Not even the worst floods in memory in June appear to have slowed the Calgary housing market’s progression this year, says a report by RBC Economics Research.

“A strong provincial economy, solid labour market, fast-rising population, and attractive affordability continue to fuel demand for Calgary housing,” said the bank’s latest Housing Trends and Affordability Report.

It said monthly resale activity increased for six straight months, including in June (rising 1.1 per cent month-over-month) and July (up 3.1 per cent). On a quarterly basis, home resales in the area posted their second-strongest gain (12 per cent) in four years in the second quarter.

“While prices recently embarked on a more steeply upward trajectory, the effect of faster-rising prices has yet to undermine affordability in any material way,” said RBC. “In fact, affordability levels in Calgary continue to be among the better in Canada.”

RBC measures for Calgary showed little movement across all housing categories in the second quarter of 2013. RBC’s measure for two-storey homes rose by 0.5 percentage points to 33.6 per cent and for condominium apartments edged lower by 0.2 percentage points to 19.4 per cent; the measure for bungalows remained unchanged at 33.0 per cent.

The RBC Housing Affordability Measures show the proportion of median pre-tax household income that would be required to service the cost of mortgage payments (principal and interest), property taxes and utilities.

RBC said Alberta homebuyers continued to enjoy a relatively affordable housing market in the second quarter, despite some increases in ownership costs in late 2012 and early 2013.

“Despite the fact that the market has kicked into higher gear since spring — thereby boosting prices and increasing ownership costs — Alberta continues to be a relatively affordable market,” said Craig Wright, senior vice-president and chief economist with RBC. “We will likely see some disruptions in market activity trickle through in summer data from the floods in southern Alberta; however, we anticipate the strong provincial economy will endure, supporting further housing growth in 2014.”

RBC’s affordability measure rose by 0.7 percentage points to 32.4 per cent for bungalows and 0.4 percentage points to 34.5 per cent for two-storey homes. The measure for condominiums rose slightly by 0.1 percentage points to 19.6 per cent.

All measures stood at a level below their long-term average, indicating that home ownership in the province remained historically attractive, said RBC.

Nationally, during the second quarter, affordability measures rose for two of the three categories of homes tracked. RBC’s measure for the detached bungalow rose 0.3 percentage points and for the standard two-storey home rose 0.4 percentage points to 42.7 per cent and 48.4 per cent, respectively. The measure for the standard condominium was unchanged at 27.9 per cent.

© Copyright (c) The Calgary Herald

Calgary’s luxury home market continues to boom.

According to Mike Fotiou, associate broker for First Place Realty in Calgary, luxury home sales in the city have already broke the August record previously set in 2007.

And a third of the month still remains.

Between August 1-19, Fotiou says a total of 42 homes sold for $1 million or more on the MLS market.

In August 2007, there were 38 sales in that price range.

“Even if no more high-end homes sell for the remainder of August, sales would still end up 31 per cent (year-over-year),” writes Fotiou on his website, adding that nine listings in that upper-end market are currently reported as conditionally sold.

“Year-to-date, 502 properties have sold for ($1-million plus) compared to 352 during the same period last year. By the end of 2012, which was a record year itself, 544 luxury homes had sold. If this torrid sales pace holds up, that record will be handily surpassed around the end of September or early October.”

So far in August, 38 single-family homes and four condos have sold in that price range.

© Copyright (c) The Calgary Herald

A Global Cities report ranks Calgary ninth in the world for economic prosperity and development with Ottawa-Gatineau getting the top rating.

The Martin Prosperity Institute, with the Rotman School of Management at the University of Toronto, a think-tank investigating the role of place in economic prosperity, measured how cities throughout the world are performing based on the three T’s of economic development — technology, talent and tolerance — along with a fourth measurement, the quality of place.

Global Cities came up with a scorecard for a variety of world cities that provides a detailed examination of how each city is performing in the creative economy.

Out of the 61 global cities studied, Ottawa was the top city as it received high grades in each of the categories, and the highest Talent grade of any city.

Overall, it is followed by Seattle, Oslo, District of Columbia, Amsterdam, London, Tel Aviv, Copenhagen, Calgary and New York-Newark.

