House prices increase slightly in Calgary, continue to soar in Toronto: Royal LePage

House prices in Calgary experienced a small increase in the first quarter of the year, according to the Royal LePage house price survey released Tuesday.

The aggregate price of a home in the city rose 0.6 per cent year-over-year to $461,635.

“This is projected to be a recovery year; oil prices have stabilized, and people are starting to feel more confident in the economy. This newfound confidence has led to a rising volume of sales and resulting lack of inventory, making it increasingly clear that people are becoming more comfortable with the real estate market in Calgary,” Corinne Lyall, broker and owner at Royal LePage Benchmark said in a news release.

“Despite the economic challenges Calgary experienced in recent years, it has always been a place where people continue to be optimistic.”

The median price of a two-storey home in Calgary remained relatively flat, increasing 0.1 per cent to $500,190  the first quarter of 2017. The median price of a bungalow increased  2.4 per cent to $479,543, while the price of a condo slid 0.4 per cent to $301,794.

The report says Canada’s two largest real estate markets continued their divergence in the first quarter of the year.

The aggregate price of a home in the Greater Toronto Area rose by an “unprecedented” 20 per cent across all housing types to $759,241 in the first three months of 2017.

In the Greater Vancouver area, the price of a home rose 12.3 per cent year-over-year to $1,179,482.

Royal LePage CEO Phil Soper says the housing correction in Vancouver began seven months ago, around the time that the B.C. government introduced a 15 per cent tax on foreign nationals buying real estate in the city.

Sales volumes then plunged and prices slowed their torrid upwards trajectory.

But just in the past month, sales in the Vancouver area have leapt forward by close to 50 per cent on a month-over-month basis, says Soper — better than the seasonal average.

“An unfortunate side effect of heavy-handed regulatory intervention is that we risk market whiplash,” Soper said in a statement.

“In the coming weeks, it is possible that six months of pent-up demand will be unleashed on the market, sending prices sharply upward again; this when the pre-intervention 2016 trend was a natural market slowdown based on eroding affordability.”

Across Canada, the aggregate price of a home grew 12.6 per cent year-over-year to $574,575 during the first quarter, Royal LePage said.

The price of a two-storey home climbed 13.9 per cent year-over-year to $681,728, while the price of a bungalow rose 10.9 per cent to $490,018. Condo prices increased by 8.9 per cent to $373,768.

-Calgary Herald

Canadians ready to cash in on their property, poll finds; problem is, where to go next?

A new poll finds 41 per cent of Canadian with plans to sell their property are doing so to cash in and make a profit.

But the problem, according to the survey released Monday by Canadian Imperial Bank of Commerce, is 62 per cent say the cost of buying another house is making them “reluctant to sell” and move out of their current home.

“In today’s market, homeowners are facing a conundrum as to whether to buy, sell or stay put,” says David Nicholson, vice-president of CIBC Imperial Service.

The survey, conducted March 16-20 online with a margin of error of plus or minus 1.7 per cent points, 19 times out of 20, comes as the Greater Toronto Area housing market shows very few signs of slowing down.

The Toronto Real Estate Board reported  last week that overall prices for the GTA were up 33 per cent in March from a year ago with the average detached home in the city of Toronto selling for $1.56 million.

Rising values, which comes as some parts of the country are still watching their housing markets struggle, has policy makers grappling for a solution. Finance Minister Bill Morneau has pledged to speak with provincial and municipal officials in Canada’s largest city to work on a joint solution.

The poll finds that Canadians are worried about what the so-called solutions to the housing market might be with 48 per cent of homeowners, who are planning to sell, concerned that government tax and policy changes will lower housing prices.

Tougher rent controls continue to be discussed in the province, supported by a New Democrat private members bill, and the CIBC poll finds 28 per cent think that renting is a better option given current house prices.

More housing product could find its way into supply as the polls also finds 67 per cent of baby boomers, those 55 and over, plan to sell their homes with the top reason being to downsize at 63 per cent. Buying is also making baby boomers nervous about selling.

“Your home is where your heart is, but it’s also likely your biggest financial asset, so there is a lot to consider as you enter or near retirement that can affect your decision to sell or not,” said Mr. Nicholson.

In the millennial category, 39 per cent of those aged 18-34 are now homeowners, the rest renting or living with family. Another 23 per cent of millennials believe they will never own a home.

Overall, 62 per cent of those surveyed were homeowners, 31 per cent rented and seven per cent lived with parents or family.

-Calgary Herald

Calgary awash in record number of vacant condos and houses built at end of boom

Alberta’s boom and bust economy has left Calgary with record numbers of newly built homes and condos that sit vacant as a massive stockpile of housing goes up for sale at the end of a recession.

More than 2,000 new housing units were unoccupied in the Calgary area last month, the biggest inventory on record, driven largely by construction of apartment-style condos, according to the Canada Mortgage and Housing Corp.

