2013 CALGARY REAL ESTATE BOARD FORECAST

CREB® forecasts moderate sales, price growth

 The full forecast report is available here.

Calgary, Jan. 16, 2013 – The resale housing market in Calgary and area will see moderate sales and house price growth in 2013, CREB® said today at its annual forecast.

Sales growth in the city is expected to ease to 2.2 per cent this year, with house prices rising by 2.9 per cent.

“Slower growth trends in employment combined with lower migration estimates will impact sales growth across all resale sectors, and, as listings continue to decline, this will further dampen sales growth, particularly in the single-family market,” Ann-Marie Lurie, CREB®’s chief economist, said at the 2013 CREB® Forecast Conference & Tradeshow. “However, as the overall market remains well supplied, prices will continue to grow but not at the levels seen in 2012.”

In 2012, Calgary’s single-family market recorded sales growth of nearly 15 per cent. With a decline in the level of new single-family listings, that is expected to ease to 1.8 per cent this year. Prices are estimated to rise by three per cent.

Becky Walters, president of CREB®’s 2013 board of directors, said the city and surrounding areas are seeing good resale activity.

“We have a nice, balanced market, and it’s expected to see some growth this year,” Walters said. “Although some big markets in Canada are stumbling, Calgary is hot on the heels of a year of recovery, with the forecast saying the market is going to stay in positive territory.”

In the condominium market, sales are expected to increase by three per cent, with a moderate price appreciation of 2.4 per cent for condo apartments and 2.8 per cent for condo townhouses.

Although the prediction is for a “balanced” resale housing market, Lurie said there are numerous risks in the market.

“The largest risk in our market is related to concerns in the oil sector,” she said. “They are facing pipeline constraints and lack of access to more diverse markets, impacting the price they receive for their oil. If the discounts on our oil persist, this clearly could impact the job sector and, ultimately, the housing market.”

RLP PREDICTS RISE IN 2012

Expect home prices to keep rising in 2012: Royal LePage
By Derek Abma
National Post Jan 12, 2012

OTTAWA — Canada’s housing market will continue to be strong this year, with rising property values expected in all major markets, real estate brokerage firm Royal LePage said Thursday.

The company’s forecast called for prices across to country to rise 2.8% by the end of 2012, after stronger gains last year.

It said in the fourth quarter of 2011, the average price of a standard two-storey home was $375,427, up 4.2% from a year earlier. The average rate of a detached bungalow was up 6.1% to $344,392, while condominiums gained 3.6% to $234,680.

“Widespread calls for a major real estate correction in 2012 simply can’t be justified,” Royal LePage CEOPhil Soper said in a statement. “The industry has significant momentum entering the year, and buoyed by the stimulative effect of very low interest rates, we expect the market to continue to expand — albeit at a slower pace.”

Statistics Canada reported Thursday that its new housing price index rose 0.3% in November, following on a 0.2% increase in October, and was up 2.5% year-over-year.

Price increases in Toronto, Oshawa and Montreal offset declines in Calgary, Vancouver and the Ontario metropolitan regions of Sudbury and Thunder Bay, the agency said. Builders in all four areas reported lowering prices in order to stimulate sales and remain competitive, while price increases elsewhere were attributed to higher material and labour costs.

The Canada Mortgage and Housing Corp. has forecast the average price of a listed homes for resale to be $363,900 this year, up 1.2% from 2011. The Canadian Real Estate Association predicted that the average price would be relatively flat at $362,700. Both forecasts were made in November.

Royal LePage said even pricey housing markets in Vancouver and Toronto — where standard two-storey homes averaged $1.1-million and $629,188, respectively, in the last quarter — will see continued price appreciation in 2012.

However, it said stronger gains will be seen in cities benefiting from commodity-based economies, such as Calgary, Regina and Winnipeg, where price gains will be in the range of four to five per cent.

Photo by: Nkuku Fairtrade

126% DECADE OVER DECADE

Calgary house prices increased 126% over past decade
Projected 2011 average cost: about $402K
By Mario Toneguzzi
Calgary Herald November 8, 2011

Strong in-migration, population growth and a vibrant oil and gas sector have pushed Calgary average house prices to an increase of 126 per cent in the past decade, says a new report published Monday by Re/Max.

The report said renovation spending and new construction have been "considerable" secondary factors propping up values throughout the city between 2000-2010.

The report also said the total value of residential building permits in the city during that period was the third highest in the country at $23.1 billion behind Toronto ($77.3 billion) and Vancouver ($35 billion).

"A few reasons I believe Calgary has seen such growth in the last 10 years is simple due to our strong economy from natural resources which has been a driving force in migration into Calgary for jobs," says Tanya Eklund, a realtor with Re/Max Real Estate Central.

"This has resulted in growing our population to well over one million, low unemployment rates, a strong GDP and the demand for housing.

"We are highly affected by inventory levels in real estate. When inventory is low and the demand is there, prices increase. . . . We had a very balanced market in this time period and saw huge economic growth which proved significant gains in the housing sector."

In Calgary, the average price rose from $176,305 in 2000 to $398,764 by year-end 2010.

The Re/Max Housing Evolution report said the average residential price in Canada rose 106 per cent in the past decade, led by Regina, which saw a hike of 173 per cent.

Regina was followed by Edmonton (165 per cent), Saskatoon (163 per cent), Winnipeg (158 per cent), Kelowna (156 per cent), St. John's (149 per cent), Greater Vancouver (128 per cent) and Calgary.

The report said investment in Canada's housing stock is at an all-time high in the 16 Canadian residential real estate markets surveyed.

"Revitalization, renovation and new construction have been largely underestimated in terms of overall impact on rising average price," said Elton Ash, regional executive vice-president of Re/Max of Western Canada. "Yet, outside of supply and demand, these have been among the foremost variables influencing real estate values.

"Population growth is a central to housing evolution, supporting steady household formation, which in turn will boost revitalization, new construction and investment in Canada's housing stock for years to come. Ultimately, a rising population bolsters the health of the real estate sector and fuels the trends that lead to continued average price growth on all fronts."

A Housing Market Outlook by Canada Mortgage and Housing Corp. said many factors that support resale housing demand in Calgary have become or remained favourable this year, including growth in full-time employment, low mortgage rates and improved net migration.

"However, competing factors such as uncertainty in the global economy has kept some prospective buyers on the fence, and will continue to temper any large increases in sales," said the CMHC.

The average price for a residential property in the Calgary census metropolitan area this year is forecast to be $402,000, up 0.8 per cent from 2010.

As the supply in the resale market moves lower and conditions become more balanced, stronger price growth is expected next year, said the CMHC. In 2012, the average price is anticipated to rise 2.2 per cent to $411,000.