Prairie market has fallen, but it can get back up
THE Canada Mortgage and Housing Corporation has released its housing forecast for the three Prairie provinces. Things look bleak for Alberta, Saskatchewan is about to rebound and Manitoba just keeps rolling.
There’s no denying the impact falling oil prices have had on the Alberta economy. Calgary was hit hard last year and will continue with lower production numbers. Edmonton will suffer from lower housing starts this year.
There were more than 40,000 housing starts in Alberta in 2014. That number could fall to 24,000 this year. Retail sales declines and job losses are sure to hit an already wounded provincial economy even harder.
MLS resale numbers in Alberta are falling in similar fashion with average prices dropping between $15,000 and $20,000. The average price is still more than $100,000 over Manitoba’s average — but this is still news.
Saskatchewan experienced a sharp decline in 2015, falling from more than 8,000 starts the year before to just over 5,000 starts. In my opinion, the new home-start numbers they experienced in 2013 and 2014 were false blips on the radar screen; the range they are in now and will continue to be in for the next few years are their operating norm. Resale numbers and prices remain constant.
Manitoba new home start numbers also declined from an abnormally high 2013. As reported here numerous times before, we have settled into a comfortable pace just slightly ahead of Saskatchewan. This is likely to remain for a while.
Our resale market keeps gradually increasing in numbers sold and in average resale value. There has not been and there are no signs of prices dropping in Manitoba. We are still, on average, more affordable in terms of home price purchase than Saskatchewan.
The rental vacancy rate presents an interesting picture. Alberta has traditionally been averaging less than a two per cent vacancy rate for the past few years. It is now expected to come in at just over five per cent. Similarly, in Saskatchewan, vacancies have been averaging just over two per cent but are now projected to exceed six per cent. Meanwhile, here in Manitoba, we have gone from the mid- to high two per cent vacancy to three per cent.
Provincially, Manitoba appears to be in a much more stable position than either Alberta or Saskatchewan when it comes to housing.