Calgary on tenterhooks as oil prices slide lower

by Olivia D'Orazio10 Dec 2014
Oil prices could drop to $43 a barrel, bringing the housing market in key oil-producing regions like Calgary with it, but industry players say that future is not yet on the horizon.

“We’re seeing some stability in the market,” says Mark Evernden, an associate with Engel & Völkers in Calgary. “Personally, [the market] is quite busy, both in home values and the higher-end homes. There is some uncertainty in the market, however, the economy and the migration is still high and the low interest rates are still supporting some of the sales in the marketplace.”

U.S. investment bank Morgan Stanley predicted the continuing slide in oil prices -- WTI crude dipped below $62 a barrel Wednesday morning -- and while financial advisors aren’t worried, the government in Calgary is already reacting. David Brown, a broker in Calgary, says he expects governmental budgets to be adjusted to prepare for the potential impact.

Still, Brown said the move is a preventative one.

“I haven’t seen any effect on [the housing market] yet,” he says. “I doubt we’ll see anything from now until the end of the year.”

Oil companies, too, are working to mitigate the risks that low oil prices have on other markets. Namely, many companies are stifling production in an effort to boost oil prices, which would have a knock-on effect for the housing market.

“The economy within Alberta is still quite strong, Evernden says. “There are still a lot of people here, the economy is very stable. The oil prices won’t stay down. We’re seeing some settling in volume because of that uncertainty, but I’m not seeing any slowdown within listings or in sales.”
 

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