A Yale professor is outlining which advisors will be most hurt by falling oil prices.
A Yale professor highlights why oil prices are throwing a wrench into the plans of advisors in Newfoundland and throughout the Maritimes whose clients could soon be affected by Alberta’s ongoing malaise.
WP sister publication Canadian Real Estate Wealth magazine published an article Thursday on its website that discussed Canada’s housing market and the impending doom that seems to have set in thanks to a new book by Edmonton-based advisor Hilliard MacBeth that’s calling for a big correction – 40 percent or more – in housing prices.
And here’s where the “fly boys” come into play, those energetic people who commute from Newfoundland and the other provinces on the east coast to work in Alberta’s energy sector and the various runoff jobs in other industries.
“If there isn’t the work, they’re not going to fly to Alberta,” Mansharamani added. “If they’re at home, what does that do to the labour markets in each of those local regions?”
#pb#
While it’s fine to quote a professor from Yale, visitors to CREW are quick to point out that these so-called experts aren’t living in the region and don’t have a first-hand view of things.
So, we went to St. John’s advisor Joe Riche to get a closer view on the situation out east.
“There’s definitely a distinct feeling that some of it is slowing down,” says Riche. “I don’t have any specific clients who’ve yet lost jobs but what they’re basically telling me is that a lot of these bigger projects are either being cancelled or postponed.”
Worse still, many of these projects might never go ahead which could put some of his client’s job security at risk.
“It’s a fair statement to say that the impact of lower oil prices has more of a negative impact [in Newfoundland] than the extra discretionary income by savings in gas prices. It’s fair to say real estate across the board is coming down here. Houses just aren’t selling.”
Should advisors in the Maritimes be worried?
Well, things could get worse before they get better. Fortunately, Maritimers are hearty folk and have weathered plenty of economic hardship.
Advisors like Riche will do just fine.
WP sister publication Canadian Real Estate Wealth magazine published an article Thursday on its website that discussed Canada’s housing market and the impending doom that seems to have set in thanks to a new book by Edmonton-based advisor Hilliard MacBeth that’s calling for a big correction – 40 percent or more – in housing prices.
Yale professor and global investor Vikram Mansharamani believes Canadian house prices are set to take a tumble suggesting, “It’s not unreasonable that we could see house prices fall by 30 to 50 per cent.”
While a very passionate subject amongst CREW readers, especially those living in the GTA, it’s the comments by Mansharamani about Alberta’s faltering economy and the indirect effect on the Maritimes that’s caught our attention.
“Without the Alberta employment gains, Canada would have a nine per cent unemployment rate,” said Mansharamani. “It is oil that has helped create that strong economy.”And here’s where the “fly boys” come into play, those energetic people who commute from Newfoundland and the other provinces on the east coast to work in Alberta’s energy sector and the various runoff jobs in other industries.
“If there isn’t the work, they’re not going to fly to Alberta,” Mansharamani added. “If they’re at home, what does that do to the labour markets in each of those local regions?”
#pb#
While it’s fine to quote a professor from Yale, visitors to CREW are quick to point out that these so-called experts aren’t living in the region and don’t have a first-hand view of things.
So, we went to St. John’s advisor Joe Riche to get a closer view on the situation out east.
“There’s definitely a distinct feeling that some of it is slowing down,” says Riche. “I don’t have any specific clients who’ve yet lost jobs but what they’re basically telling me is that a lot of these bigger projects are either being cancelled or postponed.”
Worse still, many of these projects might never go ahead which could put some of his client’s job security at risk.
“It’s a fair statement to say that the impact of lower oil prices has more of a negative impact [in Newfoundland] than the extra discretionary income by savings in gas prices. It’s fair to say real estate across the board is coming down here. Houses just aren’t selling.”
Should advisors in the Maritimes be worried?
Well, things could get worse before they get better. Fortunately, Maritimers are hearty folk and have weathered plenty of economic hardship.
Advisors like Riche will do just fine.
