“It’s hard to predict the national market, just because there are so many regional markets,” says leading real estate economist Ben Myers, now senior VP of market research for Fortress Real Developments, pointing to the very different economic landscape that caused housing prices to slide some 12 per cent during the 2009 recession.
Earlier this week, however, Teranet-National Bank reported that national housing prices, despite a 4.4 per cent year-over-year increase, are decelerating. Still, Myers says he doesn’t see massive drop-offs in price Canada-wide.
“I don’t think we’ll see price declines,” he says. “Edmonton, Winnipeg, Ottawa, Toronto, I think those markets will have fairly flat price growth – two to three per cent, and four to six per cent for Toronto.
“I think [price declines] will stay in Alberta and Saskatchewan. Those will be the major areas impacted by oil price declines.”
In February, the median house price in Calgary dipped just 1.15 per cent year-over-year, compared to a massive decline in sales, down 34 per cent from the year-ago period. But Duane Ritter, a sales rep in Calgary, said the market hasn’t had the explosive reaction to lower oil values that many expected.
“The prices are what they always have been,” Ritter says. “[Residents] are saying, ‘If I can sell it I’ll sell it’. But they’re not going to be the lowest guy on the block. There’s a steady market.”
It’s for that reason that prices, unlike sales, haven’t declines. And Myers says he doesn’t see that shifting anytime soon.
“People are in the crisis of confidence right now,” he says. “They don’t know what’s happening, so they’re holding off.”
Myers – along with many other agents commenting in the REP forum – points to the financial crisis of 2009, when oil values fell off in the midst of a recession. That situation, he says, was so different from the current environment that it’s unlikely we’ll see a similar crash.
“We were in a much poorer place [in 2009],” he says. “The market was already sliding so the impact of oil only exacerbated the problems in that market.”
Toronto and Vancouver, you’re exempt, of course. But for other agents worried about falling real estate prices in their markets, here’s something you should know.