Calgary Real Estate Market Recap 2015
2015: Taking a Look Back at the Calgary Housing Market
Looking back on 2015, the impact of low oil prices on Calgary’s economy and housing market is clear to see. Not only did the market struggle in terms of sales, but prices have been falling as inventory has increased.
Getting Off to a Rough Start
During the first quarter of 2015, buyers took on a “wait and see” approach as they watched the market and how it would be affected by the oil industry. As a result, the market started to see a decrease in sales activity. When coupled with an increase in new listings activity, inventory began to slowly increase while prices dropped when compared to the final quarter of 2014. On average, the first quarter saw months of supply hit 4.16 during the first quarter.
While the start of 2015 was a bit shaky for the Calgary housing market, the next two quarters were characterized by a bit more balance. As a result, housing prices did not see the steep decline that was anticipated. This was partially due to the fact that the number of new listings started to drop off as owners decided to wait out the market while oil prices started to show signs of stabilization. With buyers still having plenty of options available to them, sales declines also began to ease up a bit.
Ending on a Low Note
Despite the signs of hope that were experienced during the second and third quarters, the fourth quarter showed that the market was not doing as well as some had hoped. With ongoing job loss within the energy sector and weaker migration, demand for housing lessened even further. At the same time, rental vacancy rates and new home completions were also on the rise, placing more pressure on a market that was already dealing with elevated supply levels. The months of supply rose to 4.29 units as prices faced downward pressure, thereby pushing the market fully into a buyer’s market.
By the end of 2015, sales activity within the Calgary housing market had fallen by 26 percent to 18,830 units. Benchmark prices, however, only slipped a small amount when comparing the start of 2015 to the end. In fact, prices had only retracted 2.24 percent to $448,800. Furthermore, when considering annual averages the benchmark price was still 1.11 percent above 2014 levels at $454,267. This was only slightly below the 1.58 percent prediction for the year.
A Varied Picture
Of course, sales activity varied significantly within the Calgary market by price range and location. While all areas of the market experienced high inventory, the centre district had the highest inventory levels at 5.7 months. As a result, this area also experienced the largest drop in benchmark prices with a 0.52 percent drop. Within the attached segment, those districts with the majority of properties priced below $300,000 experienced stable-to-modest gains in benchmark prices throughout 2015. Meanwhile, those areas with the most affordable detached properties – namely the northeast and east districts – recorded appreciation through 2015, while most other districts saw a retraction in prices.