Saturday, February 24, 2007

Making the case for Price Increases

Let me start the first real post on this blog by making the bullish case for Alberta real estate. Here is the stuff that is all going on in favor of Alberta:

- Overheated economy with minimum wage of $15/hour commonly seen.
- Massive proposed capital spending planned for next several years. Figures routinely quoted range from $50 to $100 billion.
-Massive influx of immigrants making Alberta a really popular destination for new immigrants who would otherwise be going to the 'Big 3' destinations (Toronto, Vancouver and Montreal).
-Massive inter-provincial migration.
-Lower Taxes in Alberta- the oft quoted 'Alberta advantage'.
-Relatively lower housing prices as compared to BC (Alberta is not lower than any other place any more).
-Alberta is different (due to above factors) and hence the economic rules applicable in the rest of the world do not apply here.

Alberta has witnessed an almost seven to eight year bull market in real estate due to above reasons. And as per bulls this is likely to continue for at least several more years before the 'crazy-maniac' prize increases subside to a respectable high single digit growth rates.

Next, I will make a bear case for Alberta real estate.
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