CREB®2017 ECONOMIC OUTLOOK & REGIONAL HOUSING MARKET FORECAST
Calgary’s housing market is expected to show signs of stability in 2017. City-wide sales are forecasted to total 18,335 units, a three per cent gain over 2016, but 12 per cent below long-term averages. This will help reduce supply levels and support some price stability in the second half of the year.
The transition in the housing market will take time. Alberta’s economy was much softer than many predicted over the past two years, as prolonged weakness in energy weighed on other sectors of the economy. We enter 2017 with high unemployment rates, weak migration and tightened budgets for consumers. Economic recovery is expected in the year ahead, but the pace of growth is forecasted to be slow, particularly in the labour market. This will impact the timing of recovery in the housing market.
While a shift is expected this year, it is important to keep some perspective. Housing sales activity is still forecasted to remain well below normal levels for the city and prices are not expected to be stable across all segments and property types.
Home prices are expected to remain relatively unchanged over 2016 levels in the detached and attached sectors of the market, while the apartment condominium sector faces more downward price pressure due to the excess supply. This will continue well into 2017 until inventory levels ease and the market returns to more balanced conditions.
FACTORS INFLUENCING THE 2017 HOUSING MARKET:
• Employment levels are forecasted to increase in the year ahead, but it won’t be enough to compensate for recent declines;
• Net migration is forecasted to remain well below normal levels in 2017, but a second consecutive year of decline is not expected within the city limits;
• Rising mortgage rates, stricter lending criteria and income adjustments can limit improvements in housing demand, causing further shifts between price segments in the detached segment and activity in attached and apartment;
• Slower new home starts activity in 2016 and 2017 will help prevent further supply gains in the overall housing market;
• High levels of new home and rental inventory will continue to create challenges in the resale condominium apartment segment. Until this supply can be absorbed, further downward price pressure is expected
Contact me, if you would like the full City of Calgary monthly stats package or 2017 Housing Market Forecast.
CREB January 11, 2017 Release – DARYL CARLSON RE/MAX Realty Professionals
Please email, text or call, if you have any questions. (403) 650 – 7400 darylcarlson@shaw.ca
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