Thoughts on Calgary’s Real Estate Market
I was listening to the Calgary Real Estate Boards chief economist Anne-Marie Laurie the other day at my Remax office. She is always a wealth of knowledge, has a great way of deciphering big picture economic factors and putting them into bit sized pieces for our real estate market.
Here are some of my take-aways on the market from her talk:
- You need to see a shift in employment before you see any growth. Otherwise you just have stability as demand meets supply.
- Energy sector is not putting in more jobs, just not losing any more.
- If unemployment drops because of negative migration that’s bad for housing market.
- Lack of investment is not just driven by price of oil it’s now dependent on politics – uncertainly is bad. Regulatory changes figure prominently.
- Stabilization in the market currently is NOT due to increase demand, it’s because of decreased in supply.
- Perspective – Any growth with not be what we were accustomed to.
- Speed of recovery will be slooooow.
- Forecasted net migration for 2017 is still way below 10 yr average.
- Purpose built rentals are at 7% vacancy rate. Highest in 25 yrs.
- Still low level of demand for housing expected for 2017.
- Apartment sector is still struggling – month of supply at 7 months (as high as in 2009), compared to 3 months for detached. Apartment is heavily influenced by new product availability which is very high.
- Condo apartment decrease in price 11.5% since 2014 high AND is lower than 2007 values.
- Detached decrease is 4.9% over same time frame.
- Higher end communities for detached saw decreases closer to 10-15%.
- Job growth is not expected to improve until the second half of the year – if they don’t, stabilization will be threatened and even minor price increase won’t happen.
- Risk is key factor to any forecast: things to watch will be jobs, reduction in unemployment rate, energy market, govt policy/taxes/regulation, political uncertainty in US and regulatory changes there.
- Except for apartment sector, most signs point to having hit the bottom.
Thinking of Buying or Selling?
If you are wondering how the current economic climate in Calgary is affecting your real estate plans give us a call or email at [email protected] or check out our website at www.richardbergeron.com