Calgary Mayor Naheed Nenshi said the report is yet another in a list of reports that ranks Calgary in the top 10 of global cities.

“That’s a pretty cool thing for a city of a million people to be ranked as a top 10 city globally. It’s great,” said Nenshi. “We’re the same as New York City. Imagine that.”

This report and others continue to add incentives for people to look at Calgary as a place to move.

“We continue to have a long-term concern about a talent crunch,” said Nenshi. “We’re really one of the few places in the world right now where our primary concern is not unemployment but in fact labour shortages.

“To manage that, we must always be seen as an attractive place for global talent to want to move, invest, live and raise families.”

Bruce Graham, president and chief executive of Calgary Economic Development, said first and foremost the report reinforces what the organization is seeing consistently from numerous ratings done by various institutes and publications.

“We’re consistently ranking at or near the top,” he said. “To be among the top nine of the 61 cities that they look at here, and second among Canadian cities, is definitely a feather in the cap for Calgary and it’s helpful for those that are looking to consider places to plant roots and to locate to as well as business because it really speaks to a strong civic environment and municipal infrastructure and dynamic marketplace that companies and people want.”

A report like this is “ammunition” for the organization’s marketing and communications efforts, said Graham.

“Anytime you can get third-party endorsements and testimonials as to your attractiveness as a place to live, work and play bodes well for our efforts,” he said.

In the report, Calgary scored an A in the Talent category as its citizens were described as “highly educated.”

“Current investment in primary, secondary, and post-secondary education will ensure talent continues to flow to the city,” said the report.

Calgary scored an A in the Technology category as well. “Calgary is one of Canada’s fastest growing urban economies,” said the report. “It is also one of the most innovative.”

The city also scored an A in the Tolerance category. “Calgary’s high foreign-born population, growing immigrant population, diverse religious affiliations, and relatively large LGBT population are clear signs of a tolerant city.”

In Amenities and Quality of Place, Calgary registered a B+. “A safe, cultured city with superior and comprehensive infrastructure, Calgary’s modern urban core is offset by its struggles with urban sprawl, which negatively impact the city’s built form, public transit and neighbourhoods scores.”

Nenshi said he found the rating on urban sprawl very interesting.

“Certainly as the city grows to another level, it’s been very clear that we must be able to sensitively intensify the city and reduce urban sprawl and it seems that even on this global ranking that’s something the world is looking at,” he said.

© Copyright (c) The Calgary Herald

Calgary saw the country’s largest increase in June in the total value of building permits, according to Statistics Canada.

The federal agency reported Wednesday that estimated building permit value was $537.7 million for the Calgary region, up 16.6 per cent from May and a year-over-year hike of 36.0 per cent.

“Following a 41.0 per cent decline in May, the value of permits issued in Calgary advanced largely as a result of higher construction intentions for commercial buildings and multi-family dwellings,” it said.

Tom Dixon, business development manager for real estate and logistics with Calgary Economic Development, said there has been an increase in activity recently in the non-residential sector in Calgary.

“The principal factor is there is a very low vacancy rate and there’s low availability in both the industrial portfolio and in downtown office space. The Class A office space in particular is in very short supply,” said Dixon.

According to Statistics Canada, the residential sector in Calgary saw a 3.7 per cent increase in building permits from May to $344.5 million while the non-residential sector was up 49.65 per cent to $193.2 million.

In Alberta, total building permits of $1.4 billion were down 0.4 per cent on a monthly basis but up 24.3 per cent year-over-year.

The residential sector in the province saw a monthly decrease of 10.4 per cent to $757.9 million. However, that was up 15.8 per cent from last year.

The non-residential sector in Alberta jumped to $645.4 million, up 14.7 per cent from May and a hike of 36.1 per cent from June 2012.

Across Canada, contractors took out building permits worth $6.6 billion in June, down 10.3 per cent from May and the first decrease in six months. It was also off 4.8 per cent from June 2012.

After three consecutive monthly increases, the total value of permits in the residential sector declined 12.9 per cent to $4.0 billion in June. That was also down 10.8 per cent from a year ago.

In the non-residential sector, the total value of building permits decreased 6.1 per cent to $2.7 billion in June. But that was up 5.8 per cent from last year.

© Copyright (c) The Calgary Herald