Photo: Bernard Spragg. NZ/Flickr
Calgary’s vacancy rate has dropped for the first time since Alberta’s recession ended in 2016, which one economist says is a step in the right direction for the city’s recovering housing market.
In April, the city’s overall vacancy rate was 3.86 per cent, a 0.9 per cent decline from 4.76 per cent a year ago, according to Calgary’s 2018 Civic Census.
“It does reflect modest improvement in our economy, which is what we’re starting to see. And, in fact, a lot of that is driven probably by the migration numbers that also improved this year. So, it’s all pointing to that flow absorption of product in the market,” Anne-Marie Lurie, chief economist at the Calgary Real Estate Board (CREB), tells Livabl.
The annual Civic Census is conducted by the City of Calgary to determine the official count of dwelling units and the population who are living in those units.
After Calgary’s two-year recession ended, the city’s housing market started to show signs of rebounding in mid-2017 and is still continuing its bumpy path to recovery.
With an abundance of supply already on the market, Calgary’s housing stock grew further in April to a total of 15,391 units — up 1.77 per cent from a year ago.
However, growth in supply was met with an increasing population, rising by 1.69 per cent year-over-year from April 2017.
“[W]e just haven’t had enough of a pickup in our economy. So, the fact that some of the people are coming back, that is a really good sign for us, that can support some future demand growth,” says Lurie.
Interestingly, Calgary’s vacancy rate dropped during a time when interest rates were rising and after the new mortgage stress test rolled out in January 2018.
Although these housing headwinds caused a slowdown in activity in the city’s homeownership market, Lurie says improving economic conditions helped mitigate the impact.
“A lot of those changes came at a time when our economy was really just starting to improve. As we start to continue to see economic growth in our city that’s just helped offset some of the changes in the higher rates,” says Lurie.
Will Calgary continue its path to housing recovery? Lurie says time will tell.
“[W]e still are faced with just too much supply on the ownership side. So, it will take time for it to all flow through but at least it’s a move in the right direction.”