CALGARY – Calgary new home prices are down for the first time in more than three years after months of economic pressure from low oil prices.
New home sale prices dropped 0.4 per cent in March, the first retreat since November 2011, according to numbers released Thursday by Statistics Canada.
“We’ve obviously had some challenging economic conditions, and it’s starting to put downward pressure on pricing because sales activity is a lot lower than what we’ve had,” said Ann-Marie Lurie, chief economist at the Calgary Real Estate Board.
Calgary had the highest home price drop of major Canadian cities after holding steady in January and February with no price movement, though prices are still up 2.8 per cent compared with March last year.
“To put some perspective to it, last year we had price gains over nine per cent,” says Lurie. “It’s really just a matter of how long the cycle will last and what impact it will have moving forward.”
The decline is largely coming from the high-end housing market, said Calgary realtor Lowell Martens. He said he’s seen encouraging sales in homes selling below roughly $550,000, but above that he’s noticed prices have been down as much as five per cent.
“I think the market is definitely slower than last year’s, and I think it will remain slower,” says Martens. “But at this point it doesn’t look like we’re going to be taking the major hits that some people thought we were going to do.”
Continued low interest rates have helped keep the market afloat, said Martens, adding that many people still see buying as a better move than renting.
The pullback in demand has caused a fall in new home construction, with new housing starts in April down to 777 homes compared to 1,592 home starts in April of the year before.
The Statistics Canada figures were released as oil prices fell back below US$60 a barrel.
Read more: Home sales across Canada were up in April