NEWS THAT MAY PUT A SPRING IN YOUR STEP

As mortgage rates fall, realtors anticipate boost to an already strong market
By Mario Toneguzzi 
Calgary Herald May 28, 2014 

CALGARY - Calgary’s hot housing market has received another incentive that could boost sales activity even more in the coming days.

Mortgage rates are starting to come down again right during the busy time of the year for the industry.

Ann-Marie Lurie, chief economist with the Calgary Real Estate Board, said lower mortgage rates will help affordability in the local housing market.

“It can actually help mitigate some of the increases in pricing that we’ve seen in Calgary’s market,” she said. “We’ve had that price growth. We’re still more affordable than we have been for some time so that’s not really the issue per se. But when you have the mortgage rates come down, that can help especially as we’re facing rising pricing.

“We’re not in any concern of overheating our market but with new listings starting to improve this can actually help some of those people who were really on that cusp. They can get into the market.”

Scotiabank announced this week it was lowering its fixed five-year mortgage rate to 2.97 per cent and its five-year variable rate to 2.47 per cent. The rate is effective until June 7.

Investors Group recently offered a 1.99 per cent rate for a 36-month closed, variable-rate mortgage, but Scotiabank is the first of the big banks to push its fixed rate down below three per cent in recent months.

According to CREB, year-to-date until May 27, there have been 10,805 MLS sales in the city, up 13.38 per cent from the same period last year. The median price has risen by 7.03 per cent to $428,000 while the average sale price is up 5.85 per cent to $480,416.

“Housing activity in Calgary has been fairly robust supported by a variety of factors. Along with employment growth, rising incomes and strong net migration, relatively low mortgage rates has also contributed to the demand for housing,” said Richard Cho, senior market analyst in Calgary with Canada Mortgage and Housing Corp. “Mortgage rates have been low for a couple of years and this has helped people, such as first-time home buyers, purchase a home.

“A decline in mortgage rates alone will not necessarily lead to an increase in sales. The decision to purchase a home often involves both personal and financial considerations.”

So far in May, MLS monthly sales in Calgary are up 17.74 per cent compared with a year ago to 2,489 transactions. New listings have also risen by 17.82 per cent to 3,756 but as of Tuesday active listings were down 5.76 per cent from the same time last year to 4,481. The median price in May of $435,000 has increased by 7.41 per cent and the average sale price is up by 5.40 per cent to $485,866.

“Will this (lower mortgage rates) affect the market in Alberta? Absolutely not. The market already is strong, the sales moving well, supply is an issue and Calgary is poised to be the hottest market in the country again this year,” said Don Campbell, senior analyst with the Real Estate Investment Network. “These lower rates will have a lot of people talking, but little or no measurable effect in this part of the world. Out East, it will as that market needs stimulus.”

Campbell said the biggest problem with some mortgages is hidden in the restrictive terms. These low rates will spark increased traffic to the banks, but consumers must be wary before signing asthe penalties and restrictions are often prohibitive, he added.

“Spring is prime fishing season in Calgary, and not just for trout. With the recent surge of new listings, I think we’re seeing a little fishing from sellers, too,” said Scott Bollinger, broker with ComFree Commonsense Network. “Sellers are recognizing the main market factors — good economy, strong housing price gains, tight inventory, seriously low average-days-on-market — and some seem to be fishing for their price rather than settling for market price. They’re trolling the waters for motivated buyers, and my advice to these buyers is: do your homework and stick to a neighbourhood’s comparable numbers to avoid taking the bait.

“Calgary buyers are smart. They know when cheap money is cheap money. And sub-three per cent five-year fixed rates are cheap. It’ll only add fuel to the hot housing market. The open question is: how much and for how long? Will Calgarians see this as a temporary phenomenon, flock to the banks, and boost the market in the short term? Or will they see it a longer-term trend and bide their time, which would reduce the urgency and the immediate impact on the market? Either way, the rates give motivated and qualified Calgarians more purchasing power in what’s still a relatively affordable market. I think that points to steady price gains throughout 2014.”

