CALGARY -- After more than two years of gloom and uncertainty, the Calgary Real Estate Board is predicting that the city's housing market will stabilize this year as steady oil prices lift the spectre of layoffs and companies start to reinvest in growth.
"Overall we expect to start to see that turn in the market where it stabilizes," CREB chief economist Ann-Marie Lurie said. "One of the key factors influencing this is there are no further layoffs expected in the energy sector."
The housing forecast is the latest sign of cautious optimism emerging in Alberta, as the province looks to emerge from two years of recession caused by a plunge in oil prices in 2014.
CREB said in its 2017 forecast Wednesday that detached house prices are projected to climb by 0.8 per cent in 2017 after falling 4.7 per cent since the downturn started.
Benchmark condo prices, which were hit much harder with an 11.3 per cent decline since the downturn began, are expected to fall a more modest two per cent this year as some supply overhang continues.
For all home types, sales volume is expected to climb three per cent from last year to 18,335 properties sold as some confidence returns to the market, though that is still about 12 per cent below the long-term average.
Signs of stability in the housing market come as oil and gas companies continue to announce expanded budgets and the restart of shelved projects with oil prices holding above US$50 a barrel.
But companies have so far been cautious on rehiring, with Calgary's unemployment rate dipping only slightly in December to 10.2 per cent -- still the highest among major cities in Canada.
Lurie says that needs to drop further before Calgary could see a more substantial turnaround.
"We need to start having job growth in this city before we can start to see a true shift in the housing market, and that's a risk," Lurie said.
Rising borrowing rates, changing mortgage rules and low net migration also continue to present risks of a more substantial turnaround, she said.
Even without a quick improvement in prices though, the city's housing market is still emerging from the downturn less affected than what happened in the 2009 downturn and well off the hit in the early 1980s.
Lurie says tight supplies in new housing, the resale market and rentals when the latest downturn started helped buffer from steeper declines.
"While demand fell, we were in a scenario where there just wasn't enough product anyway, so that prevented a steeper decline," said Lurie.