Slower sales activity and home price declines continue to characterize Calgary, a market still struggling to recover from the significant losses of the oil and gas industry crashes.
“The resale prices have been falling for most of the past five years since the price of oil fell,” Royal LePage (Calgary) broker Jim Sparrow told CBC News. “We’ve sold fewer detached single family homes year-to-date than we did last year.”
The downward trend in prices did not help in boosting the prospects of this year, which is proving to be the city’s most sluggish in around 23 years, Sparrow admitted.
Latest figures from Statistics Canada pointed at a 2.2% shrinkage in the average price of a new home in Calgary since July 2018.
“If you’re selling your house, you have to take a deep, deep breath and you have to lower your price to probably well below what you thought your house was worth. And even then, you’re in for a challenging time,” Sparrow added.
A major driver of the phenomenon is availability: At the moment, Calgary appears to have more homes than what is warranted by demand levels.
“The resale side of the market is oversupplied as well. So there is a lot of products available for detached in new as well as in resale,” Calgary Real Estate Board chief economist Ann-Marie Lurie explained.
“Because of that, that adds that additional pressure on the new home side and is likely causing them to start reducing some of their starts activity.”
Housing starts have consequently crawled down, with January-to-September new construction dropping by 15.8% annually, according to data from Canada Mortgage and Housing Corporation.