Builders have been busy constructing new houses over the past year or so in places like Calgary and Regina thanks to plans put in motion when oil prices were sharply higher.
Unfortunately for them, those new homes are being finished just as work is drying up and job seekers are moving away from Alberta and Saskatchewan, a trend that is already denting real estate values in both provinces.
MORE: Already lofty home prices in Vancouver and Toronto continue to surge
Those who are moving away from oil-producing regions are landing in cities where prospects are better – namely Vancouver and Toronto — something Kavcic says will keep pressure up on already lofty home prices in those cities this year.
“The two cities that have been the biggest concern for housing bears will continue to benefit from strengthening job prospects, improving population trends and mortgage rates that are lower than they otherwise would have been had oil prices not collapsed,” he said.
Benchmark home prices in December fell in both Calgary and Regina by low-single digits, which look positively tame compared to the still-blistering growth witnessed in the Vancouver and Toronto areas.
“The real estate correction is already happening – just not where most expected,” Kavcic said.
MORE: Toronto Real Estate Board predicts homes sales to soar in 2016
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