Calgary’s housing market renaissance has not been a steady process, as the overall improving trend in resale activity was inconsistent last year, says a report released today by RBC Economics Research.

But the city remains one of the more affordable housing markets in Canada.

The latest Housing Trends and Affordability Report said recent statistics, however, show that resales in the area stabilized in the first quarter of 2013 and that month-to-month gains were registered during the February to April period.

“Calgary-area buyers continue to benefit from a strong provincial economy, accelerating population growth and attractive affordability,” said Craig Wright, senior vice-president and chief economist, RBC. “RBC (affordability) measures for Calgary compare favourably against both historical norms and the national average, keeping it one of the more affordable housing markets in Canada.”

The RBC Housing Affordability Measure, which has been compiled since 1985, is based on the costs of owning a property. The higher the reading, the more difficult it is to afford a home at market values. For example, an affordability reading of 50 per cent means that home ownership costs, including mortgage payments, utilities and property taxes, would take up 50 per cent of a typical household’s monthly pre-tax income.

The RBC measures for Calgary in the first quarter of 2013 were:

– Bungalows: 38.7 per cent (up 0.8 points)
– Two-storey homes: 38.8 (up 0.4)
– Condominiums: 22.9 (up 0.8)

This modest deterioration in affordability was caused by higher home prices was the result of tight market conditions, said RBC.

According to the Calgary Real Estate Board, to May 22 there have been 9,170 MLS sales in the city this year, up 3.63 per cent from the same period a year ago. The median price has increased by 5.41 per cent to $399,500 while the average sale price of all properties has gone up 6.61 per cent to $453,654.

The RBC report also said Alberta’s housing market was not hindered by modestly higher home prices in the first quarter of 2013, as high household income across the province kept market conditions among the most affordable in Canada.

“Despite higher prices and, in turn, a slight erosion in affordability in the first quarter, homebuyers in Alberta enjoyed substantial buying power thanks to their elevated income. The provincial market remains among the most affordable in Canada,” said Wright. “Barring an unexpected shock to the economy, Alberta’s housing market should remain brisk in 2013.”

RBC’s housing affordability measure for the benchmark detached bungalow in Canada’s largest cities is as follows: Vancouver 82.3 per cent (up 0.1 percentage points from the previous quarter); Toronto 53.8 per cent (up 0.8 points); Montreal 40.1 per cent (up 0.6 points); Ottawa 39.1 per cent (up 0.1 points); Calgary 38.7 per cent (up 0.8 points); Edmonton 30.4 per cent (down 0.2 points).

© Copyright (c) The Calgary Herald

Fewer Calgary homeowners intend to buy a property in the next five years, according to the BMO Housing Confidence Report released on Wednesday.

The report said plans to buy in Calgary have decreased by 13 per cent since the fall (39 per cent versus 52 per cent).

In Calgary, the 12-month price expectations have dropped to 2.1 per cent from 2.4 per cent in the fall.

Sal Guatieri, senior economist with BMO Capital Markets, said “in Calgary, strong price gains appear to have put some potential buyers on the fence.”

According to the Calgary Real Estate Board, month-to-date until May 21, there have been 1,658 MLS sales in the city, up 3.95 per cent from the same period a year ago. The median price has risen by 3.97 per cent to $405,500 and the average price has increased by 2.69 per cent to $458,355.

Nationally, 48 per cent of Canadian homeowners intend to buy a property in the next five years – mostly unchanged from fall 2012 – signalling a high level of confidence in Canada’s housing market is continuing into 2013, said BMO.

“The relative strength of the Canadian housing market continues to bolster homeowners confidence, while improving affordability across all regions reflects that Canadians are making responsible choices when it comes to financing a home,” said Martin Nel, vice-president of lending and investments for BMO Bank of Montreal.

BMO’s second semi-annual report, conducted by Pollara, tracks confidence in Canada’s housing market among Canadian homeowners by measuring intentions to buy or sell, price expectations and overall mortgage affordability. The report found: close to half of all homeowners under 40 intend to purchase a larger home within the next five years (46 per cent), and are three times more likely to move to a more expensive rather than a less expensive neighbourhood (24 per cent versus eight per cent); 10 per cent of homeowners plan to buy a recreational property in the next five years, down two points from last fall; and homeowners planning to buy an investment property have declined to six per cent from eight per cent last fall.

Nationally, sensitivity to price increases has lessened significantly as intentions to buy would drop only four points in the event of a five per cent increase in home prices compared with a 10 point drop last fall. Over the next year, homeowners expect prices to rise by 2.0 per cent.

