File photo by Advocate staff

Central Alberta real estate market reflects Alberta’s slow recovery

Real estate markets will bounce back but incoming mortgage changes don’t help, say realtor groups

Central Alberta Real Estate Association president Danielle Davies got into the home-selling business in the midst of the last big recession in 2008-09.

So, she’s no stranger to tough markets. The latest downturn and the slow recovery, though, has been even more challenging.

“It’s been one of the longest in history,” said Davies, who is a realtor with Red Deer’s Century 21 Advantage.

That reality has been reflected in the Multiple Listing Service statistics her office compiles into a monthly report.

This year began with some positive signs. Year-to-year house sales were up over 2016 for the three months of the year. However, the momentum did not last and as of September house sale numbers were in line with last year, which was hardly a banner year.

September sales were down seven per cent from last year and down almost a third from 2014, a record year for Central Alberta sales.

Central Alberta’s housing market reflects Alberta’s economic recession and what is shaping up to be a slow recovery, says the president of the Central Alberta Realtors Association.

“We’re definitely still in a downturn year over year,” said Danielle Davies.

The real estate markets have bounced back before and will do so again, she said.

“The message is we’re just plugging away. It’s coming. We’re moving forward.

“In Central Alberta, we have to be patient.”

The challenging year makes mortgage changes due to take effect in January all the more frustrating for the real estate industry.

Under the new rules, even home buyers who don’t require mortgage insurance because they have a 20 per cent down payment, will have to prove they can afford their mortgage if interest rates rise above Bank of Canada’s five-year benchmark rate or two per cent higher than their existing mortgage rate, whichever is higher.

Daniels said that will hit the middle class the hardest, especially those who hoped to move up to a bigger home. The same segment of the population were hit by tougher “stress test” rules last October.

Mortgage Professionals Canada estimates the requirement will disqualify one in five potential house hunters.

Central Alberta Real Estate Association, along with federal and provincial realtor associations, are lobbying government officials and politicians to halt the changes.

Daniels said Central Alberta house sales dipped when mortgage requirements changed last year. The real estate market adapted to the changes — and will do so again if necessary — but Daniels argues now is not the time to bring in measures that will dampen the market.

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