Real Estate Market Update

Recent oil price gains may have some feeling optimistic but persistent weakness in the labour market continues to impact housing demand in the Calgary real estate market. We are also starting to see the impact in the non Oil and Gas sectors where wages are declining and unemployment levels remain high.

We are also seeing housing supply levels rise in the rental, new home and resale markets. Inventory levels rose by 14% in May to a total of 6,148 units but the largest inventory growth has occurred in the apartment and attached categories. Together, these sectors represent half of all resale inventories in Calgary’s real estate market.

While apartment resale supply remains well below the high in 2008, the combination of rising supply in the apartment sector and steep declines in sales activity has elevated months of supply to nearly six months. The impact on pricing is more dramatic in the apartment sector compared to the detached and attached sectors.

In the detached and attached real estate markets, home prices totalled $500,500 and $332,100, a year-over-year decline of 3.4 and 4.3%. While this time last year the numbers already reflected a slightly slowing market, the numbers still aren’t as shocking as some had predicted when oil prices dropped steadily in late 2014 and early 2015.

Co-written with Martin Breeze, Mortgage Broker, TMG The Mortgage Group