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With the first month of 2020 behind us, we are off to a good start for the year. Comparing the numbers of January 2020 to January 2019, we saw an increase in sales by 5.43% across the Province, a decline in new listings coming on to the market, and an overall decrease of listing inventory which has all led to lower Months of Inventory through most of the Regions in Alberta.
While lower Months of Inventory will lead to more balanced markets and stabilized pricing, we have noticed that the properties being sold have had an increased average price of 4% in Alberta to $375,649 from $361,131 in January 2019. Since the current Months of Inventory, and the number of sales in January do not support a market where we would see significant movement in price, it is primarily due to movement in the higher price ranges that is having this effect on pricing. The 6.3% increase in the average price for sales in Edmonton, and a 4.8% increase in the average price for sales in Red Deer had a big part in that jump upwards for the Province.
December sales improved to levels more consistent with activity recorded over the past five years. This follows weak sales activity last year.
A stronger second half in 2019 was enough to push annual sales up by one per cent.
“Price declines, lower mortgage rates and some modest improvements in full-time employment helped support some demand growth in the city. Reductions in supply are also contributing to the slow adjustment to more stable conditions in the housing market,” said CREB® chief economist Ann-Marie Lurie.
“As oversupply in the market continues to ease, we should start to see more stabilization in prices. However, conditions continue to favour the buyer and this is weighing on prices.”
December unadjusted benchmark prices were $418,500. This is just slightly lower than last month and one per cent below last year’s levels.
Overall prices in 2019 declined by three per cent over last year’s levels. The total adjustment in prices is a 10 per cent decline since the 2014 slowdown in the energy sector.
While there are signs of stabilization, conditions vary significantly by location, price range and product type.
Improvements in the resale market have been mostly driven by lower priced product or areas where price declines were enough to bring more purchasers back into the market.
For more information on the 2020 housing market, the annual forecast report will be released at CREB®’s 2020 Forecast Conference & Tradeshow (www.crebforecast.com) on Jan. 14, 2020.
HOUSING MARKET FACTS
- Improving sales in the second-half of the year helped offset earlier declines. This resulted in detached sales that are relatively unchanged from 2018 levels.
- While city wide levels remained stable, homes priced under $500,000 recorded sales growth of nearly nine per cent. However, sales declined by 11 per cent for homes priced over $500,000.
- When considering sales activity by district, sales activity eased or remained relatively stable across most districts. However, exceptions include the North West and South Districts which recorded annual sales growth.
- Supply levels generally eased, but the adjustments were not consistent across the city as inventories rose in both the West and City Centre districts.
- Detached benchmark prices were $480,100 in December contributing to the 2019 average of $484,808, three per cent below last year’s levels.
- 2019 price declines ranged from a one per cent in the North East district to a five per cent decline in the City Centre district.
- Stronger apartment style sales in December were enough to push annual levels to 2,672 units. This is just above last year’s levels.
- The improvements were mostly driven by gains in the North, West and South East districts. This is offsetting the significant declines in the North East, North West and East districts.
- New listings continue to ease across all districts except the South East. This district has seen a rise in new home construction and is likely contributing to some of the rise in new listings and inventory. Despite these trends in the one district, easing inventories relative to the sales have helped reduce some of the oversupply in this segment.
- Reductions in oversupply helped ease the rate of decline in resale apartment condominium prices. However, prices in December remained one per cent below last years levels with a price decline range of five per cent in the West district to a one per cent increase in the South East district.
- The attached segment of the market has seen the largest improvements in sales when compared to the other product types. Annual sales improved by nearly seven per cent for a total of 3,780 sales.
- Both row and semi-detached product recorded improving sales with easing new listings and inventories. However, there was some variation depending on the district.
- December semi-detached prices were $388,200 and row prices were $283,000. Both segments saw annual price declines in excess of three per cent and remain well below previous highs.
- Depending on the district, the range of price activity varied significantly across the semi-detached and row segments. In 2019, price activity ranged from a seven per cent decline in row prices in the East district to a one per cent increase for semi-detached product in the North district.
REGIONAL MARKET FACTS
- Improving sales over the past three quarters more than offset declines in the first quarter. This resulted in 2019 sales of 1,193 units and is four per cent higher than the previous year.
- Rising sales was met with a pullback in new listings. This is helping to support further easing in inventory and the amount of oversupply in the market.
- The reduction in the oversupply has helped support slower declines in prices, but prices remain nearly three per cent below last years levels.
- The pace of sales growth did slow in the third quarter, but sales activity for the year improved by three per cent. Combined with a reduction in new listings, this helped push down inventory levels and reduce the amount of oversupply in the market.
- Prices continue to ease in the market as competition from the new home market has likely weighed on resale prices. In 2019, benchmark prices averaged $403,250, nearly four per cent below last years levels and seven per cent below 2015 highs.
