While there has been a lot of doom and gloom over the drop in oil prices, one of Canada’s largest realtors says they will have an impact on housing prices in Calgary, but it won't be in the way that some forecasters fear.
Royal Lepage says that instead of a price drop, the average cost of a home will actually go up by a modest amount.
The company says that the drop in oil prices is a concern, but it will mostly be felt in the slowing of the appreciation value of the average home as opposed to a serious price drop.
Officials say there would have to be a prolonged period of low oil prices for any significant impact on the housing market.
Lepage predicts that the price of an average home in Calgary will increase by 2.4 percent in 2015.
The price for an average detached bungalow jumped 9.1 percent in 2014 and sits at $511,889.
The company also says that Calgary remains the hottest market in the country for homes because of the imbalance between availability of homes and the number of homebuyers.
On Wednesday morning, the Calgary Real Estate Board also released a report where it said that homeowners in the City of Calgary could possibly see a decrease in prices for the first few months, but that trend won't last the whole year.
CREB is predicting a modest increase of 1.58 percent over 2015, a far cry from 2014's increase.
The board is expecting sales to slow throughout the year, but that's only because Calgary's market is so overheated currently. The demand was way out of sync with supply and CREB economist Anne-Marie Lurie says the climate in 2015 will create a more balanced environment.
"If people are worried about whether they'll have a job in the next year, they are less likely to make major purchases like a home, so that can pull back on some of the demand," Lurie said. "We have to keep in mind that it's not necessarily at a panic stage. People are going to wait and see if it might make them reassess their listing of their homes or upgrading so they might just stay put and wait to see what happens as we move into the spring market and into the summer."
Calgary isn’t alone in housing price increases this year.
Toronto is expected to lead the pack with an increase of 4.5 percent this year, followed by Vancouver, which will see an increase of 2.8 percent.
Royal LePage says a potential interest rate hike and possible changes to mortgage rules by the federal government could also pose risks to the country's real estate sector if they materialize.
"Ultimately the biggest threat to the Canadian housing market is a decline in consumer confidence, which could result from worsened employment prospects or decreased purchasing power, be it real or perceived," president and chief executive Phil Soper said in a statement.
"In this light, we will be watching market developments closely in the regions most negatively impacted by oil price declines, such as Alberta, Saskatchewan and Newfoundland."
Buyers in western Canadian cities could benefit from lower prices in the short term, but Soper says the trend is unlikely to last.
"Over the longer term, we foresee a return to regional home price appreciation that is above both the historical average and national trends in general, when energy markets recover," he said.
"In the interim, slowed growth in the price of homes will be a welcome sign for many people in the West, especially in pricey markets like Vancouver where first-time buyers have been frustrated by a hyper-competitive market and home prices that have escalated at a feverish pace."
(With files from the Canadian Press and Kevin Green)
