Ft. McMurray, Alberta, Canada, the Gateway to the Canadian Oil Sands, saw wildfires ripped across an area more than 7X bigger than New York City last month.
The inferno was most expensive natural disaster in Alberta’s history. It is now expected to help boost a local real-estate market that recently hit a 20-year low after scores of workers lost their jobs in the energy industry.
“It’s going to be kind of hustle and bustle here over the next year or two,” Lynn Edwards, President of the Fort McMurray Real Estate Board, said in an interview Thursday.
Houses were sold even during the evacuation period and offers have been coming in during the past week, Mr. Edwards said. There are fewer than 600 currently for sale, down from 830 listings in the city at the end of April, she said, adding that more accurate figures will not be available for several weeks.
“There is a shortage of accommodations in Ft McMurray right now,” Ben Dutton, CEO of Fort McMurray-based construction firm Casman Group of Companies said. “The hotels are maxed out.”
The city is going to need to find temporary housing for people displaced by the wildfire in addition to insurance adjusters and contractors involved in the rebuild, Mr. Dutton said. There will probably be upward pressure on prices due to limited supplies as some out-of-town builders see the city’s housing market as an opportunity, he said.
The wildfire hit at a time when a wave of foreclosures was expected in Ft McMurray because of the Oil industry downturn, Mr. Dutton said. There were only 193 housing starts in Y 2015 and just 1 start in April, compared with 2,175 single and multi-family homes that broke ground in Y 2007, according to a 9 May report from the Canadian Home Builders Association.
Early estimates suggest that 2,400 buildings were damaged or destroyed in Ft McMurray, including 1,600 private dwellings, and rebuild efforts may provide a C$1.3-B boost to Alberta’s economy in Y 2017, according to the Conference Board of Canada.
While most of the community’s public buildings were saved from the wildfire, the City will need additional money to repair and rebuild roads and other infrastructure, and construction will probably remain elevated until Y’s 2018 and 2019, the Conference Board said.
“We anticipate there is a lot of spending that will occur as people rebuild their lives,” Russell Dauk, Vice-Rresident of land and commercial for Edmonton-based homebuilder Rohit Group of Companies, said.
A slowdown in housing in Calgary and Edmonton means there will be an available supply of contractors to work in Ft McMurray, Mr. Dauk said. Rebuilding efforts are unlikely to start before August and builders are still waiting to hear how or if the construction will be coordinated, he said.
Homeowners are already phoning for information as they assess damage with their insurers, said John Dawson, a retail manager for the Ft. McMurray area at Qualico, a Winnipeg-based home builder.
“I can tell you it’s a massive undertaking,” Mr. Dawson said. “I have no predictions how long it’s going to take.”
The municipality must decide whether to rebuild homes in the same area or move them to other serviced lots in Ft. McMurray that are ready to go for new construction, said Jim Rivait, CEO of Alberta’s chapter of the Canadian Home Builders’ Association.
“There’s complete communities that have to be rebuilt,” Mr. Rivait said. “It could take a while.”
Latest posts by Paul Ebeling (see all)
- Long Term US Mortgage Rated “Slipped” Last Week - March 26, 2017
- New SEC Chairman Expected to take a “Loose” Approach to Dodd-Frank - March 26, 2017
- Should Robots Be Taxed If They Take People’s Jobs? - March 26, 2017