Fort Mac - Catching up on itself...

By: David Yager, National Leader Oilfield Services

Originally published in MNP's Oilfield Service News, titled "Fort McMurray Housing Under Pressure - August 4th, 2015

The housing market in Fort McMurray is experiencing a correction after several years of steady growth. An August 2 Globe and Mail article reported house prices and rents are falling and vacancy rates are rising. A four bedroom house that once rented for $3,200 a month is now available for $2,700. The unemployment rate in the Wood Buffalo-Cold Lake regions has doubled to 8.2%. In April, the vacancy rate for one-bedroom dwellings jumped to 21% compared to 5.8% a year ago. The average price of houses sold was $544,000 this year, down 9% from $597,626 in 2014. 

But not all the news is bad. For people accustomed to long waits and poor service for almost everything in Fort McMurray, the slowdown has some positive effects. Passenger traffic at the new airport is down 11.8% for the first six months of 2015 from the same period a year ago. Charter airline passengers are down 47.1% according to research from AltaCorp Capital Inc. This makes arriving at and departing from the airport less hectic. 

Anecdotally, the wait for service at one of Fort McMurray’s three Tim Hortons shops is only 10 minutes, half of what it used to be. Traffic on highway 63 to Fort McMurray and further north to the oilsands mines is also reduced, welcome news for those accustomed to driving these roadways.  

The other good news is production from oilsands projects in and around Fort McMurray will continue to rise in 2015, 2016 and 2017 as projects under construction are completed. Decline rates for oilsands production are nominal compared to conventional production and almost flat compared to shale oil. Providing prices don’t drop to the point where production is shut in, this will provide a steady employment and income base for Fort McMurray for years to come.


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