- Strong sales throughout most of the second half of the year offset earlier pullback and resulted in sales growth of ten per cent. New listings eased compared to sales bringing down inventory levels and the months of supply compared to last year.
- The amount of oversupply in the market has eased compared to the previous year. This is helping to reduce downward pressure in prices over the fourth quarter. On an annual basis, prices remain nearly four per cent below last years levels, and over five per cent below previous highs.
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The Bank of Canada announced today that it is keeping its key rate unchanged, noting that the global economy appears to be stabilizing with growth expected to edge higher in the coming years, although uncertainty relating to ongoing trade conflicts continues to be a risk. A resilient Canadian economy, with investment spending stronger than expected, has allowed the Bank to hold rates while many other countries have eased. Going forward the Bank’s rate decisions will be guided by negative impacts of trade conflicts against our sources of economic strength, which are consumer spending and housing.
The next rate-setting day is Wednesday, January 22nd.
Be sure to get in touch if you have questions about your mortgage strategy. It’s important to get advice and a personal assessment of your situation if you need a new mortgage, are renewing, looking to refinance for debt consolidation, renovations or other large expenditures.
We regularly receive short-term rate promotions that are not posted online, which means our rates change frequently. Please contact us for these unpublished rate specials.
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Sales activity increase led by lower-priced homes
City of Calgary, September 3, 2019 – Increased sales and easing new listings reduced housing inventories in August. Sales were primarily driven by homes priced below $500,000.
“Employment numbers have been improving, but mostly in industries that are traditionally lower paid,” said CREB® chief economist Ann-Marie Lurie. “This is contributing to the shift that we are seeing in the housing market, with growth being limited to product priced below $500,000.”
Rising sales for homes priced under $500,000 offset sales declines in the higher price ranges. This caused August sales to improve by six per cent compared to last year.
Sales activity improved for all product types. The growth was largest for apartment-style and attached properties.
Attached sales increased for the sixth consecutive month compared to the previous year. This is also the only property type with year-to-date sales higher than last year’s levels.
New listings continued to ease this month, which caused inventory to decline. This is helping the market shift toward more balanced conditions.
The amount of downward pressure on prices is also easing. At $426,000, the unadjusted citywide benchmark price this month remained comparable to last month, but 2.6 per cent lower than last year’s levels.
Despite improving sales and reductions in inventory, housing market recovery will take time. Inventory levels remain elevated and sales activity is still well below historical norms. The market continues to favour the buyer, with over four months of supply.
HOUSING MARKET FACTS
- Year-to-date detached sales remain just below last year’s levels, but sales improved in the South and North West districts this month.
- Citywide growth has been driven by homes priced under $500,000. Meanwhile, easing sales and elevated inventories among homes priced above $500,000 have increased the months of supply, pushing it further into buyers’ market territory.
- Benchmark prices in August ranged from a year-over-year decline of over five per cent in the South district to a decline of nearly one per cent in the South East.
- For the second month in a row, sales activity improved for apartment-style homes, but these gains were met with a rise in new listings. This prevented any significant adjustments to inventory levels and kept the months of supply elevated.
- Sales activity remains just below last year’s levels. On average, the amount of inventory in the market this year has eased compared to last year.
- Citywide benchmark prices in August eased compared to last year, but the East, South East and North East districts recorded modest gains. Despite those gains, prices remain well below 2014 highs.
- For the sixth consecutive month, year-over-year attached sales improved in the city. This has resulted in year-to-date sales of 2,665 units, nearly a five per cent increase compared to the previous year. At the same time, new listings continue to ease, causing further reductions in inventory.
- The months of supply have moved from over six months at this time last year to under five months in August.
- These improvements have supported some monthly gains in benchmark prices, but August benchmark prices remain 2.6 per cent below last year’s levels.
REGIONAL MARKET FACTS
- Despite a year-over-year decline in sales activity this month, year-to-date sales sit just above last year’s levels. Unlike Calgary, most of the growth here has been driven by gains in the detached sector. Year-to-date new listings have eased by 13 per cent and inventories have edged down relative to last year.
- A general trend toward more balanced conditions has eased downward pressure on prices. The benchmark price was $334,600 in August – 1.8 per cent below last year’s levels.
- Fuelled by reductions in new listings and stable sales, inventories continue to trend down. This has supported some easing in the months of supply, which dropped from nearly eight months in August of last year to five months this year.
- Reductions in oversupply have supported more stability in monthly prices. The benchmark price was $408,000 in August, nearly four per cent below last year’s levels.
- Improving sales in August contributed to year-to date sales of 373 units, slightly higher than last year’s levels, but still below long-term averages. The number of new listings continues to ease. This is causing inventories to decline and reducing the months of supply.
- Months of supply dropped from nearly 10 months last year to under five months this August. Despite this reduction in oversupply, benchmark prices so far this year have remained over four per cent below last year’s levels.