As we all know and would rather like to forget, 2016 was a difficult year for the Alberta province and its residents. The drop in oil had far-reaching effects that no one was immune to. Experts predicted the low economic activity would prevail, like a cockroach, well into 2017.
Now that 2017 is upon us and well underway, though, experts are slowly changing their tune; new information has been released showing evidence that the province is slowly, but surely, moving out of this bleak period. It is welcome news for many.
Positive Signs for Investors
In 2016, investors saw a huge vacancy rate plaguing their multi-family buildings. In Edmonton alone, the vacancy rate was hovering around 8%. Many also saw a decrease in revenue as they lowered rent prices to accommodate a population that had their income slashed due to job loss. This year investors will be able to slowly recover.
According to Finance Alberta, the province’s labour market is showing some improvement, meaning tenants will once again be able to afford slightly more expensive rental units. Employment levels plummeted to a low in July of last year, but have since grown by 19,000 jobs. Employment insurance claims have also decreased although they still remain on the high side.
Housing activity has also picked up compared to last year. The resale market grew in December and the months following after new mortgage rules were implemented in November. Rebound activity was hottest in Calgary where prices reached a new high at the end of last year. Investors looking to decrease their portfolio size and sell a property could stand to make a lot of money. As for new home construction, they averaged roughly 26,000 around the tail end of the year.
Positive Signs for Alberta
Alberta’s economic activity is on the rise, and signs of improvement can be seen on the horizon. For starters, rig drilling activity has strengthened as a result of climbing oil prices. By the end of January, the amount of active rigs rose above 200, the highest level seen since 2015. Rig utilization also doubled from last year, hitting 50%.
Source: Statistics Canada
Alberta is now producing and exporting at a higher rate compared to 2016 levels. Crude oil production, along with rising oil prices, has led to an increase in the province’s level of exports. The value of said exports climbed as well, reaching a resting place of over 40%. Oil production throughout the province grew substantially to 3.3 million barrels per day. This number increased by 9.2% from the same time period during 2015. Continued growth in the production of synthetic crude and bitumen drove this notable increase.
The province still has a long way to go before it stabilizes and even further to go to reach pre-recession economic levels. The past year has been bleak, but 2017 is showing signs of life. Investors can look forward to more revenue and better resale prices, and the rest of the province can look forward to job openings. What was once thought of as another write-off year, 2017 is surprising us all.