Modest supply reductions may signal shift to balanced housing market by end of year
City of Calgary, July 22, 2019 – A struggling energy sector continues to weigh on the overall economy. Unemployment levels remain elevated and income growth remains weak.
However, Calgary continues to benefit from stable population growth fuelled by international migration and natural increases.
“With current economic conditions, we expect housing demand will remain similar to levels recorded last year,” said CREB® chief economist Ann-Marie Lurie. Supply continues to adjust in the resale market, as well as the new-home and rental markets. Reductions in housing supply are expected to move the resale market toward more balanced conditions and support price stability by the end of the year.
“While supply declines are expected to support price stability by the end of the year, on an annual basis, prices are expected to remain lower than levels recorded last year across all property types,” said Lurie.
Conditions throughout specific price ranges and product types will continue to vary. Growth in the attached and detached markets will continue to be fuelled from the lower end of the market, but apartment activity will continue to face challenges due to the competition from new product and rentals.
Nonetheless, supply declines will help to better position the broader market moving into 2020.
Three things to know about the 2019 mid-year forecast:
• Stable lending rates and the new shared-equity mortgage program may support modest improvements in housing demand in the second half of the year.
• Concerns regarding slowing global growth and impacts on commodity prices may affect consumer confidence and housing sales.
• Slowing economic activity in the province may result in weaker job growth than the current forecast suggests.
For more information, please refer to CREB®‘s 2019 Economic Outlook & Regional Housing Market Mid-Year Update, available here.