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Royalty Review, Alberta Real Estate – Now What?
Author: Joe Samson  | Posted: 31-10-2007 | Comments: 0 | Views: 5 | Rating: (50)  (?) 
 By Joe Samson, Calgary REALTOR®
The world is coming to an end! Real estateprices have already dropped $45,000 in Calgary real estate in the last two months and the new royalties will cripple the Alberta economy due to massive project cancellations…. These were some of the headlines you could read in the media in the past weeks. But what is really going on and how is this really going to affect all of us, especially our real estate values in Alberta? A lot of self declared experts are comparing this new royalty hike to the 80’s NEP (National Energy Program) when Alberta’s economy turned into the “Great Depression” and real estate was being bought and sold for $1.
Let’s dig in and get right to the bottom of everything. The number one job of any media is to make a profit by selling lots of headlines. Just to show a few examples, we don’t have to go back in time too far. Does anyone even remember the predictions of Alberta’s housing market to crash because of KYOTO in 2001…? I don’t think so. How about the devastating rent controls that are going to kill our real estate market? It’s really sad how many topics are twisted out of proportion, creating hysteria among investors who don’t look at the global and national economics.
At the end of the day, it doesn’t matter how you look at any news scare. Real estate prices have and will be increasing in the future for a simple reason. SUPPLY & DEMAND! The day when I am writing this article oil prices are sitting at $90 which is considered to be quite cheap according to many economists. Obviously Alberta has the second largest oil reserve in the world that creates a lot of excitement among oil companies especially when other sources become unstable due to political reasons and when global demand is growing twice as fast as supplies can keep up.
How does all this tie into real estate? The headlines what newspapers are trying to sell suggest that if massive lay offs begin in the oil industry, everyone will want to sell their home causing real estate prices to drop. This makes sense in theory but why would the oil companies want to cancel all these projects if they know that the oil prices have only one way to go which is up. Oh yes, they are threatening to invest their billions somewhere else. Well the last time I’ve checked the Middle East or Venezuela wasn’t among the most secured investment places on my map. So where are they going to go? Maybe Saskatchewan? Supposedly if you do the math with the new royalties in the equation it’s still cheaper for the oil companies to stay in Alberta than to go somewhere else.
Another fact that I managed to filter out from the noise is EnCana’s threats to cancel major projects in Alberta and invest it somewhere else. If those threats are for real then why are they spending 1 billion dollars on a new sky scraper in down town Calgary?
Just recently, EnCana has announced to sell off the majority of their international assets so they can focus solely on the North American market. Knowing that the majority of those investments have to be in Alberta (due to the lack of availability elsewhere on the continent), you’d have to wonder where they would go.
What is really going on? I believe this royalty hike has been needed a lot more than you might actually think of it. Not only because I think that the Stelmach government is greedy but mainly due to the fact that our economy is so much out of control that the Bank of Canada couldn’t do anything anymore about controlling the western inflation. Unfortunately Canada’s economy is split into two halves now. In Ontario, the country’s manufacturing heartland, the industry is already in a “dollar-induced” recession. In Alberta we are seeing inflation at unprecedented levels and it rapidly drives up the cost of everything. The only remedy to slow the inflation down is to increase interest rates or to redesign provincial policies such as royalty hikes. Unfortunately if David Dodge were to substantially increase the interest rate on a national level it could do serious damage the eastern provinces’ economy.
The only way for Dodge to help the overall Canadian economy and save jobs is to drive the dollar down by cutting interest rates. If the high dollar isn’t enough to hurt Canadian manufacturers, they also have to cope with a slowdown in the U.S., Canada’s primary export partner.
Mr. Stelmach has not only done Alberta a favor but he has also helped out Mr. Dodge by not having to increase interest rates across the board. Unfortunately some jobs will be lost but it won’t be anywhere as devastating as some make it sound. The drilling industry that might be makings some noise about job josses were already going to decrease production anyways. So I guess the timing couldn’t be any better for them to find a scapegoat.
