CREB: COVID 19, decreased demand for oil to hamper housing market in 2021

Calgary home sales, prices and new listings might be headed for a slight increase in 2021, but they’re likely still bound to be hampered by COVID19 and reduced demand for oil, the city’s most prominent housing organization predicted Tuesday.

The Calgary Real Estate Board said in its annual outlook report that both the pandemic and energy industry woes will continue to weigh on the Albertan city and its surrounding neighbourhoods’ real estate market this year.

”We are not back to recovering from previous levels that we had, but we do expect that as we move into the earlier parts of the year that some of that momentum that we saw at the end of last year will continue but not necessarily at the same pace,” Ann-Marie Lurie, CREB’s chief economist, said at a press conference.

Source: CREB 2021 Forecast

Her board’s annual outlook showed if layoffs, bankruptcies and oil industry consolidation continue, people in the region will likely need to adjust their housing to match their new employment situation.

However, they’ll be more confident in listing their homes if mass vaccinations continue and COVID19 restrictions around travel, social gatherings and business closures are slowly lifted, Lurie said.

Source: CREB 2021 Forecast

While new listings fell by nearly nine per cent last year and resulted in the slowest year for new listings since 2002, CREB expects they will rise in 2021 as owners who delayed sales during the early stages of the pandemic put their homes on the market.

Prices will also creep up slightly, Lurie said.

CREB is forecasting overall housing prices will edge up by 1.3 per cent to hit $423,307.

”We do expect to see some price growth this year, but not exactly strong price gains,” said Lurie.

”Really we are talking about some modest gains happening, especially in the earlier part of the year”

She said the region is on track for sales to reach 16,928, a five per cent increase from 16,151 in 2020.

The market will also see some divergence, said Lurie.

In higher-end housing, she believes supply levels will remain high and weigh on prices.

However, conditions at the low- or mid- end of the market will be ”quite tight” because supply is still low while demand is high, she predicted.

Lurie expects to see sales improvements across all property types, but believes detached homes will drive most of the 2021 gains.

”With some of the tightness we are seeing at the lower end of the market, as that persists that will drive people to go toward semi- row and apartment condos,” she said.

”There will be less detached in that market so it will turn people’s attention toward other segments of the market.

This report by The Canadian Press was first published Jan. 26, 2021.

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