Overbuilding leads to continued high residential vacancies in Calgary: CMHC

Calgary's housing market continues to have high inventories of homes, condos and apartments.

A new report from the Canada Mortgage and Housing Corporation (CMHC) says there's been too much building, meaning it'll continue to be a buyer's market.

CMHCmarket analyst Richard Chosaidresidential inventories have been high for a few years in Calgary.

"They were rising for the last little while and recently in December they hit a record high," he said. "In terms of the vacancy rate that has been up as well, they're starting to come down, but they are still above what we typically see in this region."

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Cho saidthis is in part because of the large number of projects that started in Calgary before the downturn.

"As these projects were finishing construction demand was much weaker and as a result a lot of these units were moving into inventory," he said.

The report found the area with the highest inventories and vacancies is the apartment and condo sector.

Single detached market likely more stable

"I think when we look at things like the single detached market, I think that market will likely be a lot more stable," he said. "In the areas of the apartment condo segment those areas are likely to be a lot weaker compared to some of the other areas.

Residential realtor, Len T. Wong, saidin buyer'smarkets like this one, there isn't a lot of urgency.

"There's hesitation in the marketplace, and in a buyer's market you'll find buyers are not rushed to do things," he said.

"Sellers, also themselves have to realize that they have to be priced right, you have to be proactive and stand in front. I find that if you're kind of in the middle of the pack you get lost because there are lots of choices."

Wong saidwith good home-buying-weather knocking, the market is sure to pick up a little,and prices will inevitably become more competitive.

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"I think you're going to start seeing pressure on prices a little bit and then hopefully with this nice weather and the spring market starting a bit late hopefully we'll be able to absorb some of the slow start we had this year," he said.

Cho said, however, that whatever pricing growth there is, it will be weak.

"So far we're still in buyer's market, so that price growth has been limited, but as the year progresses we're anticipating the market to gradually shift from a buyer's market to more of a balanced market and we're expecting to see more stability in prices," he said.

"But overall for the year prices are expected to be fairly flat compared to 2017."

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