While the recent drop in oil prices has caused speculation about implications for the housing sector, stable conditions are expected given current forecasts for employment and migration.
“While employment and migration are expected to support housing demand, estimates could change depending on the extent and duration of oil price declines,” said Ann-Marie Lurie, CREB®’s chief economist. “However, concerns over the potential impact will influence consumer confidence. This is expected to cause supply and demand to ease in 2015, maintaining resale market balance and keeping prices relatively stable.”
According to Lurie, the risk lies with the potential severity and duration of the pullback in the energy industry, which would have a lagging effect on the housing sector. While the current situation has some comparing today’s market to 2009, there are some differences.
“Following the financial crisis, many countries including the United States were struggling. In Calgary, new home starts outpaced household formations, contributing to an oversupplied market,” said Lurie.
While CREB® has not yet completed its forecast for 2015, based on the current range of economic expectations, Calgary’s housing market is not expected to see the same level of pullback recorded from 2008 to 2010.
It is important to note there can be significant differences between segments of the Calgary market. Bill Kirk, president of CREB®, clarifies that there are many factors to consider when buying or selling a home, outside of market conditions.
“Market influencers are wide-ranging and may include anything from price range to the type of home and availability in a particular market segment,” said Kirk. “A REALTOR® can help determine how these factors will impact a given property in a given area, allowing consumers to make an informed decision.”
CREB®’s 2015 forecast report will be available January 14, 2015.