Calgary luxury home market poised for another record year

Calgary’s luxury home resale market experienced a stunning record year in 2013 and a report released Tuesday suggests 2014 could see more of the same.

“With solid confidence in place, Calgary is expected to mirror 2013’s stellar performance, with the luxury market proving strong and steady,” said the RE/MAX Upper End Report. “Another record year is possible, particularly with the optimism that’s now building.”

Calgary’s resale market had 732 MLS transactions of $1 million plus in 2013.

The report, highlighting trends and developments in 16 major Canadian centres, revealed that 75 per cent of markets experienced year-over-year percentage increases in sales — including eight markets that posted double-digit gains. Greater Vancouver led the charge with a 36 per cent increase in luxury sales last year, followed by Calgary at 34 per cent, Edmonton at 32 per cent, Hamilton-Burlington at 31 per cent, Kitchener-Waterloo at 27 per cent, Winnipeg at 26 per cent, Greater Toronto at 18 per cent, and Saskatoon at 15 per cent.

Over two-thirds of markets set new records for high-end sales in 2013. Markets included St. John’s, Quebec City, Greater Toronto, Hamilton-Burlington, Kitchener-Waterloo, London-St. Thomas, Winnipeg, Regina, Saskatoon, Edmonton, and Calgary.

Tamara Pilipchuk, a realtor with RE/MAX Realty Professionals in Calgary, said Calgary’s luxury market is in hot demand and in short supply.

“Not only has the market recovered, but Calgarians see opportunity in the luxury market. With low interest rates and continued growth economically, the luxury market is both affordable and desirable,” she said. “Added pressure comes from increased foreign investment and inter-provincial migration as Calgary becomes more noticed on a global scale.

“There is tight inventory not only in the resale luxury market, but new construction builders are able to pre-sell lots for development upon release. New sale records are being set throughout all communities and all types of product. In a very short time, our housing market has not only recovered but is pushing forward to unprecedented levels. The luxury market is booming but with low inventory and rising prices, attaining that dream home can be a considerable feat.”

She said there were seven homes in Calgary which sold for more than $4 million last year compared with two in 2012.

Since 2009, luxury home sales in Calgary have increased by 115 per cent. Sales for each of the years were: 340 in 2009; 367 in 2010; 447 in 2011; 548 in 2012; and 732 in 2013.

Last year, Calgary had the highest ever sale for the city at $11.1 million for a home in the Crescent Heights neighbourhood.

Calgary had 10 consecutive months of new monthly records in 2013 with the exceptions of January and December. According to the Calgary Real Estate Board, so far this month until Sunday, there were 32 MLS sales over $1 million. The January monthly record was set in 2007 at 36.

Ann-Marie Lurie, CREB’s chief economist, said there has been some opportunity for people looking to upgrade in the housing market.

“As home values have been increasing for those people who are looking for the larger property, moving into something a little different, or upgrading essentially, they have some equity gains potentially in the other segments,” she said. “What’s interesting is that the price gains have been higher at the lower end of the market versus on the higher end of the market.

“Overall people who are doing that likely feel secure with their employment situation as well so they’re willing to make those types of moves. As we continue to see price increases, some of those homes that were at that margin are now pushing above the million-dollar price range. A lot of those newer builds that tend to come onto the resale market tend to be in that higher price point as well especially for single-family.”

The RE/MAX report said the condo sector in Calgary saw year-over-year luxury sales grow by 88 per cent from 36 units in 2012 to 68 in 2013.

“Along with traditionally popular, older, established inner core areas, newer areas such as Aspen are drawing purchasers,” it said. “Infill continues unabated, driving up values in neighbourhoods on the peripheral of the city’s blue chip areas, in pockets like Inglewood and Montgomery. The southwest is also on the rise. Strong confidence, based on sound economic fundamentals, is behind the growth in upper-end sales, along with steady trade-up activity, bolstered by equity gains, incomes, in-migration and immigration.”


© Copyright (c) The Calgary Herald

Calgary ranks fifth in highrise construction in North America

Calgary is ranked fifth overall in North America for the number of highrises and skyscrapers currently under construction.

A ranking compiled by Emporis, an international provider of building data, said Toronto is North America’s highrise boomtown with 130 projects on the go.

