Located in a part of Alberta closer to British Columbia's border than any major city, Grande Prairie has become a centre of growth of its own. It's one of the faster growing cities in the country, largely based on its increasing number of jobs. The city's population has exploded since 1958, going from 7,000 to more than 50,000 in just over 50 years. But one of the issues the city is now working on is how to reign in that growth and focus it towards the centre.
A report in November 2009 by city planners demonstrates this. "New commercial growth followed housing to the suburbs and thrived at the expense of older commercial areas," says the report. "This means that business, employment, housing, service and entertainment areas are typically oriented towards car users."
Grande Prairie's economy is based on oil and gas, forestry, and agriculture. But it's not just a place for transient oil workers, either. It's a quickly changing place that has an increasing need for more housing.
"It's the jobs that bring people to Grande Prairie, but it is the lifestyle that keeps them there," says Greg Dobko, an associate broker with Re/Max in the city.
That lifestyle includes all kinds of sports such as hockey, golf, curling and hunting. Others prefer snowmobiling, boating, fishing and camping. Late last year the Olympic torch made its way through this city as well, highlighting its role as the leading city in western Alberta. Grande Prairie is four hours from Jasper and four and a half from Edmonton.
Locals sometimes call it by its nickname, Swan City, as well, relating to its emblem and focus on the endangered trumpeter swan that migrates in the summer.
The latest stats from the CMHC show the average singlefamily home is $274,900. Apartment vacancy is just over eight per cent but this figure is expected to decline in the near future. The lowest vacancy rate is for bachelor apartments at 4.2 per cent, which are the most in demand for renters. A lot of the vacancy has to do with some overbuilding lately, as the expectations for the number of workers coming to stay in Grande Prairie was overshot.
Those numbers could be improving, however, says Dobko. It all really depends on the economy in the region. "As we get into winter and the oil patch starts to go back to work, there is slightly more activity in home buying," says Dobko. "We need the price of natural gas to go up and stay up and we should have a balanced market in the spring ."
The city reports an average household income in the city of $110,000, but the higher earners tend to own. Rentals are largely based on people moving into the area for work, as well as lower income earners, says Dobko, but the yields can be good.
A two-bedroom in a prime city location could sell for $180,000 to $230,000 he says. A $175,000 property could bring in a rent of about $1,000, for example, he says. Cash flow can still be good with those figures in mind. A 20 per cent down payment on a $175,000 apartment property, with an interest rate at four per cent and 35-year amortization would allow for a monthly mortgage payment of about $620. Finding the right spot will take some patience and research, however. "It all comes down to buying a property at a price that the rent can carry it," says Dobko. "That's not an easy task today."
From the February 2010 issue of CRE
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