08 Jan Calgary Real Estate Forecast 2018 ⌂ Market Update Oil Prices Home Prices Calgary Airdrie Downtown Condos Apartments
Calgary Housing Forecast 2018 and Market Update
What’s the forecast for Calgary’s housing market for 2018 and beyond? At this point, cautiously optimistic for buyers who are in a good position to take advantage of a bloated winter housing market.
This latest burst in oil prices might be a signal (although this is not advice to sell) that it might be a good time to sell. As we’ll discuss in this post, there is optimism for oil price increases, however there are strong counter forces to high oil prices too. OPEC and Russia will have their work cut out for them in 2018.
The burning question you have is: “Should I buy a house in Calgary?”
Why not try and name your price? How about condos in Calgary? There are thousands of condos for sale in Calgary. And with the new Federal mortgage rules coming in, Calgary condo prices could drop 3% to 5% more. Time to start looking at the best ones to buy right now.
The Globe and Mail reports that 30% of Alberta’s new inventory remains unsold. This has to be one of the best buyers markets ever, as long as you don’t mind waiting for the payoff.
If you’re currently employed, tired of renting and building no personal equity, can safely make the downpayment, and meet Calgary’s high taxes, it just might be the time to commit to buying a house or a condo.
There are more houses for sale at lower prices and you have the best bargaining power recently. The price of oil is a volatile thing, yet with global economic growth positive and OPEC showing solidarity, there is reason to believe oil will continue climbing slowly through 2018 (update: it’s $63 a barrel, and US pipelines are being approved).
International investors with a long term investment strategy should compare what you can buy in Calgary for $400,000 vs what you’ll get in the Vancouver market or Toronto market areas and you can see the long term investment advantages. And is the market bubble or crash potential higher in those cities or in US cities?
With the recession now largely in the rear view mirror, and with the price of oil rising steadily, homebuyers and property investors will be looking at Calgary homes differently.
With house prices so low, the expectation for buying residential properties in 2018 will improve. For speculators, the Calgary market is tantalizing, given that home prices in Toronto, Vancouver, Los Angeles, Bay Area, New York, and Miami have peaked.
Calgary’s low price entry point offers a great long term potential. And the selection of luxury homes in Calgary is as spectacular as the landscapes and views from many of the properties.
Inmigration to Calgary is rising and mortgage rates remain low. Although made in Canada housing policies will constrain the market, the outlook for Calgary real estate is for growth. The extent of that growth of course depends on the price of oil and the value of the Canadian dollar vs the US dollar.
The Price of Oil – Already Above Expectations
Oil Prices were never expected to rise near $50 yet are above $62 now. The Saudis have proven they control the price of oil, not markets. Tough to predict what they’ll do however their recent actions show some resolve and purpose. The fact prices have reached $62, well above the limits predicted by all the experts has to indicate something.
Screen Capture courtesy of Marketwatch.com
The World Bank may have posted the best forecast for oil prices through to 2020.
Screen capture courtesy of the IMF
You can check all the oil price predictions for yourself.
Calgary Housing Stats for December, 2017
Calgary real estate activity in December continued as it did in October and November with falling sales, growing inventories of listings, and prices headed downward. Prices fell 9% year over year.
Realtors in Calgary had sales of 1467 units and a rise to 6463 listings.
The average home price dropped slightly to $438,000. Total overall sales for the month was near $495 million, which is down 9% or $50 million from 12 months ago.
The average price of a detached house for sale was $551,000 which is up $16,000 from January 2017. Sales transactions are down 11% from one year ago. Strangely, inventory of houses for sale rose by about 200 units where there is 3.57 months of supply. Most of the home sold in Calgary during 2017 were priced between $300k and $600k. Contrast those prices with home prices in Toronto, Vancouver, Seattle, and San Francisco, and you can see the upside potential of a property in Canada’s oil province. If you love oil country, Dallas, Houston, Fort Worth and San Antonio down in Texas are probably worth a look too.
Price to list ratio revels that those putting up their houses for sale are receving 95.7% of their list price.
Total sales volume of apartment dropped slightly, however total sales in dollars dropped by $5 million compared to September.
Calgary Housing Prices and Transactions Nov 2017
|Calgary Monthly Housing Stats||October 2016||September 2017||October 2017||Change from Last Year||Change from Last Month|
|Total House Sales||1031||919||910||-11.7%||-1.0%|
|Days on Market||42||42||44||4.8%||4.8%|
Stats courtesy of CREB.com
Screenshot courtesy of CREB.com
Economic Predictions for Calgary
If oil continues to rise steadily in price, Alberta stands to recover economically. Businesses have pared down their costs and are better able to profit from growth. Although not officially a big component of the rosy Canadian economic forecast, Alberta and Calgary are keys to the future.
Alberta’s economy is much more diversified than it used to be however it is impossible to replace the revenue generation of the Canadian oil sands, the world’s largest pool of untapped oil reserves.
The price of WTI oil just reached $56, well above $30 a barrel last year, and there are indications the Saudis intend to cut production. The wise course of action is for governments to support the oil sands and other more costly production methods to grow oil supply. This would prevent OPEC from harming the growing US economy and the global economic upswing.
CREB’s 2017 Economic Outlook and Regional Housing Market Update
In the Calgary Real Estate Board’s most recent 2017 Economic Outlook and Regional Housing Market update, CREB believes the pace of economic recovery will be slow but stable. Stagnant employment, wages, slow immigration, tighter mortgage lending restrictions, and made for Vancouver/Toronto economic policies will weigh on the Calgary housing market.
The latest report does forecast for 2018. However, Alberta’s economic performance is expected to be well up at 4.3% for all of 2017. New construction housing starts will be well down this year at around 3500 units. Multifamily housing starts are down just slightly from 2016 levels.
Screen capture courtesy of CREB.com. Stats courtesy of CMHC.
Total house sales were precisely forecasted to be 600 higher in 2017 than 2016 with a price similar. Dead on accurate. New listings will total 32,731, 400 for the full year. Sales of apartment will rise slightly over last years numbers at about 2800 units.
It appears Calgary’s recession has ended, and although unemployment remains high at above 8%, it’s falling quickly. Forecasts for the price of oil at under $50 USD have not played out true, since prices have been consistently above $630 so far this year and are rising.
The loonie remains around 80 cents CAD vs USD, maintaining an excellent premium on exports from Calgary, and exports of Alberta oil.
If new construction starts are constrained, then the resale market may grow in the neighbourhood of 1% in 2018, 2% in 2019 and perhaps 3% in 2019. Of course, all predictions rest on the price of oil which as mentioned, the Saudis and OPEC control. And US shale production and drilling rig counts seem to moderate upward increases in oil prices.
The last word on the Calgary Real Estate Forecast is positive. Oil price is rising, the US dollar is climbing with President Trump’s new tax cut to raise the US dollar value. With Alberta’s growth currently reported at 6%, a solid Canadian economic forecast at 3.7% growth in 2018, we’re running out of reasons why Calgary isn’t going to boom in 2018.
Note: the preceding post is not meant as specific investment advice, but rather as a comparison of real estate investment or home buying opportunities. Please ensure you discuss all investments with a licensed professional.
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