Average prices in major housing categories have remained relatively flat in Calgary for the first half of this year but they are forecast to decline by 2.4 per cent in 2015 compared with 2014, says a new report released Tuesday by Royal LePage.
The real estate firm’s House Price Survey and Market Survey Forecast said that in the second quarter the standard condominium category gained 1.6 per cent year-over-year to an average price of $291,022. Over the same period, standard two-storey homes declined 3.1 per cent to $474,239 and detached bungalows were down 0.9 per cent to $496,689.
Ted Zaharko, broker and owner with Royal LePage Foothills in Calgary, said predictions of gloom due to low oil prices and the change in the provincial government are proving to be premature.
“I think the City of Calgary, the economy of Calgary generally, is bigger than people expect it to be,” said Zaharko. “We were in a kind of limited inventory situation. Interest rates have been attractive. I don’t think people are as pessimistic about the future as a lot of other people think they are.
“Things are just balanced and I think that’s good.”
The report said the average house price sale in Calgary will drop to $449,500 this year from $460,584 in 2014. It was $437,036 in 2013.
“We’re going to continue to see a situation of what we’re going through right now. The inventory levels are not being replenished. We could be in kind of an awkward inventory situation where there’s limited inventory in all these price ranges and the buyer wants to see houses for sale,” said Zaharko.
According to the Calgary Real Estate Board, in the first half of 2015, there were 10,197 MLS sales in the city, down by 26.4 per cent compared with the same period last year. New listings also fell by 7.7 per cent to 18,678. The inventory of homes for sale at the end of June of 5,457 listings is up 53.1 per cent. The sales-to-new listings ratio of 0.55 dropped by 13.9 per cent. The days on the market to sell a listed property has gone up from 29 in 2014 to 40 this year.
Nationally, Royal LePage said the detached bungalow segment had the highest national increase in the second quarter, rising 7.5 per cent year-over-year to $438,938, while standard two-storey homes appreciated 6.8 per cent to $471,002. During the same period, the average price of a condominium rose 3.9 per cent to $268,583, it said.
The report said the average price of a home in Canada will increase 6.1 per cent for the full year to $432,960 when compared to 2014’s price of $$408,068. It was $382,466 in 2013.
“The robust national average home price increases that we have seen in the second quarter are heavily influenced by activity levels in Toronto and Vancouver,” said Phil Soper, president and chief executive of Royal LePage, in a statement. “Looking to Canada as a whole, 2015 is shaping up to be a record year for housing, despite the cloud of economic uncertainty caused by low oil prices and twitchy global economies.
“While the oil shock has been a troublesome drag on our economy this year, it seems premature to ring the recession alarm bells now, injecting further monetary stimulus. The country’s all-important real estate market simply does not need a rate cut. I worry that stoking this engine further could move us from a perfectly manageable major market expansion into a more difficult correction, as price levels decouple from more household incomes.”