Everyone knows numbers don’t lie.

But when it comes to residential real-estate markets across the country, even the strongest of traditional indicators don’t necessarily tell the whole story.

These days, that’s good news in Alberta, where residential construction starts, housing prices and resales are expected to defy earlier predictions – including those based on the strongest of market indicators – and remain robust for the last quarter of 2004, predicts Canada Mortgage and Housing Corp. (CMHC) third-quarter report.

Markets for new construction and resales across the country are “still extremely hot,” says Richard Corriveau, a senior market analyst with CMHC. Corriveau is based in Calgary, the site of CMHC’s Prairie, Nunavut and Northwest Territories Business Centre.

Don Campbell

With 2003 posting a nine-year low for employment, coupled with declines in net migration, CMHC had predicted the 2004 national housing market would feel the lagged impact of reduced demand. Instead, continued low mortgage rates have helped the market spurn traditional indicators through the third quarter. CMHC’s third-quarter housing outlook report anticipates the national resale market is actually on track to reach a new record in 2004.

While Alberta shows some weakness in terms of previous records, Corriveau attributes that position to economic recoveries in other provinces. B.C., for example, leads the national average for growth, with higher net migration, growth in full-time employment and low mortgage rates providing the economic fuel for housing starts.

Even so, Alberta is the “third- strongest province in the country behind Ontario and Quebec” in new construction and “we’re sitting fourth across the country” in resales, says Corriveau.

Making The Numbers Work So how does one take the numbers and turn them into solid real-estate investments? Recent columns about two Calgarians who’ve invested in local real estate yielded a mini-deluge of e-mails requesting more information on how to make similar deals work. For questions like that, the Albertan to talk to is Don Campbell, a veteran of the real estate investment business and president of the Real Estate Investment Network (REIN).

Established 12 years ago, the trademarked company has approximately 1,000 members, about 25 per cent of them in Ontario and most of the rest in Alberta. For about $200 a month, members can hone their business strategies at monthly meetings (held in Edmonton, Calgary and Toronto) that feature guest speakers, exclusive market research and the chance to learn about some of the hottest deals REIN members are making.

Members can also access more than 100 free documents (purchase agreements, rental agreements and the like) from REIN’s website (www.albertarein.com) and can run deals, for no charge, by REIN lawyers, accountants or Campbell himself.

Unlike some investment promoters in the market, Campbell always maintains a healthy portfolio of real estate investment property. “If you’re teaching real estate, you better be buying it along with the rest of them,” says Campbell, who’s currently dealing on another four properties These days, he’s bullish on the Alberta real estate market, where jobs (we’re the national leader in job creation), money (the average weekly wage rate is climbing on a year-over-year basis, bringing Alberta to what CMHC terms a “high average”) and low interest rates are countering some of the downward pressure of lower net migration.

Good market or not, Campbell refuses to talk about real estate investment as a get-rich-quick business. “It’s quite obvious to me that real estate creates wealth,” but it’s not the same as getting rich, he says.

He also spends no time talking up the wishful concept of buying low and selling high. From where he sits, it’s better to buy smart. That means paying close attention to market fundamentals (as per the exclusive market research members access via REIN membership) and sticking to three strategies. REIN members typically buy a property to hold and rent; take advantage of a good deal and buy a property to renovate and resell; or buy three properties, hold them for a brief period of time and then sell them to buy a bigger one.

And just what is Campbell’s best tip for real estate investment going into the last quarter of 2004? Buy Edmonton. “There are two plateaus in any boom and Calgary is in the first plateau. Edmonton hasn’t slowed down at the same rate,” he says.

There, as in Calgary, Campbell recommends investors look at neighbourhoods with rising stars. In Edmonton, he picks the inner-city neighbourhood of Queen Mary Park. In Calgary, it’s Bowness – and Forest Lawn. Potential investors who react to his top picks with looks of disbelief are letting emotions make a business decision rather than market fundamentals, insists Campbell.

“I’m telling you right now that when I tell people from Ontario or people from B.C. to come and buy in Forest Lawn, they do not have any emotion around it,” says Campbell, whose only portfolio sticks to a tried-and-true formula of putting “quality tenants in a quality building.”

As for Albertans who want to buy their own homes versus revenue property, CMHC’s Corriveau expects low financing will continue to attract buyers to resale and new housing markets in the coming months.

CMHC data suggests Alberta’s resale activity will register an all-time high in 2004, then drop significantly in 2005, from 54,000 sales this year, to 50,000 sales next year.

The same market report predicts housing resale prices in the province will climb 5.6 per cent over the course of 2004, rising another 5.7 per cent in 2005.

(Joy Gregory can be reached at joy@businessedge.ca)