Oil at $110 and Canadian dollar not moving

BiegeToyota wrote: ↑ I have never experienced this. CDN basically flat. This looks very bullish for real estate and very bullish for Alberta.

BiegeToyota wrote: ↑ very bullish for Alberta.

adamtheman wrote: ↑ Alberta real estate is already soaring in price, just adding fuel to the fire. A lot of $$$ shifting back to Alberta after having abandoned it for the last 10+ years. Almost cyclical.

StatikIEV wrote: ↑ Fear trade, flight to "quality" ie) the USD when there is world turmoil. It will likely adjust whenever predictability is normalized...and the VIX isn't threatening the year high.

No judgement on the consequences good or bad on RE, but most analysts have/had the CAD/USD ending the year around 1.15 with gas about 85 a barrel, and 5 interest hikes on the table for 2022.

asbraich wrote: ↑ Depends, money is shifting back in housing but the gains have been modest compared to the rest of Canada.

Historically the big wealth creation in Alberta came from the superprojects up North with massive capital spends. Those have not and likely will not return. This "boom" will not be like the ones before it.

adamtheman wrote: ↑ Agreed, and this is a positive for Alberta going forward, wouldn't you say? Past underperformance could meet future overperformance. Historically speaking it's not unlikely to be true.

BatCountry wrote: ↑ Very much agree with this take...it's all about the demand for US currency is very high given the turmoil in Europe - on top of pandemic related issues and the expectation they're going to raise rates as well.
The fact that we raised rates today and it also had little impact on the CAD dollar is also telling. It's rate differential to the US and oil that traditional move our currency...the only reason it's not rising is because people are hiding in safe haven currencies/markets.
Without those things we're probably an 82-83c dollar already...and rising.

I don't think the dollar is impacting RE prices (in Alberta or elsewhere) tbh...at least not yet - the lag period for that effect is many months down the road.
The fact that we're raising rates today and it's having nearly no impact on the dollar is concerning - to some degree we also need a rising currency to get inflation under control...the fact it didn't move the needle, might force even more aggressive rate increases and THAT will impact RE prices.

Medellin wrote: ↑ Because everyone is flocking to USD. If it wasn't for oil CAD would be down.

divx wrote: ↑ Last time when oil was above $100 the CAD was above USD.

sircheersa wrote: ↑ It's not just oil, a lot of the resources we export are very high like aluminum for instance. I don't think people realize how massive Canada is for global mining exports. We are 3-5th provider for many minerals like copper, cobalt, aluminum, natural gas etc.

asbraich wrote: ↑ Why is this a good thing?

In a non-moronic economy you would actually want the housing to be as cheap as possible and instead have money invested in things that increase productivity and efficiency. Not an economy composed entirely of the useless and unproductive asset that is housing changing hands every 6 months for higher and higher prices.

Everyone's housing price going up by 20% doesn't really change anything except your wealth on paper, unless you are a landlord, planning on downsizing, or moving to a low CoL country; all it does is screw over FTBs and hinder real economic growth.

divx wrote: ↑ Last time when oil was above $100 the CAD was above USD.

Andy34 wrote: ↑ With inflation that would be the equivalent of $120.
We’re only at the equivalent of around $85 right now compared to the last run.

Andy34 wrote: ↑ With inflation that would be the equivalent of $120.

We’re only at the equivalent of around $85 right now compared to the last run.