“There has been a significant drop-off in new and resale housing sales volumes, but pricing has not corrected in a meaningful way, with average values holding steady from the beginning of the year,” said Ben Myers, senior vice-president of market research and analytics with Fortress Real Developments in his latest Market Manuscript
“Volatility in the energy sector and the oil price markets will continue to weigh on the mind of potential purchasers in 2015, but there was a return of confidence among buyers outside of the oil and gas industry, which is a portion of the market nearly four times larger.”
When it comes to oil prices, Myers says that the Alberta Government expects oil to steadily rise to $84 by 2019/2020 when excess supply has been removed from the market. “If oil prices increase in line with the consensus forecasts, consumer confidence will continue to improve and unit sales will follow,” he said.
Calgary’s reliance on oil is less than the public perceives, Myers added. “About a third of Calgary’s economy is dependent on the petroleum industry, down from about 55 per cent in the 1990s.”
Still investors on the ground say the vagaries of the oil market have a definite impact on real estate.
“I have seen our share of ups and downs, surely based on where the oil prices are right now, but the market is stable,” Akbar Nimji, a real estate agent with Re/Max in Calgary, told CREW
A look at housing starts in Calgary also soften the gloom and doom, said Myers.
“In the Calgary CMA, there were more starts in the first half of 2015 than all of 2009, indicating that lenders still feel confident in the Calgary market over the long term, and credit has not dried up in any way.”
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For investors nervously watching the Calgary housing market, there is hope, says one expert, who predicts steady pricing and a soft landing.