The Calgary housing market recovery is uneven and progress stalled in the late stages of 2019, yet demand and supply are in better balance, and prices are gradually stabilizing, says a report by RBC Economics.
“Stronger population growth bodes well for housing demand to pick up in the period ahead. For the time being, energy sector uncertainty continues to weigh on buyer confidence. High condo inventories remain an issue,” said the Canadian Housing Health Check report.
In rating the Calgary housing market, RBC looked at what it considered to be “significantly outside historical norms and posing much higher risk than usual” and only rental market balance and new home inventories for multiples fell into that category.
For the category of “modestly outside historical norms and posing moderately higher risk than usual” only homes under construction for multiples was in the category.
And the following was classified as being “within historical norms or not posing any immediate threat” – affordability, resale market balance, interest rates, labour market, demographics, new home inventory for singles, and homes under construction for singles.
The RBC report said strong population growth, generally solid labour markets and low interest rates are more likely to drive prices higher over the next 12 months in Canada.
“Demand supply conditions have tightened considerably in previously soft markets, including Vancouver and Toronto. Price pressure is now
rising rapidly in Toronto and has begun to intensify in Vancouver. Hot markets like Montreal and Ottawa see accelerating price gains. Conditions are gradually returning to balance in Calgary and Edmonton,” said the report.
“Frenzied financial market reaction to the coronavirus outbreak and heightened global economic uncertainty could spook buyers who may move to the sidelines temporarily.”
It said lower longer-term rates now act as a tailwind to the market.
RBC said healthy labour markets and strong population growth will provide solid support for the housing market, adding that weak spots in the Prairies are “tentatively—though unevenly—turning around” as the oil sector uncertainty weighs on buyer confidence.
“Crude oil transportation issues ultimately pose a risk to housing markets in these regions,” it said.
