Sales ended on a high note for 2019, but the latest real estate data for resale homes in Calgary continued to show the city’s market remains weighed down by economic uncertainty.
“Really it’s been a consistent story, so sales activity did improve slightly over 2018 levels, but it’s still really quite low relative to longer term historical numbers,” says Ann-Marie Lurie, chief economist with the Calgary Real Estate Board.
Compared with the heyday of real estate more than a decade ago when sales exceeded 1,600 units in the month of December 2005 and 2006, this past December saw just over 800 transactions. It’s also about 20 per cent lower than in 2014, another high point in sales.
The difference in sales largely hinges on the well being of the energy industry.
“The energy sector has long been a big factor in the economy, so when that did well in Calgary, everything else did so, too,” Lurie says.
Still, 2019 was an improvement over the previous year. All told 858 units sold in December, up from 794 in 2018 when the market slumped temporarily along with oil prices. That’s a jump of more than eight per cent.
While sales grew, prices still declined. The benchmark price in December was $418,500, down from $424,600 in December 2018, a decrease of almost 1.5 per cent.
“Some of the stronger than expected increases in sales were due in part to prices coming down more than we thought,” Lurie says, adding prices fell by more than three per cent for the entire year.
Overall, the benchmark price has been falling in the city for resale homes since 2015 from about $460,000 to its price at the end of last year, a drop of about 10 per cent.
“Since 2014, price declines have been the highest in the apartment sector,” she says, adding it’s fallen about 17 per cent.
“But condo apartment prices over the last year only decreased by 2.3 per cent.”
The slowdown in the price decline is partly due to growing demand for affordable homes. Demand for affordability saw the most growth in the attached segment even though its benchmark price still declined by almost four per cent for all of last year.
Attached sales (townhomes and other semi-attached buildings) were up 14 per cent in December compared with the same month last year, and they were up almost seven per cent for all of 2019.
In contrast, sales for homes priced over $500,000 continued to slump.
“We still have price declines in the overall city numbers, but I would argue those price declines are larger in the higher end than the city average.”
But the lower end of the market is “different,” she adds.
As Lurie further explains, the current conditions demonstrate how the city’s market is “divergent” with lower priced homes moving toward balance, and higher priced homes remaining very much entrenched in buyer’s territory.
More than anything, Calgary’s real estate market has become highly neighbourhood specific where one area can experience high demand with less supply, and another the opposite.
“Consequently citywide numbers might not reflect the trends you’re seeing in your community or neighbourhood,” Lurie says.