Amidst the fall of the oil and gas industry that has been plaguing Alberta and the rest of the nation, the housing market in Calgary continues to hold its ground. Phil Soper, President and Chief Executive Officer of Royal LePage, has reported that we are currently seeing numbers that fall only ten per cent below the level of 2014’s peak housing market. Over a five-year period that included economic downfalls largely due to the oil and gas industry, it is incredible to see just how resilient the housing market in Calgary has remained.
Calgary is currently situated in a buyer’s market with a high supply of properties listed and fewer buyers looking to purchase. While Calgary sits in this market, those looking to purchase a new property have many options with lower prices due to the high competition of sellers. The aggregate price of a home in Calgary rose 1.3 per cent in the fourth quarter of 2018 from that of 2017, meaning prices are no longer collapsing. Soper also stated that the forecast for 2019 estimates that Ottawa will pass Calgary to be the third-most expensive major housing market in the country. Therefore, Calgary is becoming a more affordable city to live in with many reasonable options currently on the market.
In 2018, the Royal LePage Price Composite Report noted that detached home segments gained appreciation in Calgary’s fourth quarter with bungalows and two-storey homes rising in value by 1.7 per cent and 2.0 per cent, respectively. Along with these median prices rising in Calgary and despite the uncertainty of the oil and gas sector, Alberta posted year-over-year housing price increases, with the exception of Fort McMurray. Fort McMurray declined 9.4 per cent in 2018, which is evident to those moving out of the oil and gas hub of Alberta due to a shortage of work.
What demographics are currently affecting Calgary’s real estate market?
Baby boomers and millennials are the two largest demographics affecting the current housing market in Calgary. Both demographics feel the new mortgage rules and rising interest rates are affecting their buying decisions. During this economic time, many baby boomers are moving outwards of the city into smaller markets while millennials are discouraged from making home purchases due to their age, distracted from the open window the market is currently presenting. With the current downward trend of home prices, this is, in fact, an ideal situation for a first-time home buyer and those seeking properties within the city limits.
Although Calgary has witnessed tough times in the past with high unemployment and economic uncertainty, the housing market continues to grow and remain resilient. Building equity in property during this time can have impactful benefits in your future and your bank account. The forecast for 2019 is looking up and we are excited to see how the next four quarters of the real estate market compare to the positive predictions.