The drastic decline of oil prices in Canada will likely impact housing prices in a number of Canadian markets, but none more so than in Alberta, according to Royal LePage.
“For our 2015 forecast, we could not ignore the potential impact of the steep decline in the price of oil on housing markets across Canada,” Phil Soper, president and chief executive of Royal LePage said. “In the immediate term we anticipate that the natural slowing of home price appreciation we called for in the third quarter of 2014 will be delayed in Central Canada and accelerated in the West by recent developments in the energy sector.”
It’s important to note that he doesn’t outright call for price declines, instead forecasting slowed appreciation.
Meanwhile, Toronto is expected to benefit from low oil prices, according to Royal LePage, as it is expected to see the highest housing price increases in the country.
“Ontario’s strengthened export economy buttressed by a flourishing U.S. economy and lower Canadian dollar; improved labour market trends; and unsatisfied demand from countless homebuyers who lost out in 2014 GTA bidding wars are expected to carry the all-important 2015 spring market,” the report states.
The fourth quarter of 2014 recorded modest price changes, which was in line with third quarter trends.
“In the fourth quarter of 2014, real estate markets unfolded as we anticipated, with modest year-over-year price changes in most regions contrasted against continued steep price increases in Western Canada and Greater Toronto,” Soper said. “This follows a similar trend observed in the third quarter of 2014, when we predicted the beginning of a cyclical slowing in home price appreciation, to a pace that better reflects broad economic factors.”
Agents in one major market are best served to prepare for sluggish housing price gains, according to one industry leader’s recent forecast.