I was listening to the Calgary Real Estate Boards chief economist Anne-Marie Laurie the other day at my Remax office. She is always a wealth of knowledge, has a great way of deciphering big picture economic factors and putting them into bit sized pieces for our real estate market.
Here are some of my take-aways on the market from her talk:
- You need to see a shift in employment before you see any growth. Otherwise you just have stability as demand meets supply.
- Energy sector is not putting in more jobs, just not losing any more.
- If unemployment drops because of negative migration that’s bad for housing market.
- Lack of investment is not just driven by price of oil it’s now dependent on politics – uncertainly is bad. Regulatory changes figure prominently.
- Stabilization in the market currently is NOT due to increase demand, it’s because of decreased in supply.
- Perspective – Any growth with not be what we were accustomed to.
- Speed of recovery will be slooooow.
- Forecasted net migration for 2017 is still way below 10 yr average.
- Purpose built rentals are at 7% vacancy rate. Highest in 25 yrs.
- Still low level of demand for housing expected for 2017.
- Apartment sector is still struggling – month of supply at 7 months (as high as in 2009), compared to 3 months for detached. Apartment is heavily influenced by new product availability which is very high.
- Condo apartment decrease in price 11.5% since 2014 high AND is lower than 2007 values.
- Detached decrease is 4.9% over same time frame.
- Higher end communities for detached saw decreases closer to 10-15%.
- Job growth is not expected to improve until the second half of the year – if they don’t, stabilization will be threatened and even minor price increase won’t happen.
- Risk is key factor to any forecast: things to watch will be jobs, reduction in unemployment rate, energy market, govt policy/taxes/regulation, political uncertainty in US and regulatory changes there.
- Except for apartment sector, most signs point to having hit the bottom.
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