BMO Report Says Calgary Housing to Prosper Soon

According to a new report issued by BMO Capital Markets on Friday, it found that the Calgary’s housing market is gathering momentum again and despite a sudden drop in oil markets, home prices have further to run and homebuilders will get busier in the year ahead. Moreover, the report alleged that Alberta is guaranteed to see another housing boom in near future. The report stated “for policymakers, this is clearly a case of superior economic and demographic fundamentals at work, not a bubble rearing its head.”

According to a senior economist with BMO Capital Markets, Robert Kavcic, the key difference in today’s market, when compared with previous boom, is that this time it’s a “pretty unique situation and I don’t think we’re going back there.” He pointed out that the economy was stronger at the time of previous boom but today Alberta is head and shoulders above the rest of the country now. Moreover, it was highlighted that the pace of growth is also less if compared with 2006, as today growth is in the 3.5 per cent range, whereas back then it was four per cent to five per cent.

Kavcic stated that “the last energy boom came on the province pretty quickly and there was really a lack of housing supply back then. You saw a real sudden pick up in economic growth and an influx in population and homebuilders were really scrambling to get homes built fast enough to satisfy that demand.” Hence, he concluded “so the market was a lot tighter back then too. Now we’ve added a good almost 10 years of strong economic performance in Alberta so the market is much more well supplied this time around.”

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