Calgary is a volatile market for energy companies and for housing. The picture changes according to prices and government opposition, something that extends back to the 1970s. Currently prices are suppressed through no fault of the people and companies in Alberta.
The latest Calgary region housing stats show prices continue downward (-8.6%) from September and (-15%) from October 2017. New listing have dropped 6% and overall inventory is down 8% yet days on market rose by 2 days. Prices of single detached homes dropped .8% year over year. Apartment prices dropped by $1,000, and inventory was down by 8%.
In the City of Calgary, housing stats are more extreme. Sales dropped by 11%, inventory rose by 13.4%, while prices declined by 1.4%. DOM rose dramatically to 40, which means its a buyers market in Calgary. Some oil analysts believe oil will rebound after the current issue with Iran. In the meantime, Calgary, Edmonton and all of Alberta are seeing their housing stock severely devalued. The most significant drops in prices were single detached homes in the northeast, apartments in the south, and semi-detached units in the south. Inventory of apartments is very high in the north.
Oil Price Discount Hurting Alberta
Although WTI oil prices are high ($65 currently) although not as high as they could be, Alberta’s WCS prices are low resulting in reduced revenue. Calgary hasn’t cashed on the WIT price bonanza due to this discount. There are no solutions for this in the next few years, so industry and Alberta government frustration will continue.
Superb Opportunity for Long Term Investors
For buyers and investors, the bottomed out Calgary housing market this fall represents a buying opportunity. The situation with the oil market is crippling the housing market.
Alberta’s WCS discount is artificially suppressing Calgary home and multifamily property value. These issues likely will be rectified in 2 years, so it’s an opportunity, especially for Millennial buyers to check out some amazing Calgary homes at a good price. Don’t wait till home prices jump back up at higher mortgage rates.(article courtesy of Gord Collins)