Sales of existing homes will slide 16 per cent in Alberta this year as a plunge in oil drags down the provincial economy, according to Royal Bank of Canada.
The number of homes changing hands will drop to 60,500 from 71,800 in 2014, according to a forecast Monday from the Toronto-based lender. The bank predicted in a Jan. 15 note that Alberta home sales would fall 6.5 per cent. The decline would be the biggest since a 21-per-cent drop in 2008.
"We're in for some kind of a correction in the province," Robert Hogue, senior economist at RBC said by telephone from Toronto. "Whether this will translate on the pricing side remains to be seen. We've seen in the numbers in the past few months a change in psychology in the province."
RBC predicts prices will fall 0.5 per cent to an average $370,600, the most since a 6.5-per-cent drop in 2009.
Crude oil's 50 per cent drop since June is already affecting the Alberta housing market. Calgary, its largest city, reported a 25 per cent drop in home sales in December from November, the biggest monthly drop since October, 2008.
Saskatchewan is forecast to have the biggest drop in resale house prices this year, with a 3.2-per-cent decline to $344,200 projected by RBC, the second-biggest lender by assets in Canada.
Gains of 4.7 per cent in Ontario, and 10.5 per cent in British Columbia, fuelled mostly by lower interest rates, are set to pull housing resales up 1.7 per cent nationwide to 489,500, according to RBC's forecasts. RBC forecasts all provinces will face declining resales in 2016 while home prices will only gain in Manitoba.