“Things aren’t always as they seem” – An Oil Industry Snapshot

Are you looking for some perspective about the state of oil prices in Alberta and its impact on the economy?

To borrow directly from Edmonton mortgage brokers Jason Scott and Gord Appel with the Mortgage Group, here’s a snapshot of where we are standing today versus ten years ago.

February 2005 (“an economic boom”):

•          Oil prices: $47.95 US/barrel
•          Canadian dollar: $.805/US
•          Bank of Canada overnight rate: 2.5%
•          Prime rate: 4.25%
•          5 year fixed rate mortgage: 5.59% ($1846.92/month for $300,000 with a 25 year amortization)
•          Fort McMurray work camp population: ~ 10,000

February 2015 (“doomsday”):

•          Oil prices: $52 US/barrel
•          Canadian dollar: $.8033/US
•          Bank of Canada overnight rate: 0.75%
•          Prime rate: 2.85%
•          5 year fixed rate mortgage: 2.79% ($1387.31/month for $300,000 with a 25 year amortization)
•          Fort McMurray work camp population: ~ 44,000

And people are saying the sky is falling now? Just something to ponder…

What do you think? Will the economy today impact your real estate investing strategies?

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