CREB® forecasts a process of recovery for the remainder of 2017
The first-half of 2017 marked a shift in Alberta's economy from recession to recovery, with conditions supporting stability rather than expansion.
"Economic challenges continue to exist, as high unemployment rates, weak migration levels and more stringent lending conditions are weighing on the housing market," said CREB® chief economist Ann-Marie Lurie.
"This will continue to cause some adjustments in the housing market for the remainder of this year. However, this is not expected to offset earlier gains supporting general stability in 2017."
Resale sales activity is expected to total 18,401 units in 2017, a 3.3 per cent improvement over last year. The pace of growth is slightly faster than originally anticipated, due to the stronger growth that occurred in the first half of the year.
"We saw many of those consumers who delayed any purchasing decisions willing to re-enter the market as concerns regarding the economy eased," said CREB® president David P. Brown.
"More potential buyers on the market helped move some of the product in inventory and started to create some price stability."
Improvements in the supply demand balance, primarily in the detached and attached sector, caused prices to start to trend up. Demand growth for the remainder of the year is expected to ease relative to inventory levels. This should prevent further substantial shifts in pricing. Overall, annual city wide prices are expected to remain at levels comparable to last year.
Despite generally improving trends, difficulties continue to exist in the condo-apartment ownership market. Rising sales cannot keep pace with the growth in new listings, keeping supply levels high and placing continued downward pressure on prices. This area of the housing market will likely continue to face challenges well into next year, as it will take the time to absorb additional inventory in the resale, new and rental markets.
"Improvements in the labor market are supporting the shift in the housing market this year. However, activity over the past two years was amongst the weakest we have seen since the financial crisis," said Lurie.
"While the shift is welcome news for many, we continue to expect that process of recovery will be slow and dependent on the property type and location within the market."