Intuit moving its head office

First it was Dell, then TD and now it is Intuit.

The crown jewel of software development in Edmonton- Intuit Canada-is shifting its head office to Toronto. No prizes for guessing the reason-it’s too hard to find talent here and too hard to sell Edmonton to potential employees from east and rest of the world.

"It used to be one of our big sellers that people could come out and start a family here, but the cost of living is working against us now."

A recruiter friend of mine says that it used to be an easy sell to bring someone from Halifax or Toronto- same or better wages and lower cost of living.

Now one part of the story has changed drastically-same or somewhat better wages but much higher cost of living. Of course, higher cost of living is predominately higher cost for housing. For both renting and owning.

Higher wages and higher cost of living together would not be such a deadly combination (Bay Area, NYC, London etc come to mind) if the city had something more to offer (Edmonton especially). Other than 9 month long winter, a huge mall, river valley, the 14 animal zoo, four glass pyramids and 400 kms separation from mountains, the city doesn’t offer much.

Edmonton used to be a good place-for all its worth-when things were not berserk here. Rampant inflation and exorbitant cost of housing is deterring companies in ICT industry to continue to operate here.

All along the ‘bust’ years of Alberta economy (mid 80s to until early 2000s), the Alberta and the municipal government tried hard to diversify the provincial economy. Information and Communication Technology industry, along with bio technology and life sciences were the focus area.

It’s too bad that every time an energy boom arrives, it causes a ‘bust’ in all industries other than energy. And when the commodity cycle turns, there’s nothing left to counterbalance the energy industry weakening. So Alberta really experiences two busts-the commodity bust and the bust experienced during the boom years caused by the exodus of non-energy related businesses.

It’s hard to predict whether there will be another bust in Alberta, but if it does happen, there won’t be too many diversified employers available to pick up the slack.

Despite attempts by Alberta government and the city of Edmonton to attract high quality workforce, it will remain an uphill task. Initiatives such as this will help, but will only go so far. What this city needs is something substantial to retain the young professionals and/or cheaper cost of living to make up for its lack of ‘everything else.’

In other ‘non-news’, the current edition of Edmonton comfree is a sight to behold. It is perhaps the thickest comfree ever produced with over 186 page and each page has around 20 properties. With very tepid sales for this time of the year, I wonder if they'll need to produce a hardcover edition of comfree pretty soon!

Have a terrific weekend everyone.

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?