The report, released Tuesday, said New York City was second at 91, followed by Montreal (25), Vancouver (23) and Calgary (22).

One aspect common to all the cities in the ranking with the exception of Houston, said Emporis, is the majority of the highrises under construction are residential buildings.

It said New York remains the city with the most completed highrises in North America with 6,069.

Emporis said the ranking consists of highrises, defined as multi-storey buildings of at least 35 metres in height or of 12 to 39 floors if the height is not known. Highrises of 100 metres or more, or that have at least 40 storeys, are considered skyscrapers.


© Copyright (c) The Calgary Herald

2014 looks strong for Airdrie real estate market

The Airdrie housing market had a very strong year in 2013 with pricing returning to the peak levels of 2007.

Now looking to 2014 the Calgary housing market is expected to continue growing, which should push Airdrie housing prices up further as well.

As homes get less affordable in Calgary, buyers will look for less expensive options and head out to the smaller centers.

With our location and with so many amenities, Airdrie is often many buyer’s No. 1 choice as their place to call home. To put some perspective to the affordability, we’ll look at benchmark pricing (benchmark means the typical home).

For a look at what is considered typical please see our blog dated Jan. 6 at

Through the third quarter of 2013 the typical home in Calgary was selling for $470,600 while in Airdrie the typical home sold for $365,900 for a difference of almost $105,000. However, in Airdrie we all know that two storeys are king and what builders will continue to build.

So it certainly makes sense to look at benchmark pricing for the typical two-storey home as well.

The typical two- storey home in Calgary sold for $508,400 and in Airdrie sold for $402,200 for a difference of more than $106,000.

With these kind of savings on the largest investment most people will ever make, it is easy to see why so many buyers are willing to move out of the city and why Airdrie continues to grow by 11 people a day, with half of them coming from Calgary.

To add to rising prices, in 2014 the Calgary real estate board is predicting an increase of 4.3 percent for the city of Calgary with the first half of the year being stronger than the second half.

This along with interest rates expected to climb slightly, Airdrie’s affordability will remain high compared to Calgary, which should also continue driving prices up here.

Another key factor for the Airdrie market will be housing starts.

If starts increase, this will help alleviate some of the pressure on resale homes.

However, if starts remain around the same then we will continue to see a low number of available homes on the market, which again could push prices up even further.

While I wish I had a working crystal ball and could tell you exactly what’s going to happen, that is just not the case. We live in a world of ever changing factors and in Alberta we are of course dependent on oil.

If oil goes up then housing prices will probably go up, if they go down then pricing will likely all relative. If you sell when prices are high chances are you will buy when prices are high.

Same goes when the market is low. So when people ask me, ‘when is it the best time to list my house?’ my answer is always ‘when you want to sell because you never know when the right buyer for your house is out there looking and if you are not on the market they will not find you.’

So regardless of pricing make the decision based on your needs.

So the good news is all factors are leading towards a strong 2014.

-Airdrie Echo

Calgary area new home prices on the rise to record level – Single-detached average forecast to reach nearly $600,000 this year

A number of factors has pushed new home prices in the Calgary region higher with a forecast of the average absorbed price for a single-detached property to rise to nearly $600,000 this year, which would be a record.

Canada Mortgage and Housing Corp. measures prices in the new home market when a property is “absorbed” which means the unit is no longer on the market as it has been sold or rented.

The federal agency is forecasting the single-detached average absorbed price in the Calgary census metropolitan area to increase to $598,000 this year from a forecast $583,000 in 2013 and $580,135 in 2012.

Doug Whitney, vice-president of sale for Crystal Creek Homes and president this year of the Canadian Home Builders’ Association-Calgary Region, said a number of factors will lead to higher new house prices this year.

He said the industry is seeing pressure on its own prices for materials such as drywall, concrete, heating, insulation – a lot of the components that go into building a home.

“There’s an uptick in the U.S. housing construction industry. So there’s a little more competition for materials,” said Whitney. “It’s a supply and demand thing. They’re a bigger market than we are and they’re starting to come alive. It’s going to drive up those basic costs for us here.”

He said most of the builders have been absorbing a lot of the cost increases from 2012 and 2013 but with the current sellers’ market in the resale sector, characterized by low supply and high demand, that will also impact decisions made by some builders on prices this year.

