Calgary is at a low risk of a housing correction, says Canada Mortgage and Housing Corp. in an assessment of market conditions across the country.
Its House Price Analysis and Assessment, released Thursday, said Calgary has an increased risk of overvaluation, but is stable or unchanged in three other areas — overheating, price acceleration and overbuilding.
The report said declining sales in recent months — a reflection of lower oil prices — has pushed the city’s sales-to-new listings ratio to a buyers’ market.
“This is expected to place downward pressure on house price growth, which could lessen the current risk of overvaluation in Calgary,” the CMHC said. The threat of price overvaluation reflects strong growth in house prices and modest gains in personal disposable income.
“The economy is being impacted by lower oil prices and slower inflows of migrants that will likely contribute to an expected slowdown in the rate of price growth in 2015,” it said.
CMHC said Regina and Winnipeg were deemed the riskiest markets in the country. Toronto and Montreal — where the number of condo units under construction is near historical highs — were rated a moderate risk as was Quebec City. Others considered low risk were Edmonton, Vancouver, Saskatoon, Ottawa, Halifax and St. John’s.
The Calgary Real Estate Board said April sales, through Wednesday were down 23 per cent from a year ago. New listings are up 19 per cent to 2,935. The median price has dropped 2 per cent to $420,000 while the average sale price is down by 1.5 per cent to $468,411.
“We are expecting slower sales as well as reduced pressure on prices,” said Felicia Mutheardy, acting principal market analyst for Calgary for CMHC.
Don Campbell, senior analyst with the Real Estate Investment Network, said a perfect storm is poised to hit the Alberta real estate market with the slowdown normally associated with spring breakup in the oilpatch coinciding with the 10th and 11th months of the oil price drop.
“The numbers are about to get pretty ugly, so prepare yourself,” he wrote recently on his website.
“Although we are seeing slight drops in average sale prices in the larger cities we are not yet witnessing the ‘panic selling’ that can have a very negative effect on average sale prices.
“However, those who listed their property in November, December or January will now be feeling the pressure to either lower their price or take it off the market. This, if they do need to sell, will lead to lower average sale prices.”