The following is a summary from our attendance at the Calgary Real Estate Board's Annual Forecast workshop:
2019 IN REVIEW
The biggest economic changes that impacted real estate in 2019 was mortgage rates & mortgage rules as well as job growth (4% job growth over 2018).
The lower end of the market was experiencing stability, while the higher end of the market was suffering.
There was a palpable shift towards “more affordable” living in light of job loss, wage decreases, economy struggling, etc. A fundamental change in consumer preferences, resulting in more cautious spending. Consumers are making fewer large purchases and when they do, including investing, they make these decisions with more caution.
Household incomes are 7% lower on average than they were in 2014.
There has been a 10% price decrease across the entire Calgary & area real estate market since 2014.
The economy is expected to continue to struggle.
The real estate market in Calgary and surrounding areas such as Okotoks, Airdrie, Cochrane and more will continue to favor the buyer.
Economists expect re-sale home sales start to improve slightly with modest growth following a weak 2019.
The general expectation is cautious optimism that the TMX pipeline will get built, eventually... And when it does that this will be a definite source for improvement in the real estate market.
Employment levels are not expected to change very much.
In terms of population growth, we still have more people moving to Alberta than leaving; but at a lower level than “booming” times. Now it is at more comparable levels to other cities with “normal” population growth.
Rental market vacancy rates are starting to decline.
Bank of Canada interest rates are expected to maintain or cut rates - encourages sales activity. This creates a favorable lending environment for the spring real estate market.
Supply (# of resale homes on the market) reductions are expected throughout 2020. Inventory is still higher than normal but is expected to come down.
New home sales - the bulk of new home starts are in the apartment sector.
There has been a 10% price decrease across the entire Calgary, Okotoks & area real estate market since 2014. All home sectors continue to be over-supplied (detached, attached & condo). The pace of decline should start to ease this year.
Risks - global concerns/US economy creating anxiety amongst companies and investors, energy price volatility, government cuts to education and health care which have been sectors with the healthiest growth in recent years, the mortgage stress tests, the number of new home starts competing with resale homes.
In consumer behaviors and feedback we see that homeownership is still about more than just an investment - it is about housing stability, lifestyle, personal investment, cost certainty and more.
If you have any questions or would like to discuss this information we would be happy to chat over the phone, or schedule a coffee meeting.
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