A SELLERS' MARKET

Calgary area housing market has best price growth expectation
7% and higher forecast for year-over-year hike in short-term
By Mario Toneguzzi 
Calgary Herald September 20, 2013

CALGARY — Calgary and area is forecast to lead the country in short-term year-over-year price growth in the housing market, according to a report released Friday by the Conference Board of Canada.

The report said prices in the Calgary region are expected to rise by seven per cent or more.

The board’s report said Calgary is now in a sellers’ market.

The board said the seasonally-adjusted annual rate of sales in Calgary of 33,264 in August was up 6.3 per cent from the previous month and a 26.3 per cent hike from a year ago.

The seasonally-adjusted annual rate of listings at 43,704 was up 2.0 per cent from July and increased by 4.8 per cent from August 2012.

The board said the average price in Calgary of $441,806 in August increased by 0.7 per cent from the previous month and by 8.0 per cent from a year ago.

Scott Bollinger, broker for the ComFree Commonsense Network, said the strong housing market in the city is due to a strong outlook for the economy.

“We’ll outperform most of the country, and that creates significant demand for housing. Interest rates are low, and the Bank of Canada is unlikely to move them till 2015,” he said. “Personal incomes are high and growing. Oil prices are strong and stable. Our growth in the 20-44-year-old demographic is second fastest in the world, behind only India. And our cost of living is lower than Toronto or Vancouver.

“That all adds up to this: More Calgarians can afford to buy a home, and more can afford to move up in the market.”

Bollinger said the strong price growth in the Calgary market is due to confidence — people who are confident about their employment and future wages.

“Confidence in housing is a good investment. Confidence in the city’s economic strengths and the strength of the market, in the face perhaps of news from other cities that a housing bubble is on the horizon. Real estate is local, and Calgarians are smart and savvy enough to realize that,” he said.

“I think we can expect this to continue because of those strong economic fundamentals, and because growth in optimistic buyers is outpacing growth in listings. It’s the old supply-and-demand.”

According to the Calgary Real Estate Board, year-to-date for just the city, there have been 17,933 MLS sales as of Thursday, up 9.33 per cent from the same period a year ago. The average sale price has jumped by 6.93 per cent to $456,779 but new listings are down 0.8 per cent to 25,943.

“The average price in Calgary is forecast to increase almost six per cent this year to $435,000,” said Richard Cho, senior market analyst in Calgary for Canada Mortgage and Housing Corp., about the census metropolitan area. “Part of the gains in the average price thus far is due to the high number of luxury homes sold this year. There has also been more pressure on prices as active listings have moved lower as well as days-on-market. Price growth is expected to continue into 2014 but at a more modest pace.”