SHAPING UP

Calgary leads nation in building permit growth

June value up 16.6% from May

BY MARIO TONEGUZZI 

CALGARY HERALDAUGUST 8, 2013

CALGARY — Calgary saw the country’s largest increase in June in the total value of building permits, according to Statistics Canada.

The federal agency reported Wednesday that estimated building permit value was $537.7 million for the Calgary region, up 16.6 per cent from May and a year-over-year hike of 36.0 per cent.

“Following a 41.0 per cent decline in May, the value of permits issued in Calgary advanced largely as a result of higher construction intentions for commercial buildings and multi-family dwellings,” it said.

Tom Dixon, business development manager for real estate and logistics with Calgary Economic Development, said there has been an increase in activity recently in the non-residential sector in Calgary.

“The principal factor is there is a very low vacancy rate and there’s low availability in both the industrial portfolio and in downtown office space. The Class A office space in particular is in very short supply,” said Dixon.

According to Statistics Canada, the residential sector in Calgary saw a 3.7 per cent increase in building permits from May to $344.5 million while the non-residential sector was up 49.65 per cent to $193.2 million.

In Alberta, total building permits of $1.4 billion were down 0.4 per cent on a monthly basis but up 24.3 per cent year-over-year.

The residential sector in the province saw a monthly decrease of 10.4 per cent to $757.9 million. However, that was up 15.8 per cent from last year.

The non-residential sector in Alberta jumped to $645.4 million, up 14.7 per cent from May and a hike of 36.1 per cent from June 2012.

Todd Hirsch, chief economist with ATB Financial, said a dip in residential permits in June in Alberta was almost exactly offset by a rise in non-residential permits.

“Residential building in our province has been consistently strong in 2013, so a small pull-back, as occurred in June, is neither unusual or cause for alarm,” he said. “The steady inflow of job-seeking migrants to the province this year has kept the demand for housing at a healthy level.”

He said non-residential building permits are much more volatile month-to-month but in June developers in the province continued to find market opportunities in office buildings, stores and restaurants.

“Building permits are an excellent forward-looking indicator of the actual construction activity that can be expected in the coming months,” added Hirsch. “The overall message . . . is that Alberta’s construction sector remains in excellent shape.”

Across Canada, contractors took out building permits worth $6.6 billion in June, down 10.3 per cent from May and the first decrease in six months. It was also off 4.8 per cent from June 2012.

After three consecutive monthly increases, the total value of permits in the residential sector declined 12.9 per cent to $4.0 billion in June. That was also down 10.8 per cent from a year ago.

In the non-residential sector, the total value of building permits decreased 6.1 per cent to $2.7 billion in June. But that was up 5.8 per cent from last year.

ONE UP

Canada’s new home prices tick up 1%, led by Calgary 
By Greg Quinn
Bloomberg News 13/07/11

Canada’s new home price index rose in May led by Calgary and cities in Ontario, the government statistics agency said.

The 0.1% national gain was led by a 0.9% increase in Calgary, Statistics Canada said Thursday in Ottawa. Prices also rose 0.6% in the Ontario cities of St. Catharines-Niagara, Sudbury and Thunder Bay.

Economists predicted the index would rise 0.2% on the month, according to the median estimate in a Bloomberg survey with nine responses. From a year earlier, new home prices increased 1.8% in May.

Other reports this week have shown housing-market strength as officials warn consumers not to become overextended with mortgage debt. Building permits rose a fifth month in May while housing starts fell less than economists predicted in June.

Thursday’s data showed prices in Toronto, the nation’s largest city by population, increased 0.2%. Montreal, the second largest, saw house prices climb 0.3% while those in Vancouver, the third-largest, fell 0.2%.

KEEP CALM AND BOOM

‘It’s boom time in Alberta’: New home construction at a five-year high (graphic)
By Mario Toneguzzi
Calgary Herald June 10, 2013

CALGARY — New home construction picked up in the Calgary region in May with Alberta’s level at a five-year high.

