Not all doom & gloom…

With the recent drop in oil prices, today’s drop in interest rates by the Bank of Canada, and all the speculation out there about how the Canadian economy and housing market, especially Alberta’s, will be impacted, I felt this an appropriate time to share Eric Bergen’s (local Mortgage Broker) thoughts on the matter. Here’s an excerpt from his e-post.

“There are daily reports being put out by the media regarding falling home prices and a dramatic drop in sales. I feel it’s time to advise my clients that rates are at historic lows and home sales are strong. Yes, oil prices have dropped from their much inflated levels and some jobs will be lost and projects will be put on hold, however this is a normal course of events when you live in a resource based economy.

The following are some statistics which show a strong Canadian housing market, as well as a resilient Calgary market, with home sales only expected to slow slightly while prices in Calgary are still expected to increase over the next 12 months.

• The Canadian Real Estate Association published national December sales data last week which showed that activity in December, although down from November’s level, was about 8% higher than in December, 2013. More than 481,000 resale homes changed hands in Canada in 2014, the highest level in seven years. Average home prices in Canada grew by 3.8% in 2014 and the MLS Home Price Index advanced by 5.4%.
• Royal LePage published its latest House Price Survey last week which calls for home prices in Canada to gain an average of 2.9% in 2015. The national realtor suggests that recent weakness in energy prices will be a benefit to markets in central Canada and may cause some western markets to slow and create better opportunities for buyers.
• The Calgary Real Estate Board published its annual forecast last week which predicts that sales volumes will fall by 4% this year while average prices in Calgary will stay on the positive side with a projected gain of 1.58%.
• The last Teranet House Price Index reading of 2014 was released last week. The index slipped by 0.2% in December but the annual gain came in at 4.95%.
• The benchmark government of Canada five year bond yield ended the week at 1.09%, down from 1.22% the previous week which translates into lower fixed term interest rates at this time.

The best news of all is that rates continue to remain very low at this time so refinancing, purchasing or renewing your mortgage is advantageous at this time.”

As always, it’s not all doom & gloom. Inevitably there’s a silver lining.

For a detailed 2015 Forecast Report CREB® released its 2015 housing forecast report on January 14, 2015 during the organization’s annual conference and tradeshow. When you have a few spare minutes you’ll find all kinds of interesting info about the Calgary Region Resale Housing Market Summary, the Global and National Economy at a Glance and the Calgary/Alberta Economics Factors.

Bill Brandsma Real Estate welcomes any questions or concerns about housing trends, interest rates, the housing forecast etc. Call 403-253-5678.