“Regional markets are going to be more and more specific per area basis,” said Mitch Collins, an investor and Realtor who specializes in the area. “Regional diversity has always been important, but never more important than in a downturn.”
Over the past few weeks, reports have pointed to a storm already brewing in Western Canada. BMO called Calgary
“very weak” markets, financial analyst Hilliard MacBeth said Calgary will undoubtedly be the first Canadian market to correct
, and a TD Economics report said Alberta is heading towards a much larger deficit in its budget than originally predicted.
Collins admitted that Alberta will be the most heavily impacted, but that there are specific resource towns investors can look to that offer more diversified economies.
“People have to drill down and really understand what the falling commodities price means to the region they’re investing in,” he added. “There is a big difference in Western Canada. There are a lot of fundamentals at play.”
For example, the real estate market in Fort McMurray
will be impacted very differently compared to the rest of Western Canada because it is solely centred on the price of oil and that type of resource development.
“But a town like Fort St. John
, which is oil and gas as well, is natural gas as opposed to oil,” explained Collins. “We’re not too far off, but it’s easy for people to paint every region with the same brush, and that’s not always accurate.”
Investors continue to keep a watch and see where the price of oil is going to settle. “With money this cheap, maybe the storm will not be that bad,” said Phil Wazonek of Distinctive Realty Services in Calgary
. “The next two to four months should be interesting.”
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Investment Hot Spots:
Brentwood, West Wentworth, Scotsburn, Doctors Brook, Kingsville
With oil prices still in freefall, layoffs coming down and the real estate market in Alberta and northeastern B.C. adjusting to these new realities, investors in Western Canada should be embracing regional diversities.