CREB® 2016 Forecast for Calgary Real Estate

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Download CREB®’s 2016 forecast: click here pdf

CREB® commentary: The Calgary Real Estate Board forecasts downward pressure on prices in 2016. With no economic change on the horizon, demand for housing in Calgary will be weak in 2016, as sales activity is expected to fall by 2.2 per cent to 18,416 units, CREB® said today in its annual forecast. The annualized benchmark price is expected to decline by 3.44 per cent to $438,652.

Weak demand and supply gains are expected in 2016, adding to an already elevated level of inventory. In this situation, the markets ability to effectively absorb more inventory will be limited, resulting in some downward price pressure across all housing sectors.

“As we move into the second year of this environment, we expect to see additional housing supply pressure and further price declines,” said CREB® chief economist Ann-Marie Lurie. “Weakness in the energy sector is overshadowing all aspects of our economy and with more people looking for work and fewer opportunities, we could see some families making adjustments to their housing situation.”

While price declines are forecasted in each of the detached, attached and apartment markets, steeper declines are anticipated in the higher density segments, a trend which already started in the fourth quarter of 2015. This is related to the near record high level of multi-family units under construction. As these units are completed, there will be more product available for a smaller pool of buyers.

“Market intelligence really matters in today’s operating environment. Pricing trends have and will continue to vary depending on product type, price range and location,” said CREB® president Cliff Stevenson. “Sellers in this market need to have a good understanding of activity within their specific niche of the market. This is where a real estate professionals can really help navigate market conditions and real estate options, which are always unique to each consumer.”

With oil prices expected to remain lower for a longer period of time, the additional impact on employment and the extent of the spillover to other industries is still uncertain. While current forecasts expect employment weakness to persist throughout 2016, further losses are not expected beyond this year.

“The main risk to the housing outlook lies with the deepness of the pullback in demand and how that will translate into supply gains,” said Lurie. “Any sign of sustained recovery in the energy sector could limit the impact on the housing market.”

For the complete 2016 CREB® regional housing forecast report, click here.

2 responses to “CREB® 2016 Forecast for Calgary Real Estate

  1. Great work on your blog. What about new infills ($800K, duplexes, standalones) in inner city NW and inner city SW: Are those prices coming down significantly? 10-15% from peak? I am starting to notice that inner city NE listing prices are coming down quite significantly already. Thanks.

  2. SL,

    I have been monitoring new infills in the NW quite closely as I’m thinking of getting into that market myself. Most listing are still listed way too high in my opinion. I have definitely seen infills sell for 10% less than the current list price. I would expect the infill market to keep dropping after the new mortgage rules set in. Also consider the demographics, most people who want to live in infills most likely require dual income, which with all the layoffs there’s less of. I believe the biggest drop will come from the $800k-$1M duplexes. Correct me if i’m wrong Mike.

    Make sure you look at the quality of the build. Just by going to open houses I’ve seen vents that terminate halfway into the wall, light switches at different heights, crooked windows, doors that don’t stay open, water pipes in the wrong spot..etc. I can’t imagine what’s hidden behind the walls. You get what you pay for.

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