Calgary was re-introduced to the negative effects of a meltdown in the oil patch almost one year ago and the entire city is feeling the reverberations.
For some it has meant a slow down and for others a major catastrophe. By all accounts this is going to be with us for the better part of 2016. By midyear we will have a better window from which to see where Calgary will be going,
Over the next few quarters Calgary will experience more lay offs and these will start to have a greater impact on non-oil related businesses.
When we look at the unemployment statistics we see Alberta fairing very well against the rest of Canada. However, not all layoffs, especially individuals with large severance packages, quickly become members of the unemployed statistics.
According to Stats Canada, Alberta’s unemployment rate for October 2015 was 6.6% while Quebec and Ontario were at 7.7% and 6.8% respectively. BC was 6.3%.
One year into the recession the Calgary Real Estate Board the benchmark condominium price of $286,000 has not fallen at all when compared to, November 2013 ($274,000) and a mere 3.5% when compared the end of 2014 (a record year for sales); January 2015 $297,000.
The bright light on the horizon however, is the interest rate, which is predicted to remain low throughout 2016 and into 2017. Unemployment directly affects under 10% of the workforce while a large spike in the interest rate, in today’s economy, would be far more pervasive and destructive.
The take away is that while we are all riding out a tumultuous storm it is by far not the worst. Let us not forget that between April 2008 and 2009 the benchmark price for condos in Calgary fell 16.2% form $278,600 to $233,000 (CREB) and we recovered.
While we all work hard to help each other get through this let’s try to remember that it could be far worse.