Calgary's housing market is bracing for more pain as persistently weak oil prices, mounting layoffs and slowing population growth continue to keep buyers on the sidelines.
Home resales in the city fell 12.6 per cent in July from the same time last year, the Calgary Real Estate Board reported. It was the 20th consecutive month of annualized sales declines as purchases of detached homes dropped to their lowest level since 1996.
"We've certainly got a softer market than we did a year ago," said Diane Scott, a broker with Royal LePage.
Benchmark resale prices dropped 4.2 per cent from last July and were down more than 5 per cent from their peak in October, 2014. Detached home prices fell 3.4 per cent from last year to $502,300.
Among condos, a surge of new listings has left the market with more than six months' worth of supply, pushing the benchmark price down 6.6 per cent from a year earlier to $277,000. Condo sales were down 21 per cent from a year earlier and were 53 per cent below peak levels in 2014. Properties in the city centre have been hit the hardest, the real estate board said, with overall benchmark price declines of 5.1 per cent, compared to 0.8 per cent for the city's more affordable northeast quadrant.
Signs of continued slowdown in the housing market come as the City of Calgary released updated census data showing that net migration dropped in the last 12 months ended in April.
It was a sharp reversal of long-term trends that saw workers from Canada and abroad flock to jobs in Alberta.
Net migration – the difference between the number of people who moved to Calgary and the number who left – fell by more than 6,500 in April from the same time last year, the city's figures show, mirroring the population plunge seen during the region's last recession in 2010.
Census figures show there are now more than 20,800 vacant homes in the city, an 8,300 increase from the previous year, as the epicentre of Canada's oil industry grapples with a recession that economists at Toronto-Dominion Bank said recently "is likely to go down in history as one of the most severe." The bank predicted that average household disposable income in Alberta, a measure of living standards, would fall 5 per cent this year, a fact that is also weighing on Calgary's housing market.
"The number of unemployed workers keeps rising and when you combine job losses with declining net migration, the result is going to be weaker housing demand," said the real estate board's chief economist, Ann-Marie Lurie.
The exodus of workers from Calgary has meant fewer new buyers in the city's housing market and those who are shopping for homes are taking longer to make an offer, said Royal LePage's Ms. Scott. "There are fewer buyers to start with and those that would be in the market are sitting on the fence, waiting for the prices to come down some more," she said.
Where buyers might have previously looked at a handful of listings before purchasing a home, many are now looking at 14 to 15 properties, she said. "They look an awful lot more than they buy these days."
The market for more affordable detached houses and townhouses, those priced below $500,000, as well as the luxury housing market above $1-million have fared relatively well, Ms. Scott said. But the market for mid-priced homes, those between $600,000 and $800,000, has suffered from a lack of move-up buyers, while rising vacancy rates have scared off many investors who would normally have purchased condos.
In one bit of good news, the number of listings on the resale market dropped more than 10 per cent from a year earlier, led by a near 14-per-cent drop in listings of detached houses. That has helped ease pressure on prices, the real estate board said.