The Canadian Investor’s Guide to Secrets of the Real Estate Cycle
. “We’ve seen a real uptick in the number of renters.”
Those new workers, drawn by the province’s oil and gas industry, are renting rather than buying. Generally, they and other migrants don`t make that leap until after two years in a new market, said Head.
That’s created an advantage for landlords also benefiting from a shrinking jobless rate, now more than 2 percentage points below the national average. The phenomenon is also helping drive demand for a finite number of rental units.
In fact, as the country lost about 19,000 jobs in November, Alberta added nearly 3,000, with its own unemployment rate falling to 5 per cent.
That job growth, in a market without rent controls, means market forces have a free hand in setting prices, said Head, based in Calgary and a big proponent of Alberta property investment.
The party for Alberta’s cash-flow investors won’t likely end until the province’s hot jobs market reignites buyer demand for housing and renters show real signs of heading for the exit and toward homeownership, he told CREW Online. That would in turn drive up home prices and encourage more sellers to step into the market.
The increase in activity would also add a sense of urgency most potential buyers simply don’t have in the current market.
“I think we’ll be in the sweet spot in terms of ROI as long as values are relatively flat,” said Head.
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“While home prices across the province are still in a slump, net in-migration and the country’s strongest wage growth are helping keep rents high across most of the province,” said Greg Head, co-author of