Residential

Originally posted 18 January 2017 Part 4- Prospects It is always difficult predicting the future at the best of times.  In the world of Donald Trump with the high degree of uncertainty about trade agreements, prognostications are even more precarious. In the previous three parts we have studied the effects of employment, corporate and personal income, and mortgage financing on the residential market. Data shows that the market is holding up exceptionally well under the current circumstances. (more…)

Part 3 Mortgage and Credit availability Next we turn to the financial aspects of the housing markets. If borrowers are experiencing difficulties in meeting their monthly (or weekly) payments, normally they will approach the creditor and seek to negotiate a type of forbearance agreement.  This can take many forms such as extending the amortization period or increasing the principal of the loan through an equity take out in order to catch up with interest payments (to pay for daily expenses or to pay down more expensive debt such as credit cards).  As the following Chart shows, the chartered banks in Alberta have not slowed down their mortgage (more…)

Throughout 2016, there has been a nagging question mark at the back of my mind about the state of Alberta’s residential real estate market.  Why has this market held up so well when the economy has suffered two years of recession?  After 18 months of economic contraction, residential real estate has not cratered and housing starts, though at reduced levels, are still fairly strong at about 2,000 units per month. This series investigates firstly whether there is a “crisis” in the residential market, secondly what are the drivers of residential prices; thirdly the financial sources of supply for the housing market, and finally the prospects for 2017. (more…)