2012 Calgary Housing Market Forecast Update

August 15, 2012
Alberta has regained its title as the fastest growing province in Canada. Following GDP growth estimates of 5.2 per cent in 2011 and a forecast of three-per-cent gains this year, the Alberta economy will expand by more than any other province in the country for the second consecutive year4. The key drivers are gains in the oil sector and strong population growth, causing some to draw comparisons to the heightened activity of the mid-2000s. But it is important to note the natural gas market remains weak, and this may result in further restructuring and consolidation. Investment growth in the oil sector will contribute to gains in employment and wages throughout the province for the remainder of this year.
This is a time of significant uncertainty. Calgary is sensitive to significant changes in the oil sector, and that has a domino effect on employment, migration, consumer confidence and ultimately the housing sector. The market has realized the high side of its potential after the first half of the year, despite the risks. This has pushed growth to levels higher than expected and led to concerns about labour shortages throughout the region. If many of the external risks do not come to fruition and the local economy avoids any significant blows, the Calgary economy should benefit from relatively strong growth for the remainder of the year.
After the first seven months, the Calgary housing market has outperformed expectations this year. While single-family benchmark price increases are above five per cent, the Calgary area is still short of the peak pricing of 2007. Sales are simply returning to typical levels of activity. Expectations are relatively bullish in the city despite overhanging global uncertainty. However, concerns in the oil sector and continued weakness in the natural gas sector are issues that will keep consumers wary. While consumers are aware of the economic risk when it comes to housing, many are thinking about job security and long-term potential. Based on activity this year, consumers are comfortable purchasing in a city where the longterm outlook is prosperous and the housing industry has yet to fully recover. While the pace of growth will likely cool over the second half of the year, the resale housing market will stay on the path to recovery into 2013.
Click on the link or the picture above to view the full report: CREB Housing Market Update