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CREA: Oilpatch Downturn Slows Fort McMurray's Property Market

Posted by Marites Alma Christiansen on Nov 24, 2015 11:00 AM EST
Steady Decline Of Oil Prices Take Toll On Oil Sands Dependent Economy In Fort McMurray, Canada more big
FORT MCMURRAY, CANADA - APRIL 27: The Syncrude oil sands site, on April 27th, 2015 outside of Fort McMurray, Canada. Fort McMurray is currently coping with an economic downturn as a result of low oil prices and most of the layoffs have been impacting the transient workforce. Canada's oil and gas industry is expected to lose 37% of its revenues in 2015. (Photo : Ian Willms/Getty Images)

The Alberta oil sands downtrend continued to affect the Fort McMurray property market, with average MLS home sales price in the area declining to just $117,000 last month, according to a report by the Calgary Herald.

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In a recent report from the Canadian Real Estate Association, results showed that average home sales price went down by 20% compared to $585,438 in the same month last year. Total MLS sales in the Fort McMurray area were down at 44.8% for 2015.

"While we have this current environment of lower oil prices, Wood Buffalo was on a longer-term trend of having fewer and fewer sales every year. What that reflects is we've had slower overall employment growth each year for a number of years. So it's not just that the current environment is down totally because of oil prices. But it's certainly had an effect and exacerbated some of those trends," said Braden Batch, a CMHC market analyst. Mr. Batch is currently assigned in the Wood Buffalo region (Fort McMurray is located in this area).

The Financial Post also reported on the weakened property market in the said Alberta area.

BMO Capital Markets' Chief Economist Doug Porter said that most oil-driven cities have weakened in the property sector.

Porter stated, "The renewed sag in oil in recent months looks to have triggered a renewed weakening in housing markets across much of Alberta and Saskatchewan. Six of the 25 major markets reported double-digit declines in sales last month, and four of those were in these two provinces."

Last year's sales also fell in Regina at 12.3%, Saskatoon at 21.4% and Edmonton at 16.3%, respectively.

TD Economics' Diana Petramala however, said that the British Columbia and Ontario territories have supplemented the total Canadian home sales with its booming markets. "Markets in oil-producing provinces continue to remain incredibly weak," said Petramala, according to the same report.

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