Residential sales activity continues to improve in Calgary, as year-over-year sales for the month of September increased by 11 per cent.
After the first three quarters of the year, residential sales within Calgary limits totaled 17,018, a 15 per cent increase over 2011, painting a different picture than the national real estate market.
“There has been significant discussion over the slowing national market,” said Bob Jablonski, CREB® president. “However, Calgary is seeing improving sales activity and price growth with no indication that the market is poised for a correction.
“In fact, for the first time in several years, the Calgary housing market is demonstrating typical behavior for this time of year.”
As well as Calgary, Alberta is also standing out amongst the national market.
“Alberta is certainly no stranger to real estate exuberance,” said Will van’t Veld, economist with ATB Financial. “But, in many ways, our province has managed to pull off what analysts everywhere hope for: a soft landing. Compared to other places in Canada, the run-up in prices before the recession was far more dramatic, but the surge in prices postrecession was nearly non-existent after the initial drop, greatly improving affordability as wages kept rising and interest rates dropped like a rock.”
Calgary’s single-family sales activity is rising, even though new listings are steadily declining. The total number of active listings has slightly improved over August. This slight increase, combined with slower unadjusted sales activity in September, helped push the months of supply into a balanced position.
A benchmark price is estimated using the MLS® Home Price Index model and is based on specific attributes such as two-bedroom, finished basement etc. typical for the area where the home is located. Because of the specific attributes, a benchmark price is more restrictive than average or median measure, which can change depending on the type of home sold in a given time period.
Year-to-date condominium apartment sales totaled 2,762 units, a 10 per cent increase over 2011. With new listings in decline and improving demand for condominiums, overall inventory levels are down and this has started to translate into moderate improvements in pricing. The apartment benchmark price for September was $249,300, a four per cent increase over September 2011. While that may seem quite a price increase, it’s compared to apartment prices that last year were in decline.
Condominium townhouse sales totaled 2,061 units after the first three quarters of the year, a 14 per cent increase over last year. The benchmark price for a townhouse in September was $277,700, a two per cent improvement over September 2011.
These recent significant gains are returning the resale market to average levels of activity and price recovery compared to the 2011 resale market, which was below typical levels of activity at the end of 2011.
“At the end of last year, a concern regarding the economic climate was heightened,” said Ann-Marie Lurie, CREB® economist. “There was discussion of a double-dip recession in the United States, coupled with weak domestic economic growth.
“While much of this uncertainty in the economy persists, consumers’ confidence in the prairie region has improved, compared to last year. This does not come as a surprise, given our province has recorded strong economic growth relative to Canadawide figures.”
According to the 2012 Civic Census, Calgary’s population increased by almost 30,000 people between April 2011 and April 2012 for a total of 1,120,225. Net migration returned to similar levels seen during the boom in 2007 with total of 19,658 additional residents moving to the city.
Lurie added that with the continued decrease in Calgary’s unemployment rate coupled with improved wages and full time employment growth, the city is “far outpacing” national averages.
Van’t Veld said in August 2012, the ratio of monthly wage income to pay the average residential mortgage payment was 39 per cent in Alberta compared to 58 per cent in British Columbia and 47 per cent in Ontario.
As of September, the benchmark single-family home price totaled $432,900. While this figure is eight per-cent higher than levels recorded in September 2011, prices appear to have leveled off over the past three months, not considering any potential seasonal factors.