Calgary’s resale housing is forecast to experience a 2.24 per cent year-over-year hike in MLS sales in 2020, although the benchmark price will fall by 0.69 per cent, according to the Calgary Real Estate Board‘s annual forecast.
The forecast, released Tuesday, predicts MLS sales in the city will reach 16,731 transactions this year. But the benchmark price – which CREB says is typical of properties in the market – will drop slightly to $419,739.
“Job growth, combined with recent easing in mortgage rates and price declines, is starting to bring some purchasers back into the lower end of the market,” said Ann-Marie Lurie, CREB’s chief economist.
“We are seeing more transactions in the $500,000-and-below price point for residential homes.”
The CREB report said improvements in the resale housing market will be driven by the lower end and challenges will persist in the higher end.
“Despite challenges in the higher end of the market, overall sales activity is expected to improve by two per cent. Improving sales and easing inventories are expected to help reduce the oversupply,” it said. “These reductions will help shift the market closer to balanced conditions, but the pace of adjustment is expected to be slow. The reductions in oversupply are expected to slow the pace of price declines, as prices are forecasted to ease by less than one per cent.
“Like 2019, divergent trends are expected to remain the theme of 2020. Relatively affordable product is expected to record some improvements, while persistent oversupply will weigh on the higher end of the market. While the housing market is generally expected to move to more stable conditions, there is some downside risk to the forecast this year. Much of this risk is coming from employment expectations. Full-time job growth did improve in 2019, but at the end of 2019, Calgary and many other areas of the province recorded job losses. Some growth is expected in 2020, but recent job losses could spill into the early part of 2020, impacting confidence, housing sales and prices in 2020.”
Mario Toneguzzi is a business reporter in Calgary.
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