Calgary homebuyer demand ‘supercharged,’ says RBC report

Homebuyer demand in Calgary has been “supercharged” by a booming economy, says the latest Housing Trends and Affordability Report released Wednesday by RBC Economics Research.

The report said modest deterioration in housing affordability in the Calgary area in the third quarter “is likely to be taken in stride by local homebuyers, because they still benefit from some of the lower ownership costs as a share of household income in Canada.”

The report said RBC’s affordability measures increased for all housing categories — between 0.2 percentage points and 0.7 percentage points. But it said the levels continue to be below the national and historical averages.

“Favourable affordability conditions primarily reflect high household income in Calgary rather than low home prices given that home prices in the area are among the more expensive in the country,” said the report. “While affordability is constructive for homebuyer demand, the more powerful factors driving it, no doubt, are Calgary’s hot labour market and fast-rising population, both supercharged by a booming provincial economy.

“Home resales surged to their highest level in six years in the area. The fact that this occurred despite the worst floods in memory at the end of June is quite telling of the market’s strength at this stage.”

The report said affordability levels in Alberta remained relatively attractive in the third quarter, with measures standing below their historical averages and the national averages.

“Alberta’s strong provincial economy and rapidly rising population continue to fuel housing market activity – third quarter home resales increased by 7.8 per cent from the second quarter, the fastest pace in nearly three years,” said Craig Wright, senior vice-president and chief economist of RBC, in a statement. “The province’s unrelenting economic boom bodes well for continued solid housing market conditions next year.”

RBC’s housing affordability measures capture the proportion of pre-tax household income needed to service the costs of owning a home at market values.

In Alberta, RBC’s measure for bungalows rose by 0.6 percentage points to 32.5 per cent, and the measure for two-storey homes rose 0.2 percentage points to 34.6 per cent. The measure for condominiums increased slightly by 0.1 percentage points to 19.6 per cent.

In Calgary, the measure rose by 0.7 percentage points to 33.7 per cent points for bungalows, 0.4 percentage points to 34 per cent for two-storey homes, and 0.2 percentage points to 19.6 per cent for condominiums.

In Canada, RBC’s measure for detached bungalows rose 0.7 percentage points to 43.3 per cent, while the measure for two-storey homes climbed 0.6 percentage points to 48.9 per cent. The measure for standard condominiums edged only slightly higher by 0.1 percentage points to 28.0 per cent.


© Copyright (c) The Calgary Herald

Unfilled jobs in Alberta above national average – 287,400 jobs went unfilled in Canada in the third quarter

Alberta’s rate of unfilled private sector jobs continued to be above the national average in the third quarter of this year, according to the Canadian Federation of Independent Business.

In its Help Wanted report, which was released Tuesday, the CFIB said there were about 287,400 full and part-time positions unfilled or 2.4 per cent across the country.

It said Saskatchewan had the highest provincial vacancy rate in the country at 4.0 per cent this quarter, up from 3.9 per cent the quarter before. Alberta’s rate was the same at 3.4 per cent.

Richard Truscott, the CFIB’s Alberta director, said there were 54,700 unfilled jobs in the province.

“It’s another indication Alberta has a serious labour shortage in terms of skilled workers,” said Truscott. “So it’s further affirmation that there is indeed an issue, there’s a major problem, and we’ve got to focus on it and try to figure out some strategies to deal with it.”

He said the number of unfilled jobs in the third quarter remained fairly stable but there doesn’t seem to be an end in sight in solving the issue.

“This is not a forecast. This is a snapshot of the current state of afffairs,” said Truscott. “But you would imagine just from talking to business owners, and looking at lots of other economic indicators, that this serious shortage of qualified people is going to continue for some time.”

Adam Legge, president and chief executive of the Calgary Chamber of Commerce, said the CFIB report reflects the reality of the situation.

“There’s lots of opportunity for labour. There’s still high demand for labour,” said Legge.

He said small business can’t compete with bigger companies from a wage or benefit perspective.

