With the energy sector feeling the full brunt of the oil price collapse in 2015, it’s no surprise the heart of the oil patch was the hardest hit in the resale housing market.
Data supplied by the Canadian Real Estate Association shows Fort McMurray MLS sales plunged by 43.5 per cent from 2014 levels and the average sale price fell by 6.2 per cent — both the biggest annual declines in the province.
The best market for sales was Lethbridge, where they increased 4.5 per cent year-over-year, while Medicine Hat led the way on prices, with its average sale price rising by four per cent.
In 2015, MLS sales were down 21.3 per cent across the province at 56,477 units. The average sale price in Alberta dropped by 1.9 per cent to $393,138.
Here are the MLS sales for the 10 markets in Alberta and their percentage change from 2014:
- Fort McMurray, 974 (-43.5 per cent)
- Lloydminster, 615 (- 34.6 per cent)
- South Central Alberta, 383 (-30.0 per cent)
- Grande Prairie , 2,394 (-28.8 per cent)
- Calgary, 23,994 (-28.6 per cent)
- Alberta West, 1,105 (-26.0 per cent)
- Central Alberta, 4,439 (-19.2 per cent)
- Medicine Hat, 1,360 (-16.0 per cent)
- Edmonton, 18,670 (-9.1 per cent)
- Lethbridge, 2,543 (4.5 per cent
Here are the MLS average sale prices for the Alberta markets and their annual percentage change in 2015:
- Fort McMurray, $560,794 (-6.2 per cent)
- Calgary, $453,814 (-1.5 per cent)
- Alberta West, $354,439 (0.0 per cent)
- Central Alberta, $314,563 (0.3 per cent)
- Grande Prairie, $318,798 (0.4 per cent)
- Lloydminster, $322, 991 (0.7 per cent)
- South Central Alberta, $232, 332 (1.6 per cent)
- Edmonton, $368,261 (1.9 per cent)
- Lethbridge, $263,408 (2.5 per cent)
- Medicine Hat, $282,454 (4.0 per cent)
“Edmonton’s market traditionally follow’s Calgary’s market by 12-18 months and is normally less volatile thus not experiencing as deep of lows and highs of peak. Edmonton has also enjoyed the more consistent in-migration and lower unemployment rate due to the many infrastructure and large construction projects on the go across the city,” said Don Campbell, senior analyst with the Real Estate Investment Network.
“Conversely, due to the less diverse economies of the smaller centres in the province, we always witness dramatic swings of the market pendulums as layoffs and economic stagnation hit these smaller cities much more quickly and with much more fervour.”
He said Lethbridge’s real estate market is always a stand-out example of the importance of a more diverse economy. It misses the highs when the rest of the province booms, but it is traditionally also the least affected of the smaller centres when the inevitable downturns hit.
Campbell said cities like Fort McMurray experience a cycle of “homeruns and strike-outs” and in a city like Lethbridge we see consistent “singles and doubles.”
“Each market has its own characteristics, some like the excitement and underlying risks of the big home-run hitters, while others enjoy the consistency of an economy like Lethbridge,” he added.
Lai Sing Louie, regional economist for the Prairies and Territories for Canada Mortgage and Housing Corp., said the drop in energy prices has reduced investment in Alberta causing employment to be negatively impacted.
“These factors are helping to slow Alberta’s economic growth and this is being reflected in Alberta’s real estate markets,” he said. “Market conditions in Alberta generally favour the buyer as supply is somewhat elevated relative to demand. This has put downward pressure on prices as reflected in the overall average price declining.
“Layoffs at head offices in Calgary are causing some to delay their home buying decision as is economic uncertainty in energy-driven markets like Fort McMurray and Grande Prairie. On the other hand, markets that are not driven by energy, such as Lethbridge, are more balanced, experiencing a modest increase in sales and upward movement in the average price.”
Making your Real Estate needs my Priority
Realtor, Century 21 Vantage Realty Ltd
Office: 780 483 2122
Direct: 780 446 3727
Fax 1 866 217 4642