2016 was a tough year for the local housing market. Home prices are down, vacancy rates nearly doubled, and rental demand has been weak. Canada Mortgage and Housing Corporation analyst Tim Gensey says the economic downturn had led to more homes for sale or re-sale as natural gas prices fell and the unemployment rate rose.
“However, we also think that things are going to get better and that’s what we’ve been hearing from my compatriots around the area as well. Natural gas has rebounded to above $3 a million British thermal units.”
With an over abundance of homes on the market in Grande Prairie, it’s expected construction will slow down even more next year. Gensey argues the city is “overbuilt” at this point, with too many homes for sale.
“The amount of active listings on the MLS has increased to quite an elevated number; we’re looking at about 1,800 listings. However, we’ve noticed that the trend has peaked and sort of plateaued, so that seems to have stopped.
Gensey expects things should pick up again in 2018, with more jobs and increased demand from the new hospital.
Grande Prairie’s rental vacancy rate has jumped from just over one per cent to almost 20 per cent in just two years, but that doesn’t mean people are moving out. Gensey explains that the city is a retail hub with many people working part-time who choose to rent instead of buy a home. He says the city added 600 units over the past two years to a market of only 3,000.
“A lot of supply came on and demand remained stable; it didn’t really go down. So, the vacancy rate is a lot higher… it seems a lot scarier than it actually is.”
Demand for rentals is expected to slowly go up over the next year, while there’s less new construction. Rent should also go down to help fill apartments.