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Real estate signs in Calgary, Alta., Thursday, June 26, 2014. Calgary’s real estate market in particular is fuelled by the price of energy, which means slumping oil prices could pinch sellers.

Jeff McIntosh/The Globe and Mail

Big time volatility in the oil markets is back, and in Alberta, that means housing markets could follow suit – creating a double whammy for Canada's most prosperous province.

Home, condo and townhouse prices are still on the rise in Calgary, and smart buyers may be able to avoid the pain that accompanied the last oil crash.

That collapse came right after a real estate frenzy that peaked in 2007. Hot competing offers came quickly. Buyers were reckless. Many got burned as oil plummeted.

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"Back then, people were putting in no financing conditions, no home-inspections conditions. The next thing you know, they need a new roof and the foundation is cracked," said Adam Mair, a Re/Max real estate agent in Calgary. "That was kind of highlighted over the next bunch of years as people buying in the boom [were then] kind of getting screwed over."

Heated bidding wars are now passé, even if potential buyers are willing to offer more than sellers are asking.

"They are going above price, for sure," Mr. Mair said. "But people aren't going in without home inspection conditions. They aren't going in without condo document conditions."

Calgary's real estate market in particular is fuelled by the price of energy, which means slumping oil prices could pinch sellers.

West Texas Intermediate crude, the grade of oil used as North America's pricing benchmark, hit four-year lows in October, and volatility is back. Oil, for example, closed at $82.70 (U.S.) per barrel on Thursday, up 92 cents after a jumpy day. It surged about $3 per barrel by 1 p.m., but then lost about half this ground about 20 minutes later.

Real estate experts so far have not seen falling oil prices trickling down to Calgary's housing market.

October's month-to-date housing sales have climbed 10.19 per cent over the same period last year, according to the Calgary Real Estate Board. The month-to-date median price in October is $440,000 (Canadian), up 5.39 per cent compared with the same time frame in October, 2013. October's month-to-date median price is also up compared with all of last month, when it clocked in at $425,000.

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Ann-Marie Lurie, the chief economist at the Calgary Real Estate Board, notes it takes time for changing oil prices to affect home prices, and the length of that lag is unpredictable. But if an energy downturn forces companies to cut jobs, Calgary's housing market will take a hit.

"It has to be a prolonged period of low oil prices before [companies] start to change some of their investment decisions," Ms. Lurie said. "So if [falling oil prices] continue, there's no question it will start to influence employment growth … and that will start to influence our housing market."

While today's housing data remain strong, energy companies are moving cautiously in Alberta and axing projects.

Norway's Statoil ASA in September put its multibillion-dollar Corner oil sands project on hold for at least three years, cutting 70 jobs. This forced Pembina Pipeline Corp. to cancel a proposed pipeline. In May, France's Total SA, along with its partners Suncor Energy Inc., Occidental Petroleum Corp., and Japan's Inpex Corp., canned plans to build an $11-billion oil sands mine known as Joslyn because of rising costs.

Royal Dutch Shell PLC is also holding back, shelving plans to develop an application to build an oil sands mine dubbed Pierre River.

With a report from Reuters

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