More signs of a housing correction in Alberta emerged this week as the real estate market continued to adjust to the price of oil hovering near six-year lows.
The pinch is being felt more noticeably in Calgary than in Edmonton. Calgary is home to many of the oil companies’ head offices, employing large numbers of scientists and engineers as well as the financial services part of the equation. Edmonton is the service hub for Northern Alberta and has a different, more transitory, demographic than white-collar Calgary.
Job cuts and spending cuts by the big oil companies and slowing interprovincial migration to Alberta have taken their toll on home sales and listings; however, prices remain resilient for the time being.
According to the January housing statistics released by the Calgary Real Estate Board (CREB) on Feb. 2, activity has fallen to levels not seen in five years.
“A lack of recovery in oil has many concerned about their employment status and this concern is reflected through the weaker sales activity in Calgary’s January resale figures,” said CREB chief economist Ann-Marie Lurie in a press release.
For Calgary, with the level of sales 39 percent lower than January 2014 and new listings increasing by 37 percent, inventory has doubled. The gain in new listings primarily occurred in the higher price ranges. Worrisome is also the 54 percent increase in inventory from December 2014.
In Edmonton, the picture is not as bad, with listings up roughly 30 percent compared to January last year and sales down just over 25 percent. This has led to inventory being up roughly 17 percent from the same time last year, but spiking up 35 percent from December 2014.
