City housing market ‘ soft’ on resales

Economists blame low oil prices and resulting layoffs for September woes

Calgary’s resale housing market had its worst September in five years as continued low oil prices limit confidence in the market.

The Calgary Real Estate Board recorded 1,448 sales in September, a decline of 32.4 per cent from a year ago. The average sale price was $ 457,658, down nearly six per cent and the biggest year- overyear drop this year. The median sale price for September was flat at $ 425,000. New listings were down 4.9 per cent to 3,081, while active listings were 21.2 per cent higher, at 5,526.

Robert Hogue, senior economist with RBC Economics, said low oil prices and resulting layoffs in the energy sector have affected home sales.

“I think the bad news on the job front will impact the housing market,” he said. “I’m not sure it’s going to be the same kind of hit we saw earlier this year. I think it was a bit of an element of surprise at the time because suddenly in December and early January oil prices fell quite precipitously.”

The Calgary housing market has posted declines in year- over- year MLS sales and average sale prices every month this year.

“We’ve had lower sales volumes for three- quarters of the year now and they continue to be soft,” said Phil Soper, president and chief executive of Royal LePage. “I would expect as the year plays out we’ll see continued softness in Calgary prices. The real question is how soft?”

Soper said people still believe in the Calgary market and that this is a temporary shift rather than a permanent reset of property values. Unless they are distressed sellers, having to sell, people are taking their houses off the market or not listing their properties, he said.

“Until we see the number of listings starting to climb, I think prices will be protected in the marketplace. People simply won’t be willing to let their properties go with what they perceive as a distressed pricing level,” said Soper.

The real estate board said the benchmark price in the city — what it describes as a typical property sold — was down 0.26 per cent year- over- year to $ 457,658.

“Rising unemployment and persistent weakness in the local economy is impacting housing demand,” said Ann- Marie Lurie, CREB’s chief economist, in releasing the data. “However, unlike earlier this year when consumers were reacting to uncertainty, recent activity reflects current economic conditions.”