Slow sales on the Calgary real estate market have persisted through the month of August 2018, maintaining the downward trend of the last twelve months.
Oversupply Is Driving Prices Down
While sales figures plummeted, inventory levels moved up. 3,060 new units entered the market in August 2018, up 1.9% compared to the same month in 2017. Despite the increase in available listings, there were only 1,490 homes sold in the city. This was a significant decline from last year, with sales figures down 6.6%.
The total number of listings currently stands at 8,121, up 23% year-over-year. However, given how sluggish sales have been in August , it would take 5.5 months to exhaust the current inventory, up from 4.2 months last year.
This uneven evolution lead to an oversupply in the housing market and a decrease in home prices. The benchmark price went down by 2.4% on a year-over-year basis, and currently stands at $432,000.
Unemployment Slows Housing Market Recovery
Issues of oversupply are indeed behind the market slowdown. However, according to CREB chief economist Ann-Marie Lurie, this is not the only problem: unemployment also plays a major role.
While for the most part Canadians have been enjoying a very solid labour market, Calgary remains an exception, as the city’s jobless rate actually increased slightly over the course of July 2018.
This, in combination with higher lending rates and stricter qualifications, prevents potential home-buyers from transitioning to ownership, further depressing Calgary’s already sluggish market.
Despite Slowdown, Calgary Housing Market Is Recovering
The local real estate market is recovering, albeit slowly. In fact, price declines and sales activity were not the same across all areas. Prices have remained fairly stable in the City Centre and Calgary’s western districts.
With such contrasting trends, CREB president Tom Westcott notes that both buyers and sellers must set clear, realistic objectives, and have a good understanding of the overall market conditions.
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