The Calgary crowd on the other hand looks more confident even though almost every third or fourth post on WeList.com has a price reduction. Almost everyone is counting on the magical recovery that always happens once summer is over. But it will take only one exception to rain on the parade and make life harder for a lot of people who are counting on the turnaround later this year.
And it looks like, a few people are claiming that we are past the peak in natural gas production in Alberta. If that is indeed the case, it bodes bad for Alberta and Edmonton in particular. Natural gas is the biggest source of royalty to the province and once it begins to decline, there is not going to be any replacement for it. Oil Sands is all good in polluting our province and generating immediate jobs, but over long term, the province will not collect more than a buck or two per barrel of oil produced. And lower provincial revenue will lead to lower spending and all the downstream consequences.
So it looks like a lot of people are still clinging to the Alberta bullish story despite:
- Rising Interest Rates
- Severe unaffordability
- Rising dollar impacting both provincial treasury and energy sector profitability
- Reduced net immigration to the province.
- Massive inventory at this time of the year.
- Significant number of new completions going to increase inventory further.
- Distinct possibility of US recession.
