary, the average rent of a 2-bedroom apartment increased by over 18% year over year.

2006 marked the ninth time out of the last 10 years that Calgary’s residential rental inventory declined, mainly as a result of increased condominium conversions. This, combined with a rapidly growing population base, is stimulating a significant upward trend in residential rental rates.
Calgary now has the lowest number of rental units per capita out of all of Canada’s 28 census Metropolitan areas.

Calgary’s downtown office space market has overtaken Toronto in pricing for prime space, with new renters now paying the equivalent of US$53.51 per square foot compared to US$52.80 in the nation's largest city, according to a global survey by commercial realty firm CB Richard Ellis.

Vacancy rates are plummeting as more and more people move to Alberta in search of housing. Historically, most newcomers to an area rent for the first few years before purchasing a home. This is great news for landlords.

Provincial Economy Highlights

“China is the only economy in the world
that is currently growing faster than Alberta.”

  • balanced budgets are the law
  • business plans ensure Albertans' priorities are the government's priorities
  • measuring results will improve Alberta's programs
  • Debt Retirement Act requires deliberate paydown of Alberta's debt
  • The lowest overall taxes in Canada.
  • No provincial sales tax [the only province in Canada without one].
  • No general capital or payroll taxes prevalent in other provinces and U.S. states
  • China is the only economy in the world currently growing faster than Alberta.

“Alberta is Canada’s only competitive tax
regime in North America today.”
CD Howe Institute

Alberta's strong fiscal position has allowed the province to become debt free and increase support for programs and infrastructure. In Budget 2006, the Alberta government produced its 13th consecutive balanced budget, which continued to address infrastructure and services for Albertans while lowering taxes and increasing savings. This is giving Alberta a level of financial strength unmatched in the rest of Canada, providing a strong foundation for Alberta’s second century.

“Alberta is the only debt free province in Canada.”

According to private sector forecasts, Alberta will lead the nation with economic growth of 5.6% in 2006 and 4.2% in 2007.

Alberta investors will benefit from having:

  • A fiscally responsible government that has eliminated its provincial debt, demonstrating to investors the business-like attitude of the government here.
  • A politically stable province to invest in
  • A highly skilled, educated, and motivated workforce that is the most productive in Canada.
  • A strong science and technology culture.
  • World-class infrastructure to support business, including transportation, telecommunications, utilities, hospitals, schools, and post-secondary institutions.

Retail Trade

Total retail trade, including all types of stores, grew to over $42 Billion, a 16.9% increase over the $36 Billion mark hit in 2005. New Vehicle sales were up nearly 13% over the year, and wholesale businesses saw a 14.8% rate of growth, lifting them from $40 Billion per year to over $46 Billion.

Oil & Gas

There is currently over $139 Billion worth of capital spending in major projects either planned or under construction.

The Oil Sands development is a major driver of this, accounting for up to 62% of major projects. That means jobs — and lots of them. So much so that people from all over Canada and the rest of the world are coming to Alberta in droves to fill the abundance of new job opportunities.

With Global demand for oil growing by leaps and bounds Alberta stands to benefit tremendously from long term increases in exports. Our province’s excellent location provides us with easy access to a number of export routes.

Conference Board of Canada estimates to crude oil prices will average above $65 USD/Barrel over the next five years. Most Oil Sand projects become profitable at levels as low as $35/Barrel, so the profitability of that sector is immense, which leads to massive inflows of oil & gas royalties into the Provincial Government.

Employment/Unemployment

“Alberta’s unemployment rate is the lowest in Canada.”

Alberta’s unemployment rate is a very low 3.1%, more than 50% lower than the 6.3% National average.

The number of people employed in Alberta increased by 6.4% between November 2005 and November 2006 - the largest gain ever.

Alberta’s job creation growth rate was more than double the Canadian average in 2006.

Alberta also enjoys the highest labour force participation rate in the country: people who come here, come here to work.

Financing

2006 saw more lending products come available to homebuyers and investors than in previous years. Increased competition in the lending industry has led to several lenders introducing various products. This includes a number of new ‘Interest Only’ mortgages, ‘No Income Qualifying’ mortgages, mortgages with longer amortization periods of 30-40 years, and a number of products tailored specifically towards investors and multi-family buyers.

Interest Rates

In addition to the creative lending products becoming available to investors, the interest rate outlook for 2007 also looks bright. A combination of a slowing economy, strong dollar relative to the US dollar and moderate inflation will help keep interest rates low in 2007.

Sources:

http://www.alberta-canada.com/economy/
http://www.alberta-canada.com/statpub/
http://www.rbc.com/economics/market/hi_provincialeco.html
http://www.statcan.ca/
http://www.rbc.com/economics/market/hi_house.html
http://www.creb.com
https://www.cia.gov/cia/publications/factbook/print/us.html