This inventory of newly built homes and condos that haven’t been bought has been steadily growing since the recession began, having ballooned by more than a third, or 500 units, so far this year, CMHC data show.


Since pre-recession March 2014, the stockpile has nearly quadrupled in size.

Todd Hirsch, chief economist at ATB Financial, said the major housing glut shows “we’re not quite out of the woods” after a bruising recession, though he noted other indicators, from retail sales to employment, suggest the economy is improving.

“Things are moving in the right direction,” Hirsch said. “That’s not to say all of that unoccupied inventory gets absorbed right away; it could still take a year.”

Many of the residential developments causing the glut broke ground in 2014, which marked the end of a boom with a dramatic slide in oil prices, triggering a prolonged recession.

Construction began on a record 17,000 housing units in Calgary in 2014, including 6,700 apartment-style condos, according to the country’s national housing agency. A year later, the city posted another 13,000 housing starts.

The result is 144 empty units downtown and in Eau Claire. The largest concentration of new, unsold homes and condos are in 10 northeast neighbourhoods, from Skyview Ranch to Sunridge, where a total of 420 units are vacant.

While apartment-style condos account for more than half of the current housing surplus, there are large clusters of new, unsold homes in south Calgary suburbs.

Across a swath of 24 southern neighbourhoods, from Evergreen to Legacy and from Douglas Glen to Cranston, there are 400 newly built, unoccupied homes, according to Canada’s housing agency.

About 465 new single-family homes in the Calgary area haven’t been sold, well above the five-year average of 400, housing data show. Another 360 new semi-detached and row houses remain on the market.

Still, CMHC analyst Richard Cho said he believes homebuilders are preparing for the spring buying season, noting there are fewer homes on the resale market than there were a year ago.

Cho expects new construction of multi-family housing, such as condo towers, will decline this year allowing buyers to take some oversupplied units off the market.

Still, CMHC forecasts construction of single family homes will rise slightly this year and again in 2018.

Home builders broke ground on a total of 1,150 new units last month, well over the 411 housing starts reported a year ago, but below the 1,640 starts in 2015.

“The economy has been moving up so we expect demand to also climb higher,” Cho said.

-Calgary Herald

Sales for new condos are picking up in Calgary

Sales are on the rise for new apartment-style condos and townhomes in Calgary.

This according to Urban Analytics, a market research and advisory firm that tracks the multi-family sectors in Calgary, Edmonton and Vancouver.

Total multi-family sales through Calgary’s new home market increased 11 per cent between Dec. 1, 2016, and the end of this past February, compared to the same period a year ago, says the firm. Activity also grew five per cent from the previous quarter.

Urban Analytics is actively following 126 condo and townhome projects in Calgary. Managing principal Michael Ferreira says the firm focuses on developments with 15 units or more.

“Compared to how we saw the latter part of 2016 finish, we are pleasantly surprised at how the market has come out of the gates in 2017,” says Ferreira.

“Particularly in the concrete sector, we’ve seen very little new product added to the market over the last 12 to 18 months,” he adds.

In downtown Calgary alone, it’s been 18 months since a new condo development was brought to market, says the firm.

From Dec. 1 to the end of February, there were 95 sales of apartment-style condos through concrete developments in Calgary alone, up from 72 year over year. This also marked a step up from 74 deals in the previous quarter.

“We saw some increased demand in that sector, which is always promising, because that’s generally driven, in part, by investor buyers. And if investors aren’t feeling confident about a certain market, then they just won’t buy, and that’s been the case over the previous 12 months,” Ferreira says. “But the fact that they’re back in the market, and certainly not dominating the market by any means, but they’re active participants, indicates that there is some growing confidence in the market and reason to be optimistic about the new multi-family market there, moving forward.”

For wood frame condo developments in Calgary, there were 254 sales in the most recent quarter, up from 208 year over year, says Urban Analytics. Between Sept. 1 and the end of November 2016, the previous three-month span, the segment had 261 sales.

Meanwhile, Calgary’s townhome sales from the most recent quarter rose to 195 transactions from 186 year over year. The past three months of data were also up from the previous quarter, which had 181 sales on the books, says Urban Analytics.

Ferreira says buyers in the wood frame condo and townhome sectors typically “like to see what they’re buying.”

“So we’ve seen more projects built on spec and completing prior to marketing campaigns launching,” he says.

“What you tend to see is a bit of a spike in standing inventory levels, so the completed and unsold units, as these projects complete,” he adds. “But then as the marketing campaign launches, and we see some sales occurring in them, we start to see those numbers come off again.”

Ferreira says the woodframe condo and townhome sectors in new communities belonging to the “outer south and outer north” ends of the city are part of a competitive market.

“If you’re a buyer and you’re looking in those neighbourhoods, it’s a pretty good time to be looking, because I think there’s some good selection and good value to be had.”

-Calgary Herald