Calgary’s real estate market has seen better days.
While it’s largely been touch and go since 2014 when the oil and gas sector commenced declining, the situation has worsened because of oversupplied oil and, consequently, its lame pricing.
However, according to Croft Axsen, owner of Dominion Lending Centres Jencor Mortgage Corporation in Calgary, the city’s housing woes have more to do with constraints created by B-20 than the oil and gas sector’s plunge, although that is a salient contributor.
Axsen’s criticism, however, extends beyond the Office of the Superintendent of Financial Institutions.
“The major problem in our housing market is the mortgage stress test rules, and Justin Trudeau signs off on them,” he said. “Every month, we probably tell more than 100 people, maybe150 people, that according to the government’s current guidelines and regulations, they do not qualify for a mortgage.”
Axsen notes that Calgary isn’t a market that needed to be reined in the way Toronto and Vancouver did; on the contrary, it’s in dire need of liquidity because its largest industry is in recession.
“The government wants to apply Toronto and Vancouver rules to us, an area that needs liquidity, for no reason other than somebody sitting in front of a computer at OSFI decided it’s more important that there’s stability in Toronto and Vancouver,” said Axsen.
Investment into the province’s oil and gas sector has declined drastically since 2014, and it’s adding to an untenable situation that Axsen believes is far from a top priority for the federal government.
“You’re playing football, you’ve already been tackled and then eight more players pile on top of you—it’s kind of like that,” said Axsen. “Whether investment in pipes, servicing or infrastructure, that stuff isn’t happening because companies aren’t sure if they’re going to make money on their investment.”
Corinne Lyall, a realtor with Royal LePage in Calgary notes the city has higher inventory than it did during the financial meltdown of 2008 and it is struggling with low sales. However, today’s buyer’s market does proffer opportunity—provided people qualify.
“Since the end of 2014, we’ve been in a sluggish market related to the energy sector,” she said. “It’s not as bad as everybody makes it seem, and part of it is we’ve been through some really, really strong markets and in Calgary we’re used to having our ups and downs. We’re in a balanced market, leaning towards buyer’s market.”