Condos could push 2014 housing starts to record heights

Stronger condo apartment starts are spurring Calgary total housing starts to a potential new record this year but some cooling is expected in 2015, says a new report by Altus Group.

The consulting firm’s housing forecast said total housing starts in the Calgary census metropolitan area are expected to reach 17,800 this year then drop to 15,900 in 2015.

The report said total housing starts in the Calgary region were 12,600 in 2013 and the annual average between 2003-2012 was 12,100.

The high was reached in 2006 with 17,046 starts.

“The new condominium apartment market in Calgary is hot,” said the report. “Starts in the first half of the year were four times the level of the first half in 2013.”

From January to June, there were 3,793 new condo starts in Calgary this year compared with 957 for the same period a year ago.

At the end of June, there were 6,458 new condos under construction, up from 4,117 a year ago. Completed but unabsorbed new condos at the end of June were only nine compared with 327 a year ago.

Sales from January to June this year were 2,225 units, up from 1,939 last year.

Several factors have contributed to the boost in new condo construction.

“Strong demand has led to accelerated new home price increases in Calgary and resale price increases remain above inflation,” said the report.

“Job growth is expected to remain strong this year and next.”

The report is forecasting employment growth of 27,100 this year and another 27,500 in 2015 following a hike of 21,900 in 2013.

The annual average between 2003-2012 was 17,800.

There were 3,000 condo apartment starts in 2013. This year, the report is forecasting that to soar to 6,700 and then dip to 5,100 in 2015.

A recent report by Canada Mortgage and Housing Corp. forecast housing starts in the Calgary region to increase by 24 per cent this year to 15,600 units then drop by 7.7 per cent in 2015 to 14,400 units.

 

Calgary resale housing market soars in August – Second highest level of sales ever for the month

Calgary’s hot resale housing market showed no signs of cooling off in August as sales and prices continued to climb with the condo market setting a monthly record.

According to the Calgary Real Estate Board, August was the 17th consecutive month of year-over-year gains in MLS sales and the 31st consecutive month of year-over-year annual price growth.

There were 2,267 sales in August, up 3.42 per cent from last year. The median price rose by 6.02 per cent to $423,000 and the average sale price increased by 5.27 per cent to $477,783. New listings were up by 13.6 per cent to 3,150 and active listings at the end of the month climbed by 17.91 per cent to 4,596.

The benchmark price, which CREB says is the cost of a typical home, was up 10.18 per cent to $459,800.

Total sales were the second highest ever for August behind only the 2,326 sales level set in August 2005.

Calgary sales this month were buoyed by strong activity in the condo market as single-famly home sales actually dropped from a year ago. The single-family market saw activity decline by 2.38 per cent to 1,477 sales but the median price rose by 6.47 per cent to $479,000 while the average price was up by 5.42 per cent to $545,238. The benchmark price rose by 10.24 per cent to $512,300.

“Sales activity has continued to improve but it’s due to the condo sector,” said Ann-Marie Lurie, CREB’s chief economist, adding that August MLS sales hit new highs for the month in the condo apartment and condo townhouse categories as well as for condos overall.

It was the second consecutive month that single-family sales have declined year-over-year.

“This is all coming down to the affordability of product. This has been a trend that we’ve continued to see happen. With less and less product being available in the single-family price range at that lower end (below $400,000) we’ve seen that pick up in demand in the condo side,” said Lurie, adding the decline in single-family sales is taking place in the lower end of that market while sales above that price point have risen.

Lurie said more than 76 per cent of new condo listings are priced below $400,000 and represent more than 68 per cent of the total inventory within city limits.

Sales for condo apartments were up by 13.85 per cent to 452 units as the median price rose by 10.58 per cent to $287,500 and the average price was up by 11.48 per cent to $332,006. The benchmark price increased by 10.2 per cent to $298,200.

In the condo townhouse sector, sales increased by 19.86 per cent to 338 units as the median price jumped by 9.86 per cent to $339,894 and the average price rose by 13.27 per cent to $377,958. The benchmark price of $328,300 was up by 9.98 per cent.

The market that includes towns outside the city also saw a spike in activity with sales up 12.3 per cent to 484. The median price grew by 5.34 per cent to $375,000 while the average price was up by 7.29 per cent to $391,595. The benchmark price rose by 7.9 per cent to $375,600.

“Sales activity is still strong relative to long-term averages,” said Lurie. “And prices are still improving. Listings are increasing. So with inventory rising as it pushes to more balanced levels, we’re seeing prices start to level off. This is what we would expect . . . But we’re still going to see strong year-over-year price gains.”