We started writing about the lower oil effects in November of 2014. Since then, we have sprinkled shared articles or at least updated how this situation is affecting Canada and the Hamilton area. We are proud to say that at Robert Floris’ Mortgage Architects office, our predictions have been spot on. We share our thoughts in expressing what we would like to know if we were the reader. Let’s look at the past year and in the near future.
The easiest place to start is in Alberta. E.I claims have more than doubled than the previous year. Over 51, 000 workers lost their full time positions. Hard hit areas have been Calgary and the Fort McMurray area.
Calgary office space has certainly gotten cheaper and now it is quite evident that Calgary homes are feeling the effects with a 30% increase in foreclosure from the year before. Prices are beginning to crack as well down on average of 3%. I do not see the situation getting any better. If the oil price should remain low in 2016, it will put further pressure to those trying to hang on. With new CMHL rules seeking a larger downpayment for homes over $500, 000, it will only add to a weaker market.
As for Canada, which in general is still based on natural resources, the result of the economy has been a mixed bag. Overall, E.I participants jump by $45, 800 to $544, 000. I am thinking mostly in Alberta. The Canadian stock market is taking a beating in 2016. Unfortunately this is a harbinger that all is not okay as this is a leading indicator. Oil and real estate were the two key elements that kept Canada chugging along.
As we have described, oil has hit the skids and now real estate is beginning to tank in Calgary, Regina, Winnipeg and some say even Ottawa. Can other areas of the economy pick up steam? With Canadians over in-debted, it does not look like it. Our only hope is that our exports can pick up the slack. With our dollar at approximately 72 cents against the U.S dollar, we may have hope.
Let’s firmly look at the Hamilton-Wentworth area. We have been kind of last to join in this real estate party. Hamilton homes have seen an incredible surge in the last few years and I sincerely believe it will continue. Due to the blessing of low mortgage rates, more people have had the ability to enjoy purchasing a home in this great city. As described above, the Canadian economy is struggling but the Hammer will not be affected as badly as our Western cities. Hamilton is still attractive in that rents are still very comparable to home ownership. If a full blown heavy recession occurs, this can hurt the psychology but for now, Hamilton looks to be sitting well in 2016.