Good News for Calgary Real Estate Investors
Calgary Real Estate Investors got some good news recently with the announcement of the Government of Alberta’s support for they Keystone XL pipeline.
But that wasn't all,
We also got word from the City of Calgary Planning and Development group announcing that they would be submitting a motion to council on Monday to extend the Secondary Suite Amnesty period through to the end of 2021. This is great news!
On secondary suites, from the city of Calgary:
“It's estimated there are still 13,000 illegal basement suites in Calgary. Many of them may not meet the current building code as they've never been inspected.”
“Under the amnesty, 1,600 new suites have been added to the city's registry of approved suites. “
This is important news for Calgary Real Estate Investors because it shows that only 1600 – barely more than 10% of the city’s estimate – took advantage of the program since it was introduced nearly two years ago.
Even if the same amount chooses to legalize their suites during the extension period it would still mean there over 10,000 suites set to come off the market, which will draw down the rental supply quite considerably, to the advantage of investors that made the decision to legalize their suites.
The following comments came from our in-house property management & sales group regarding the rental market right now:
“Over the last 10 days we have seen the active rental market stay steady and even strengthen. There have even been recent instances where multiple applications have been received on certain properties, most being multifamily units and under $1,700. During these uncertain times the Calgary rental market will become even more important as home buyers become more hesitant to purchase. I forecast rental interest will stay steady, however more turn over will occur. I would suggest for current Landlords to be conducting very thorough screening of tenants, and think about asking for a lease co-signer for extra security.”
Great insight on the strength of our rental market despite all of the uncertainty. People need a roof over their heads!
Some highlights related to Keystone:
“Kenney told reporters the newly announced deal — which will see the Alberta government take a $1.5-billion equity stake in the project as well as provide a $6-billion loan guarantee to ensure pipeline company TC Energy is able to finance construction costs — was six months in the making.”
“University of Calgary economist Trevor Tombe said the deal is structured as an equity investment that will allow the government to sell its shares after the project is completed, and therefore poses little risk to the taxpayer. He said the government’s balance sheet is strong, and its ability to borrow has obviously not been affected by the current COVID crisis.”
According to the government, the Keystone XL pipeline project — which is set to begin construction immediately for a summer 2023 commissioning date — will create 1,400 direct high-paying jobs in Alberta, and 5,400 indirect jobs.
It will also boost investor confidence in Alberta’s oil and gas sector, leading to increased production and an additional $30 billion in royalty revenues for the Alberta government over a 20-year period, Kenney said.
On the pipeline, I feel that this is great news. The structure being used where the government is making a loan and a modest equity stake to be re-sold later is the right way to go about this. This move, along with the TMX expansion should do a lot to help increase market access for Alberta energy products which will mean more revenue to Albertans, which is great for everyone here.
Once each of these pipelines are completed (TMX in 2022, KXL in 2023) Alberta will have increased its export capacity by over 36% from current.
There will certainly more news to come, and when it does I'll be sure to report it onward to you.
In the meantime if you have any questions about the rental or investment property market I'd love to setup a virtual meeting to discuss.
Stay safe, stay healthy.
KARLA LINARES, Realtor®
Redline Real Estate