“Alberta appears to be the most sensitive region to price changes, where a five per cent increase in prices would result in a 12 point decrease in buying intentions, compared with only one point in the fall. Over the next year, Albertans expect prices to increase 1.9 per cent, down from three per cent in the fall,” said BMO.

In another report released Wednesday, the Canadian Association of Accredited Mortgage Professionals said the anticipated change in the annual rate of housing starts for the Calgary census metropolitan area is expected to be a positive 600 to 1,800 units, creating 2,500 jobs.

The Change in the Canadian Mortgage Market report said average annual starts for the Calgary CMA in 2011 and 2012 was 11,067.

© Copyright (c) The Calgary Herald

Prices for repeat home sales in Calgary were up 5.5 per cent in April compared with a year ago, according to the Teranet-National Bank National Composite House Price Index.

The index, released Tuesday, also said prices in the city increased by 1.2 per cent from the previous month.

The index is estimated by tracking ob­served or registered home prices over time using data collected from public land registries. All dwellings that have been sold at least twice are considered in the calculation of the index.

Nationally, in 11 markets surveyed, prices were up 2.0 per cent on an annual basis and by 0.2 per cent month-over-month.

The year-over-year hike in Canada was the smallest 12-month rise since November 2009.

“By way of comparison, the Case-Shiller home price index of 20 U.S. metropolitan markets was up 9.3 per cent from a year earlier in February (the latest available reading),” said the Teranet-National Bank report.

In Canada, the rise over the 12 months ending in April exceeded the cross-country average in seven of the 11 markets surveyed for the national composite index: Quebec City (6.1 per cent), Calgary (5.5 per cent), Hamilton (5.4 per cent), Winnipeg (4.4 per cent), Toronto (4.3 per cent), Edmonton (3.6 per cent) and Halifax (2.8 per cent).

The report said price increases lagged the average in Ottawa-Gatineau (1.5 per cent) and Montreal (1.3 per cent). Prices were down from a year earlier in Victoria (3.3 per cent) and Vancouver (1.5 per cent). For Vancouver it was the ninth month of 12-month deflation.

Amna Asaf, economist with Capital Economics, said house price growth in Calgary and Edmonton have continued to accelerate, following from their housing downturn of two years ago.

“Although house prices rose in most of the cities, we suspect that as home sales drop, the former will eventually respond,” said Asaf. “Based on the figures already reported by the regional real estate boards, both Toronto and Vancouver posted fewer existing home sales in April compared to a year ago, although the pace of decline has eased. We suspect that national existing home sales . . . may have dropped at a more modest pace of around two per cent year-on-year.

“If we are correct about declining home sales this year, the month’s supply of inventory is likely to rise much further. Accordingly, we suspect that house prices will eventually begin to decline outright.”

On Tuesday, federal Finance Minister Jim Flaherty said he has no plans to intervene in Canada’s housing market, which he says is unfolding in a healthy way.

While some observers are expressing fears the bubble is about to burst, Flaherty said the market is responding the way he envisioned when he tightened lending rules last year.

The Teranet-National Bank index said the national monthly change was the weakest in the 15 years since the inception of the index with the exception of April 2009 when the country was in recession.

“In three markets considered lively, the monthly gain exceeded one per cent: Winnipeg (1.3 per cent), Edmonton (1.3. per cent), Calgary (1.2 per cent). Excluding these three regions, the Composite index would have been flat in April. Lesser monthly increases were recorded in Hamilton (0.6 per cent), Montreal (0.5 per cent) and Toronto (0.4 per cent). Prices were down from the month before in five markets: Vancouver (0.8 per cent), Quebec City (0.5 per cent), Ottawa-Gatineau (0.2 per cent) and Victoria and Halifax (0.1 per cent).”

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Residential construction in the Calgary region boosted the local economy by $5.7 billion in completed projects and employed 19,300 direct jobs last year, says a new report released Friday by the Canadian Home Builders’ Association-Alberta.

The survey also said home builders and renovators in the Calgary area supported 9,200 indirect jobs in Alberta and 8,700 in other provinces with total wages at $2.3 billion.

The CHBA said the impact of homebuyers on Alberta’s economy is even greater when spinoff benefits of the industry are considered.

Will Dunning Inc., a specialist in housing market analysis, which conducted the report, said the province’s home builders and renovators completed $15.1 billion in construction last year and directly employed 48,000 workers. It supported another 22,600 indirect jobs in Alberta as well as 21,800 jobs in other provinces during 2012. Wages paid by the industry totalled more than $5.7 billion.

“We forget the key role home construction plays in Alberta’s economy because oilsands megaprojects get so much attention. But comparing the $12.9 billion Imperial Oil spent over three years to build the Kearl oilsands mine with the more than $15 billion spent on residential construction in a single year puts the importance of housing in perspective,” said Dave Hooge, president of the CHBA-Alberta, in a news release.

