By Paul Cowley
Expect a slow recovery in Red Deer region’s housing market for the next two years, says the Canada Mortgage and Housing Corporation.
A Housing Market Insight released recently projects existing home sales and new semi-detached home starts will remain roughly at current levels through 2018.
CMHC is projecting 3,340 to 3,960 units sold this year, down from 4,439 last year. (Through October, Central Alberta Realtors Association recorded 3,072 sales through its Multiple Listing Service.)
For 2017, CMHC is projecting 3,290 to 3,910 units sold and, in 2018, 3,360 to 3,990 units.
New home construction is expected to follow a similar pattern. Single-detached starts are expected to range between 143 and 157 units this year and in 2017, improving in 2018 to 152 to 168 units.
In its analysis, CMHC says Red Deer’s young population typically means a lot of first-time home buyers.
“However, labour market conditions have deteriorated throughout the year, which has moderated demand for existing homes.
“Resale activity is not expected to increase until 2018, when economic and demographic fundamentals are expected to strengthen.”
For the city of Red Deer alone, statistics provided by RE/MAX Real Estate Central Alberta show 1,485 house sales to the end of November, compared with 1,613 over the same 11 months in 2015.
In his analysis, RE/MAX broker/owner Dale Russell suggests OPEC’s decision to cut supply and the federal approval of two new pipelines should boost consumer confidence and boost employment next year.
Despite tepid housing markets, resale prices have remained relatively stable with a median price in the $310,000 range.
“The median price fell dramatically in the fourth quarter of 2015, but has rebounded in 2016, a sign of resiliency at the higher end of the market, not a sign that prices increased on average,” says Russell.
CMHC also projects stability in pricing taking the region as a whole. The average house price is forecast to range between $293,100 and $312,900 for the region this year and in 2017, rising to between $297,000 to $317,000 in 2018.