Calgary real estate market stays the course
Sales activity trending towards long-term stability
Calgary, July 3, 2012 Residential sales in the City of Calgary totaled 11,752 for the first half of this year, a 16-per-cent increase over the same period last year. The rise in sales has brought activity levels closer to long-term trends in the city.
Recent mortgage rule changes may dampen some of the gains in the resale market, says Ann-Marie Lurie, CREB®s chief economist. But this is not expected to cause a full reversal of either sales or price growth, provided the global economic situation does not significantly worsen.
Our housing market is returning to normal levels of activity, supported by the improvements in our employment sector and rise in migration.
Single family monthly sales reached 1,609 units in June, a decline over the previous month, but 16 per cent higher than levels recorded in June 2011. However, new listings are declining as consumers appear to delay putting units on the market until they see further price recovery. Despite the decline, with a current inventory of 3,817, the supply constraint has eased and the single family market is moving towards more balanced levels.
Overall, the Calgary market is trending towards long-term stability, says Bob Jablonski, president of CREB®. Activity levels are consistent with our expectations, and are not demonstrating an overheated market. Weve seen a slight lack of supply in single-family homes, but this is not the case in the broader residential market, including surrounding towns.
The single-family benchmark price for the month of June 2012 was $430,800, a 7.3-per-cent increase over the previous year. Year-over-year price increases have been particularly strong in the recent months, in part due to the decline in months of supply. As the city moves towards balance, we can expect price growth to ease in following months.
Homebuyers are confident about the long-term prospects in our city, and continue to search for homes in those communities that align with their needs, Jablonski says. People who are in the market to buy right now have to make their decisions quicker, but they are well informed and they continue to seek out value for their money.
While June sales activity showed a modest improvement over last year, year-to-date condominium apartment sales totaled 1,858, a 7-per-cent increase over the first half of 2011. Both monthly and year-to-date sales remain consistent with long-term trends. The rise in sales over the first half of the year combined with a decline in listings helped reduce the excess supply. With supply hovering just above three months, the condominium apartment market remains in balance.
The condominium-apartment market recorded a modest improvement in pricing, with a benchmark price of $246,300 in June 2012, a year-over-year price gain of 1.5 per cent. The condominium-townhome benchmark price grew by 3.3 per cent over 2011, and is now $278,000.
Recent reports have mentioned an overvalued Canadian housing market, and it is important to note that the Calgary market has already recorded a correction, says Lurie, who notes benchmark prices in the entire CREB® residential market remain 8 per cent below peak levels. Alberta was slow to recover from the recession, but this year our province is expected to lead the country in economic growth. This growth will continue to support gains in full-time employment and encourage positive momentum in our local housing market by way of both demand and price recovery, Lurie concludes.