Real estate prices will definitely soften up a little, but not because of the royalty review. I rather suggest that prices are softer today due to the increased supply of inventory caused by many speculators. Real estate is a long term investment vehicle, however not everyone thinks like it. 37% of today’s listings are either vacant or occupied by a tenant amongst Calgary Real Estate Board’s listings. If you eliminate the speculators and the over priced listings we are actually looking at a pretty balanced marked for this time of the year. Those of you who are seriously considering investing in real estate and believe in long term investments this is a prime opportunity to increase your real estate portfolio. I can’t remember the last time I have seen offers being accepted $30,000 to $40,000 below the asking price. Calgary real estate market isn’t finished yet, it’s just beginning its real journey!
Don’t forget. There will be lots of noise, lots of newspapers sold, lots of fear and greed in the real estate market. At the end of the day, a year from now the scary headlines will be long forgotten, just like before…
Posted by Calgary Realtor - Joe Samson
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About the Author:Joe Samson is an Alberta based real estate professional and licensed member of the Real Estate Council of Alberta - Proudly representing MaxWell Canyon Creek Realty. Joe began building his personal real estate career in 2000 and hasn\'t looked back since. Using unique real estate strategies he managed to help countless clients of his to become on route to be financially independent and happy home owners.
At that time, Joe worked as a Project Manager for a major International gas compression manufacturer. After regular business hours Joe managed to dedicate a large amount of his time to his passion - Real Estate. Joe spent countless hours educating himself of \"how to buy, where to buy and what to buy\" while minimizing risks and maximizing returns. Then he took that knowledge and began working with clients who were interested in purchasing revenue-producing real estate using his own unique strategies. Over the years, Joe has dramatically increased his personal net worth, along with that of many of his clients.
And now, with his real estate knowledge and experience backing him, Joe has left his safe/secure job to dedicate his time to growing his Real Estate experience and helping others become financially independent by sharing with them his \"real life\" Real Estate strategies.
The foundation of his business really is \"You Can Have Anything In Your Life... Just Help Enough Other People Get What They Want.\" And due to this commitment, virtually all of Joe\'s business comes from repeat or referral clients.
To better support his clients, Joe constantly shares his knowledge with others to assist and guide them in their Real Estate & Wealth Creation.
Joe Samson\'s background, experience, energy, ability and honest hard work will be key factors in building your wealth, investment confidence and eventually your financial independence!
Joe is adamant about always putting his client\'s interests first and realizes that the level of service offered to clients dictates the level of success you will attain. \"don\'t worry about making the sale - concentrate on providing great service and in giving helpful advice the business will follow\" , says Joe. A motto he has lived by since the day he began his real estate career. Joe incorporates the services of a trusted team to enable him to bring a whole new level of service to his clients and offer attention to detail in all aspects of the real estate transaction.
Trust and Integrity
Joe\'s success comes from taking the time his clients need to make the right choice. Joe is there every step of the way, providing top-notch professional service while at the same time helping to make it an enjoyable experience.
Joe gratefully acknowledges the super support he has received from his past clients who have recommended him to their family and friends. The trust and confidence they placed in him when they purchased or sold their home is reflected through these recommendations. Integrity is everything to Joe. He does not hesitate telling his clients the pros as well as the cons to every home buying or selling opportunity. Call Joe today at 403-278-8899 or at www.JoeSamson.com .
When the world is moving at speeds too fast to comprehend, it\'s important to keep pace with the competition or risk being left behind. If you plan on buying or selling Calgary real estate, let Joe Samson use his unique real estate systems to maximize your opportunities. He uses all the technological advancements to provide his home sellers and buyers with an extra edge in a competitive market. He makes a point of always staying connected with their clients so that timely decisions can be made effectively. While Joe may lead the way in high-tech conveniences, he still understands that nothing can replace good old-fashioned personal service, hard work and dedication.
Buying Calgary Real Estate? Joe will provide you with useful real estate information about the buying process, making an offer, negotiating, financing, mortgage rates, moving, and everything involved in making an informed real estate decision in today\'s
Calgary real estate market including school information, amenities and communities. He showcases all the current Calgary MLS listings online from the Calgary Real Estate Board MLS database. These real estate listings are of new and resale Calgary homes, town homes, condos and land with maps, satellite maps, photos and some with floor plans! He offers free relocation services and in-house mortgage brokers to make sure you get the lowest interest rates in town. FREE automatic Calgary Real Estate updates on a daily basis so that as new homes for sale come on the market you are immediately notified by email!
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