Job Growth & Foreign Workers Set To Boost Real Estate in Alberta
Canadian job growth and foreign workers hold the potential to boost Alberta's property markets further, which may help increase returns for Canadian real estate investors.
How fast are foreign workers coming in? Why is this pace unlikely to cool anytime soon, and what does it mean for Canadian real estate?
Data shows a significant uptick in foreign workers in Canada, with Alberta almost boasting double the number of these workers as Ontario.
Thanks largely in part to the expansion of Canada's Temporary Foreign Worker Program (TFWP) 6 years ago, thousands of new workers have entered the country, specifically migrating to Alberta.
Numbers from Employment and Social Development Canada show these jobs grew seven-fold in as many years, through 2012. This has created a massive jump from 10,245 in 2005, to 84,465 in 2012.
While a few may not be happy with foreign competition for jobs, Albertan companies continue to demand more workers and state the need for more talent as one of their biggest obstacles ahead.
Supporters of TFWP cite the expansion to include lower-skilled workers in the food service, hospitality and retail industries as a great thing for Canada. This enables Canadians to focus on higher level and better paying jobs. It could also potentially reduce overhead for Canadian retailers and drive up profit margins. This, in turn, will help retailers' landlords and investors in retail properties.
Albertan cities like Calgary and Edmonton continue to boast some of, if not the lowest, unemployment rates in the world. This, combined with a booming tech and start-up scene, new developments, and a strong energy backbone, will continue to attract global brands and workers at both ends of the skill spectrum. When taking into account a bubbly Asian property market with significant uncertainty in Hong Kong and on the Chinese mainland, plus a flat U.S. economy with rising unemployment, far more foreign workers should be banging on Alberta's door for the foreseeable future.
The fallout of these trends suggest that temporary workers may become the norm. This means a longer term boost to housing, in Edmonton in particular. New extended visitors, workers, and residents also means more shoppers with significant spending needs. This should bode well for Canadian retailers and their landlords.