Oversupply persists despite improved sales activity for affordable product
March saw a modest decline in city wide sales activity compared to last year. However, sales have been rising for more affordable product in the detached and attached sectors. Shifts in the lower end of the market have not outweighed easing across the higher priced product. First-quarter sales dropped to 3,108 units. This is nine per cent below last year and 28 per cent below typical levels of activity. Price declines and relatively slow sales activity are impacting the number of new listings. For the second consecutive month, new listings eased compared to last year’s levels and long-term trends, but it was not enough to prevent inventory growth. “If new listings continue to slow compared to sales, it could start to help with the persistent oversupply scenario weighing on our housing market,” said CREB® chief economist Ann-Marie Lurie.
“However, inventory is still high. It will still take time for our market to transition towards more balanced conditions and stable pricing.” With 6,595 units in inventory in March, the months of supply eased to five months. This is an improvement over the past several months, but still considered oversupplied when compared to levels traditionally recorded in March. The oversupply in the Calgary market has caused further price declines this month. As of March, benchmark prices eased to $413,900, five per cent below last year’s levels and just below levels recorded last month.