July 2018 – Market Update

Home Sales Limping Along in Calgary and Other Energy-Related Cities

Many energy-related cities in Canada located in the provinces of Alberta and Saskatchewan have been experiencing a struggling housing market in the last few years, which has caused a decline in prices.

Higher interest rates and the recently enacted changes in mortgage rules are causing lower demand, which is affecting prices in these areas.

Ann-Marie Lurie, CREB^® chief economist, said, “Although the recession is over, unemployment remains high and there are worries about long-term growth. These factors, along with higher interest rates and stricter requirements are all affecting the demand for housing.”

“New listings are starting to lag for certain types of property, but not enough to keep the supply from growing and, in the end, cause an oversupply in the housing market.”

Calgary has been experiencing weak sales and this trend has continued on in June. Sales of residential homes in June came to a total of 1,896 units. This figure is 11% lower than June of 2017 and 12% lower than long-term averages.

Higher inventories as compared to sales have resulted in a buyers’ market and this is fairly widespread. This in turn has caused prices to go down. The benchmark price in Calgary for June came to $436,500, which was lower than May’s and 1.13% lower than 2017 levels.

The market for detached homes accounted for more than 60% of overall sales and contributes to more than 54% of the housing inventory of 4,817 units in June. With sales slowing down and inventory rising in most every price range, inventory for homes listed for less than $500,000 is still far lower than peak levels.

Tom Westcott, CREB^® president, said, “Whether it’s a buyer’s or seller’s market, it’s vital that you be well informed. You need to know what the process is for getting a pre-approval on a mortgage and have the latest information on how property is priced in the neighborhood you are selling or hoping to buy in.”

Want some more area-specific information for your current or next home? Contact us and let us know which area(s) you would like more information on!