The number of homes up for sale may have declined, however Calgary’s housing market showed no sign of letting up in January.
Undeterred by a four per cent drop in new listings, MLS® sales in the city increased by 17 per cent year-over-year in January. The increase marks the tenth consecutive month of year-over-year increases in Calgary dating back to March of 2013.
“Sales growth continues at the double digit pace seen over the later portion of 2013, mostly due to the gains in the condominium sector,” said CREB® Chief Economist Ann- Marie Lurie. “While these are the highest January sales levels since 2008, total sales transactions are in line with long-term trends.”
Condominium apartment and townhouse sales totaled 466 units in January, a 33 per cent increase over the same period in 2013. This is relative to the 974 sales in the single- family sector, only an 11 per cent increase over the previous year.
The good news in Calgary’s condo market isn’t confined to the resale sector. A report from Altus Group Limited showed sales of new condos in the city reached 5,400 in 2013 – a figure that approaches those seen in Calgary’s peak of 2005.
“Consumers looking for more affordable product turned to Calgary’s condominium market, which was the only sector to record growth in new listings, compared to January 2013,” explained CREB® president Bill Kirk. “The improvement in listings helped ease some of the tightness in the condominium market, however overall conditions continue to favour the seller.”
New listings in the condominium apartment and townhouse market totaled 809 units, a combined increase of six per cent. Meanwhile, the single-family sector lost momentum with new listings recording an eight per cent year-over-year decline. Overall market conditions continue to remain tight with months of supply remaining below two months.
Calgarian Jayden Lukas Van is one of the many Calgarians who decided January was the right time to buy a new home. According to Van, the decision to upgrade was motivated in part by the city’s cramped rental market.
“Rental vacancy is the lowest I’ve ever seen it, so I decided to buy a move-up home to free up the current condo that I own for rental investment,” said Van. “The market is also doing really well right now – it’s competitive among buyers and there’s a low turnaround time for most sellers.”
Last January, the average day on market for a Calgary home was 50. This year, the number dropped to 40. According to Lurie, demand in the city has been driven thanks to the increased number of people calling Calgary home.
“Two consecutive years of strong migration levels are expected to support improving housing demand this year, but at a slower pace,” said Lurie. “However, with no significant change in the supply situation this month, prices continue to rise at higher than expected levels.”
According to Statistics Canada, Alberta saw its highest level of net interprovincial migration in 2006 when the province welcomed more than 46,000 new residents. Through the three quarters of this year, the province has welcomed 37,498. Although the final numbers aren’t in, with five straight quarters of 10,000+ growth, it’s a good bet that the province will set a new record in 2013.
The influx has also had an effect on the price of the average Calgary home, as the unadjusted single-family benchmark price was $476,700 in January, a 0.95 per cent increase over the previous month and a 9.1 per cent increase over the previous year.
Despite the increase, prospective buyers could end up benefitting from a rise in prices. According to Canada Mortgage and Housing Corporation’s Housing Now report for January, new listings in Calgary’s resale market have been on the rise when viewed over a longer timeframe.
Following a seven per cent year-over-year increase in the third quarter, new listings in the fourth quarter rose eight per cent to 7,010 units, up from 6,477 units during the fourth quarter of 2012.
“The resale market has started to see an increase in the number of homes being newly listed, as existing homeowners take advantage of rising prices,” said the report.