SMOKIN' HOT

Calgary real estate industry heading for $9-billion plus year

MLS sales and average prices continue to rise

BY MARIO TONEGUZZI

CALGARY HERALD AUGUST 8, 2013

CALGARY — Calgary’s residential real estate market is on pace to record one of its highest ever yearly total dollar volume for MLS sales.

As of Tuesday, the local industry reached just over $6.8 billion in year-to-date transactions. That is more than $800 million ahead of last year’s pace which was just short of $6 billion as of Aug. 6, according to the Calgary Real Estate Board.

In 2012, total dollar volume for the entire year was slightly over $9.1 billion — only the third time in history it eclipsed the $9-billion mark. The other times were in 2006 at just under $9.9 billion and the record year of 2007 at $11.3 billion.

Christina Hagerty, a realtor with Sotheby’s International Realty Canada, said it’s been a busy real estate market in Calgary this year.

“We anticipated this activity in the beginning of the year with vacancy rates as low as one per cent in the inner core. Limited rental supply and increased rental rates, continued low interest rates with a positive influx of people transferring to Calgary, have made it an extremely buoyant real estate market,” said Hagerty.

“Inner-city condo prices in newer buildings are between $500 to $600 per square foot. There are competing offers from buyers ready to make a purchase when something of quality hits the market. This has caused a ripple effect into inner-city homes from both empty nesters downsizing, transferees, and condo sellers moving up. Many of our clients are renters moving into the buying market simply due to rental prices, investors seeing an opportunity or a significant amount of people moving here from across the country.”

She said home builders are picking up lots where they can find them and there have been several situations where lots are bidding for $100,000 to $200,000 above list prices in inner-city neighbourhoods.

“Alberta fundamentals remain sound and confidence in Alberta’s economy remains strong. It’s a testament to Calgary’s spirit and resilience that the post-flood cleanup has continued at its remarkable pace. Calgary has been leading the nation for the past few years and continues to grow,” added Hagerty.

According to CREB, there were 21,326 MLS sales in Calgary in 2012 with an average sale price of $427,912. In 2007, there were 26,709 sales with an average price of $423,145.

As of Wednesday, year-to-date, there have been 15,001 MLS transactions in Calgary, up 7.06 per cent from the same period a year ago and the average sale price has risen by 6.88 per cent to $457,499.

Becky Walters, CREB’s president, said pent-up demand is contributing to the continued rise in residential real estate sales in the city.

“This past year we saw 30 some thousand net migration to the city,” she said. “We’re getting more and more people moving here ... We’ve got fabulous job availability here.”

Another factor is that Calgary consistently rates high as one of the most affordable housing markets in the country due to its high level of personal income.

“People are seeing that there’s not a ton of inventory. So they’re getting out there making sure they get what they want,” added Walters.