Alberta employment grew by 13,700 in January and the unemployment rate dipped to 4.5%, tying Saskatchewan for the lowest rate in the country. Alberta alone added 174% more jobs than what the consensus was for all of Canada.
Annually, employment in the province rose by 66,900 accounting for over half of the job gains in Canada. Employment growth was 3.0%, the highest rate of the provinces (See chart below). So is Calgary’s real estate slowdown due more to a lack of consumer confidence?
At this point, the slowdown is a mix of both lost jobs and a less than positive outlook. Statistics Canada’s LFS estimates were for the week of January 11 to 17 and many layoffs have been announced since then.
An Alberta Treasury Board & Finance research note warns:
“Despite the strong reading in January, the labour market is still expected to cool this year as a result of lower oil prices. Job losses have, in the past, lagged sharp corrections in oil prices,” (Source)
Statistics Canada reports:
[Alberta] Employment in natural resources was little changed on a year-over-year basis, but it was down 13,000 (-7.2%) from the most recent peak in September 2014. (Source)
ATB economist Todd Hirsch writes:
“A deeper dive into the data reveals that the energy market is, indeed, seeing a slowdown. Between December and January, there were 1,000 fewer jobs in oil and gas, and 3,700 fewer jobs in a category labelled “professional, scientific and technical” jobs. These would be occupations such as geologists, engineers and other technical services which are frequently contracted by petroleum producers.” (Source)
A total of 274* homes sold during the first week of February: that’s down -34% y/y, off -35.6% from the 10-year average & -26.3% from the 5-yr average. Detached sales, which make up the overall bulk, were even below 2009’s level. (*CREB®’s homepage stats shows 275 sales MTD, but one of them was incorrectly marked as being located in Calgary when it’s actually in Nanton)
New listings are elevated both on a year-over-year basis and compared to the 10-year average, however they remain well below 2008 levels when Calgary inventory surged to the highest level on record. A key difference this time around, however, was that sales that year weren’t as muted as they are now. Active listings are now at 5100 and growing.
A bright spot was an Aspen Woods home that sold for $2,350,000 this week which was the highest sale price so far this year.
Just for curiosity’s sake, I calculated what the average price would be without any $1M+ sales.
The average price month-to-date would be $454,783 instead of $474,984. For February 1-7, 2014 the average would only be $441,321 rather than its current $500,062.
From a 2013 blogpost: “Last October marked the beginning of a string of monthly records for luxury sales. Going forward, the y/y comparison for high-end transactions should be close and will help with the average price skewing that we have been seeing of late.” Now we’re in the exact opposite situation with fewer high-end sales than the year before amplifying the decline in the average price.
The median price month-to-date is up 4.72% year-over-year, from $424,950 to $445,000. But again, it’s early in the month and the average & median price fluctuate daily because of how few sales there are.