Plummeting oil prices are making the Calgary housing market one of the hardest to predict, as far as the Sotheby’s International Realty Canada is concerned.
“Continued uncertainty in the oil market will impact Calgary real estate over $1m, however, the degree of influence is still unknown. If employment and migration into the city remain at expected levels, sales are expected to remain on pace into early 2015,” said Sotheby’s International Realty Canada in a report.
This year may see continued strong performance from the real estate industry if the interest rates stay at their lowest, said Ross McCredie, president and chief executive of Sotheby’s in Canada.
For four years now, the Bank of Canada has not raised its overnight lending rate.
“There’s nothing that I’ve seen from any of the banks [indicating that the Bank of Canada is going to raise rates] and even if it went up one, two or three percentage points, that’s cheap money historically,” said McCredie.
The report adds that the prime rates at most financial institutions are around 3% and most homebuyers are able to negotiate discounts off that rate.
“Alberta is the one place where there is a lot of wait-and-see right now. This time last year no one saw this [drop in oil prices],” said McCredie. “For most of our clients, they’re upper end [and] they’ve really made a lot of money. There are a lot of blue-eyed sheiks coming out of Alberta. They’ve diversified in their investments and you won’t see a panic.”
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