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Even as retail activity in Canada has begun to downshift from the rapid growth of last winter, the tepid sales of June showed a surprising hot spot.
The Montreal Gazette reported that while overall retail sales fell 0.2% in June – pulled down by auto dealerships offering heavy discounting to boost traffic – recreational vehicle sales surged. Sales in the past year have shot up 17% in the retail category that includes RV dealerships as well as used-car and parts dealers.
The key to this mystery is in the oil rich Alberta Province, says Statistics Canada analyst Lucy Chung.
“Recreational vehicle sales have gone up enormously, and it’s mainly in Alberta,” notes Chung.
It could be that in Alberta, where salaries are rising much faster than elsewhere in Canada, there are simply more people with the income to afford a portable vacation home.
But another factor might also be in play. Alberta’s housing market is straining to shelter the biggest influx of new residents in recent Canadian history, making any form of shelter look more attractive.
More than 50,000 people from other parts of Canada flooded into Alberta in the 12 months ended in March, points out Douglas Porter, deputy chief economist at BMO Nesbitt Burns. That’s an even bigger migration than the one triggered by Ontario’s soaring economy in the late 1990s or the last Alberta oil boom 25 years ago.
With the average price of a new Calgary home shooting up by 49% over the past year and builders unable to keep up with demand, a motorhome or trailer could be a reasonable second choice for many.
Statistics Canada’s retail figures can’t show what use people are making of their RV purchases, Chung says, but she has heard anecdotes suggesting desperate new arrivals could indeed be turning to temporary homes on wheels.
Whatever the reason for the RV rush, Alberta remains a healthy market for nearly any kind of merchant. Among the big provinces, Alberta showed the biggest sales gain in June, up 0.5%. Ontario was up 0.3%, Quebec down 0.1% and British Columbia down 1.4%.