Drops in costs might herald “price correction”

Migration of potential buyers to major markets is hurting prices in several provinces

Drops in costs might herald “price correction”
Alberta and Saskatchewan have seen a flurry of activity from builders constructing new homes, but some observers said that this frenetic pace might be for naught.
Recently, a significant volume of potential buyers are moving away from Calgary and Regina. This exodus has fuelled significant price drops in the real estate markets of Alberta and Saskatchewan, according to the latest figures.
“The real estate correction is already happening – just not where most expected,” Bank of Montreal economist Robert Kavcic told Global News. “Look for continued home price declines [in those regions].”
Benchmark values in the two provinces have fallen by single digits. In addition, the continuous global oil price crashes have compelled people to move to locales with better prospects such as Vancouver and Toronto, in turn ensuring constant pressure on these high-demand high-volume metropolitan markets.
“The two cities that have been the biggest concern for housing bears will continue to benefit from strengthening job prospects, improving population trends and mortgage rates that are lower than they otherwise would have been had oil prices not collapsed,”Kavcic said.