“And so when there are fewer people than there are jobs, they’re going to migrate towards the ones that pay the best or offer the best experience,” he said. “And often small business doesn’t have the resource base to compete on some of those.”

Legge said the labour shortage will continue unless the province experiences challenges to its economy.

Ted Mallett, CFIB’s chief economist and vice-president, said in a statement that more than half the job vacancies in Canada are in small businesses that employ less than 50 people.

“These firms have unique challenges that make finding and keeping workers with the right skill set more difficult,” he said.

The CFIB said the highest number of job openings in the third quarter was in the retail, hospitality and construction sectors, with over 30,000 potential openings across the country.

Alberta’s unemployment rate in October was 4.4 per cent, the second lowest in Canada behind Saskatchewan’s 3.6 per cent.

According to the Alberta government, employment growth in the province was 74,800 people or 3.5 per cent in the past year. It was the highest annual employment growth in the country and accounted for 35 per cent of Canada’s employment growth.


© Copyright (c) The Calgary Herald

Luxury home market in Calgary and area shines – Record year for upper-end real estate

The luxury home market in Calgary and area continues to shine in what has turned out to be a record year for sales in the upper-end of residential real estate.

Ann-Marie Lurie, chief economist with the Calgary Real Estate Board, said several favourable economic conditions have been supporting a strong luxury home market in Calgary and area this year.

“There’s more activity in the inner-city. A lot of those sales are actually occurring in the inner-city,” she said. “And a lot of them are single-family homes.”

The inner-city market is also demanding a premium price these days.

“Overall it does point to people and what they feel is going to happen in Calgary in the long term. There’s some confidence of what’s happening in the Calgary market,” said Lurie. “That’s supporting that growth as well.”

So far this year, according to CREB, there have been 689 MLS sales in the city of $1 million or more, up until Tuesday. The previous record for a year was set last year at 544.

Every month this year, with the exception of January, has seen new records set in the luxury home market in the city.

Month-to-date up until Tuesday there have been 44 luxury home sales. The November record is 48 which was set last year.

The Calgary MLS market also set a record earlier this year with the highest priced sale ever as a Crescent Heights home sold for $11.1 million. A penthouse condo in Calgary’s Beltline district is currently for sale at $10 million but not through the MLS system.

But the appetite for expensive properties is not only a city phenomenon this year.

This year, a Canmore lot sold for a record price of $2 million in that real estate market. An executive single-family home in Silvertip sold for $3.75 million, setting the record for the biggest resale residential property ever in Canmore.

There have been 24 single-family home sales over $1 million in Canmore from January 1 to November 19, up from 16 for the same period last year. In 2012, there were no sales over $2 million. This year there have been four up until November 19.

The top five most expensive MLS listings currently on the market are: $29.057 million for 279 hectares of rural land near High River; $13.5 million for 48 hectares of rural land near Springbank; $12.7 million for a home in Canmore; $12 million for a home near Cochrane; $12 million for a home near Priddis; and $12 million for a home near Calgary to the west.

Jeff Neustaedter, realtor with RE/MAX House of Real Estate in Calgary, has just listed the home for $12 million in Rocky View County. It is one of about 20 listings he has on the market for $1 million or more.

“People overall feel confident there’s not going to be a bust,” he said, adding that people are also turning a deaf ear to all the chatter about interest rates going up.

“This is the new reality. High real estate prices and low interest rates.”

He said so many people in Calgary make a very good living resulting in solid sales in the upper-end market.

Steve Landi, a realtor with Royal LePage Rocky Mountain Realty in Canmore, has the home in Canmore listed for $12.7 million.

“Canmore’s star is rising again for obvious reasons,” he said. “It should have never faded because of it’s proximity to Calgary. What a phenomenal four-season playground Canmore is . . . This is an exceptional community.”

“The luxury end is well and truly back and it kind of fits in with everything that’s happening in real estate not only in Canmore but other areas that a couple of years ago were depressed (in the United States) . . . The luxury end of the market is the strongest it’s looked since the correction.”

He said Canmore’s residential real estate market started gathering some “modest momentum” about this time last year.


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