Calgary and area average house prices jump 108% over 10 years $412,315 in 2012: RE/MAX report

CALGARY — Calgary’s residential housing market is poised for expansion in 2013, with move-up buyers set to lead the charge, says a report released Thursday by RE/MAX.

The report said the 10-year appreciation in average house prices for residential properties in the city and area was 108 per cent going from $198,350 in 2002 to $412,315 last year.

By comparison, average house prices across Canada jumped by 93 per cent during the same period from $188,164 to $363,740.

“Low interest rates and a slow but steady increase in average price have provided the impetus, with purchasers finding the current climate ideal for trading up to a larger home and/or better neighbourhood, or laterally, to a downtown condominium,” said the RE/MAX Move-Up Buyers Report about the Calgary market. “While equity gains have been limited over the past five-year period, those who purchased within the last decade have realized solid appreciation.”

Tanya Eklund, a realtor with RE/MAX Real Estate Central, said it has been amazing start to the new year in the market.

According to the Calgary Real Estate Board, year-to-date until February 20, MLS sales in the City of Calgary are up 11.97 per cent compared with the same period last year and average sale prices have increased by 9.36 per cent.

“Listing inventory is down and sales are up based on last year to date. We seem to be in this little sweet spot in the market right now,” said Eklund. “Sellers have gained momentum due to inventory levels and low selection. We are seeing multiple offers again, not just on land but on resale homes.

“Buyers seem to be very confident and are considering move-up homes or buying investment properties. Rental rates have increased due to the low vacancy so this is putting new buyers into the market and giving consumers confidence to purchase revenue properties again.”

Calgary and area average house prices are actually down slightly by just under one per cent from 2007 when they were $416,399 during the housing boom.

The RE/MAX report said a supply shortage, particularly in sought-after neighbourhoods, could place “serious” upward pressure on pricing once again.

“The strong economic fundamentals at play in Calgary and the province overall, will likely buoy the residential real estate market in 2013,” said RE/MAX. “While more experienced, move-up buyers are forecast to dominate homebuying activity this year, the first-time buyer won’t sit still for long. Pent-up demand — combined with a tight rental market — could spark renewed interest by year-end.”

Calgary’s 10-year price appreciation was the seventh highest in the country of the 16 markets surveyed by RE/MAX.

The top percentage increases and the average prices in 2012 were: Regina, 198.90 per cent, $301,145; Saskatoon, 165.41 per cent, $315,834; Winnipeg, 160.12 per cent, $255,058; St. John’s, 149.10 per cent, $285,529; Greater Vancouver, 142.17 per cent, $730,063; and Edmonton, 122.63 per cent, $334,318.

Against a backdrop of strong equity gains and lower interest rates, move-up buyers are once again set to ramp up their role in major Canadian housing markets, said the RE/MAX report.

Driving the upward movement has been substantial price appreciation in most major centres.

But gains have been more muted over the last five-year period.

“Canadian confidence in home ownership continues to fuel homebuying activity, particularly in the move-up segment,” said Elton Ash, regional executive vice-president for RE/MAX of Western Canada. “Equity gains have been a primary driver, with return on investment exceptionally strong in the past decade. In fact, the Prairies have seen a substantial upswing in housing values between 2002 and 2012, yet prices remain surprisingly affordable. Strong economic fundamentals helped fuel record price appreciation in markets like Regina, Saskatoon, and Winnipeg after decades of slow but steady growth.”

RE/MAX said the time between moves has decreased with first-time buyers generally prepared to upgrade within four to seven years after their initial purchase.

Twitter: MTone123

© Copyright (c) The Calgary Herald

Good Economic News for Canada

Good news in Canada easily goes unnoticed. Below is some good stuff:

•    Canadian 10-year bond yields touch 2.00%, marking an 8-month high. = MORTGAGE RATES will have pressure to creep up! This is one of the indicators I watch.

•    TD Economics has pushed back the first Bank of Canada rate hike to the first quarter of 2014.

•    November GDP surprises markets on the upside, growing by 0.3%.

•    Small business owners were more optimistic in January, with near-term hiring intentions at a post-recession high.

How much do you think you’ll get back for that reno?

This is one of the better articles on renovations. We did hear of a client who showed my recipts for $88,000 of back yard landscaping. It was super awesome and he had a massive rock moved in from Golden, BC at at cost of more than $20,000.

Imagine the disappoiontment when he found out that the total maximum that can be added to a home value for “superior landscaping” was $8,000. AND the people that ended up buying the property ended up having to pay $2,000 to have that giant rock moved out of their back yard.

Some people’s gold is other people’s garbage. How true.

How much do you think you’ll get back for that reno?

Shelley White

The Globe and Mail

Ah, the sweet sounds of summer: hammering, sawing, digging, demolition. Well, they’re not sweet exactly, but certainly familiar to anyone who lives in one of Canada’s larger cities. With real estate prices in a state of flux, it seems everyone is eager to spruce up what they’ve got and hopefully be rewarded with an increase in property value. However, as we know, not all renovations are created equal. Just because you’re sinking the money into your home doesn’t mean you’ll see a return on your investment. And just about everyone has an opinion on what you should and shouldn’t be tearing out.

I came across a handy-dandy online tool offered by the Appraisal Institute of Canada, which can help you determine how much of a return you can expect to get out of your home renovation. (The AIC is a self-regulating professional association and the largest property valuation organization in Canada, with 4,800 members in Canada and around the world.)

Choose a reno, plug in your expected cost, and it will tell you how much of your investment you can expect to get back. For example, if you spend $25,000 on a kitchen reno you are likely to get 75 to 100 per cent of that investment back when you sell, or $18,800 to $25,000.

Clearly, these are general guidelines, not hard and fast rules, and how much you spend will affect how much you get back. If you blow $70,000 on a fabulous bathroom job in a house that’s only worth double that, you’re unlikely to ever see a dime of that money again. In addition, choosing a renovation should be about more than just return on investment – it is your home, after all, and any work you do should also be for your enjoyment. But if you’re mulling over one job versus another and you’re looking to sell soon, it might be prudent to go for the basement reno over the swimming pool (see below).

Some of the big winners are obvious (bathroom and kitchen renovations appear to give the biggest bang for your buck), but there were others that were more surprising to me (only 25 to 50 per cent return on landscaping? Say it ain’t so).

Here’s a look at the return on investment you can expect from 25 of the most popular home renovations, according to the Appraisal Institute of Canada:

Bathroom and kitchen renovations are the real winners, providing a return on investment of about 75 to100 per cent, followed closely by exterior or interior painting at 50 to 100 per cent.

Other safe bets include basement renovation, garage construction, window/door replacement, rec room additions and fireplace installation, which return about 50 to 75 per cent, as do exterior siding and upgrades to flooring or furnace/heating systems.

You can expect a slightly lower return on investment (25 to 75 per cent) with concrete paving and roof shingle replacement, as well as installing central air conditioning or building a deck.

The lowest return on investment comes from landscaping, asphalt paving, building a fence or interlocking brick walkways, or even installing a home theatre room, which all return about 25 to 50 per cent. The home renovations that are least likely to increase property value are skylights, whirlpool tubs and swimming pools, which return between 0 and 25 per cent.