An expected increase in interprovincial migration into Calgary will provide a new boost in housing market demand over the next two years, according to Canada Mortgage and Housing Corporation’s (CMHC) newly released housing outlook.
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The recent increase in oil price and improvement in labour market conditions have led to population growth, with net-interprovincial migration into Alberta becoming more firmly positive this year to date.
The employment gains were led by full-time employment in the service sector, which will support housing demand in the latter half of 2019 and over the interim.
Analysts have reason to believe there will be a recovery in sales in both 2020 and 2021, reaching a similar sales pace that was experienced between 2011 and 2012.
“Net interprovincial migration into Alberta is correlated with gains in employment in the Calgary area. Given continued gains in employment projected for 2020-21, this positive trend is anticipated to remain,” reads the report.
After significant decreases last year, resale prices will begin to stabilize in the latter half 2019, leading towards modest upticks in 2020 and 2021.
“This will largely be the result of continued declines in available inventory in the existing home market, along with the new home market, as the market shifts slowly from buyers’ conditions to more balanced conditions,” continues the report.
The lowered inventory of unsold homes should lead to a modest increase in housing starts for all housing types, especially for more affordable multi-family homes.
Furthermore, fuelled by stronger population growth, the rental apartment vacancy rate will decrease, after experiencing two straight years of declines.
“Improving labour market conditions and the subsequent effect it has in attracting labour from other provinces is highly correlated to movements in the apartment vacancy rate in Calgary,” adds the report.
“As we anticipate net-interprovincial migration into Calgary to remain fairly strongly positive over the next two years, driven by improvements in the labour market, the vacancy rate is projected to continue to trend lower over the 2020-21 period despite modest increases in new rental supply.”
CMHC 2020 housing forecast for Calgary
- Total housing starts: 11,900 to 10,100 units
- Single-detached homes: 3,400 to 4,400 units
- Multi-unit homes: 6,700 to 7,400 units
- MLS sales: 21,400 to 25,000 units
- Average MLS price: $430,500 to $443,900