Demand down with net migration

Prices similar to last month, down more than four per cent from last year

In step with City of Calgary census data on declining net migration levels, housing sales activity totaled 1,741 units in July, a 12.6 per cent decrease over last year and the 20th consecutive month of year-over-year sales declines, according to CREB®’s monthly housing release for July.

“Continued pullback of sales activity is a sign of economic conditions,” said CREB® chief economist Ann-Marie Lurie.

“The number of unemployed workers keeps rising and when you combine job losses with declining net migration, the result is going to be weaker housing demand.”

Slower sales were accompanied by declining new listings in July. This helped prevent further inventory gains and minimize the downward pressure on benchmark prices, said CREB®. By month’s end, the residential benchmark price was $440,000, similar to last month, but 4.2 per cent below July figures from the previous year.

While detached price seem to be leveling, this is not the case for all property types. With over six months of inventory in the apartment sector, oversupply continues to create steep price declines, reported CREB®. The apartment benchmark price totaled $277,000 in July, a 0.4 per cent decline over the previous month and 6.6 per cent below last year’s levels.

City-wide benchmark prices for detached product totaled $502,300 in July, which is similar to last month, but 3.4 per cent lower than last year’s levels, said CREB®.

Meanwhile, semi and row attached product recorded a year-over-year decline of 3.1 and 5.5 per cent for July prices of $385,200 and $310,300.

“To buyers and sellers that have been paying attention to the housing market in Calgary and surrounding areas, it should come as no surprise that we continue to see a slowdown in sales activity,” said CREB® president Cliff Stevenson.

“Buyers are expecting further declines in sold prices, and sellers are adjusting to softer demand with price decreases. When these expectations intersect, we’re seeing sales activity in the market, but not at the level realized over the last several years.”

Other notes from CREB®’s monthly release:

  • The average year-to-date benchmark price decline within the city districts has ranged from highs of 5.1 per cent (City Centre) to lows of 0.8 per cent (North East).
  • The pullback in detached new listings helped balance out declining sales.
  • Detached sales account for around 63 per cent of the entire market this year. Yearto-date, there has been 6,908 sales, 22 per cent below the ten year average and the lowest level since 1996.
  • Year-to-date apartment sales totaled 1,668 units, a 21 per cent decline over last year, which already recorded an 33 per cent annual drop compared to 2014
  • Months of supply in the apartment sector has averaged 6.3 months this year, far higher than the 3.0 and 4.2 in detached and attached product
  • The average apartment price showed a year-over-year gain of 13 per cent. This does not reflect any change in trend, as the jump was caused by one high end sale that skewed the numbers

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