CREA Downgrades 2016 Forecast For Alberta Real Estate

The Canadian Real Estate Association has revised Alberta’s market outlook again as prospects for an oil price rebound dimmed.

Yesterday’s forecast downgraded the expected average price & sales activity for Alberta in 2016.

CREA is now predicting the average price will fall -2.5% next year to $383,100, the largest percentage drop among the provinces.

Alberta sales activity is to be hardest hit as well, falling by -3.7% to 54,300. “In particular, the regulatory changes are also likely to reduce sales activity in Calgary once they take effect in early 2016,” notes the forecast.

Below is a round-up of bank commentary on November’s report:

RBC: “Markets in oil-producing provinces such as Calgary risk spiralling down, especially if oil prices linger at depressed levels for an extended period of time.”  (Source)

Scotia:  “Sales appear to be stabilizing at weak levels in Calgary, though the latest slump in oil prices and additional cutbacks in the energy sector could lead to a renewed softening in demand in the new year.” (Source)

BMO:  “Note that national sales have posted these big gains even with a near-30% plunge in Canada’s fourth largest city – Calgary.”  (Source)

TD: “Alberta housing market will continue to grapple with the economic consequences of low oil prices. The unemployment rate spiked to 7.0% in November, just shy of the 7.3% peak reached in the 2008/2009
recession and with oil prices hitting new lows recently, more near-term weakness is expected.” (Source)

CREA forecast

December & September forecast comparisons

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