Fort McMurray Takes Hardest Hit in Alberta Real Estate Market in 2015

Alberta's real estate market was hit hard in 2015. SEAN KILPATRICK / THE CANADIAN PRESS

MARIO TONEGUZZI, CALGARY HERALD

‚ÄčHousing sales in the heart of Alberta’s oilpatch have taken the hardest hit from plunging oil prices.

Data from the Canadian Real Estate Association show Fort McMurray MLS sales last year fell by 43.5 per cent from 2014 levels, while the average sale price declined by 6.2 per cent — both the biggest annual declines in the province.

The best Alberta market for sales was Lethbridge, where they increased 4.5 per cent year-over-year. Medicine Hat led the way on price gains, with the average sale price there 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 MLS sales for 10 Alberta markets surveyed, and their percentage change from 2014:

  1. Fort McMurray, 974 (-43.5 per cent)
  2. Lloydminster, 615 (- 34.6 per cent)
  3. South Central Alberta, 383 (-30.0 per cent)
  4. Grande Prairie , 2,394 (-28.8 per cent)
  5. Calgary, 23,994 (-28.6 per cent)
  6. Alberta West, 1,105 (-26.0 per cent)
  7. Central Alberta, 4,439  (-19.2 per cent)
  8. Medicine Hat, 1,360 (-16.0 per cent)
  9. Edmonton, 18,670 (-9.1 per cent)
  10. 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:

  1. Fort McMurray, $560,794 (-6.2 per cent)
  2. Calgary, $453,814 (-1.5 per cent)
  3. Alberta West, $354,439 (0.0 per cent)
  4. Central Alberta, $314,563 (0.3 per cent)
  5. Grande Prairie, $318,798 (0.4 per cent)
  6. Lloydminster, $322, 991 (0.7 per cent)
  7. South Central Alberta, $232, 332 (1.6 per cent)
  8. Edmonton, $368,261 (1.9 per cent)
  9. Lethbridge, $263,408 (2.5 per cent)
  10. Medicine Hat, $282,454 (4.0 per cent)      

“Edmonton’s market traditionally follow’s Calgary’s market by 12 to 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.”

Campbell said Lethbridge’s real estate market is 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.”
 

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