In the last couple of years, in the face of turbulent economic conditions, Calgary’s real estate prices have more or less been stable, and the average price of a home is $457,044 as of September 2016, which is almost the same price for the corresponding month in 2015.
Employment figures are down, wages are down, residential real estate sales are down, and even consumer spending has declined. Sales increased for the first time in 21 months in September as it was fueled by the rise in sales of attached housing complexes. How is the market expected to fare in 2017?
The rental market
As more and more migrants leave Calgary due to declining employment rates, the vacancy rates are only projected to rise in 2017. As a result, more untrained landlords are likely to offer houses on rent for below market rates to ease their financial situation.
It will be a good market for renters. They will have a greater variety of choices and lower prices to be happy about. The new mortgage rules will also ensure that the vacancy rate will not be too high as prospective home buyers are receiving a greater degree of assistance.
As the resale market and rental market continue to remain generous, housing starts are expected to remain between 8,400-9,400 units in 2017, a far cry from the 2015 figure of 13,033 units. New home construction projects will be below historical averages in 2017. Even if the oil prices increases next year as expected, the benefits are unlikely to be felt instantly. Until income and job levels rise, housing starts will also not increase.
Average home prices
The average price of a home is unlikely to be significantly affected, and it is expected to hover around $450,000 in 2017. The number of expected residential sales in 2017 is expected to be between 20,000-22,500 units, which is much lower than the 2014 and 2015 figures. The mortgage rates are expected to remain the same or increase moderately and they will not adversely affect sales unless they increase or decrease in an extreme manner.