Calgary's housing market continues on its downward trend with home prices expected to fall lower than previous year's values. The local city real estate board sees the drop in oil prices affecting the housing market.
According to Globe and Mail, a mid-year forecast released by the Calgary Real Estate Board (CREB) Wednesday, July 29, predicted that by the end of 2015, home sales will likely drop 22 percent lower than in 2014. The board also stated that home prices will likely end 0.2 percent lower compared from previous year's level. In January, CREB initially forecasted Calgary home prices to end 1.58 percent higher than 2014, with home sales dropping to only 4 percent.
Corinne Lyall, CREB board president, mentioned it was no surprise that low oil prices affected consumer confidence, particularly earlier this year, reports Calgary Herald. Lyall said, "We've actually seen a little less concern from consumers lately and the main reason for that is we haven't seen the worst-case scenario being played out in the energy sector or in the housing market at this point. And perhaps we're also realizing that this market could be our new normal for some time."
The CREB executive also added that oil prices will continue to play a major role in Calgary's housing market. "We're not sure how long the impact on our energy sector is going to last. That is the biggest unknown and the one that's obviously going to cause us the greatest impact in the long term."
In the Calgary Herald report, Ann-Marie Lurie, CREB's chief economist, added that aside from oil prices, rising unemployment rates will also play a big factor in the city's housing market. "These employment changes, combined with overall weakness and slower than anticipated recovery of oil prices, are expected to keep housing demand relatively weak for the rest of 2015," said Lurie.
Meanwhile, CREB noted that price moderation is to be expected in the following months although it will not be a double digit decline that some real estate experts have suggested, reports Calgary Herald. This is partly due to the limited housing supply on the market.
