A clearly positive forecast for Calgary’s real estate market is being given by a federal agency.
“Up, up, up,” is how senior market analyst Richard Cho characterized predictions at the recent 2013 Alberta Housing Outlook Conference by Canada Mortgage and Housing Corp.
“For next year, many of the factors that are so important for housing are expected to continue to support housing activity in 2014 — growth in employment, growth in income and strong in-migration flow,” said Cho.
Steadily growing employment and lower unemployment rates compared to other parts of Canada, coupled with higher wages, are attracting migrants to the city in record numbers, he said. This is helping push housing demand, with prices and construction starts of homes predicted to climb in the coming year.
Cho expected the Calgary census metropolitan area to see steady gains in employment growth by the end of 2013 and into 2014, with growth sitting at 2.8 per cent this year and 2.5 per cent next year.
The area includes surrounding cities and towns as well as Calgary.
Average weekly earnings are expected to grow by five per cent for the year to date, settling around $1,100 per week compared to the national average of about $900 per week.
Calgary’s labour market will likely remain hard at work, with the city’s unemployment rate of five per cent, seasonally adjusted, sitting about two percentage points lower than the national average of seven per cent.
The city continues to attract new residents, perhaps attracted by these higher wages and lower employment rates, said Cho.
Net migration — people moving to the city minus those leaving — is expected to post another record year in 2013, with a forecast of 30,000 people moving to the province, just topping 2012’s record. CMHC expects net migration to tail off a bit to 23,000 people in 2014.
Demand for resale homes will likely continue to grow, says the federal agency. Total sales of MLS-listed resale homes are expected to continue to grow, rising from 22,466 in 2011 and 26,634 in 2012 to 29,200 by the end of 2013 — topping out at 30,000 in 2014.
Likewise, the average price of these homes will likely grow to $447,000 next year, up from $436,500 this year.
The new home market will likely grow to 6,500 construction starts of detached single-family homes, up 300 starts from 6,200 predicted for 2013. Construction starts for multi-family housing is expected to show a much bigger jump, likely rising to 6,600 starts next year compared to a predicted 5,500 starts this year.
Meanwhile, even while the vacancy rate is expected to improve slightly to 1.2 per cent in 2014, down from 0.8 per cent this year, the cost of renting an average two-bedroom unit is expected to climb to $1,280 per month in 2014, up from $1,230 per month this year.