It’s a sign that the housing market is heating up.

Canada Mortgage and Housing Corp. reported Monday that total starts in the Calgary census metropolitan area reached 1,078 units during the month, which was an increase from 949 in May 2012.

“The trend of total housing starts increased slightly in May, due to strong construction in both the single-detached and multi-family markets,” said Richard Cho, CMHC’s senior market analyst for Calgary.

Multi-family starts rose to 519 in May from 466 a year ago while the single-detached market saw starts jump to 559 from 483 last year.

“While softer energy prices may be moderating overall economic growth this year, it appears that home builders didn’t receive the memo. Judging by the most recent statistics, it’s boom time in Alberta,” said Todd Hirsch, chief economist at ATB Financial.

Builders started construction on 41,438 new homes in Alberta in May — the highest this year and the first time since early 2008 that the figure has risen above the 40,000 mark.

“What’s more, the trend over the last several months clearly suggests that the housing market is heating up,” added Hirsch. “Between May 2012 and May of this year, housing starts are 14.1 per cent higher than they were in the previous 12-month period.

“What’s causing this boom in home construction isn’t any big mystery: population growth. Even if overall economic growth has slowed somewhat, the inflow of people into our province hasn’t.”

The latest Labour Force Survey, released last week, points to a surge in the labour force, which has grown by 59,400, or 2.6 per cent, over the last 12-months.

“Interprovincial and international migration to Alberta is driving some of the demand for new homes. High wages, low unemployment and a younger population are also contributing factors,” said Hirsch.

“The strong housing starts number ... is supported by another figure from Friday’s employment report — the number of construction jobs is also rising. Even if jobs in the energy patch and manufacturing have eased back a bit, employment in construction continues to provide some great work opportunities.”

Robert Kavcic, senior economist with BMO Capital Markets, said multi-unit housing starts in Canada came storming back in May “after falling precipitously through the winter months.”

“Still, the six-month trend in overall Canadian housing starts sits very close to demographic demand, further hinting at a soft landing,” he said.

Total Canadian housing starts rose by 13.8 per cent in May to 200,178 annualized units, the strongest pace in six months, added Kavcic.

The multi-unit segment rose by 22 per cent.

He said Alberta posted a modest gain, and activity in the province now sits at the highest level in five years.

“With the six-month moving average now more in line with the rate of household formation, May’s sharp jump in the pace of new home construction is unlikely to be sustained,” said Dina Ignjatovic, economist with TD Economics, about the national picture. “Indeed, slower price growth in the housing market could lead to lower homebuilding activity in the coming quarters. Moreover, the overbuilding that has taken place over the last 10 years could lead to new home construction falling below this demographic need for a period of time. This should, however, help to prevent further overbuilding and a consequential sharp correction in the housing market.

“Overall, we expect new home starts to gradually trend down over the next 12-18 months, suggesting that the Canadian economy will not be able to count on residential investment to prop up growth over that time frame.”

For Graphs:
http://www.calgaryherald.com/business/Calgary+region+housing+starts+trend+upwards/8503723/story.html

MAY, OUI

Calgary condo sales in May see upward trend
May 28, 2013

As the month of May nears its end, Calgary’s resale condo market has seen a healthy upward movement in sales and prices.

According to the Calgary Real Estate Board, month-to-date until May 27, there have been 346 MLS sales in the condo apartment category, up 5.17 per cent from the same period last year.

The median price has risen by 4.56 per cent to $261,500 while the average sale price is up by 12.39 per cent to $310,871.

In the condo townhouse category, sales of 311 are 25.91 per cent higher than a year ago; the median price has increased by 7.63 per cent to $317,500; and the average sale price is up 3.54 per cent to $342,638.

Source: Calgary Herald Blog

RISE UP!

New-home prices in Calgary region on the rise
By Mario Toneguzzi
Calgary Herald July 13, 2012

Real estate . New-home prices in the Calgary region continued to rise in May.

