December 31, 2016 – Market Update
Red Deer sales in December were down almost 50% when compared with November, and on par with December of 2015. The number of active listing also came down again to levels we haven’t seen since last January, although not enough to keep the market in balance after being there for the last several months.
Total sales in Red Deer in 2016 were down only 8.3% compared to 2015 after a 17% drop from 2014 to 2015 and were the lowest total since 2010. The overall central Alberta market fared slightly worse than Red Deer in 2016 with sales down 12.6% from 2015.
A struggling energy industry was the biggest contributor to a slower market in 2016, but provincial government initiatives including minimum wage legislation and the new carbon tax also had an effect on business and consumer confidence. When business and consumers are unsure how government policies will affect them, business is reluctant to invest and consumers are unlikely to make large buying decisions. The federal government’s new mortgage rules also contributed by making it more difficult to qualify for a mortgage. All these factors may combine to offset what could have been substantial gains in 2017. Instead, we expect the 2017 housing market to be only slightly better than 2016 assuming oil prices stay above $50US.
