Today Statcan rolled out their latest Labour Force Survey results… and they weren’t pretty, at least as far as Alberta is concerned. 14,800 jobs lost, most of which were full-time (14,300 to be exact). This is a big blow after three months of slow but steady gains in full-time employment.
Unemployment of course rose given that news, again nearing 7%… but the true impact is still not fully exposed as the participation rate also continues to drop as well (meaning many previously counted as unemployed are no longer counted as part of the work force at all, thus actual unemployment is higher than stated). Beyond that, the stated measure counts full-time and part-time jobs equally, which while valid for the measure, doesn’t necessarily tell the whole story.
To get a better idea of the effects of the downturn this is an easy little measure I devised (and have used previously)… full-time jobs divided by total eligible population (those typically considered of working age). Here we can see that there has been over a 5% drop in the percentage of Albertans who are employed full-time from the peak in 2008. This is also the lowest rate witnessed since 2000, and obviously well below what was experienced during the boom.
This would again really make one wonder who near record level of real estate transactions can take place during the biggest economic downturn in almost 30 years. Not to mention, during that earlier recession real estate dove as soon as jobs started being lost. This time, somehow it just started gearing up. Who knew? Foolish me I guess, thinking fundamentals and rationality have any place in market behavior…. it’s different here… real estate prices only go up… except when they don’t…
In other news… 5-yr bond yields are pushing their highest point since the crash, only a fraction below a week-long plateau in October. This will put some upward pressure on interest rates, and will only build as the BoC is expected to raise rates before the Federal Reserve does. And the dollar is creeping towards parity… again, a figure that will be under upward pressure in light of the BoC’s expected rate hike in advance of the US doing likewise.
Good insignt into the posted stats. Makes you wonder how long can the RE market be in a bull run.
The end is nigh?
http://www.edmontonrealestateblog.com/my_weblog/2010/03/edmonton-real-estate-market-weekly-update-1.html
Considering what is coming down the pipeline interest rate wise, and how people typically respond to it, I would expect things to pick up this spring… I think it will be the summer and fall that will be very interesting.
But who knows, at this point nothing would surprise me.
5-yr bond yields are pushing their highest point since the crash, only a fraction below a week-long plateau in October. This will put some upward pressure on interest rates, and will only build as the BoC is expected to raise rates before the Federal Reserve does.
http://www.bloomberg.com/apps/cbuilder?ticker1=GCAN5YR%3AIND
And the dollar is creeping towards parity… again, a figure that will be under upward pressure in light of the BoC’s expected rate hike in advance of the US doing likewise.
http://finance.yahoo.com/q?s=CADUSD=X
“This would again really make one wonder how near record level of real estate transactions can take place during the biggest economic downturn in almost 30 years.”
I have posted this on other forums before. It is quite clear why the Real Estate market hit records in some parts of Canada during a recession. It has everything to do with the Conservatives literally opening the flood gates and allowing every Tom Dick and Harry to qualify for a mortgage. Without the CMHC and the Conservatives basically mandating them to give everyone who asks a mortgage, there is NO WAY that banks would have been lending the amount and the size of mortgages that they have been especially in places like Vancouver and Toronto. Take away the CMHC and people would not be qualifying for mortgages greater than 150,000.
Without question, I believe that the CMHC single handedly has driven the housing bubble. We are now on the hook as Tax payers for Half a TRILLION dollars worth of CMHC insured mortgages. If the media actually covered this, most people would be shocked. But when you have the Real Estate industry for the most part owning the media with their ad spending, you will rarely hear any sort of negative Real Estate press.
This is pretty much why the Real Estate Bubble keeps getting larger when it should have collapsed by now.
http://www.rabble.ca/news/2009/10/canadas-sub-prime-mortgage-time-bomb
Has AlbertaBubble died? They haven’t had a new post over there in a couple months?
I hope not, it’s a good crib and keeps the crazies and trolls from venturing out and bothering the rest of us