Calgary house prices to get burst of energy
House prices to get burst of energy
Where oil goes, so goes Calgary.
As much as we like to say the city isn’t as dependent on black gold for its health and prosperity, the fact is, we are.
With oil prices regaining strength and with hiring happening in the oilfields, the economy is beginning to strengthen — and it’s pulling consumer confidence along with it.
A real estate axiom says that when the economy is good, the pace of home sales at the higher end of the market increases.
People in those income brackets aren’t likely to buy if there is an indication the economy is headed south.
“That’s probably true,” says Norb Park, managing broker with Sotheby’s International Realty Canada. “The business-minded are probably saying the economy is heading in the right direction, the oilpatch is in good shape, so this isn’t a bad time to deal.”
Resale housing statistics from the Calgary Real Estate Board tend to agree.
From the start of the year to the end of August, 948 homes priced at $700,000 and more changed hands, up from 779 for the same eight-month period in 2010.
In August, sales in that price range totalled 104 compared with 67 for the same month a year ago.
“There’s a mindset that when oil is doing well, then the economy must be good,” says Park. “That, in turn, increases consumer optimism — and right now, people are feeling positive.”
But not all of us can afford homes that expensive.
Matter of fact, nearly 50 per cent of single-family homes sold this year and last were priced between $300,000 and $450,000.
“With Calgary’s energy sector slated to grow, it is expected to lift the city’s employment, income and in-migration — and in turn help contribute to growth in the resale market,” says Sano Stante, president of the Calgary Real Estate Board. In-migration refers to the migration of people to the city.
“We expect price growth to improve as we approach the end of 2011 and move into 2012,” he says, adding the market is seeing a boost in sales at both ends of the market.
“Improving economic conditions, coupled with affordability and price stability, has given Calgary a boost in buyers for upper-end homes and entry-level condos,” he says.
CREB also reports the average price for single-family resale homes reached $468,051 by the end of August, a one-per-cent increase compared to last year.
Taking a page from the RBC affordability reports, Stante says: “When looking at Canada’s major cities, Calgary is one of the most affordable regions for homeownership in the country. Buyers are benefiting from improved selection at all price ranges in the market.”
The single-family home market had 1,106 sales in August, an increase of 28 per cent when compared to the same month last year — which, by the way, was the lowest for August since 1994.
Sales of 9,485 for the start of the year to the end of August are 10-per-cent higher than the same period last year.
Condo sales totalled 468 units in August 2011, with a year-to-date total of 3,885 — similar to levels recorded in the first eight months of 2010.
PACE QUICKENING
Just like the sale of used single-family homes, the pace is also quickening for resale condos.
As of the end of August, 834 units sold at prices below $200,000, well up from 596 for the same eight-month period in 2010, says the Calgary Real Estate Board. But condo prices continue to remain one per cent lower than last year’s figures with an average price of $288,167 for January to August.
© Copyright (c) The Calgary Herald