The market has yet to fully wean itself off the worst effects of the oil price crash
Calgary’s residential prices are highly likely to even out this year as the market is steadily getting accustomed to operating under what the city’s real estate board called a “new normal.”
Much of the stability will be due to the stronger performance of Calgary’s lower-end housing, with sales growth in the market of homes valued under $500,000 increasing by 7% in 2019.
Overall sales activity is projected to grow by 2% annually in 2020, while the benchmark price of a home in Calgary is likely to drop by 0.5% – still better than the 3.3% year-over-year decline seen in 2019, but a decline nonetheless.
Indeed, with the impact of the mid-2010s petro industry crash still reverberating throughout the province, a slower local market will be the running theme for much of this year.
“It’s not going to be like what we had prior to 2014,” CREB chief economist Ann-Marie Lurie stated, as quoted by the Calgary Herald. “We’re moving into slower, more normal conditions. When you compare it to other markets across the country, we’re looking a lot more like them.”
Oversupply is expected to be another roadblock towards recovery.
Data from the Canadian Real Estate Association covering November showed that Calgary remained a buyer’s market, with sales levels only a little above 2018 levels.
“Like some of the other sectors, the detached market is slowly moving toward more balanced conditions. However, it is still oversupplied, and this trend continues to weigh on prices,” CREA stated in its November market report, as quoted by CBC News.
“Achieving more stable conditions will take time. Sales activity has been settling in at lower levels and is likely being influenced by the economic conditions and uncertainty weighing on our market,” Lurie noted at the time.
