Here is an excerpt for the Alberta Weekly Economic Review with some sobering numbers on resale housing. This is not surprising given the short to mid-term uncertainty around oil prices, market access, pipeline approval process dynamics and NAFTA 2.0 confirmation status given the results of the U.S. midterm elections.
Resale market cools
“Activity in Alberta resale housing market slowed in October, reversing gains
made over the summer. Seasonally adjusted home sales fell 5.3% m/m to a
two-and-a-half year low of 4,194 units. Sales slowed in most regions with
noticeable pullbacks in Edmonton (-8.2% m/m), Central Alberta (-9.9% m/m),
Lloydminster (-25.5% m/m) and Grande Prairie (-10.0% m/m).
While the number of new listings also declined in the province, the decrease was less
pronounced than the drop in sales. As a result, the months of inventory rose to
an eight-year high, with 7.9 months of supply on the market.
With elevated supply and slowing sales, the average resale price slipped
$1,718 to $385,372. Despite declining in 2018, the average resale price remains slightly above the January 2016 recessionary low.
New Home Starts Down Too
Add to this is news that Housing Starts in Alberta for October are down 39% on a year-to-year comparison on a seasonally adjusted basis. There is lots of unsold inventory out there. Will the construction jobs that new homes generate, and now being lost, be picked up by industrial, commercial and institutional projects?
The good news is there are significant projects recently announced in the oil sands. that should help close the gap and also continue to keep costs under control.