What’s your feel about the real estate market in Calgary these days?
Eklund: We would be naive not to follow the statistics and look at what’s going on. It is a buyer’s market. It’s 100 per cent challenging.
I laughed. I had heard someone say there’s some brokerage-type tech companies coming to town and they feel like realtors have it so easy these days because of technology. And I thought, well they’re not selling real estate in Alberta right now. It’s very challenging. We have to be aggressive. We have to be on it. We have to market more.
So in the last almost 19 years of my career this has been the most challenging time and it’s been the time I’ve been working the most.
Why is the supply for homes still so high in Calgary?
Eklund: One of the reasons supply is high is because we have seen so many people move out of the city. We’re losing ex-pats. We’ve lost talent. I moved out more people in 2016 than I had in the previous six years combined.
This year we’re actually seeing the net migration improve. We had just over 12,000 people move here in 2018. which astonished me. The year prior, we had just over 2,000 people move to Calgary. So we’re starting to see net migration.
But a lot of people are still leaving. We’re still losing talent. The people who can afford to are taking this opportunity to up-size. So they’re selling their home at $700,000 and buying at $1.2 million because what they lose on their sale they will more than gain on their purchase because the higher-end homes have seen more of a decline. So we’re seeing a lot of that.
We’re seeing people unfortunately divorced. We’re helping couples move on and then purchase. We’re seeing a lot of that inventory. We’re also seeing a lot of people downsize from their large homes.
Why is demand so low and sales continue to be sluggish?
Eklund: My thought on that is demand is low because we had five interest rate hikes in 365 days. We had a (mortgage) stress test come into effect. People who have lost their jobs in 2015 and 2016, many of those people are re-employed but they’re not re-employed at what they were making. So they could have been making $150,000 and now they’re making $80,000.
That’s a big difference when you look at your service-debt ratio and you then go to apply for a mortgage and they look at your income and your expenses. That’s another reason.
What’s it going to take for this market to turn around?
Eklund: Another boom, which I’ve heard is never going to happen. My hope is that the Bank of Canada talked about raising interest rates this year already and that has not occurred. So I think keeping interest rates low will help.
It would be great to get some pipelines going or at least have a way, rail it sounds like, to get our oil out.
There’s a lot of economic factors that could help us. But I would say interest rates and just more Alberta’s economy improving.
What are the positive signs, or are there any, that you see in the market?
Eklund: Well, I do have the feeling talking with buyers and sellers that the worst is behind us. So we’ve really seen that 13 per cent decline since the height of 2014. My belief is that the worst is behind us. Will we likely see a bit more decline this year. Yes, then hopefully we hit the bottom.
The good news is we saw over 10,000 people move to Calgary last year. I was very surprised to see that. I think that’s good that we have people moving back into our our city.
People who live in Calgary love Calgary. They’re advocates of the city and so I do feel we are starting to see more buyers come into the market this time of year. I’m getting feedback on my listings. “Great listing, Tanya, we’ve just started our search.” That’s very common. We’ve got a lot of great things going on within the city.
So I think the vibe is getting a little bit better. People’s mindset is turning around. They’re a little bit more optimistic.
– Mario Toneguzzi for Calgary’s Business