2014 has been a productive year for real estate in Calgary and across Canada. Fueled by low interest rates, home and condo sales have continued to increase in most areas. Here are the predictions for 2015 by some of the major players in the Canadian real estate industry:
Because of falling oil prices, interest rates could remain as they are. Alberta home prices will increase, but only by three percent due to the slump in oil prices. Unless the price of oil continues to decline, house prices should remain steady.
Canada Mortgage and Housing Corporation:
Existing home sales will rise moderately with increases of about 2 percent.
Royal Bank of Canada:
Not the most optimistic report, RBC predicts that home sales are expected to drop by about 1 percent in 2015 and home prices to rise by only 1.1 percent. Interest rates will rise in late 2015, this in turn will inhibit affordability and home sales. As new condo construction projects are being completed, buyers will gradually start looking at older, resale units.
The biggest drops in the number of homes sold are expected in British Columbia (Vancouver) and Ontario (mainly Toronto). Alberta is expected to remain strong at the top of the rankings, with additional increases in Atlantic Canada.
Bank of Montreal:
The next 5 years will bring a decrease in home prices, narrowing the gap slightly from U.S. prices. Currently Canada is about 50 percent higher. They also predicted a slight rise in interest rates about October 2015.
Bank of Canada Governor Stephen Poloz announced that houses are overvalued by as much as 30 percent, and the household debt-to-income ratio is at a record high. He hasn't really indicated how this might affect interest rates.
All of the above predictions could be thrown out of the water depending on whether oil prices continue to plummet and for how long. For now, enjoy the low interest rates while you can, and try to reduce your debt.
Merry Christmas & Happy New Year from the Calgary Home Team!
Ryan MacDonald, B.Sc. Real Estate Professional
Million Dollar Club Member
Top 1% Real Estate Professional in Calgary
O: 403.278.2900; F: 403.592.8008