It’s been a challenging year for Calgary’s resale housing market, which is still feeling the effects of two recession years in 2015 and 2016.
While the economy has rebounded, it has been at a slow pace, and this has been evident in the real estate industry. As of the end of June, year-to-date MLS® System sales in the resale market totalled 8,553 units, down 17.1 per cent in the city compared with the same period a year ago.
“We went through a tough period,” said Lai Sing Louie, a regional economist in Calgary with Canada Mortgage and Housing Corp. (CMHC). “Migration numbers dropped quite dramatically.”
Net migration has always been a pillar of the housing market. When an economy is humming along at a good pace, jobs are created and people move in to take advantage of the prosperity. The same happens in reverse when an economy is in a tailspin.
“In the first quarter of this year, net in-migration reached nearly 1,900. That’s likely to continue as Alberta’s economy gradually improves.” – ATB Financial Economics and Research Team
According to CMHC, as the city geared up for an economic boom, net migration totalled 25,120 in 2005-06, but a global financial crisis dropped that number down to 11,219 in 2009-10.
Then the city began its road to economic recovery, and impressive net migration followed – 28,781 in 2011-12, 37,990 in 2012-13 and 35,388 in 2013-14.
The latter half of 2014 saw the beginning of the oil price collapse. The decline in net migration followed, with totals of 18,563 in 2014-15, 18,542 in 2015-16 and 13,716 in 2016-17.
According to ATB Financial’s Economics and Research Team, the economic expansion between 2010 and early 2015 saw 19 consecutive quarters of net in-migration in Alberta. That ended in the middle of 2015, however, and net out-migration lasted for eight quarters in the province.
“But the outflow of the recession was dwarfed by the inflow during the economic expansion. During that time, Alberta saw a net gain of 133,000 people … During the downturn, net loss amounted to only 30,000 people. It’s always tough to see our friends and neighbours leave Alberta during recessions. Though given the severity of this recent recession, the out-migration was more of a trickle than a stampede,” said ATB.
“And now, net migration has returned to positive. In the first quarter of this year, net in-migration reached nearly 1,900. That’s likely to continue as Alberta’s economy gradually improves.”
And that’s good news going forward for the resale housing market.