Cold Lake is being referred to as the “new Fort McMurray” as rising real estate prices, tight rentals and huge energy project make it characteristic of Alberta’s best known oil town.
Cold Lake, roughly 290 kilometres northeast of Edmonton, is in the midst of cash-fueled boom, thanks to major expansion project at Imperial Oil’s Cold Lake operations.
That project, known as Nabiye, will add about 40,000 barrels per day of oil sands production starting in late 2014.
To get there, of course, will require everything from roads, well pads, pipelines and a new processing plant to high voltage power lines and a cogeneration power plant – not to mention $2 billion in cash.
The company has been busy ramping up construction activities for the past several months – bumping up activity in the city as a consequence.
While building permit totals for Cold Lake were only $29.2 million in 2010, they hit over $61 million in 2011, and are tracking higher this year.
Real estate sales have been strong, to say the least.
Colleen McEntee, executive officer for the Northeastern Alberta Realtors Association, said 2012 is shaping up to be a record year for sales in the city.
As of the end of August, 346 single-family homes had sold, which is more than the 331 sold in all of 2011.
Condo sales for the current year had also already passed 2011 volumes, McEntee said.
The average single-family home price is up about 5.6 per cent over last year to $344,649, McEntee said.
“We have very, very little inventory available right now,” McEntee said, noting the city of 14,400 only had about 50 single-family homes on the market as of early September.
Tight housing is definitely an issue in Cold Lake, both historically and in the present.
According to Canada Mortgage and Housing Corp., Cold Lake’s vacancy rate for rental apartments fell from 4.9% in April 2011 to only 0.3% in April 2012. Average rents, on the other hand, jumped 3.8% in that same period.
Cold Lake is now the second highest priced rental market in Alberta ($1,175 per month for a two-bedroom unit) behind only Fort McMurray.
For a complete report on Cold Lake, see the October issue of Western Investor.