If you are fortunate enough to own a home or are thinking about getting into the market, the unprecedented economic shocks brought on by the COVID-19 pandemic are bound to make you wonder what’s next for house prices. 

With the pandemic in play, it’s extra hard to see what’s over the horizon when it comes to the housing market. Keeping this in mind, things don’t look as bad you might think.

According to a Royal LePage report released earlier this week, the aggregate* price of a home in Canada will either rise by 1.0 per cent or decline by 3.0 per cent. These are not great numbers—Royal LePage was originally forecasting growth of 3.2 per cent in 2020. But considering the wallopping the economy is taking, they could be much worse. And if you are a buyer, lower prices are a good thing.

That’s the national picture, but with real estate it’s all about location, location, location. Here in Alberta we are facing not just the economic hit from COVID-19, but also an oil price crash that could leave our primary economic driver in low gear well after the pandemic is over.

Royal LePage is forecasting an annual decline in Calgary’s aggregate home price this year of between 1.5 per cent (assuming business activity resumes by late spring) and 4.0 per cent (assuming it resumes by late summer). In Edmonton, the price is expected to decline by between 1.0 and 3.0 per cent. (The report does not include forecasts for other Alberta markets.)

This hurts if you are a homeowner (keeping in mind actual sale prices vary widely across individual properties). But, again, it could be worse given everything that is going on, and lower prices will help those looking to break into the market.

The wild card in all this is the trajectory of Alberta’s oil patch. Alberta does not have a housing “bubble” that could burst, but if recovery in the oil sector is slow, the forecasts noted above could darken.

*Royal LePage’s aggregate home price is based on a weighted model using median prices and includes all housing types.

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A note on COVID-19: The COVID-19 pandemic is having a major impact on the economy here in Alberta and around the world. The Owl will report on these impacts when good information is available while continuing to track regularly scheduled releases of economic data and long-term trends. Please go to atb.com for COVID-19-related updates from ATB Financial.