Every quarter Canadian Mortgage and Housing Corporation Issues a Calgary Housing Report. This reports on new build, inventory, MLS Sales, Rental Vacancies and the why behind their predictions.
Date Released: Spring 2016
Below are some highlights on the Existing Home market.
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Existing home market: Average house prices forecast to decline in 2016 Following a 29 per cent decline in 2015 to 23,994 units, MLS® residential sales in Calgary are forecast to move lower for the second consecutive year in 2016. Job losses, especially among full-time positions, and reduced consumer sentiment will keep many buyers on the sidelines. In addition, income growth will also be muted and migration to the region will decrease. While mortgage rates are expected to remain low throughout the forecast period, weakness in the other primary drivers of housing demand will keep sales from rising. Sales in 2016 are forecast to range between 19,800 and 22,200 transactions. Oil prices in 2017 are expected to stabilize at higher levels compared to the year before, leading to modest improvements in economic activity and consumer confidence. MLS® residential sales in 2017 are forecast to range between 20,200 and 22,600 units. Following a pronounced increase of over 40 per cent in 2015, the rise in active listings has slowed down in 2016. In the first quarter, active listing were at elevated levels, and up four per cent from the previous year. The increase in supply has provided prospective buyers more selection compared to a year earlier. Not only are sellers under more pressure to accept lower prices, but new home builders are also facing more competition from the existing home market. Although trending up in the last several months, active listings have started to plateau and will move lower later in 2016 and into 2017. New listings in 2016 are not expected to change significantly compared to a year earlier. After three months, new listings were down three per cent from the corresponding period in 2015. As housing demand has moderated and prices have declined, homeowners are not rushing to list their houses for sale. In addition, newly listed homes will also be competing with 0 5 10 15 20 25 30 35 40 thousands Inner range Source: CREA, (F): CMHC Forecast Figure 2 Calgary CMA, MLS® Sales (000s) Housing Market Outlook – Calgary CMA – Date Released – Spring 2016 Canada Mortgage and Housing Corporation 4 an already well-supplied resale market where homes on average are taking longer to sell. New listings in Calgary are not expected to rise substantially until home prices post stronger gains. The average MLS® residential price in 2016 is forecast to post another decline and range between $444,500 and $449,500, compared to $453,814 in 2015. The sales-to-active listings ratio declined to 21 per cent in the first quarter and is expected to remain relatively low for most of 2016. The increase in supply and lower demand has given buyers an edge over home sellers, putting downward pressure on prices. CMHC’s Housing Market Assessment2 framework had also detected moderate evidence of overvaluation as house prices have not been fully supported by economic and demographic fundamentals. In 2017, house prices in the resale market are anticipated to gradually stabilize as the market shifts to more balanced levels. Improvements in economic conditions and housing demand combined with less supply will help support home prices. The MLS® average residential price in 2017 is forecast to range from $450,400 to $455,600.