Sales have decelerated further from not only a year-over-year comparison, but in relation to 2010-2013 as well. The 513 sales so far this month are on pace for the second lowest January level in over fifteen years.
Citing low oil prices, the Bank of Canada surprised the market by cutting the overnight rate by 0.25% yesterday and specifically mentioned Alberta’s housing market: “The oil-price shock will also affect housing activity in energy-intensive regions. There has been a decrease in housing starts and a sharp drop in resales and sales-to-listings ratios in Alberta in December. Near-term housing activity elsewhere is expected to remain high, supported by very low mortgage rates, although the extent to which the downturn already evident in Alberta will spill over into other regions remains to be seen.” (Source)
December’s labour report for Alberta was surprisingly upbeat with 5,700 jobs added (SA) last month and “even more curious about the job numbers is that jobs were stable in the oil and gas sector.” (Read report) Admittedly, January’s report will likely be far different.
At this pace, month-end inventory will cross north of the 5,000 mark, making it the 3rd highest January level since 2006. High inventory, low sales: too early to expect the benchmark price to be affected significantly this month but if this market imbalance persists, we’ll see price deflation.