Low crude oil prices are affecting Edmonton's real estate market. This has resulted in a decline of home resales, as reported on globalnews.ca. Comparatively, the market's 2015 performance is below that of 2014, as confirmed by the Canada Mortgage and Housing Corporation, or CMHC.
"We don't know for sure when oil prices are going to firm up, but we're thinking perhaps in the second half of 2016 is when the economic fundamentals might strengthen up a little bit and that'll translate to a bit of strength in the housing market at that time," said CMHC's Christina Butchart.
A recent census of the Edmonton metropolitan area showed total housing starts had lowered to 13,800 units for the year. This is a decline of 0.5 percent from 13,872 of 2014, according to a report from edmontonjournal.com. The market is further expected to decelerate by 2016, where there is a projected decrease of 16.7 percent to just 11,500 units started. This would be the lowest level recorded since 2011, where at the time only 9,332 starts were recorded.
Butchart, current principal for market analysis at CMHC, added, "Lower employment growth, a higher vacancy rate and more selection on the resale market will slow down housing production in the latter part of 2015 and into 2016."
On the other hand, according to a report from benzinga.com, the demand for resold homes in the area is at a moderate pace for 2015 but appears stronger compared to previous years. However, demand for these homes are expected to decline for 2015 and 2016.
CMHC is Canada's authority on housing that provides information and resources for Canadians in their housing needs. It has contributed to the stability of the housing market and the financial system for over 65 years.
