Demographics and Investing

In our attempt to provide coverage of the economic fundamentals for Alberta real estate, readers are sometimes provided with news of a new school being built or plans for expansion.  On the surface, this does not seem to have anything to do with cash flow, equity or interest rates and may wonder what it has to do with property.  The answer is a great deal.

Demographics is the study of a makeup of a population. When people make more money, they spend more, when they spend more, real estate prices go up. Peak spending in fact is at approximately 40 years of age and after that point, it starts to decline. One of the factors that drives real estate is the makeup of households and that is why I provide information on new schools as it is a factor as to where growth is or will be occurring.  A community of mostly 25-30 year olds has (all other factors being equal)  a positive demographic profile compared to one where it is mostly seniors who spend much less.

Alberta’s demographics is to show that our province is in fact getting younger and therefore extending our peak spending years many years into the future.

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