Central Alberta sales to the
middle of February improved slightly when compared to the first two weeks in
January, but were slower than the same period in 2019. It seems that
events we have no control over continue to conspire to slow the market down.
In January, it was the deep freeze and this month, it’s the freeze on our roads
and rail lines. While those protests haven’t physically impacted us on a
local basis yet, they have had a significant impact on consumer confidence as
it seems the police and governments are unwilling or unable to deal with the
The good news is that this too
will pass. The federal government cannot allow the economy to be ground
to a standstill by a few people. Canadians are very tolerant people, but
when critical supplies like gas and propane become short and they can’t heat
their homes, the problem will get resolved and we can move on until the next
protest. We are still waiting for a decision on the Teck mine in Northern
Alberta. A decision to approve from the federal government would go a
long way to bolstering that consumer confidence even if it doesn’t get built
The Central Alberta real estate market moves into
2020 in typical January fashion with lower inventory levels and slower sales
than December. The good news is that the first two weeks of January 2020
were quite a bit busier than the first two weeks of January 2019 in spite of
some very cold temperatures that probably delayed both sellers and buyers from
entering the market.
The new decade is off to a good start with some
encouraging economic news. Significant progress has been made on three
pipelines that will bring jobs and renewed confidence in our economy, a key
factor in the health of our community and province. Confidence changes
the way we view things and creates new opportunities all on its own.
Our prediction for the central Alberta real estate
market in 2020 is slightly more sales with similar or slightly higher inventory
levels. A busier market will encourage more sellers to participate which
will maintain the supply and demand balance we’ve experienced over the past
year. Hopefully the relationship between supply and demand this year will
move closer to balance and keep prices stable.
In 2019 in central Alberta, total real estate sales of all types
were down for the fifth consecutive year.
The cumulative decline as a percentage of total sales since 2014 is
35.4%. That means 2,052 fewer properties
changed hands in 2019 than in 2014. The change from 2018 to 2019 was -7.60% or
308 fewer properties that sold in 2019.
Real estate prices are determined by the relationship between Supply and
Demand. While sales are down 35.4% since
2014, Supply is up 32.3% this month compared to Dec. 2013. That is a great situation if you are a
buyer. In fact, we believe this is
probably the best opportunity a buyer will see with a combination of the lowest
prices in five years and very attractive mortgage rates.
Five years ago, no one would have believed Alberta’s economy would
have suffered this long. We’ve had a few
false positives in that time when we felt like we had hit bottom only to slide
a little deeper after disappointments like the cancellation of a pipeline,
endless delays to three others and the exit of massive amounts of capital out
of the region. Not to be like the boy
that cried wolf, but we do feel there is improvement ahead in 2020. Oil prices are sneaking up, Alberta oil
production is increasing and export capacity is improving as a result of more
rail capacity and more efficient utilization of the Line 3 pipeline. And the Trans Mountain continues to slowly
move ahead. Buyers take note!
Sales in central Alberta in the
first two weeks of December were almost as good as November’s and higher than
the same period a year ago. The number of active listings is down from
last month, but up a little compared to last year. We have been a little
busier than we would expect this month, which may be a sign that there is some
optimism around the encouraging news we’ve heard lately, especially on the
pipeline front. There was also a hint in the Prime Minister’s mandate
letter to the Finance Minister that the mortgage stress test will be reviewed,
which would be huge for Alberta home sellers and buyers.
Christmas is supposed to be a
time for family gatherings, friendship and charity, but we are especially
mindful of the people in central Alberta who have struggled this past year with
job losses or setbacks, illness or family issues that will make this a more
difficult time. Our thoughts for everyone this Christmas is that you find
hope for a better future and that there is something to celebrate. In
spite of the economic trials we have been through over the past few years, we
are reminded that we live in one of the best places in the world and we are
very thankful for all the great things this province has to offer.
Albertans are resourceful, strong and determined and we will survive whatever
The real estate market in central Alberta in November was a
continuation of what we have seen for almost 5 years now – slower sales and
more inventory than the sales will support.
Demand is still not keeping up with supply and the market continues to
favor buyers. Year to date sales in
central Alberta are down 8% while compared to the first 11 months of 2014 (our
last strong real estate market), are off by 35.6%
Homes priced between $200,000 to $400,000 are getting the most
attention in all central Alberta markets while the best deals are to be had in
the higher price ranges. That creates
the dream opportunity for those looking to move up – the ability to sell high
and buy relatively lower. There are
always pockets of opportunity no matter what the general market conditions
As we come to the end of another economically difficult year, there are signs of a brighter future. There has been progress on three major pipelines, one at least (Line 3) which could be moving more Alberta oil as early as next year. The recent premier’s conference resulted in some consensus that could be beneficial to Alberta’s position. For home buyers, prices are very reasonable and interest rates are low.
