Make Alberta Great Again

[Thomas Beyer]

Not a surprise really that Jason Kenney will be Alberta’s next Premier by winning the UCP leadership race this afternoon.

Congratulations.

Awesome !!

And thank you to both for running and putting so much time and conviction into the race & province they love. Both very capable men. Brian Jean will make a great finance minister or any other job he prefers to have.

Make Alberta Great Again !!

http://www.ctvnews.ca/canada/jason-kenney-wins-alberta-united-conservative-leadership-race-1.3653329

The worst is over but a long valley ahead to about 2020 for any meaningful rent and real estate value recovery as Alberta continues to fall further into a deep sea of red ink that will take a decade or 2 to clean up. But the worst is over. Time to put the acquisition hat on again.

 

[Tom Kenny]

Hey Thomas, this may be off topic but since Calgary is part of Alberta, do you have thoughts about the new council possibly solving the Secondary Suites issue? I'm wondering what a simplified or streamlined process would to to rent levels.

Obviously the econ-101 answer is that rents will fall as barriers to adding rentals are removed, but as a marketplace participant would you expect a tsunami of new rental suites coming online in this event or more of a slow trickle or maybe even a non-event as all the illegal suites just become legal and not much else happens.

I'm just starting my education in this area but it looks to me like properties with illegal suites are cheaper to buy than those that comply with the law. Perhaps shopping for properties that can easily be made legal after council updates the rules is an investment strategy?

 

[Thomas Beyer]

Hey Thomas, this may be off topic but since Calgary is part of Alberta, do you have thoughts about the new council possibly solving the Secondary Suites issue? I'm wondering what a simplified or streamlined process would to to rent levels.

Obviously the econ-101 answer is that rents will fall as barriers to adding rentals are removed, but as a marketplace participant would you expect a tsunami of new rental suites coming online in this event or more of a slow trickle or maybe even a non-event as all the illegal suites just become legal and not much else happens.

I'm just starting my education in this area but it looks to me like properties with illegal suites are cheaper to buy than those that comply with the law. Perhaps shopping for properties that can easily be made legal after council updates the rules is an investment strategy?

Secondary suites are expensive to create so I expect a trickle not a Tsunami indeed. Plenty of rental supply right now with very high vacancies and rents 20-35% below where they were in 2014 ( depending on product and location ) but with new OSFI mortgage qualification rules we will see rental pickup .. but slowly slowly.

I expect a flattish recovery ie long valley until at least 2020. Do not budget massive rent or property value increases the next three years. If you get them, great. Assume flat values and rents and if a TH, house, condo, duplex or multi-plex works on today’s numbers then buy or keep.

Oil will likely never go above $60 again and we will see more and more electricity being produced by solar and wind. So the Alberta Advantage might never come back (low income taxes, no PST, massive energy resources, hard working conservative folks) http://www.mauldineconomics.com/con...ution-could-shrink-your-electric-bill-to-zero

Another province run by socialists or soon, social conservatives. Very similar to BC's Liberals ie high spending high taxing too !

Look to EU where we are heading: high taxes, big safety net, perpetual debt, very large well paid union controlled public sector, 30-40% left wing and 30-40% right of center parties vying for government plus 10% or so on either side very left/green/socialists and 10% very right/liberatarian. In Alberta slightly more right ie likely UCP majority. But no miracle afterwards due to oil at $50, massive debt and massive bureaucracy with tight gold plated long term contracts in place. Maybe less CO2 and income taxes.

Back to normal even in AB !

 

[Matt Crowley]

Secondary suites will have no effect on rental prices. In Edmonton there is a grand total of ~1,500 legal suites since the program begin. Virtually no effect on rents.

There will never be a tsunami because no institutional money will be interested. The yields on SFH even with basement suites are far too low to bother, especially given the amount of time it takes to develop and manage a scattered portfolio. Not appealing for large portfolios.

There is very little change in property value from putting in the suite so if you invest money into developing the suite, understand that the value is in holding the investment not in a "flip".