Image: Bernard Spragg. NZ/Flickr
High unemployment continues to hinder Calgary’s struggling resale housing market, which remains far from its 2014 peak, the Calgary Real Estate Board (CREB)’s latest monthly sales data suggest.
In August, home sales processed through CREB’s MLS system were down 6.58 per cent from a year ago while the benchmark price of $432,000 was 2.39 per cent — or nearly $10,000 — below where it sat for the same month in 2017.
“We just haven’t had that pick up in employment,” Ann-Marie Lurie, the local board’s chief economist, tells Livabl. “It’s keeping demand fairly weak,” she adds.
As demand has dried up due to the shock to oil prices and slow industry recovery, inventory has skyrocketed. Last month, inventory numbered 8,121 listings, a year-over-year increase of 22.69 per cent. “We’ve still seen some recent job losses,” Lurie says.
Meantime, listings are staying on the market for an average of 56 days as of July, up from 45 last year. “We do have more supply than we are used to having,” Lurie notes.
The condo market remains particularly oversupplied, and downward pressure on pricing continued last month. The benchmark price of a condo apartment was $258,100 in July, representing a decline of 2.09 per cent. The number of condo transactions was down by roughly the same percentage.
For the detached segment, the benchmark price sunk 2.59 per cent to $497,000, while sales fell by 5.70 per cent. However, the year-to-date average price was $566,461, up 0.44 per cent compared to the same period in 2017.
“I think for anybody who’s in this market, they really need to understand where the pockets of supply are,” says Lurie.
Beyond Calgary’s elevated unemployment rate — which in July hit 7.8 per cent for the metro area, according to the most recent Labour Force Survey from Statistics Canada — stricter lending rules and competition from the new-home segment have hampered home resales.