Sales continued to slip in the
first two weeks of November compared to the same time in October, although they
aren’t significantly lower than a year ago at this time. The number of
active listings has also dropped which is normal for this time of year although
the relationship between supply and demand continues to favour buyers.
Consumer confidence is struggling
right now with all the rhetoric about Alberta’s place in Canada. Our
provincial Government is working hard to find some traction for Alberta’s
energy business and it’s very possible we will see some results in the new
year, including a firm commitment to complete the Trans Mountain Pipeline. A
boost in consumer confidence in Alberta would provide a real shot in the arm to
the economy. Another significant boost would be elimination of the
mortgage stress test, an unnecessary impediment for both buyers and sellers.
Red Deer Market Update — Residential sales in central Alberta
were slower again in October which is normal for this time of year. It is
possible that preoccupation with the federal election also helped slow things
down a little. However, the election is over and it’s time for us to get on
with business. What can Alberta do that could have a very positive influence on
the real estate market?
The federal government’s mortgage stress test was designed to calm heated
markets in Vancouver and Toronto but it unnecessarily penalizes buyers and
sellers in Alberta where there are no heated markets. The other reason for the
stress test was that interest rates were going to be higher in the future and
homeowners will have trouble managing those higher rates when their mortgages
come up for renewal. But there aren’t any economists predicting higher interest
rates any time soon. We need relief from that irrational policy.
The federal government should eliminate the stress test in Alberta. If they
won’t, the Alberta government could create an “Alberta Mortgage and
Housing Corporation” that would insure mortgages for Albertans without
having to adhere to federal government stress test regulations. AMHC would be
self funding through similar premiums collected now by CMHC. We encourage all Albertans
to write the Prime Minister, Minister of Finance, CMHC, Premier Kenny, your MP
and your MLA to ask them to find a solution.
The typical fall real estate cycle sees the number of active listings go down with sales following suit. This year is no different with the number of active listings in central Alberta off by more than 200 (almost 7%) compared to the middle of September. Sales compared to the middle of September are down almost 15%. Typically, the percentage decrease in listings and sales should be similar, but we suspect many Albertans are waiting for election results before making the decision to buy.There is no clear leader in the election and the nature of the conversation around the energy industry has been very negative. It appears there is potential for a federal government that is not friendly to the energy industry that is a major employer in Alberta and the source of much of Canada’s wealth. No wonder some folks are awaiting the outcome of the election before making one of the biggest financial decisions of their life. No matter what happens in the election, Canadians and the rest of the world will need oil and gas for many years and whichever federal government we end up with will know it. We Albertans are used to difficult times and we will survive these.
Residential sales in central Alberta in September were down
slightly (7.65%) compared to August while year to date sales are down
14.65%. Red Deer was a bit of a
different story with sales in September up very slightly compared to August and
year to date sales down by 4.7%. The
surprise in the Red Deer market comes on the active listing side where
inventories dropped to 692 compared to the beginning of September when there
We have identified the current situation as our “new normal” in
central Alberta for some time now.
Alberta history over the past 40 years has taught us that the market
always recovers from a downturn with a vengeance and comes back stronger than
ever. Many homeowners are still working
on that premise, but we have to ask ourselves what might happen to drive a
Previous recoveries have always been financed by energy. Alberta’s ability to export our oil at world prices is being blocked on all fronts and it will likely be a long time before that changes, if ever. We believe that Albertans are the most resilient, innovative and progressive people in Canada and we will eventually return to prosperity, but it will take longer than it has in the past. In the meantime, we must learn to accept our current reality and move on.
Sales in the first two weeks of
September were up slightly in central Alberta compared to August, while the
number of active listings is down. It’s normal to see slightly higher
sales in September, but it’s especially significant considering some Albertans
may be waiting for the result of the federal election before making a
move. Lacombe, Ponoka and Penhold were the ones who bucked the trend and
saw an increase in their inventories. Coincidentally those are the
markets that don’t already have large excess inventories.
Generally, the number of homes on the market in central alberta is down compared to this time last year. There are a couple of possible reasons for the change. First, some of the people who had homes on the market a year ago weren’t getting the prices they needed so decided to wait until the market improved. Second, new construction has slowed and our total inventory hasn’t been growing much. Our population has increased a little in the past year which would have absorbed some of our excess inventory.