Analysts say house prices are expected to drop through the year
2019 is shaping up to be a buyer’s market in the City of Calgary as there are still far too many homes for sale and just not enough people interested in buying.
The Calgary Real Estate Board held its annual conference on Wednesday where it took a look at what would be happening in the market this year.
Ann-Marie Lurie, CREB’s chief economist, isn’t expecting much in the way of change in Calgary’s housing market because there hasn’t been enough of a boost to confidence in the economy to change anything.
“We still expect to see further declines in sales activity. Prices are also expected to come down just because we continue to struggle with that oversupply in the market. There are no fundamental changes in the economy expected this year and there’s nothing that’s going to shift the housing market as well.”
Lurie says the city is still struggling with a very high unemployment rate and that’s taking a toll on the housing market.
She does say that the Bank of Canada’s stress test has resulted in some increases in sales of lower priced homes.
“Those areas are a little different and I think trends could be different in those segments of the market.”
UCP leader Jason Kenney, who also spoke at the CREB conference on Wednesday, called the city’s housing market the “canary in the coal mine” for the industry.
“Their sales last year were apparently the lowest in two decades. The city has grown by hundreds of thousands of people but home ownership is down so much that they are hitting new record lows.”
He adds that the NDP government’s regulations have increased the costs of building homes and workers in the home building industry are suffering as a result. Kenney also says that the federal government is to blame.
“The so-called ‘stress test’ imposed by the Canada Mortgage and Housing Corporation, has put tens of thousands of Albertans out of reach of home ownership, diminishing the value of homes they can buy to deal with the markets in Toronto and Vancouver. This is typical of how Ottawa gets it wrong.”
Garratt Hooker is one of the people who has taken advantage of the buyer’s market, taking the plunge to purchase a home. He says there was a lot of careful planning that went into the decision.
“We were looking for about a year. We were just trying to be patient and see how things would go.”
He says he kept an eye on the real estate websites and saw prices continually drop over the last while.
“Prices have definitely decreased.”
Lurie says the only way the housing market would shift would be if some of the restrictions start to change, but she isn’t confident on that happening.
“It’s not expected to be enough to take us out of buyers’ market conditions this year.”
There were 16,100 home sales in Calgary last year, a 15 percent decline from 2017.
The statistics also show that sales of homes priced under $300,000 were up in 2018.
(With files from Chris Epp)