Posted by & filed under Alberta Real Estate Update, Calgary Real Estate, Prestigious, Victoria Real Estate Update.

The Real Estate Market in Victoria and British Columbia in general has had a very strong year and it looks like it will continue in 2008. If you have been following our blogs you know that we are pretty bullish on the Real Estate Market in Victoria.

Every so often we look at some of the other cities in Canada and we recently received a very good newsletter from John Hripko (Ripco LTD. Real Estate Team) in Calgary.

John’s article is very interesting and makes you think, here it goes:


The sky is falling…….or is it? There will always be the nay sayers in every economy, but the reality for the Calgary real estate market is not as complicated as it may appear. Let’s forget about the sub-prime mortgage fiasco in the U.S. as it will have little if any impact on Calgary Real Estate. The factors that are impacting us are the following, and until they get resolved we will continue to myre in mediocrity and a painfully slow Real Estate market.


1. The Alberta Governments pending determination of how high to increase the oil and gas Royalty revenues. This is huge as many Albertans are uncertain as to what the future holds. Uncertainty is the #1 cause of a slow Real Estate market. With 2% of the successful wellheads contributing 40% of the Government Royalty revenue, the provincial government can’t afford to reduce our exploration as it will be the NEP all over again (for those of you that don’t recall – the early 1980’s National Energy Program which sank the Alberta economy in a nanosecond and took over five years to dig out of). The Alberta Government has to increase the Royalty rate if only to appease the 78% of the population that is demanding it as they want to be re-elected in the likely 2008 Provincial mandate. It will be the typical political spin where they’ll “make the Big Boys” pay (or so it will appear) and the public will appear to have slain Goliath and the big oil machine. Many people do not realize that there have been tens of thousands of jobs eliminated over the past few months throughout the Province, with some organizations only allowing your continued employment if you accept a 20 to 30% wage rollback!

2. The Canadian dollar is trading at a high not observed in over 30 years. Don’t expect this to remain the norm, but the next six months will allow us to travel to warmer climates on fewer dollars. The downside is that our largest trading partner is the U.S. and when they are struggling as an economy and then have to pay even more due to currency values only causes them to buy less. A vicious circle.

3. The price and consumption of natural gas. For suppliers to make a decent dollar over the long term , continue exploration and develop new techniques, gas has to trade above the $5 mark that we currently see. Six would be great and seven would be phenomenal to maintain a high degree of employment throughout the industry. Remember that it doesn’t matter if the jobs are right in Calgary or not, Alberta needs to be firing on all cylinders for Calgary to keep our office towers full and subsequently maintain our Real Estate values. It should be noted that gas contributes more to the Alberta coffers than oil and Calgary is a gas city, not oil based as many believe.

4. Migration out of Calgary must slow down. 2008 will see a minimal increase in population, as many residents have decided to cash in their massive 50% plus value gain last year and return to their homeland, be it Saskatchewan, Ontario or the Maritimes. We have reached a critical mass of over one million population, and for us to ride out any curve balls, we need to maintain a continued net migration over the next decade.

5. Our total housing inventory must drop from the current 11,000 +/- units to a more manageable 7000 units. (5500 to 6000 units would be considered a balanced market) These figures are for the entire Calgary Real Estate Board region which includes our immediate surrounding area, but what happens in our bedroom communities has a direct impact on Calgary itself. Our housing availability is high primarily due to three reasons –

A. Many speculators purchased new homes to be built last year and have taken possession in the last few months. With no intention of occupancy and strictly one of flipping these homes remain vacant. Further, builders now find themselves competing with their own inventory that they just passed on to last years client and as such their housing starts are plummeting as are construction jobs.

B. A different class of investor feels more security in a condo complex, and with all the cranes in and around Calgary, the buyers of these new buildings are majority flipper investors. This is evident when a new complex is finally completed, there are between 20 to 40 units immediately available for purchase in the building.

C. 30% of single family and 38% of condominiums currently available are VACANT!! Points A and B tell you why, and until we eliminate this massive inventory, values will remain flat with little upside. The vultures are circling and depending on one’s motivation, there are some good deals to be had.

6. Our housing demand must maintain its volume. On a bright note our volumes have stayed relatively consistent after seasonal weighting. Given that our inventory keeps increasing, if our demand started to fall our values would drastically drop, not just stall, and we would then see mass corrections as the pandemonium and even more vultures circle above.

7. Interest rates will stay flat with the probability of minor increases on longer fixed term rates. Where is our employment rate and how long will we be able to sustain our Canadian dollar. Our interest rates typically follow bond yields, the yields have dropped dramatically while we have maintained our rates – why? If the rates dropped then our dollar would increase even further compounding the Fed’s problems with exports and our overall employment.

8. Given the aforementioned, NOW is the time to buy! The window of opportunity is, in my opinion, the next six months or so. By Spring / Summer 2008 values will start increasing back to the levels we experienced a few short months ago and increase up to an additional 10% in 2008. Why, the excessive inventory will have been swallowed with our typical demand model and although Calgary is Canada’s third most expensive Real Estate city, we offer one of the best lifestyle packages in our country. The jobs are here, the city has a young driving pulse and new ideas continue to surface. This will continue to attract even more young people to our fold and sustain our vibrant dynamic.

Remember you heard it here first!

I would like to welcome Mr. Darvin Schafer as the newest member to our Team. Darvin has an extensive background in the medical field and those insights only add to his ability to handle the situations we deal with daily.

Lastly, given our strong Canadian dollar, many of you are considering the acquisition of a U.S. residence for either recreational or retirement purposes. Contact us if this is on your radar. We have numerous excellent contacts in most locations throughout North America and also have some insight as to the hot spots, where the deals are and most importantly the tax implications. These referrals will give you added certainty in making the best decision possible. If you would like to stay local, there are many excellent value propositions available, contact us to expand your portfolio, remember now is the time.

I’ll be attending a career conference in Toronto at the start of November. There are over 60,000 people who purchased tickets to attend and consider the career opportunities in Calgary and Alberta. It will be interesting to see what their questions are and why the are considering leaving Ontario at my booth which will focus on the availability and price structure for housing.

Let me know what you think of my forecast or even this column. I’d love to hear from you. Contact me via e-mail at or call direct at the office 245.4477 locally or 800.741.5741 toll free in North America.

John has been one of the Top 1% of REALTORS® in Canada and Calgary’s #1 Relocation Expert for the last 10 years, John is the founder and leader of the Ripco Real Estate Team. Since 1984, John has continually been a top sales performer for Royal LePage Foothills. You can also reach John on his website.

If you have any questions about Victoria Real Estate in General, you can contact us anytime.

Cheers, Anders

Anders Treiberg, Associate Broker, REALTOR®

Properties in Victoria Professionals-Royal LePage Coast Capital. We Know Real Estate

Anders Treiberg has been a REALTOR® in Victoria since 1990. He has extensive Real Estate Expertise and can be reached on his website or via email at

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