August sales in Red Deer hit the highest single monthly total so far this year, while the number of active listings fell slightly compared to last month, bringing the market close to balance. Sales across central Alberta were also better in August, bringing year to date sales in line with the same period last year.
One month doesn’t make a market, but the improvement certainly suggests we are turning the corner. There haven’t been any highly visible events that point to the change, but strong GDP growth in both the Canadian and Alberta economies suggest there is potential for continued recovery. Unfortunately, a strong Canadian economy may cause another bump in the Bank of Canada rate which will trigger another jump in mortgage rates. Tougher mortgage qualifying requirements imposed by the federal government combined with a rate increase would be detrimental to our fragile housing market recovery.
Oil prices remain subdued, moving up and down just under the $50 US benchmark, but seem to be just sufficient to keep activity up in the energy sector. Capital investment budgets in that sector are likely to be trimmed a little going into fall and winter and only the most cost efficient projects are moving ahead. We are cautiously optimistic.