As oil prices continue to drop across Canada, analysts are predicting an impact to Calgary’s resale house market in 2015 as a result. While there appears to be no stopping the rising house prices, there will certainly be a slowdown in the price growth in the New Year.
House price increases have been attributed to the employment in the energy sector, one of Calgary’s primary source of jobs. In the fall of 2014, however, the housing market saw a shift from a seller’s market to a more balanced market, mostly due to a decrease in oil prices. The price adjustments will likely have an impact on the 2015 Real Estate market, and is anticipated to be less active as potential buyers wait to see if lower gas prices result in more favorable house prices.
Re/MAX expects the market to have sales go up by four percent from 2014 levels, with buyers looking to upgrade their housing to drive the market in 2015. Also, the low vacancy rate for rentals will have potential tenants look at purchasing sooner than they anticipated.
Recent reports said the average price of residential property in Calgary at 402,851 in 2011, 412,315 in 2012 and 456,000 in 2013. The house market was booming at the end of 2013 right up to the end of November, with the market very active and breaking records. Now, buyers can sense the heat is off and waiting to see possible deals in the marketplace.
According to CREB, there have been 25,011 MLS listings in Calgary, which is up 10.222% from the previous year. The average sale price has also risen by 5.83% to $483,303.
“What we have been expecting is that as we look at 2015 and lower gas prices, there’s going to be a lot of wait and see” said Ann-Marie Lurie, chief economist with CREB, although the board has not finalized its forecast for 2015."
Full-time employment in the energy sector could also create some stability in the housing market, although no gains are expected. The lower gas prices could see a fall in employment, which would also impact the house prices.
Prices are expected to remain stable, with listings and sales pulling back a bit. Don Campbell, senior analyst with the Real Estate Investment Network, said Alberta’s Real Estate markets have historically been cyclical than those in the rest of the country.
“There is good news and not so good news in that history. Good news is that when there is dramatic change in oil prices, either up or down, Albertans usually do not over-react for the first six months… However when the price stays down for more than six months, nervousness begins to develop in the Real Estate market in customer confidence and retail sales…”
The Re/MAX report forecast the median sale price in Canada to go up by 2.5% to 416,300 in 2015 after a 6.2% hike in 2014 to $406,415.
I will continue to monitor Real Estate prices throughout Calgary and Canada, and will publish updates as soon as they come. For proven results and distinctive Real Estate services, give me a call.