“Probably one of the biggest components that builders have to be aware of is the upward pressure on land prices, which is a huge component in the price of a home,” added Whitney.

“So if it’s costing a developer more to bring land to market, or if there’s a shortage of (land) and they’re charging more, the house price is going to be higher,” said Whitney.

Teresa Centanni, area sales manager for Douglas Homes in the Kinniburgh community in Chestermere, said prices are going up for a number of reasons including a strong economy, attracting more people moving here, which is driving up housing demand. Also, there is a low inventory of active listings in the resale market these days.

She said homebuyers like the idea of a builder’s warranty on a new home and having the ability to have some input on the home’s specifications before it is built.

“We already had a price increase on September 1. Our trades increased their prices due to the flood (in June) and there’s going to be another three to four per cent price increase they’re predicting for March, April. We’re trying to do our best to keep our prices.”

According to the CMHC, the number of single-detached absorptions in the Calgary CMA until the end of November was 5,622. It’s the latest data the agency has for the market. In 2012, there were 5,429 absorptions which was up from 2011 at 4,733.

The following is the Calgary CMA single-detached absorbed price for each year back to 2000, according to the CMHC: 2000, $225,996; 2001, $239,454; 2002, $242,525; 2003, $267,106; 2004, $285,321; 2005, $315,796; 2006, $353,662; 2007, $474,511; 2008, $581,800; 2009, $547,795; 2010, $514,466; 2011, $547,670; 2012, $580,135; 2013 (forecast), $583,000; and 2014 (forecast), $598,000.“We’re starting to see growth in prices for new homes. There’s a number of factors contributing to this,” said Richard Cho, senior market analyst in Calgary for the CMHC. “One is our economy has been growing so with that we’re seeing stronger demand for housing. Also, with the supply in the resale market coming down as well, we’re seeing more people look to the new home market for their housing needs.

“Also, with the new home price, we’re also seeing more pressure on costs, materials, labour. That’s also contributing to the increase in the home price.”

He said labour market conditions, demand for materials and land costs are expected to maintain upward pressure on home prices this year.

As a comparison, the following is the average yearly MLS sale price for single-family homes in the city of Calgary, according to the Calgary Real Estate Board: 2000, $194,202; 2001, $201,137; 2002, $221,028; 2003, $237,081; 2004, $251,558; 2005, $287,125; 2006, $400,081; 2007, $471,852; 2008, $460,057; 2009; $442,828; 2010, $461,420; 2011, $466,509; 2012, $481,259; and 2013, $517,887.


© Copyright (c) The Calgary Herald

Calgary MLS listings significantly down from last year Pushing prices upwards

The single-family home inventory of 1,515 MLS listings is the lowest level to begin a year since 2006 and it’s the second fewest active listings in a decade to begin a year, says a Calgary realtor.

According to research by Mike Fotiou, associate broker with First Place Realty, there were 2,236 active listings in the city’s overall real estate market to begin the month of January, down 17.9 per cent from a year ago.

In January of last year, there were 1,267 fewer homes for sale in Calgary, representing a 31.8 per cent reduction in listings from the 3,989 the city had to start 2012.

“Calgary’s market has worked through the glut of inventory we experienced after the boom in 2008 when speculators expecting house prices to continue their meteoric rise were left holding multiple properties,” said Fotiou. “Record levels of net international and interprovincial migration in Alberta over the past couple years has resulted in high demand for housing. In Calgary’s resale market, continued strong sales have kept inventory low despite a rise in new listings.

“The new home sector has benefited as buyers looking for quick possession turn to builder spec homes. We’ll likely see more construction this year as new home builders step up to meet demand.”

As of Sunday, Calgary Real Estate Board data indicates total active listings in the city at 2,302, down 17.46 per cent from a year ago while the single-family inventory has dropped by 18.39 per cent to 1,549.

The lack of listings, combined with continued demand, has pushed prices upwards. Calgary’s resale housing market finished 2013 with all-time records in average sale prices for total MLS ($456,703) and single-family homes ($517,887).

Records were also set in 2013 for the median sale price for total MLS at $401,000 and for single-family homes at $450,000. The median price rose by 5.53 per cent from the previous year for total MLS and it was a 7.14 per cent hike in the single-family market.

