The Calgary housing market needs to brace itself for a long-term downturn, according to the Calgary Real Estate Board.
Second-quarter home sales volume, which was 35% slower annually, might be a significant indicator of the trend despite better performance compared to prior estimates, the CREB said in its report.
“The situation may look brighter than it did a few months ago, [but] it is also important to note that challenges remain,” the CREB said. “Our local economy is still facing record-high unemployment rates, with significant job loss occurring not only in areas associated with the shutdown (e.g., accommodation and food, retail trade) but in our professional, scientific and technical services sector. Some of the jobs in areas impacted by closures will start to return as our economy re-opens, but the challenges weighing on the energy sector will likely have a lingering effect on employment.”
New listings fell to 2,557 units in July, from the 3,335 properties available as of the end of Q2.
“The pullback in new listings in the second quarter caused inventories to trend down, preventing a more significant decline in prices,” the CREB said.
However, the local economy will be burdened by the prolonged recovery of the highest-paying industries, with downside risk to the housing sector likely to last well into 2021.
“This will cause some persistent challenges for the upper end of the housing market, having a greater impact on those higher-priced homes versus product in the lower price ranges,” the CREB report said. “Overall, we continue to expect city-wide benchmark home prices to ease by just under 3% this year and sales activity will remain weak compared to the already low levels recorded last year.”