Canada has experienced a sharp increase in building costs recently. There are several factors contributing to the building material increases in Canada.
When COVID-19 lockdowns were in full affect, many property owners started and or finished renovation projects. Some hotels, motels, clubs, recreation facilities, offices, churches, and commercial buildings had limited occupation or were unoccupied or had limited usage during the pandemic lockdowns. Property owners took advantage of these lockdowns to conduct upgrades that would normally disrupt use of the buildings.
Many suppliers for lumber and other building materials shut down temporarily due to COVID-19 restrictions. This created a supply shortage.
Central banks lowered interest rates to spur economic activity creating a general increase in demand.
Border restrictions have delayed material movement and made trade more complex from a cost and time perspective. Lumber sitting in warehouses and docks negatively impacts prices, timelines, and supply.
The United States often takes precedence for material suppliers as it is much larger market. The comparatively smaller Canadian market competes with the United States for everything needed to build. This causes shortages, increased costs and delays.
Average farmland values in Alberta increased at a much slower pace in 2019 at 3.3%, compared to an increase of 7.4% in 2018. The larger increases were in the south and central regions, while values showed incrementally smaller increases moving northward. Alberta agriculture faced several challenges in 2019 with weaker economic conditions, volatile commodity prices and adverse weather contributing to a smaller average increase in farmland values. Many areas of the province were impacted by a September snowfall, so harvest was delayed or never completed in some areas and the overall quality was down. Potatoes in the southern region were the bright light in 2019 with an increased demand from the processing sector, which contributed to a 3.9% increase in the average farmland value for the region. With an additional potato processing company in the Lethbridge area, producers were given an incentive to increase their irrigated potato production. Dry conditions, however, negatively impacted values for unirrigated land. Northern and Central regions of the province reported stable to moderate increases in farmland values, 1.5% to 5.3%, respectively. Moisture conditions in the western part of the northern region were above average, reducing yield and quality. Many areas of the Peace region experienced periods of forest fires and related smoke. Frost and dry conditions were followed by an early snowfall, which made for a challenging season that resulted in a modest 1.1% increase in average farmland values. Despite this, there were a few pockets in the Peace region that experienced a successful season and land sales continued to be strong, but the increases are still lower than the previous year.
The median sale price for single family homes in Brooks in 2018 was $240,000 which is almost unchanged from the 2017 median sale price of $241,000. The market remains relatively stable after seeing some decline from 2015-2017 due to the recession in Alberta. There is still an oversupply of homes on the market in Brooks and area. The oversupply may still be putting some downward pressure on sale prices.
Oil prices declined heavily near the end of 2018 and this will likely put more stress on the real estate market in Brooks. There is still significant uncertainty regarding the future of Alberta’s oil industry and the outlook for 2019 is uncertain due to the recent oil price fluctuations. A pipeline approval would go a long way toward restoring confidence in the market.
The average value of Alberta farmland increased 7.3% in 2017, following average gains of 9.5% in 2016 and 11.6% in 2015. Values were driven by both demand and weather. While the province experienced steady demand in all regions, there were pocked of very strong demand from competing farm operations as well areas of decreased demand due to overly dry conditions. Southern Alberta was impacted in 2017 by a lack of rainfall on dryland, however this was offset by the pockets of increased demand. The Southern Alberta region’s irrigated land saw a stead to increase demand combined with limited supply leading to higher overall increase of 11.4%.
With the new solar and wind farms popping up on farmland all over Alberta many people are wondering how it affects property values. This article offers some insights.
“A key point of contention against wind (and solar) farms is that they require much larger amounts of land to generate the same amount of electricity, an important downgrade of their “greenness” that goes conveniently ignored. Wind power is naturally intermittent, and plants typically operate at about 25% of full capacity, compared to coal and natural gas plants operating at 90%.”
The average value of Alberta farmland increased 9.5 per cent in 2016, following gains of
11.6 per cent in 2015 and 8.8 per cent in 2014. Values in the province have continued to
climb since 1993.Despite an economy hurt by depressed oil and gas prices, Alberta reported the second highest average farmland values increase in Canada, eclipsed only by Prince Edward Island. The province’s 9.5 per cent average increase was largely buoyed by grain sector expansion in the north, as well as activity from non-traditional buyers in the south. While competition for available farmland also increased prices in other regions, farmland on the
outskirts of urban centres saw reduced prices due to the general economic downturn. Some adverse weather, as well as depressed oil and gas prices, placed downward pressure on farmland values, while large farm expansion and competition
between beef and grains sectors in some areas helped boost the value of marginal cultivated forage or pasture acres.
2017 has so far been a stronger year for real estate than 2016. Average overall sale prices have increased. This time last year there were 22 sales with an average sale price of $241,045. So far in 2017 there have been 28 sales with an average price of $262,741. Brooks has 70 homes for sale on the open market right now as well as many homes being sold privately.
Average sale price for in Brooks for the first 9 months of 2016 was $248,800 which was 3.1% lower than the same time last year. There has also been a reduction in overall sales. The first 9 months in 2016 had 77 sales as opposed to 95 sales for the first 9 months of 2015. Brooks currently has 88 houses on the market.
The average value of Alberta farmland increased 11.6% in 2015, following gains of 8.8% in 2014 and 12.9% in 2013. Values in the province have continued to climb since 1993. The majority of the province experienced a steady increase in farmland values throughout the year. The continued positive outlook on agriculture resulted in many producers purchasing land for expansion or to support succession planning. Agricultural land price increases were observed in northern, eastern and southern portions of the province, largely due to strong pulse crop prices. Continued strength in beef prices resulted in increased demand for land used for grazing in cattle producing areas as well. There were localized areas that started to reflect the impact of the downturn in the resource sector or appeared to have reached the point where the demand for cultivated land lessened.
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