Ann-Marie Lurie, chief economist at CREB, said it’s only a week into January so it’s difficult to see what the trend will be for sales and listings during the month.

“What we had been seeing throughout last year is that in the second half of the year those listings were actually starting to improve. The level of new listings,” she said. “Now, overall the inventory levels are still relatively low compared to what they had been in previous years.

“I would be concerned if I still saw those active listings basically declining and new listings declining. That would concern me more than what I am seeing now. Because we’ve seen new listings start to rise, that actually means that decline in active listings is starting to improve.”

On a historical basis, she said, active listings are still trending higher than the lows the real estate market experienced in 2006 during the housing market boom.

“That’s a good sign. We’re not as tight as we were back then,” said Lurie.

“Looking forward, active listings they have been declining. Will they continue to decline? It will depend on if we continue to see these new listings rising. If new listings keep going up, this should help alleviate some of the supply pressure in the market. That tends to happen as prices increase. Another thing to note is you’re starting to see some increased activity in the new home sector which should start to ease some of the pressure on the resale market.”


City of Calgary MLS Market
Sales to
new listing ratio

 -Source: Calgary Real Estate Board


© Copyright (c) The Calgary Herald

Calgary home values close to boom levels, despite flood impact

 Calgary home values are nudging 2007-08 property boom levels, with sharp declines in flood-hit neighbourhoods unable to check the city’s real estate growth.

The city’s 2014 property assessments, released Friday, showed values of properties outside areas badly damaged by the June floods have risen six per cent since last year.

Citywide, the typical home is now worth $430,000, up from $410,000 in 2013.

That’s the highest level since 2008, when the boom lifted the median price to a record $447,500.

“We have certainly seen a really strong increase, and certainly a resetting of some of those values back before some of the financial crisis happened,” said city assessor Nelson Karpa.

Many communities saw assessments rise more sharply than the six-per-cent median, particularly those in northeast Calgary and those hugging Nose Hill and Fish Creek parks.

Elbow Park and Roxboro were the only neighbourhoods where assessed values dropped.

Calgary Real Estate Board (CREB) economist Ann Marie Lurie said the citywide rise was likely being led by a surge in demand for single family homes.

“A single family home under $500,000 have been selling quicker and their prices are increasing.

“We have finally pushed above those unadjusted (for inflation) levels. We’ve pushed above those peaks that we saw in 2007 (for single family homes).”

The trend was likely stronger in parts of the city which registered value increases above the six per cent average, she said.

“It could be that those areas have more homes on that lower end of the (single family) market.”

Value increases for condos and townhouses still trailed single family properties, she said, despite strong recent performance.

Price growth for single family homes in 2013 was 7.8 per cent, CREB figures showed, compared to 8.7 per cent for condos.

However, condo prices in the city took a bigger hit after the 2007 boom, Lurie said, and were yet to recover to that peak.

Calgary property taxes are based on the assessments. The city council set this year’s property tax hike at five per cent, but all homeowners whose property assessment rose by more than the six per cent average will pay a greater increase and people with lesser value rises or drops will face a lesser one.

Realtors often warn that assessments aren’t a substitute for actual market value. Assessors normally don’t visit homes, and they only consider neighbourhood home sales up to the previous June 30 — which means they’re already six months behind sales trends.

Residents and business owners can review assessments and appeal by March 4.

© Copyright (c) The Calgary Herald

Booming luxury market pushes Calgary house prices to records

A booming luxury market, and tight overall conditions with listings not keeping pace with demand, has pushed Calgary house prices to unprecedented levels.

Average sale and median prices hit all-time records for the city in 2013 for both total MLS transactions and in the single-family home category, according to data released Thursday by the Calgary Real Estate Board.

The average sale price for total MLS reached $456,703 for the year, up 6.54 per cent from 2012, while the single-family average price rose by 7.61 per cent to $517,887.

The median sale price for total MLS was $401,000 and it was $450,000 for single-family homes. The median price rose by 5.53 per cent from the previous year for total MLS and it was a 7.14 per cent hike in the single-family market.

Also, December capped a solid year for the residential real estate market with the highest-ever monthly average sale price at $527,764, eclipsing the previous record of $526,546 set in June 2013.

