Slumping oil prices are likely to impact
Slumping oil prices are likely to impact Calgary's real estate market in the coming year, causing home prices to slow their rapid acceleration in Alberta's largest city, according to a report by realtor group Re/Max.
The average sale price of a Calgary home is expected to rise by only three per cent in 2015 to $497,500 after shooting up six per cent in 2014, as more buyers are expected to sit on the sidelines to see if the recent slump in oil prices will make houses cheaper.
"Calgary had a significant run-up over the last few years, so it's becoming more of a balanced market as opposed to a slowing down of the market per se," said Gurinder Sandhu, executive vice-president, Re/Max Ontario Atlantic.
A booming oil sector has helped drive immigration to the city in recent years, fuelling demand for homes. However, crude oil prices have tumbled roughly 35 per cent from their mid-summer highs due to a strong U.S. dollar, weaker demand and a glut of global supply.
The decline in oil prices has already caused Calgary's real estate market to become less "red hot," said Sandhu. But unless low oil prices persist for a prolonged period, home prices in Calgary are unlikely to decline.
"It would have to be a sustained, long-term depression of oil prices to the point where it would have to start impacting jobs and the overall economy, and we're not anticipating that for 2015," he said.