Cutbacks in the oil patch have been the first shoe to drop from a collapse in oil prices. Alberta’s real estate market now appears to be the second, with new sales data pointing toward a chilly spring in Calgary and elsewhere in the province.
“Fissures are starting to show in Calgary’s housing market,” Sal Guatieri, a senior economist at Bank of Montreal said Tuesday, a day after the biggest city in the oil-rich province released monthly sales data for December.
Sales are down 7.5 per cent versus a year ago, while new listings have “gushed” 42 per cent higher – a sign homeowners are racing to sell before market conditions deteriorate.
Prices still rose a strong 8.8 per cent in Calgary last month, but the gains “looks to slow sharply, if not turn negative this year,” Guatieri said.
In Edmonton, the picture isn’t all that much different: Prices are still rising but under the surface lies a drop off in sales activity coupled with a surge in new listings.
The number of sales that took place last month in the province’s second biggest centre was flat compared to December of 2013, the city’s real estate board said. The number of homes hitting the market shot up 20 per cent.
Cut in half
Experts are still assessing how the collapse in oil prices will affect the country’s top-performing provincial economy. On Tuesday, BMO’s chief economist Douglas Porter said during a panel discussion in Toronto Alberta’s growth will be cut in half.
Oil slipped 4.2 per cent on Tuesday in New York to $47.94 a barrel – or 55 per cent lower than its June high.
The latest consumer confidence poll from Nanos Research from last week shows optimism for higher home prices in Alberta is sliding.
The share of survey respondents from the province who said they expect home prices to continue to rise shrunk to under a third last week. In July, about half said home prices would continue to climb.