“Momentum was building from the last quarter of 2012,” said Christina Hagerty, a realtor with RE/MAX Realty Professionals in Calgary. “We approached 2013 with low interest rates, one of the lowest unemployment rates in the country and the lowest vacancy rate in the past decade. Employment growth and higher than expected net migration into the city helped support the demand for housing and increased sales and pricing. 2013 was an extremely busy year for us with informed and prepared purchasers.

“People talk about the flood adding to this, but I focus on the amazing ability for a city to rebound in a very short period of time. Something that may have devastated other major centres. I believe that this is largely due to the sense of community and the job market allowing people the ability to rebuild.”

The previous records for average sale prices were set in 2012 at $428,649 for total MLS and $481,259 for single-family homes. The previous records for median prices were set in 2007 at $382,000 for total MLS and in both 2007 and 2012 at $420,000 for the single-family market.

Average prices in the city ballooned this year as a result of a strong luxury market that set a record for most transactions ever at $1 million or more.

devastated other major centres. I believe that this is largely due to the sense of community and the job market allowing people the ability to rebuild.”

According to Mike Fotiou, associate broker with First Place Realty, there were 727 luxury home sales in 2013, which was a 33.6 per cent hike from the previous annual peak in 2012. The year was marked by 10 consecutive months of new monthly sales records. Only January and December did not set records in 2013.

Total MLS sales in the city reached 23,489 units in 2013, up 10.78 per cent from the previous year. New listings of 32,153 were up 0.97 per cent but active listings at the end of December were down by 17.80 per cent to 2,235.

“Companies are recruiting professionals across Canada and globally and this has put Calgary on the map as a thriving metropolis of opportunity and a safe place to raise their families,” said Hagerty. “With vacancy rates at one per cent and an abundance of job opportunity, there is a confidence in the city. 2014 looks to continue with solid growth fueled by sound fundamentals.”

MLS sales and percentage increase from 2012 for different housing categories were: single-family, 16,302, 7.92 per cent; condo apartment, 4,007, 14.45 per cent; condo townhouse, 3,180, 22.40 per cent; and towns, 4,516, 13.81 per cent.

Average sale price and percentage increase from 2012 were: single-family, $517,887, 7.61 per cent; condo apartment, $299,517, 5.17 per cent; condo townhouse, $341,116, 7.73 per cent; and towns, $381,884, 9.55 per cent.

Median price and percentage increase from 2012 were: single-family, $450,000, 7.14 per cent; condo apartment, $261,000, 3.78 per cent; condo townhouse, $306,000, 6.45 per cent; and towns, $355,700, 6.18 per cent.

Scott Bollinger, broker with the ComFree Commonsense Network, said prices in Calgary climbed because of increased sales and listings not keeping pace with the demand.

“Most notably in 2013 we saw rising wages, low interest rates and record in-migration. So it’s not surprising after three to five years of relatively little price growth, and despite the steady employment and the wage growth along with record low interest rates, that prices surged this year,” he said.

“Add to that the Alberta and Calgary economies outperformed almost every other region in Canada in 2013 by a wide margin, which had the effect of attracting all of those people. But the interesting thing is that 70 per cent of the net migration to Calgary in particular was international. And the other thing about the migration was that we set a record this year for the growth of the cohort of ages between 25 and 45 and those people, along with the international crowd, are most likely to engage in household formation.”

Bollinger said he is surprised that the listings didn’t catch up with the sales. He said the market might expect to see more of a reaction from the listing side early in the new year.

“If we don’t see that increase in listings, I think we’re going to continue to see farily significant price increases,” said Bollinger.

In a statement, Ann-Marie Lurie, CREB’s chief economist, said sales growth exceeded expectations in 2013, pushing above long-term trends.

“Two consecutive years of elevated levels of net migration, combined with an improving job outlook and confidence surrounding long-term economic prospects, supported the demand growth,” she said.

“In 2014, both sales activity and prices are expected to improve, but not at the same pace recorded this year. While factors influencing demand will support growth in 2014, rising listings and increased competition from the new home sector should alleviate some of the supply pressure in the market.”

Those factors, combined with potential increases in long-term lending rates, should take some of the steam off the exceptionally strong price growth recorded in 2013, said Lurie.


© Copyright (c) The Calgary Herald