As a result, listings are up more than 43 per cent as sellers rush to sell their homes and buyers increasingly disappear from sight, demonstrating that confidence is low in the short-term due to a number of factors, including falling oil prices.
Despite the numbers, Nabih Faris, a founding investor in Penn West Petroleum and leader of Intergulf’s residential developments in Alberta, said he’s optimistic things will stabilize in the long-term.
“We are erring on the side of caution over the short-term, however we have confidence in the Alberta real estate market’s long-term strength,” he said. “There’s likely to be a slow-down in the condo market over the short-term, but just as in past cycles, we are experiencing sustained demand for rental options and low density, master-planned communities.”
He added that the signs of a weakening real estate market are not enough to change the long-term outlook of future investment in the region.
“The major infrastructure projects are designed with decades-long investment horizons and, as such, are not swayed easily by short-term market cycles. While upstream oil and gas opportunities are certainly curtailed to an extent by low prices, the industry as a whole continues to adapt and move forward.”
What’s more, a sales rep from Calgary also weighed in on the numbers from CREB, citing an inaccurate picture being painted on the Albertan city.
“In Calgary we are finding certain segments of the market have slowed, but others are still very active and even with multiple offers in still common in $300,000 to $500,000 segment,” said Steve Howes, a Re/Max sales rep in Calgary, in a recent post on the REP forum.
Residential prices remained relatively stable, although there was some variation in sectors, according to stats from the Calgary board.
The apartment sector recorded the largest gain in new listings relative to sales and inventory levels nearly doubled reaching 1,148 units.
The rise in supply relative to demand placed pressure on benchmark prices, which fell to $298,700 compared to $300,400 in December.
Still, the average price for a home in Calgary now sits at $460,929, 0.5 per cent lower compared to this time last year and with home sales at their lowest level in five years, consumer confidence has been shaken.
“A lack of recovery in oil has many concerned about their employment status and this concern is reflected through the weaker sales activity in Calgary’s January resale figures,” said Ann-Marie Lurie, chief economist of the Calgary Real Estate Board.
“Nonetheless, if supply levels continue to rise at levels that exceed the pace of demand growth, we can expect this will start to impact prices in the city.”
Sales are continuing to plunge in Calgary as stats for the month of January show home sales down 37 per cent compared to this time a year ago, according to the Calgary Real Estate Board.