The Alberta market continues to be stuck in low gear, as both sales of existing
homes and construction of new housing units are showing very modest
increases at best so far this year. Persistent hesitation on the part of homebuyers
is likely symptomatic of long-lasting payback from their overextension
during the 2006-07 boom when home prices jumped by more than 50%.
This has since driven up the rate of mortgages in arrears to a generational
high in the province. Until the latter stages of 2010, plentiful supply of
homes for sale combined with sluggish demand to keep home prices firmly
under wraps. Stable or slightly declining prices, in turn, contributed to substantial
improvement in affordability in Alberta last year. While market conditions
have become more balanced in recent months, there remains very
little pricing momentum in the provincial market at this stage, maintaining
attractive affordability levels – the RBC Measures for all housing categories
in Alberta stood below their long-term average in the first quarter.