Calgary’s residential sales are continuing to show positive growth.
Sales increased by 15 per cent on a year-to-date basis in 2012, and were up eight per cent this November compared to last. With nearly eight consecutive months of double-digit, year-over-year sales growth, the city’s inventory levels are decreasing, as new listings haven’t been able to keep up. However according to CREB®’s monthly stats, the ratio between sales and inventory shows the market remains in balanced territory.
“With fewer inventories in the market, consumers are eager to view new listings, and if consumers see value they will buy,” said Bob Jablonski, CREB® president. “However, the market is not demonstrating the same frenzy that we saw during the overheated period.
“Clients are more cautious today and are considering all of their options. They have reverted back to considering if this is a home they can stay in for many years, because the quick equity gains are less likely.”
While Calgary’s 15 per cent year-todate increase brings sales activity to levels more consistent with long term trends, new listings have declined by six per cent after the first 11 months of the year, resulting in an average 17 per cent decline in what was considered elevated inventory levels. Months of supply have stayed within the lower range of balanced territory throughout the year and this has supported the citywide average year-to-date benchmark price growth of five per cent.
“While the Calgary area market has been improving, it is not on the cusp of a dramatic rise or fall,” Ann-Marie Lurie, CREB®’s chief economist. “Slower growth trends in the employment market along with changes in lending policy and near term challenges in the oil sector will likely dampen demand, preventing a boom. The decline in new listings will compensate for any adjustment in demand, helping maintain price stability in the market.”
Single-family sales totaled 1,006 for the month of November, a five per cent increase compared to 2011. As the temperatures begin to drop, there’s typically a corresponding drop in sales activity and new listings. November’s inventories declined to 2,586 units and sales activity also declined compared to October, keeping the market in balance.
The unadjusted benchmark price for single-family homes was $433,600 this November, unchanged from October, and 8.5 per cent higher than levels recorded last November.
In the past 11 months, condominium apartment and townhouse sales increased by a respective 11 and 17 per cent compared to the same period in last year. The apartment market has remained balanced throughout most of the year, leading to some price gains following the declines recorded throughout much of 2011.
As of November, the benchmark price for an apartment condominium in Calgary was $248,000, while townhomes were $282,800. Both sectors of the condominium market recorded a four per cent increase this month relative to November 2012. However, on a year-to-date average, this growth drops to two and three per cent for apartments and townhouses respectively.
“Despite elevated concerns regarding household debt and activity in other Canadian markets, the housing market continues to demonstrate resilience in Calgary,” said Lurie. “This is related to the migration, wage and employment growth recorded in the city.
Migration, wage and employment growth is not only found in Calgary but throughout the rest of Alberta as well. Statistics Canada reported average weekly earnings in the province hit $1,085.22 in September, a four per cent increase over last year.
“When wages increase quicker than the cost of living, the material standard of living in a community improves,” said ATB chief economist Todd Hirsch. “Based on this measure, a lot of Alberta communities have been improving remarkably with each passing month.”
According to Calgary’s 2012 Civic Census, a net migration of 19,658 additional residents made the move to the city, more than half the number recorded in 2011. People moving to Calgary, and Alberta in general, are finding plenty of work, especially in the construction sector.
“Commercial construction accounts for more than 70 per cent of all non-residential activity,” said Hirsch. “It slipped a bit in the third quarter, probably reflecting softer business confidence in light of the wobbling global economy and weaker energy prices. Still, at $1.67 billion, Alberta’s commercial building accounts for almost a quarter of total commercial spending in all of Canada — not bad for a province that holds only 11 per cent of the national population.”