This is great news! Mostly the home prices are supported by the strong in-migration.
Typical price jumps 7.72% from last year
CALGARY — Home prices in Calgary grew at the fastest year-over-year pace in Canada in March, according to a report released Monday by the Canadian Real Estate Association.
The association, in its MLS Home Price Index, said Calgary’s resale market saw growth of 7.72 per cent in its benchmark price.
Nationally, of seven Canadian centres surveyed regularly in the index, price growth was only 2.20 per cent from last year.
In March, CREA said MLS sales in Canada of 39,527 fell by 15.3 per cent compared with a year ago while in Calgary the drop was only 0.6 per cent to 2,631 transactions.
New listings in Canada were down 8.5 per cent to 81,677 and they were off by 6.7 per cent in Calgary to 4,225.
The average sale price in Calgary grew by 7.7 per cent to $441,424 while in Canada it was up 2.5 per cent to $378,532.
In Alberta, sales dropped by 2.9 per cent to 5,605, new listings were off by 9.0 per cent to 9,781 and the average sale price was up 6.5 per cent to $386,330.
Doug Porter, chief economist with BMO Capital Markets, said all major home price measures are displaying unusual uniformity at present — the average and median price are both up between two per cent to three per cent.
“The main story is that home sales have taken a big step back since last spring but prices are holding up,” he said. “The market remains relatively balanced, albeit with a distinct fade. Look for the headline figures to turn less negative later this year, although we still expect a seven per cent drop in annual sales for 2013.”
© Copyright (c) The Calgary Herald
This is a GREAT article on how to look at things. Edmonton, just like Calgary, is seeing lots of in-migration which is also supporting their home prices.
Low inventory is causing rapid growth in the average price of real estate in Edmonton. The interesting thing is that the inventory is low because there are fewer new listings than we typically see at this time of year, not because of increased sales.
As you can see below, the inventory of properties for sale is significantly lower than we typically see in March. There were 4,741 properties available on the MLS® system at the end of March – down 15.4% from the same time last year.
Alberta’s population expanded by 3.04% in 2012, nearly three times the national average. 46,000 Canadians move to Alberta from other provinces last year, just beneath the record levels seen in 2006, leaving many people wondering – where is our boom?
“The great mystery here is that we’ve had phenomenal employment growth, very strong income growth, very strong net in-migration, and yet it hasn’t poured over into the housing market yet,” says John Rose, chief economist for the City of Edmonton.
“These are unprecedented levels of in-migration into the province, so this (the relative stability in house prices) has kind of mystified us,” says Richard Goatcher, economic analyst with the Canadian Home Builders’ Association-Alberta.
From my perspective, there are a number reasons we are (thankfully) not seeing a repeat of 2007:
- It’s harder to get financing than it was in 2007. Back then it seemed like the banks approved just about anything, today they are being much stingier.
- Lack of speculation: in ’07 everyone and their brother wanted a piece of the action, and a lot of people bought properties (especially new homes) to flip… a lot of those people still own those properties 5 years later.
- Low vacancy rate: this situation typically leads to higher sale prices, but in this case I believe it is leading to low inventory. For years now we’ve heard “if I can’t sell it for the price I want I’ll just rent it out” and I think a lot of people have their investment properties rented out to good tenants. Why sell when you’re finally making money by renting?
- Lower consumer confidence – no matter what is happening locally, the news from Toronto, Vancouver and around the world does not encourage people to jump into the market.
Of course, as Don Campbell recently reminded us, real estate is local:
“At no other time in history has the real estate market in Canada been so regional… Alberta’s population is growing substantially, especially with that younger age cohort. They come out here to get a job and make $80,000 instead of $30,000 back home. And once they’re here, they discover Alberta is a pretty cool place to live, but it takes awhile for that to kick in, often about two years. So I’m very bullish on the direction that the market is going to be taking over the next portion of the cycle, say the next three, five or seven years.”
With all that said, we did see a significant jump in the average sale price of residential real estate in Edmonton in March. The residential average was $354,759 in March, up 4.3% from $340k last year and $343k last month. The median price did not jump as much and was $329,700 in March, up from $323k last year and $320k last month.
Sales are up, but they would be up higher if there were more homes on the market. There were 1497 sales in March, up from 1480 last year and 1068 last month.
When first time buyers cannot find a house that meets their needs or are forced into a multiple offer situation, they often remain on the sidelines,” said REALTORS® Association of Edmonton President Darrell Cook. “Low interest rates and rising rental rates create the interest and desire but lack of suitable properties means they are not able to make the transition to home ownership at this time.”
The number of new listings were significantly down from previous years – there were 2422 new listings in March compared to 2847 last year and 1995 last month.
the reason for the tight market is the continuing in-migration of Canadians moving for high quality jobs. Where else would they go. IF the pipelines get approved it will only get tighter.
Tight market drives home prices higher
Real estate board reports average Calgary house sold for $518,400
CALGARY — A tighter market for resale homes led to faster sales as prices set new all-time highs in March, according to the Calgary Real Estate Board.
In Calgary, average housing unit prices including condos and townhouses were up nine per cent to $460,800 from $422,400 in March 2012. That’s more expensive than the record $457,100 in February, which upset the previous high mark of $452,600 set in July 2007.
Single-family homes sold in the city averaged $518,400, ahead by nearly 10 per cent over March 2012, while condos were up nearly 11 per cent at $300,900 and townhouses were up 13.5 per cent at $355,500.
The average MLS sale price for a single-family home in February was $518,500, beating the previous record of $506,700 in July 2007.
“Less resale product available to consumers is ultimately limiting sales growth,” said CREB president Becky Walters in a news release.
“In addition, resale homes are selling in less time and with continued upward pressure on prices.”
The average residential price in the Calgary region jumped nearly seven per cent to $451,500 in March from $422,400 in the same month of 2012, the board said in a news release.
CREB said the inventory of active homes for sale in Calgary showed the lowest March levels in more than five years, coming in at about 4,000 units, up from February’s levels but well below the number available one year ago.
New listings in March were five per cent lower than levels recorded in 2012, and five per cent lower after the first quarter, it said.
“While market conditions are a far cry from activity witnessed throughout the frenzy in 2006 and 2007, there has been a noticeable change over what became the norm over the past few years.” Walters said.
Ann-Marie Laurie, CREB’s chief economist, said new single-family listings under $500,000 are declining at double-digit rates, driving consumers at that price point to either surrounding towns, condominiums or the new home market.
A total of 1,480 single-family homes were sold in Calgary in March, down six per cent from 1,575 in March of 2012.
Condo sales were down two per cent at 347 units and 283 townhouses were sold, up by a fifth from 235 in the same month of 2012.