21st Century (1991-present)
The 1980s were a turbulent and unpredictable decade. By the 1990s, however, Alberta's economy had stabilized and has witnessed increased growth that has continued well into the new millennium. In an attempt to escape the roller coaster effects of an economy based on oil and natural gas, the province sought economic diversification, capitalizing on the technological revolution of the 1990s. Calgary and Edmonton expanded their information/computer technology sector as well as their retail, tourism, and manufacturing industries.
Government cutbacks in the early 1990s, however, hurt the province's infrastructure, allowing urban centres to fall behind on the building and maintenance of roads, schools, and hospitals. Rural Alberta struggled because of rising freight rates while oil and gas wells supplanted farm land. Job opportunities were scarce in rural Alberta and as a result many young adults left the farm in search of work in the city. Economically, two central themes emerged in the 21st century - a declining rural area and a fast-growing urban corridor led by the mavens of resource production in the north, Fort McMurray and Grande Prairie, and the financial centres Edmonton and Calgary.
High energy prices and large financial investments in Alberta's oil sands industry allowed Calgary to maintain its position as Alberta's premiere financial centre. The city's investment in the computer technology sector set it on the path to becoming a technology hub in Canada. Edmonton was not far behind either; its gradually diversifying economic base led to rapid population growth. In both cities, residential and commercial real estate sales were on the rise. There was tremendous growth in Fort McMurray, as well, because high demand for oil called for oil greater exploration and production in the area. At the same time, Grande Prairie emerged as the service centre for the resource-rich Peace Country, benefiting from growth in the oil, forestry, and natural gas industries.
At this time, the real estate sector witnessed considerable growth in urban Alberta. Alberta's real estate industry achieved self-governance when the Real Estate Council of Alberta was established with the passing of the Real Estate Act in 1996. The act ensured that the council, rather than the province, was charged with setting and enforcing the industry's high standards. Every Alberta REALTOR® was mandated to continue their real estate education on a yearly basis in order to maintain their license.
The Real Estate industry of Alberta continues to prosper in the 21st century. Alberta is one of the wealthiest provinces in the country, with a high standard of living, high disposable incomes, and low unemployment. Edmonton and Calgary have become global cities, attracting mass immigration and a wealth of employment opportunities.
Edmonton has experienced tremendous real estate growth, particularly in 2006 and 2007. Economic development combined with consumer confidence, a high Canadian dollar, and tremendous population growth caused residential housing prices to skyrocket. Between January and May of 2007, prices rose by 23%. Economic growth and expansion can be seen throughout the city. For instance, the University of Alberta continues to expand with several new engineering buildings, the innovative Telus Centre for Professional Development, and a new Health Research Innovation Facility. Revitalization plans are under way on Jasper Avenue and Alberta Avenue, and core neighborhoods like Oliver, Rossdale, Cloverdale and Boyle-McCauley, in an effort to lure people back to the city centre. Even as its centre grows, its outskirts expand, with new developments along the edges of the city, linked by the new Anthony Henday ring-road. Real Estate growth is expected to continue in the next few years, although the housing boom is beginning to plateau, and prices are decreasing.
Calgary's expanding portfolio of industries - technology, manufacturing, retail, financial, manufacturing, transportation, and film - have all contributed to its expanding real estate market. Between 1998 and 2002, Calgary built 10,000 new housing developments every year. Its population has been increasing and vacancy rates decreasing to a low of 1.46% in 2007. Average housing prices have been on the rise for a number of years; in 2007, they reached $394 758, up from $306 390 the previous year. Meanwhile, commercial real estate has been in tight supply, particularly in downtown. Over the next few years, eight high-rises are scheduled to be erected, including the massive Penny Lane Project, consisting of two commercial towers totaling over two million square feet.
Red Deer, Lethbridge, Medicine Hat, Grande Prairie, and Fort McMurray have all shared in Alberta's economic prosperity. Grande Prairie and Fort McMurray are among the fastest growing cities in Alberta. For the past few years, Grande Prairie has averaged a yearly growth rate of about 5% and has established itself as the administrative and manufacturing headquarters for the Peace Country. The city's population went from 35,962 in 2000 to 50,277 in 2007. Northeast of Grande Prairie, Fort McMurray is bursting at the seams with new growth. The oil magnates Syncrude, Shell and Suncor have all invested billions of dollars into massive oil sands projects. As a result, housing shortages have reached critical rates; in 2006, Fort McMurray had the highest real estate prices in the province, with an average new home costing $494,502, compared to the next highest, Calgary, at $348,622. Red Deer benefited from the growth of its trading partners, Edmonton and Calgary, rising to become the 3rd largest city in Alberta. Red Deer has some of the lowest municipal taxes in the country and this has benefited commercial and industrial development. Comparatively, Lethbridge and Medicine Hat have expanded at a slower rate than the aforementioned cities but, nonetheless, residential and commercial construction is steadily increasing.
Despite the strength of the real estate industry in Alberta, problems threaten to undermine its success. The American economy is currently experiencing a recession that directly impacts the Albertan economy, since Alberta's largely resource-dependant economy relies on American buyers. At the same time, the high Canadian dollar has kept American buyers away while the crash of the sub-prime housing market in the United States threatens consumer confidence. Alberta's booming housing market, though beneficial to the real estate industry, exacerbates the issue of homelessness in the cities by driving up housing prices thus making them largely unaffordable for low income earners.
Updating building codes is yet another important issue facing today's real estate market. Construction booms combined with labour shortages suggests that many buildings are being completed in a short amount of time. Proper and effective building codes need to be mandated to protect real estate owners and customers from shoddy construction. Mass migration to the cities has contributed to urban sprawl, as individuals and families seek larger homes and spacious backyards. Urban sprawl is a serious issue from both an environmental and economic standpoint. Edmonton and Calgary are currently overextended and the cities are finding it increasingly difficult to build and maintain the infrastructure to support urban sprawl development. Sprawling cities create many environmental problems including, most notably, long commuting times as suburban neighbourhoods are highly dependent on vehicles as their mode of transportation.
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