Interesting Times....

Just a couple of interesting pictures that are probably the sign of these times. kind of contradictory, but we are living in interesting times.

Affordability is of course the biggest problem for Alberta real estate. But the good mortgage doctors admitting it themselves? And what's their magic potion- interest only loans (not sure if we are there yet), 40 year terms (very likely) or government subsidies for buyers? Who knows.





And yet, we have this:

Outside a newly built condo complex in West Edmonton (yes, close to the biggest mall in the Universe). How many for sales can you count? See the first comment for the answer!



And while all this is going on, here's a very nice example of disparity between the present (rent) and future(own) takes on the real estate market. Right in downtown, a newly built condo selling for around $340k and renting for a princely $1200.

And what is this blasphemous talk of rent reduction?
There are thousands of highly paid jobs getting created in Edmonton that can easily support rents of $2000 per month. Right?

And I can't really believe, this is the 49th post for this blog. Thanks all for your wonderful support. Would you like to see anything special for the 50th post?

Non-Eventful news...

Not much in terms of news bearing any major impact on Alberta real estate. Still, there were a few items that were anticipated by both bulls and bears that could have some impact on the prices.

The anticipated capitals gains benefits never really came in the budget, so no great incentive for flippers to either accelerate or decelerate whatever they have been doing.

The Oil Sands tax tax deferral benefit will go away, but without impacting anything that is already there. All projects currently approved will go unaffected. So nothing like NEP redux. But it might have some impact down the road if oil prices stay at this level and more companies begin to look at oil sands investment.

Finally, inflation rate picked up quite a bit led by gasoline and house prices. Even the 'core numbers', including all the hedonic adjustments and removal of most essential items-food, energy etc-came in much higher. So in case the housing prices go down a little bit from here on, the rate cuts may not cut very quickly. One month doesn't make a trend, but these numbers are pretty close to inflation numbers in the US.
Hard to say if we will see an asset price deflation and cost of living increases at the same time.

On two different notes:

First, I came across this really funny post on Ben Jone's blog that says:

“It seems in Southern California now you need three breadwinners: husband, wife, and house. Unfortunately, the house isn’t making money like it used to.”
I don't think we are anywhere close to that in Alberta. Perhaps they are getting close to this in Vancouver or Victoria.

Secondly, just an observation of the very local condo market. I see that condos have stopped moving at a blistering pace in downtown Edmonton. Two or three building that I pass through on my way to work have the same 'On Sale' signs that were there more than a month ago. I don't have any statistics, so these could be isolated cases.

How are things moving in your neck of woods?