The Calgary housing market may be yet to turn the corner, but it certainly appears to be approaching it according to a new report.
The corner in question is in the higher inventories, lower sales category.
The new Canada Mortgage and Housing Corporation (CMHC) Housing Market Assessment (HMA) report, which is based on data in the first quarter of 2019, says the Calgary housing market no longer shows high evidence of overbuilding, the first time in a number of years that it hasn’t.
CMHC says overbuilding exists when the rental apartment vacancy rate and/or inventory of newly built and unsold housing units are significantly above normal levels.
James Cuddy, senior analyst economics at CMHC, said: ‘While the number of completed and unsold units in the new home market remained elevated, inventory levels are moving towards levels that are more balanced. Housing demand is showing some early signs of recovery, particularly in more affordable segments of the market and new supply coming onto the market is slowing down.’
As the market looks to turn the corner, overseas property investors will be keeping an eye the situation, looking to get back into the Canadian housing market.
As evidence of the market reaching the corner, the report stated as follows.
Moderate evidence of overbuilding continued to persist in the first quarter of 2019, however, inventories in the new home market are moving towards more balanced levels. The number of completed and unsold units per 10,000 population moved lower for the second consecutive quarter, largely due to declining apartment inventory.
“More recent monthly data has shown that inventory in other segments of the market has been moving lower, as well. Meanwhile, the pace of absorptions continues to face headwinds as the economy across Alberta recovers slowly and builders have primarily focused on adjusting their production in order to manage inventory levels.”
CMHC says its HMA reports offer information and analysis that can help buyers make more informed decisions and contribute to an orderly adjustment of housing market imbalances.
Overseas property investors interested in Canada should be watchful for that corner.