CREB® report singles out changing conditions in apartment sector
Buyer’s conditions in the apartment sector are contributing to a continued shift in Calgary’s resale residential housing market, which experienced a second consecutive month of price declines in October, according to CREB®.
The local housing agency noted that while overall, new listings in the city did not decline enough to prevent inventory gains and, ultimately, price contractions, the biggest shift continued to occur in the apartment sector.
CREB® chief economist Ann-Marie Lurie noted months of supply in that sector have gone from a low of three months in June to nearly six months in October.
As a result, apartment benchmark prices fell to $288,300, a 0.8 per cent decline from September and nearly four per cent from the same time last year.
“That sector is facing added competition from several new apartment projects, improved vacancy in the rental market and more supply in the attached sector,” said Lurie, noting months of supply in the sector has remained above four since August.
“When combined with a steep pullback in demand, it creates conditions that generally favour the buyer.”
Overall, benchmark prices declined 0.7 per cent month-over-month to $453,100 in October. Sales activity declined by 33 per cent year-over year to 1,421 units, while year-to-date sales fell by more than 26 per cent.
Meanwhile, inventory levels during the month remained at 5,578 units, pushing months of supply up to 3.93.
Lurie also attributed the overall price declines – which were nearly 16 per cent below long-term averages – to a shift in where sales activity is taking place. More than half of detached sales – which represented more than 60 per cent of all sales in the city in October – occurred below $500,000, compared to steeper price losses in the higher end of the segment.
“Sales activity has varied depending on market segment and price,” noted CREB® president Corinne Lyall. “For example, while some price adjustments have occurred in the higher-end detached category, this is less likely for the under-$500,000 detached segment which had more balanced conditions.”
“In this type of market, both sellers and buyers need to have those hard discussions with their real estate professionals about their objectives. If sellers are serious about selling, they need to consider how they are positioning their home on the market. Buyers, meanwhile, have to consider whether that home satisfies their lifestyle needs.”