Calgary’s resale housing market was in ‘balanced’ territory in November as sales and prices dropped from the previous month, but it has rebounded this month with the pace of activity picking up.

In a report released Thursday, the Conference Board of Canada said the seasonally-adjusted rate of annual MLS sales in the city dropped 1.5 per cent from October to 35,292 units in November while listings rose by 5.1 per cent to 52,236.

The average price was also down by 0.4 per cent to $466,255.

So far in December, Calgary’s housing market continues to shine compared with December 2013.

“I’m not sure if the reality (of lower oil prices) has set in,” said Todd Hirsch, chief economist with ATB Financial. “Everyone’s watching these oil prices and it kind of means something to them on one level. But I think it will start to have a broader impact on the housing market in 2015 when we do start to see some of those layoffs coming. Some of those bonuses are going to be scaled back. All of the things where it really starts to affect people’s budget and even their ability to purchase homes.

“It just hasn’t shown up yet but I think it will.”

According to the Calgary Real Estate Board, month-to-date up to and including Wednesday, there have been 776 MLS sales in the city, up 2.78 per cent from the same period a year ago. New listings have risen by 42.75 per cent to 985 and active listings of 3,621 are up by 33.86 per cent.

The median price of $419,200 has increased by 4.93 per cent while the average sale price has risen by 5.15 per cent to $476,425.

The conference board report said the short-term year-over-year MLS price expectation for Calgary is in the range of a three to 4.9 per cent hike.

On a year-over-year basis compared with November 2013, sales were up by 11.2 per cent; listings rose by 21 per cent; and the average price increased by 3.8 per cent.

“The impact of economic shifts, such as the price of oil, take approximately six months to really be felt in the real estate market,” said Don Campbell, senior analyst with the Real Estate Investment Network.  “The current market numbers are a reflection of the in-migration we have witnessed over the last 12 months combined with a very low vacancy rate, pushing potential renters into the purchase market sooner than would normally occur.

“The on the street reality is that the higher end homes are having fewer showings than at this time last year, which signals a market that is being a bit more cautious. These fewer showings will lead to fewer sales in the new year, unless the oil price finds a stable bottom in the next couple of months.”

 

-Calgary Herald

The rental apartment vacancy rate in the Calgary region has risen slightly in the past year, but remains very tight and it’s the most costly in the country.

The vacancy rate for the Calgary area was 1.4 per cent in October, up from one per cent from a year ago, according to the Canada Mortgage and Housing Corp’s fall rental market survey, released Tuesday.

“While elevated net migration has continued to support rental demand in Calgary, additions to the rental stock have resulted in a higher apartment vacancy rate,” said Felicia Mutheardy, CMHC’s senior market analyst for Calgary. “Despite the increase from 2013, the vacancy rate remained low by historical standards, resulting in continued upward pressure on rents.”

Based on a sample of common properties in the 2013 and 2014 surveys, the average rental rate for a two-bedroom apartment rose 5.9 per cent in Calgary. One-bedroom units rose 7.1 per cent, while three-plus-bedroom units were up 5.6 per cent, said the report.

In the Calgary area, the average two-bedroom apartment rent in new and existing structures was $1,322 per month in October. That is the highest in the country followed by Vancouver at $1,311 and Toronto at $1,251.

The highest average two-bedroom rents in Calgary remained in the Downtown and Beltline zones at $1,459 and $1,441, respectively.

The rental condominium vacancy rate was 1.1 per cent in October, compared to one per cent in 2013.

Bob Dhillon, chief executive and founder of Calgary-based Mainstreet Equity Corp., which last week announced its 16th consecutive quarter of double-digit growth for net operating income and funds from operation, said demand for apartment rentals remains very strong in the city.

” I don’t know if it correlates to the warmer December but usually rental season slows down. It generally does. But compared to last year it’s still very active,” he said.

 

 

-Calgary Herald

 

New home price growth in the Calgary region led the country by far in October, according to Statistics Canada.

The federal agency reported Thursday that its New Housing Price Index for the Calgary area rose 6.6 per cent from the past year while for the rest of Canada it was up by only 1.6 per cent.

On a month-over-month basis, prices were up 0.2 per cent in the Calgary region and by 0.1 per cent in Canada.

