RISE AND SHINE

Low inventory, high demand pushing Calgary house prices upward
Royal LePage forecasts prices to continue to rise

By Mario Toneguzzi 

Calgary Herald July 9, 2013

A combination of low inventory and strong demand has driven prices of all housing types in Calgary higher, according to a report released Tuesday by Royal LePage.

The real estate firm, in its House Price Survey and Market Survey Forecast, said that year-over-year in the second quarter detached bungalows increased by 5.9 per cent to $457,889, condominiums were up six per cent, to $261,933, and standard two-storey homes rose by 6.7 per cent to $453,789.

“Inventory is low across all categories right now, and this is driving prices up,” said Ted Zaharko, broker and owner of Royal LePage Foothills, in a news release. “When a listing comes up, there is a swarm of potential buyers, and multiple offers are common. Condominiums are profiting from the spillover effect — buyers who are having difficulty breaking into the tight bungalow market are moving to the condominium market, to the point where inventory is tightening there as well.”

Zaharko said the recent flooding in Calgary may cause some “irregular activity” in the short-term but it won’t have a long-term impact on sales or prices.

He said prices are expected to continue to rise in Calgary as are overall sales.

“Unit sales would be greater if more inventory were available, but until additional inventory comes onto the market, growth in unit sales will be somewhat tempered,” he said.

Nationally, in the second quarter, standard two-storey homes and detached bungalows both showed a year-over-year average price increase of 2.7 per cent to $419,614 and $386,547, respectively. Average prices for standard condominiums rose 1.2 per cent to $248,750.

Royal LePage is forecasting average house prices in Calgary to rise year-over-year by 6.5 per cent this year to $439,000 while sales will increase by 3.3 per cent to 27,500 transactions.

Across the country, the real estate firm is forecasting a three per cent jump in prices to $374,650 with a decline of 5.0 per cent in sales to 430,500 units.

According to the Calgary Real Estate Board, year-to-date until July 8, there have been 12,763 MLS sales in the city, up 4.71 per cent from the same period last year. The median price has increased by 4.99 per cent to $400,000 while the average price has risen by 6.75 per cent to $458,371.