Stricter lending conditions, a rise in interest rates, persistently high unemployment and slow economic recovery have weighed on housing demand so far this year.
Home sales have eased more than anticipated so far in 2018, as economic conditions did not improve enough to offset changes in the lending market.
By the numbers, Alberta had the fastest growing economy in 2017, employment started to improve and recent net migration numbers are positive. So, why is the housing market still struggling to recover?
- The economy has not yet reached the levels of pre-recession activity.The type of job growth has shifted, as employment gains have not occurred in traditional sectors.
- Higher lending rates and stricter qualifications are preventing some first-time buyers from transitioning to the ownership market. This is also impacting the ability of some existing homeowners to consider moving up to a higher price point.
- Two years of recession left us with excess supply in all aspects of the housing market.
- Consumer confidence continues to be impacted by concerns about Alberta’s prospects and how much more this circumstance could impact housing prices, particularly now with elevated inventories.