A bullish economic forecast combined with a strong realty ranking has a number of real estate investors hot on Edmonton.

Massive resource developments in northern Alberta, high disposable incomes and low interest rates are all driving Greater Edmonton’s robust economy, members of the Real Estate Investment Network (REIN) were told at a recent conference about the future of Edmonton real estate.

“Edmonton is the place to be,” REIN president Don Campbell told an enthused audience.

Calgary-based REIN had previously ranked Edmonton No. 1 out of 31 Alberta cities and towns in a study that looked at which community offers the greatest potential for a return on investment in 2004.

EDE president Allan Scott sees Edmonton as an ideal investment opportunity.

That report described Edmonton as “entering the predicted real estate plateau, as the market takes a breather. Every real estate boom in history has at least two of these plateaus, which include higher vacancy rates and more stable price increases,” the study said. “This temporary plateau will prove to be a tremendous buying opportunity.”

Further, the report added, “long-term economic fundamentals behind the Edmonton market will propel the city’s real estate and rental market through the plateau more quickly than in most cases.”

It’s those fundamentals that explain why Edmonton is an ideal place to invest in, said Economic Development Edmonton (EDE) president and CEO Allan Scott.

“Whether you’re looking at starting a new business, relocating a business or looking for an exciting region to live, work and play in, now is an ideal time to choose Edmonton,” Scott told delegates at the conference, held at Edmonton’s Mayfield Inn and Conference Centre.

Scott trumpeted an estimated gross domestic product (GDP) growth rate of 4.5 per cent for the Edmonton Census Metropolitan Area in 2004 – higher than forecast real GDP growth rates of 3.2 per cent for Canada and 3.8 per cent for the United States – and an economy that is in part fuelled by $50 billion of major Alberta projects from the oil, gas and oilsands sectors.

Scott also discussed an investment climate powered by rising disposable incomes, with Edmonton’s personal disposable income per capita virtually tied with Toronto’s, and strong retail sales.

As to residential real estate, Scott pointed to an expected 11,300 housing starts in 2004 and 10,100 in 2005. While Edmonton starts peaked at 12,582 in 2002, the market is coming off superheated levels and starting to return to a more normal growth period, REIN members were told.

However, even though the housing market has been a strong contributor to Edmonton’s economic growth, Scott said there is one real estate cloud on the horizon – a maturing housing market.

“There is an expectation among forecasters that at some point, housing demand from persons already residing in the region – that are either first-time buyers, or buyers looking to upgrade – will mature,” he said.

“At that point, the demand for new housing could dramatically slow, even without an appreciable change in the interest rates or a change in the migration patterns,” he added. “That would bring about a slowdown in the construction industry. Housing starts will be an important barometer of this possible change.”

After Edmonton, the next-best Alberta community in which to invest is the nearby town of Devon, according to the seventh annual REIN report of Top 10 Alberta Towns to Invest In. Following Devon, and in descending order, are Sylvan Lake, Calgary, Red Deer/ Okotoks (tied for fifth place), Lacombe/High River (tied for sixth), Cochrane, Grande Prairie, St. Albert and Fort McMurray.

Edmonton ranked second in 2002, and first in 2001 and 2000, in similar REIN studies.

“Since 1984, we have been studying the economic and demographic affects on the real estate in cities and towns across Canada. We have boiled all of the numbers down to three critical indicators called the Booming Statistics,” said Campbell. “Over the years, we have used these indicators to discover the best towns to invest in for maximum return on investment.”

To produce the report, REIN researchers compile data from a variety of sources including the provincial government, Canada Mortgage and Housing Corp., Statistics Canada, the Conference Board of Canada, Alberta Real Estate Council and representatives of specific municipalities. They also travel to 31 Alberta communities to interview local officials and assess local economies.

REIN provides training, knowledge and networking opportunities to help Canadians learn how to invest in residential real estate. REIN members own a cumulative 8,200-plus real estate properties across Canada with a combined value of more than $750 million.