Due to COVID-19 impacts in Calgary’s housing market and general economy, it is not business as usual.
This year was projected to be a time when Calgary would start to see some modest improvements.
“The uncertainty surrounding the COVID-19 pandemic and the energy industry is expected to cause a dramatic decline in housing demand over the second quarter,” said CREB® chief economist Ann-Marie Lurie.
“With social distancing expected to soften by the third quarter, the pace of the decline in sales will ease by the third and fourth quarter. However, a turnaround in sales is not expected by the end of the year, as the financial implications for many households will have lingering effects.”
At the same time supply levels are also declining, as social distancing measures are causing some households to delay listing their home during the pandemic. In situations of rising unemployment rates and job loss, we can see rising inventory levels. However, the ability for households to defer their mortgage will help prevent a steeper rise in supply when social distancing measure are relaxed. This will help prevent home prices from collapsing.
However, given the situation in the energy sector, weakness in our economy is expected to persist beyond the immediate impact of COVID-19. On this basis, our housing market is expected to struggle with excess supply and further price declines. On an annual basis, prices in 2020 are expected to decline by nearly three per cent.
For more information, please download CREB®’s Q1 2020 Calgary & Region Quarterly Update Report here.