Housing booms in Canada's red-hot oil town
As Canada's real estate boom continues unabated, Fort McMurray, the epicentre of Alberta's oil boom, has become the hottest housing market in the country.
With reserves second only to Saudi Arabia and an estimated tripling of the output to 3 million barrels a day by 2015, the oil sands bonanza in northern Alberta has triggered a massive influx of people.
They are lured directly by dozens of huge projects expected to pour more than C$60 billion ($385 billion) into the region over the next decade. With wages above average and a population growing at 8 per cent per year, the oil party has started a real estate frenzy.
'In June the average house cost reached C$420,540 - a more than C$100,000 increase compared to one year ago,' said Fort McMurray Real Estate Board vice-president Len Clarke.
'If you can find an investment that gets you 32 per cent back, I would suggest that you put your money in it,' said Canada Mortgage and Housing analyst Charles Fortin, adding that the local variation in prices in the past year was the highest in the province. 'I'd have to check with Vancouver and Toronto to see if we're the highest in the country.'
Indeed, a lot of investors are well ahead of Mr Fortin. In fact, so many have invested in property that the vacancy rate for houses in Fort McMurray - dubbed by locals as 'Fort McMoney' - dropped to 0.2 per cent in June.
And Mr Fortin does not have to call Toronto for verification. Last Wednesday, the Canadian branch of Century 21, the world's largest real estate organisation, released a study that shows first-time homebuyers in the city, 400km north of Edmonton, are now paying C$285,000 for a 1,200 sqft home. This means that the price of an average starter home in Fort McMurray has risen 467 per cent in the past decade. Housing has also become scarce in the city, because there are almost no rental properties available.
The province, local insiders said, had been slow to release new lots for development in order to keep pace with growth. But there was good news in the pipeline, said Melissa Blake, the Mayor of Wood Buffalo, the municipality that includes Fort McMurray.
'We do have 1,000 acres [404.6 hectares] of Crown land that has just been released for development,' she said.
Whether this can ensure that supply in the red-hot oil town will keep pace with growth is uncertain. The city expects to have up to 100,000 people by 2010.
The only doubt among local experts is whether prices in this booming place will drop soon.