Population growth continues to push housing demand in the Calgary region.
A report released Tuesday by Ben Myers, senior vice-president of market research and analytics with Fortress Real Developments, described the city’s new housing market as “red hot.”
It said there were 9,294 housing starts in the first half of this year, an increase of 67 per cent over the first six months of 2013, and more than year-end totals for 2009, 2010 and 2011.
“The average forecast is calling for 16,400 starts in the Calgary CMA for 2014, which would represent an increase over 2013 (12,600) and the 10-year average of 12,000,” said the report.
“The market may be overshooting slightly, as based on population and employment data, the Calgary CMA may only be able to support approximately 15,100 units in 2014. However, TD Economics noted in July that Calgary remains one of the few cities that is undersupplied.”
The report said Calgary prices have increased between three per cent and six per cent depending on the housing index from the end of 2013. The metropolitan area has appreciated at an average annual rate of approximately seven per cent to nine per cent over the past decade, notwithstanding the highly fluctuating market values in-between, it noted.
“Calgary may have room to grow comfortably, as the average condominium owner has an annual income over $90,000, and the average non-condominium owner has an average annual income over $130,000, both are the highest among the major metros in Canada,” said the report.
It said there were just 490 completed and unabsorbed new housing units in the Calgary census metropolitan area at the end of June, well below the 10-year average of approximately 850 units.
“Just nine completed condominium apartments were unabsorbed in the entire Calgary CMA at the half way mark of the year, less than five per cent of the long-run average of 200 unabsorbed units,” said the report.
“There were 2,225 new condominium sales in the first half of 2014, an increase of 14.7 per cent over the first six months of 2013. The multi-family market in Calgary is expected to perform inline with 2013, and is supported by declining new and resale inventories and rising prices, which has resulted in the new concrete high-rise developments downtown launching at $600 per square feet or more this year.”