Sales volume in the Alberta housing market are expected to remain flat in 2015, but price growth will continue to lead the nation, according to a new report from the Canadian Real Estate Association.
According to the CREA’s resale housing forecast, MLS sales in the province are expected to rise just 0.1 per cent in 2015, after posting gains of more than nine per cent in each of the past two years. For Canada as a whole, the CREA upwardly revised its forecast, to 0.8 per cent growth.
While sales are expected to remain steady, however, price growth is still expected to be among the strongest in the country, at 1.9 per cent — sharing the lead with Manitoba. The national average is forecast to be 0.9 per cent.
“The big drop in oil prices will be a significant challenge for the Alberta housing market even as supply remains tight,” said Benjamin Reitzes, senior economist with BMO Capital Markets.
Also on Monday, the CREA released its MLS Home Price Index, which showed the Calgary market led the nation in price growth for the month of November. The CREA reported that for November, Calgary led Canada with an 8.5 per cent hike from a year ago. The aggregate of 12 major centres across the country was 5.2 per cent.
But the association’s chief economist, Gregory Klump, noted oil prices’ effects on the housing markets are “something of a wildcard at the moment.”
“It’s not clear how far oil prices may drop or for how long they’ll stay down,” he said. “How that plays may affect the outlook for interest rates, job growth, consumer confidence and sentiment about making major purchases.”
It is the third report in less than week showing the strength of Calgary’s housing market. Last week, the Teranet-National Bank Composite House Price Index, of repeat home sales, said Calgary prices were up 9.2 per cent year-over-year in November. Statistics Canada’s New Housing Price Index said prices for new homes in the city rose by 6.6 per cent in October from a year ago.
In November, Calgary reported MLS sales of 2,292, up 5.5 per cent from last year while they rose by three per cent in Alberta to 4,699 transactions and by 2.7 per cent across the country to 33,229.
The average MLS sale price in November rose by 5.7 per cent in Canada to $413,649. It was up by 3.8 per cent in Calgary to $462,031 and by 5.7 per cent in Alberta to $407,071.
CREA Sales forecasts
MLS Sales Growth
Canada: 5.1% in 2014 (481,300 total sales), 0.8% in 2015 (485,200 total sales)
Alberta: 8.3% in 2014 (72,200 total sales), 0.1% in 2015 (72,300 total sales)
MLS Price Growth
Canada: 6.0% in 2014 ($405,500 average price), 0.9% in 2015 ($409,300 average price)
Alberta: 5.2% in 2014 ($400,100 average price), 1.9% in 2015 ($407,900 average price)