Prairie Housing Markets Respond Differently to Oil Price Decline

CALGARY, ALBERTA -- (Marketwired) -- 09/15/16 -- Canada Mortgage and Housing Corporation (CMHC) released its latest Housing Market Insight (HMI) report on the economic structure of the Prairie Provinces and the impact of low oil prices on Alberta, Saskatchewan and Manitoba housing markets.

The decline in oil prices will impact each Prairie province differently. Alberta's economy and to a lesser extent, that of Saskatchewan make these two provinces vulnerable to an oil price shock. Manitoba's economy, which is more diversified with a relatively smaller oil and gas industry, tends not to experience as much of an impact on its housing market.

Report Highlights

--  Low oil prices have reduced investment and employment and slowed
    economic growth in Alberta and Saskatchewan. This has decreased housing
    demand and created housing market conditions that favour buyers in
    Alberta and Saskatchewan. Meanwhile, Manitoba which has a more
    diversified economy is experiencing more balanced market conditions.
--  In Alberta, after declining 21 per cent in 2015 to 56,477 units, MLSr
    sales are on pace to decline for a second consecutive year by around 11
    per cent in 2016. Saskatchewan is responding to low oil prices in a
    similar fashion, with resales on pace to decline for a second
    consecutive year. Conversely, Manitoba is on track for its third
    consecutive year of growth in MLSr sales.
--  In the Prairie region, Alberta is experiencing the sharpest declines in
    housing starts, followed by Saskatchewan, while Manitoba is experiencing
    a more muted decrease.

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As Canada's authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers objective housing research and information to Canadian governments, consumers and the housing industry.

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QUOTES

"The structure of Alberta's economy makes it vulnerable to oil price shocks which can cause considerable swings in the economy and housing market."

Lai Sing Louie

Regional Economist, Prairie and Territories

Canada Mortgage and Housing Corporation

Contacts:
Renee Nat, CMHC Public Affairs
(403) 515-2963
[email protected]

Source: Canada Mortgage and Housing Corporation

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