Average house prices in Calgary could flirt with record levels within the next two years due to a commodity boom in the province, says a real estate industry analyst.

Don Campbell, president of the Real Estate Investment Network, said house prices could increase five to seven per cent this year and another five to seven per cent in 2012.

“And then after that, we’re going to be back in a bit of a frenzy,” said Campbell. “A frenzy as in a seller’s market. Now I hope it’s not as hot as it was in 2007 and 2006 but I’m telling you by looking at the job market and the population growth expectations I wouldn’t be surprised if it was in the double digits in two years.”

Campbell said people who try to guess what the real estate market is doing by looking at housing statistics are “doing the equivalent of driving across the city staring at their rear-view mirror.”

He said there is an increase in demand for the key four things that Alberta has: food, fuel, fertilizer and forestry.

“Every single one of those is starting to enter into a bit of a super cycle where demand is going to start outstripping supply over the next little while,” said Campbell. “All four of those create jobs and all four of those create in-migration and in-migration is what’s going to drive the real estate market in 24 months.”

According to the Calgary Real Estate Board, in the first quarter of this year, there have been 3,309 single-family home sales in the metro market, up 3.73 per cent from the same three-month period in 2010. The average MLS sale price this year is also up by .08 per cent to $460,315.

In the condominium market, sales in the first quarter have dropped by 11.31 per cent to 1,349 transactions. The average sale price this year is also down by 0.88 per cent to $285,799 compared with the same period a year ago.

The average price of a single-family home in Calgary peaked at $505,920 in July 2007 while the average price of a condo hit a record level of $332,237 in May 2007.

When it released its latest MLS data recently, CREB said Calgary’s labour market has shown some recent improvements but it is still in the early stages of recovery as job growth remains below the five-year average.

“Improvements in the energy sector are anticipated to show stronger job growth in the second half of the year, providing the foundation for continued recovery in the housing market,” said CREB.

Campbell said job growth and in-migration will decrease rental vacancies initially which will eventually increase rents. Then people will start looking at purchasing residential real estate property.

“That’s when the frenzy will be hitting in about 24 months,” he said.