Statistics Canada said Thursday that prices in the Calgary area were up 0.3 per cent from April and 0.8 per cent from a year ago.

Nationally, the index rose by 0.3 per cent and prices were up 2.4 per cent from May 2011.

Gains in Toronto, Oshawa and Calgary were the top contributors to the May increase, StatsCan said. The most significant monthly price declines were recorded in Victoria (0.8 per cent) and Charlottetown (0.4 per cent).

The Royal LePage house-price survey, released earlier this week, showed varied year-over-year resale house price increases in Calgary.

In the second quarter, detached bungalows posted the largest average year-over-year price increases, rising five per cent to $432,322. Prices for two-storey homes rose 2.5 per cent year-over-year to $425,456. Condominiums declined by 0.8 per cent year-over-year to $247,056.

A"MAY"ZING MONTH!

Condo resale market climbs in May
By Josh Skapin
Calgary Herald, June 8, 2012

Calgary’s condo resale activity climbed 35 per cent in May, compared to the same time last year, says the Calgary Real Estate Board.

In fact, there were 675 apartment or townhouse sales last month after only 500 condo units changed hands in May 2011.

The average resale price for condo apartments last month was $280,030. For townhouses, the average price was $330,446.

High-end condo sales are also on the upswing in the city.

After the first five months of 2012, 10 townhouses priced from $900,000 were sold in the city — only three units in that price range changed hands during the same period in 2011.

For condo apartments, eight units have sold for at least $900,000 so far in 2012, compared to five units last year.

Zone C, which roughly covers southwest Calgary, paced the city in condo sales last month with 385. The zone also saw the highest average resale price at $322,204. It also paced the city in inventory with 1,016 available units.

Located in Zone C, Connaught topped all Calgary communities in May with 49 units sold. Also in Zone C, Springbank Hill had the highest average price at $571,200.

A distant second to Zone C’s sales totals in May was Zone A, which roughly corresponds to northwest Calgary. It saw 189 sales at an average resale value of $295,682.

Zone D, which roughly covers southeast Calgary was third in sales totals last month with 69 at an average resale value of $263,609.

The slowest area of the city for condo sales was Zone B, which roughly covers northeast Calgary. It had 32 sales at an average price of $170,893. The community with the lowest average price in the city was Forest Lawn at $88,000.

MAY it be a GREAT YEAR!

May MLS sales in Calgary up substantially
Calgary Herald
May 29, 2012

It’s been a good spring so far for the local real estate industry with sales moving ahead of last year’s pace at a good clip.

And so far in May sales have continued to be quite healthy.

According to the Calgary Real Estate Board, from May 1-28, there have been 2,104 MLS residential sales in the city, up 27.90 per cent from the same period last year and the average sale price has increased by 3.03 per cent to $445,120.

The single-family home market has seen year-over-year growth of 26.52 per cent in sales to 1,503 with the average price rising by 3.12 per cent to $503,694.

That average sale price is flirting with the all-time monthly record of $505,920 set in July 2007.

In the condo apartment category, sales of 345 are up 31.18 per cent from last year and the average price has risen by 4.03 per cent to $275,382.

Also, in the condo townhouse category, sales in May are up 31.96 per cent from last year to 256 transactions and the price has increased by 5.29 per cent to $329,969.

THOSE ARE RESULTS

Resale Flexes Muscles
By Marty Hope
Calgary Herald June 11, 2011

May was a relatively strong month for resale residential activity in smaller centres surrounding the city, says the Calgary Real Estate Board.

There were 395 sales in May, an increase of nearly 17 per cent from the 338 for the same month last year, it says.

But from January to Mary, 2,386 homes changed hands, down from the 2,676 deals for the same period in 2010.

In terms of average price, both the May and the five-month averages trail year-ago figures.

Last month, the average was $343,071, down from $363,231 a year ago -while the five-month figures are $348,840 and $358,879 respectively, says the board.