The association also said average weekly earnings in construction were $1,301 – significantly higher than the $1,146 average for all industries in Alberta.

“In a year when the Alberta government is struggling with lower resource prices, it is important to recognize that residential construction is a key driver of the economy. Companies and their employees pay taxes that support all levels of the government. Municipal, provincial and federal government policies that make homes unaffordable should be balanced against the fact that the industry generates big benefits for the economy as a whole,” said Jim Rivait, the association’s chief executive.

The report’s finding of the economic impact in different regions include:

Edmonton: Value of construction – $5.6 billion; direct jobs – 17,200; indirect jobs in Alberta – 8,000; jobs in other provinces – 7,800; total wages – $2 billion.

Grande Prairie: Value of construction – $265 million; direct jobs – 900; indirect jobs in Alberta – 410; jobs in other provinces – 410; total wages – $107 million.

Lethbridge: Value of construction – $330 million; direct jobs – 1,100; indirect jobs in Alberta – 510; jobs in other provinces – 510; total wages – $132 million.

Medicine Hat: Value of construction – $167 million; direct jobs – 560; indirect jobs in Alberta – 260; jobs in other provinces – 250; total wages – $66 million.

Red Deer: Value of construction – $262 million; direct jobs – 880; indirect jobs in Alberta – 420; jobs in other provinces – 390; total wages – $105 million.

Lloydminster: Value of construction – $201 million; direct jobs – 470; indirect jobs in Alberta – 180; jobs in other provinces – 300; total wages – $52 million.

© Copyright (c) The Calgary Herald

The Calgary region was the top contributor in March to the increase in new home prices across the country, says Statistics Canada.

The federal agency reported Thursday that the New Housing Price Index for the Calgary census metropolitan area rose by 0.3 per cent in March from February. It was up 0.1 per cent nationally.

On a year-over-year basis, the NHPI in the Calgary region increased by 4.3 per cent while it went up 2.0 per cent across the country.

“Calgary was the top contributor to the advance in March, up 0.3 per cent from February. Builders indicated that increases in material and labour costs as well as market conditions were the main reasons for higher prices,” said Statistics Canada.

“In Calgary, annual prices rose 4.3 per cent, following an identical increase in February and several consecutive months of accelerating annual price increases.”

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More than half of Calgarians feel either stressed or anxious when buying a home, according to the BMO Psychology of House Hunting Report which was released Thursday.

The poll looked at the emotions of people when buying a home — 24 per cent in Calgary said they were stressed and 27 per cent said they were anxious. Other emotions included excited (52 per cent), cautious (46 per cent), and optimistic (33 per cent).

Nationally the results were: 48 per cent, excited; 41 per cent, cautious; 31 per cent, optimistic; 25 per cent, stressed; and 21 per cent, anxious.

The report said Canadian homeowners spent an average of five months house hunting and visited 10 homes before making the decision to buy.

It also found: 80 per cent of prospective buyers know if a home is right for them as soon as they step inside; 68 per cent of likely buyers are willing to settle for a home that’s less than ‘perfect’; 33 per cent feel rushed into making a purchase – a number that rises to 39 per cent among first-time buyers; and the biggest worry on the minds of home buyers is finding something wrong with the home after the purchase (71 per cent), followed by a post-purchase drop in prices (55 per cent).

“It’s important to take a practical approach when house hunting and have a clear idea of where you stand financially to ensure you make a responsible home buying decision,” said Laura Parsons, Mortgage Expert, BMO Bank of Montreal. “Doing research ahead of time and setting realistic expectations can help you avoid making an uninformed or rushed purchase.”

According to the report, 44 per cent of current homeowners say they bought their home because they felt it was a good investment; 37 per cent stated they were motivated to buy because they felt the time was right to get into the market. Another 23 per cent bought because they wanted to move to a new neighbourhood, and 18 per cent bought because their family was expanding.

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Luxury home sales in Calgary posted the strongest percentage increase of all major markets across Canada in the first quarter of 2013, with a substantial 50 per cent hike over year-ago levels, says a new report released Tuesday by RE/MAX.

The Upper-End Market Trends Report 2013 said the trend follows an uptick in the overall market and is a reflection of the renewed confidence emerging among the city’s homebuyers.

The report said 172 luxury homes changed hands in the city in the first quarter of this year on the MLS market, 150 detached houses and 22 condominiums.

“There’s been a strong upswing in the amount of sales that have taken place in the upper end of the market,” said Lowell Martens of RE/MAX Mountain View in Calgary. “I think it’s a vote of confidence. Some properties are being priced accordingly . . . That’s part of a contributing factor.

