The mass exit of energy sector workers—who often hail from other provinces—after the worst effects of weak oil prices became apparent in Alberta has had a massive impact on the province’s rental market, according to analysts.
Itinerant laborers in Alberta have exceeded 150,000 just three short years ago, with 70,000 to 80,000 working in oil and gas as well as other segments involved in fossil fuel production, as reported by Robson Fletcher for CBC News
Just 10 months after the oil crash, however, approximately 56,000 workers departed from Alberta. Authorities have credited this outbound migration to these professionals returning home following layoffs and facility closures.
“We've been paying very close attention to [this],” Real Estate Investment Network senior analyst Don Campbell said.
In particular, Campbell pointed at the significant effect of this mass flight on the rental market.
“We know that itinerant workers generally don't participate in the actual real estate market,” he stated.
The exodus also had a noticeable impact on the vacancy rate, which saw a 10-year high of 4.3 per cent. The number of unoccupied homes increased dramatically to 21,000 as of April, way up from 8,300 from the same time last year.
And while the worst hit by these developments are rental homes, Campbell argued that it won’t be long before home prices start feeling the pinch of depreciation.
“It always takes a couple of years before the reality sets in,” he said. “But where we've been blessed in Calgary is in that it has not been a couple of years before the turnaround occurs, at least since the 1980s.”
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