There are no signs that Alberta’s housing market will cool this year according to a report released by Alberta Treasury Board and Finance. Rather, the real estate market in Alberta is forecast to strengthen further in 2014 even as the national market is expected to slow or level off.
The positive report is tempered by several risks to the outlook:
- As a small and commodity-driven economy, Alberta is subject to a number of global risks. A renewed slowdown in emerging markets, for example, could lower commodity prices and hurt Alberta’s economic prospects. This could negatively impact in-migration and housing demand
- Higher wages, and low interest rates have enabled housing to remain affordable within the province. A sudden, unexpected shift in either of these factors would quickly offset housing market balance, driving up costs for consumers or suppliers, and making housing less affordable
- Alberta’s robust labour market and low global inflationary pressures have kept building cost pressures fairly contained, however a shift in these factors could cause costs to accelerate. A sudden tightening of the labour market, or a pick up in global inflationary pressures could add to home building costs which would likely be passed onto buyers.
Alternatively, there’s the chance that the real estate market could strengthen more than expected, leading to more in-migration, and put further
pressure on housing demand.
You can download the entire report here.