“It also speaks to the future of Alberta, the future of Calgary, that has made people feel much more confident about making a purchase even in the higher end price range.”

The report said Calgary’s inner core remains most desirable, including the city centre, Hillhurst, Elbow Park and Killarney—to name a few.

“A good mix of purchasers are active in the marketplace, including locals, out-of-province and international buyers,” said the report. “The mindset among purchasers remains cautiously optimistic, but many continue to take their time in making decisions. Despite the solid upswing in activity, few multiple offers have been recorded. Several exceptions have been noted on well-priced properties in established areas in close proximity to the inner core, such as Lakeview and Wildwood, for example.

“Improved interest in properties that once stagnated during the downturn has been a positive sign of a changing tide. In fact, Calgary’s most expensive sale ever recorded took place recently on an Aspen Woods listing that originally came on stream in July 2011. Built on speculation, the 9,300 (square foot) home, with a sticker price of $11.495 million, ultimately moved for $10.35 million — $50,000 above the previous benchmark set in 2009.”

The report said the bulk of Calgary’s luxury home sales is occurring between $1 million and $1.5 million, accounting for just over 70 per cent of activity.

“Preference seems to be equally split between newer homes and those in older, established areas. Infill activity remains strong, and plenty of properties are either knocked down, rebuilt or totally renovated,” said RE/MAX.

“If the current level of buyer enthusiasm continues in the upper end, 2013 could enter the books as a record year for luxury home sales in Calgary.”

Calgary’s luxury home market has been on fire in the past two years. According to the Calgary Real Estate Board, year-to-date until April 28, there have been 228 MLS sales in the city for properties over $1 million compared with 160 for the same period a year ago.

The top communities in the city for luxury home sales this year are: Elbow Park/Glencoe, 25; Altadore/River Park, 15; Springbank Hill, 15; West Hillhurst, 11; Aspen Woods, 9; Elboya, 8; Eau Claire, 8; Lakeview Village, 8; Discovery Ridge, 6; West Springs, 6; and Mount Royal, 6.

Last year set a record for the most luxury home sales ever in the city at 544, eclipsing the previous mark of 458 in 2007.

Just last week, the home of former Calgary Flames’ captain Jarome Iginla sold for full list price of $3.995 million in the southwest Elboya neighbourhood after being on the market for just one day.

The RE/MAX report said Edmonton was second to Calgary with a 41 per cent hike in high-end sales in the first quarter of this year followed by Regina (10 per cent), Saskatoon (six per cent), Winnipeg (five per cent), London-St. Thomas (five per cent), and Quebec City (three per cent).

“Activity in the luxury segment is quite healthy, especially when compared to years past,” said Elton Ash, regional executive vice-president of RE/MAX of Western Canada.

© Copyright (c) The Calgary Herald

Calgary’s resale housing market saw continued growth in April with MLS sales and prices on the upswing.

According to preliminary, unofficial figures on the Calgary Real Estate Board website, total MLS sales during the month of 2,381 were up 8.28 per cent compared with April 2012.

The average sale price jumped by 4.08 per cent to $446,408 while the median price increased by 4.69 per cent to $399,900.

“I listed one in Signal Hill. It sold within a week. We had a ton of showings within the first couple of days. Properties are moving,” said Kristine Semrau, a realtor with Sotheby’s International Realty Canada in Calgary.

“I’ve got buyer clients and we’ve got properties lined up to see the next day and by the time the next day comes they’re gone. I’m sure you can tell by the number of sold signs and all the stickers around town. It’s a little crazy but good.”

New listings of 3,476 were up 7.32 per cent from last year but active listings of 4,364 have dropped by 17.11 per cent.

An indication of how quickly properties are being purchased is the days on market statistic which shows it took an average of 33 days in April for a property to sell, down 19.51 per cent from the 41 days a year ago.

“House prices in Calgary have been on the rise in 2013. Demand for housing continues to be well supported by the economy, while active listings have declined. Homes are also selling quicker compared to the previous year which is also putting upward pressure on prices,” said Richard Cho, senior market analyst in Calgary for Canada Mortgage and Housing Corp.

In the single-family market, sales reached 1,611, up 1.96 per cent from last year as the median price rose by 6.74 per cent to $449,900 and the average price increased by 5.75 per cent to $510,834.

The condo apartment sector saw sales increase by 22.22 per cent to 429 as the median price rose by 4.29 per cent to $255,500 and the average price was up by 8.74 per cent to $291,344.

In the condo townhouse market, sales increased by 27.24 per cent to 341 transactions. The median price fell by 1.11 per cent to $296,000 but the average price was up by 5.15 per cent to $337,118.

© Copyright (c) The Calgary Herald