November 18, 2015
Oil Price Declines and Their Effect on Edmonton’s Housing Markets
Housing Market Insight — Edmonton CMA
Given the importance of the energy sector, when oil prices post a large decline it affects key drivers of Edmonton’s housing markets, including employment, wages and consumer confidence. However, the reaction from the housing market is not consistent, and varies depending on the conditions in the housing market leading into an oil price crash.
Key differences in how the housing market reacted to the rapid decline in oil prices in 2014 compared to that of 2008 include:
- Resale market: supply has remained elevated since the beginning of 2015 and price growth has stalled, but prices have not posted the same declines seen in 2008 and 2009.
- New home construction: lower inventory levels have supported continued growth, concentrated in the multi-family sector.
However, as oil prices still remain low one year after the 2014 oil price crash, the housing market is still reacting and the low oil price environment continues to pose a downside risk to all segments of the housing market.
This is the first release from CMHC’s new Housing Market Insight series providing in-depth analysis.
Read the full report — Housing Market Insight, Edmonton CMA