The federal agency said that in Calgary “builders cited higher material and labour costs as the main reasons for the gain.”

On an annual basis, it said price movements at the national level have ranged from gains of 1.3 per cent to 1.6 per cent since September 2013.

 

-Calgary Herald

Slumping oil prices are expected to impact Calgary’s resale housing market in 2015 with price growth for homes slowing down, says a new real estate report released Wednesday by RE/MAX.

The 2015 forecast predicts that average residential MLS sale price in the city will grow by three per cent to $497,500 from $483,000 in 2014 which will be a hike of 5.9 per cent from 2013.

The report came the same day the Bank of Canada warned that Canadian home prices could be overvalued by as much as 10 to 30 per cent.

House price increases have been attributed to good employment in the energy sector, which has driven migration to the city, said RE/MAX.

“However, in the fall of 2014, the housing market started to show a shift from a seller’s market to a more balanced market, likely due to a decrease in oil prices,” said the report. “The price adjustment in the energy industry should likely have an impact on the 2015 Calgary housing market. While it is still expected to see a slight increase in price, it is anticipated to be less active as potential buyers wait to see if lower oil prices result in more favourable house prices.”

RE/MAX said it expects 2015 to be a balanced market with sales up by about four per cent from 2014 levels.

“Buyers who are looking to move up are likely to drive demand in Calgary’s real estate market in 2015. Also, the low vacancy rate for rentals has made potential tenants look at purchasing sooner than they anticipated.”

The report said the average residential sale price in Calgary was $402,851 in 2011, $412,315 in 2012 and $456,000 in 2013.

“There’s a certain amount of uncertainty at the moment because of what we’ve been hearing in the oilpatch,” said Lowell Martens, of RE/MAX Real Estate (Mountain View) in Calgary. “Are oil prices going to stay down long term? Are they not going to stay down long term? We’ve had such a really good year this year right from the beginning of the year – actually the tail end of 2013 – right up until November. Our market has been pretty active and breaking records.

“The buyers are sensing that the heat is off and we don’t have any need to jump too quickly now which we kind of experienced this year with buyers saying ‘woa, I better get into this marketplace’. Now we’re sensing there’s no big rush anymore.”

According to the Calgary Real Estate Board, year-to-date until Tuesday, there have been 25,011 MLS sales in Calgary, up 10.22 per cent compared with the same period last year and the average sale price has risen by 5.83 per cent to $483,303.

Month-to-date, there have been 426 MLS sales, up 9.79 per cent from a year ago while the average sale price in December has increased from last year by 4.98 per cent to $476,536.

Ann-Marie Lurie, chief economist with CREB, said the board has not finalized its forecast yet for 2015.

“What we’re expecting is that as we look at 2015 and lower oil prices, there’s going to be a lot of wait and see,” she said. “That’s the best way I can describe it. We have to see what that impact is going to be on employment. What will that mean for full-time job growth? Currently there is still some gains expected in employment. That should create stability in the housing market. But I don’t think we’re going to see the gains.

“We might start to see the levels of sales and listings almost pull back a bit . . . Prices will remain stable next year. Even if there is some pullback, that pullback will also occur in listings as well keeping the market relatively balanced.”

Don Campbell, senior analyst with the Real Estate Investment Network, said Alberta’s real estate markets have historically been more cyclical than those in the rest of the country.

“There is good news and not so good news in that history.  Good news is that when there is a dramatic change in oil prices, either up or down, Albertans usually do not over-react for the first six months as they have seen the swings before. This provides a stabilizing force to the markets during the initial shift in oil direction, as we are witnessing right now,” he said.

“However, when the price begins to stay low for six or more months, nervousness begins to enter the real estate market, the consumer confidence and retail sales. The longer the lower price settles in, the more reactionary the Albertan populous becomes. This is when the local real estate markets really begins to over-react, as we witnessed during the Kyoto Accord debate and the 2008 Global Recession. Listings increase, average sale prices begin to drop as it turns into a buyer’s market which has also historically provided wonderful opportunity for homebuyers and investors to pick up homes at relatively inexpensive levels.”

The RE/MAX report forecast the average residential sale price in Canada to rise by 2.5 per cent to $416,300 in 2015 after a 6.2 per cent hike in 2014 to $406,145.

 

-Calgary Herald