It’s been a tough couple of years for Calgary’s housing market, as it slowly recovers from the collapse of oil prices that started in 2014.
That pain created some deep wounds for the city’s economy, which shed thousands of jobs and plunged into a recession for both 2015 and 2016. The light at the end of the tunnel began to materialize this year, and the recovery is expected to fully take hold in 2018.
That’s good news for the real estate market, as job growth will fuel demand going forward.
“After a decline in 2016, employment levels in Calgary are forecast to rebound in 2017,” according to the recent Housing Market Outlook from Canada Mortgage and Housing Corp. (CMHC). “A majority of the job growth thus far has been in the service-producing sectors as opposed to the energy sector. Many oil and gas companies in Calgary have been cautious about hiring new staff and expanding payrolls.
“Employment is anticipated to improve further in 2018 and 2019. Higher oil prices and increased investments in the energy industry will contribute to a lift in economic activity and support job growth across various sectors.”
“Employment is anticipated to improve further in 2018 and 2019. Higher oil prices and increased investments in the energy industry will contribute to a lift in economic activity and support job growth across various sectors.” – Canada Mortgage and Housing Corp.
The CMHC outlook isn’t the only report to come out recently that was the bearer of good news for the Calgary market.
According to the Real Estate Investment Network’s Top 10 Towns and Cities – Alberta report, Calgary was ranked second in the province behind Edmonton as the best for homebuyers and investors. The ranking was based on the potential for housing market strength over the coming five-year period.
Another report around the same time buoyed the spirits of the real estate industry locally as well. It didn’t receive much attention, but the Bloomberg Global City Housing Affordability Index said Calgary was the most affordable housing market in Canada and fourth most affordable in the world.
Meanwhile, a recent report from market research and advisory firm Urban Analytics said a lack of buyer urgency, which many sales representatives attribute in part to the city’s record-high summer temperatures this year, contributed to a 23 per cent drop in third quarter sales in the multi-family residential market. However, the report said it was a “hiccup and not a trend,” as third quarter sales still came in 32-per-cent higher than the first quarter of 2017, and on a year-over-year basis, 16-per-cent higher than the same time last year.
Urban Analytics tracks 130 new condominium and townhome projects throughout Calgary.
“A positive sign for Calgary’s new multi-family home market is the continued trend of diminishing spread between the number of quarterly sales and the amount of unsold inventory at the end of a given quarter,” said Urban Analytics senior market analyst Kimberly Poffenroth. “For the first time in nearly two years, the number of unsold, move-in-ready units dropped from the previous quarter. The decreasing trend of standing inventory is an encouraging sign for the Calgary market, as it justifies the release of new projects, which generates increased buyer urgency.”