“Most of the negative news that goes around – Alberta’s dealt with this stuff before,” says Edmonton-based agent, Ron G. Pollock. “In history, we’ve come out of it before. We’ll need some short-term adjustments, but we’ll be fine.”
Interest rates are not the short-term adjustments Pollock is talking about. Jobs, he says, are usually the driving force behind peoples’ decision to buy property, and it will continue to be a deciding factor.
The Bank of Canada, meanwhile, said declining oil prices were the primary reason for the lowered rate. The central bank said dropping oil values would be “negative for growth and underlying inflation in Canada.”
“I don’t think Alberta’s in trouble yet,” says Colleen Walsh, an agent in Edmonton. “Oil is a long-term resource and many long-term projects are still underway. Like any resource there will be ups and downs. We’re finding the housing market and buyers in particular are up right now and we expect that to continue.”
While oil has severely declined over the last several months – despite recording an increase on Monday to $46.29, largely on an impending winter storm – the province’s housing market doesn’t seem to have witnessed a large-scale impact. Sales in Alberta in 2014 were up 8.6 per cent over the year-ago period. Average sale price, too, rose 5.2 per cent to $400,590. In the month of December, the province’s home sales were down 2.2 per cent, though prices were up 2.6 per cent.
“We’ve been here before and I think if we look at historical data, the reason we had the real downturn in ‘07 and ‘08, it was mostly due to the U.S.,” says Pollock. “The oil industry now has a problem that’s relatively minor compared to the financial crisis of ‘07 and ‘08. Now we’re just talking one sector of the economy. [Oil companies] are not dead in the water; it’s just new projects [that have suffered].”
Analysts and industry watchers were pointing to Alberta for the reason behind the BoC’s decision to lower interest rates, but agents on the ground say Alberta’s doing just fine, thank-you-very-much.