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.”

CALGARY TOPS IN GROWTH

Calgary leads country in housing market price growth
Prices up nearly 7% from last year
By Mario Toneguzzi
Calgary Herald August 15, 2013

CALGARY — Calgary led the country in July with the best year-over-year price growth in the resale housing market.

The Canadian Real Estate Association’s MLS Home Price Index, released Thursday, indicated prices in Calgary were up 6.79 per cent — more than doubling the national aggregate of 2.66 per cent price growth.

The index measures the rate at which housing prices change over time taking into account the type of homes sold. Nine major Canadian centres are surveyed.

“Our market is trending towards a selling market. Listing inventory is 20 per cent lower than this time last year and pricing is approximately seven per cent higher overall,” said Tanya Eklund, with RE/MAX Real Estate (Central) in Calgary. “The Calgary floods created a short-term surge in house purchases in certain areas. People who could afford to buy have purchased, so their families were not displaced. Due to the very low vacancy rate, rental inflation and difficulty in finding rental accommodation, this made some consumers turn to purchasing instead of renting.

“We are seeing many inner-city communities flourish with sales, however I am seeing certain suburb markets higher in inventory in the plus $1 million, so sales have not been as abundant as other communities closer to the interior of the city. Overall, it appears to be a great time to sell. Buyers have less time to think about their purchases with hopes of not losing out on their ideal home. I am confident we will continue to see a stable real estate market as we enter into the fall.”

CREA stats indicated Calgary MLS sales in July of 2,976 were up 18.9 per cent from last year while the average sale price jumped by 7.0 per cent to $438,192.

Across Canada, sales were up by 9.4 per cent to 44,829 units and the average price rose by 8.4 per cent to $382,373.

In Alberta, transactions increased by 17.8 per cent to 6,853 units while the average price was up by 4.3 per cent to $379,696.

“Canadian home sales have staged a bit of a recovery in recent months after having declined in the wake of tightened mortgage rules and lending guidelines last year, but the numbers for July suggest that national activity is levelling off at what might best be described as average levels,” said Gregory Klump, CREA’s chief economist. “Sales dropped sharply in August last year, so we may see some year-over-year increases in sales and average prices next month that would reflect weakness in the rear view mirror.”

Sales and prices in Calgary are continuing their upward trend in August. According to the Calgary Real Estate Board, month-to-date until Wednesday, total MLS sales of 945 were 32.17 per cent higher than the same period last year and the average sale price was up 13 per cent to $455,688.
In another report released Thursday, Canada Mortgage and Housing Corp. forecast MLS sales in the Calgary census metropolitan area to rise to 27,800 transactions this year from 26,634 in 2012. Sales are expected to jump to 28,300 in 2014.

The agency forecast the average MLS sale price in the Calgary region to rise from $412,315 in 2012 to $435,000 in 2013 and to $445,000 in 2014.

Nationally, the CMHC’s point forecast is for MLS sales across Canada to decline from 453,372 in 2012 to 448,900 this year and then rise to 467,600 in 2014.

The national average sale price is expected to see year-over-year growth of 2.7 per cent this year to $374,800 followed by an increase of 2.1 per cent in 2014 to $382,800.