For the city’s real estate market, 2013 is going to be a tough act to follow.
In a year that saw nearly tape-totape sales growth over its predecessor, 2013 ended on yet another high note as December sales increased eight per cent year-over-year sales over the previous year. Year-over-year sales growth rose every month in 2013 save February and March, with MLS® sales for the year up by 11 per cent over 2012.
“Sales growth exceeded expectations in 2013, pushing above longterm trends,” said Ann-Marie Lurie, CREB®’s chief economist. “Two consecutive years of elevated levels of net migration, combined with an improving job outlook and confidence surrounding long-term economic prospects, supported the demand growth.”
Calgary residential sales totaled 1,172 units in December, bringing the total number of homes sold in 2013 to 23,489. Along with the number of homes being sold, prices for the year were up by 8.6 per cent over 2012, as market conditions favoured the seller for much of 2013. Price gains were evident in both the single-family and condominium sectors in the city. The single family benchmark price was $472,200 in December, a 0.3 per cent increase over the previous month and an 8.6 per cent increase over the previous year. On an annual basis, unadjusted single family prices grew by more than seven per cent in 2013, exceeding previous highs.
“Prices have recovered in the single-family market, but sellers need to keep in mind there are differences between communities and types of homes,” said 2013 CREB® President Becky Walters. “Higher-end homes (priced above $500,000) have recorded slower price growth than those in the lower-price segment. And there are many communities where prices have not surpassed previous highs.”
Condominium apartment and townhouse prices totaled $278,600 and $307,100 respectively in December. On average, annual benchmark price growth in the townhouse market totaled just more than six per cent, compared to the apartment sector increase of nearly nine per cent.
Helping to drive demand both in the city and around the province has been the number of new residents. According to Statistics Canada, 26,616 interprovincial migrants arrived in Alberta in the third quarter of 2013, while 16,347 left for other parts of the country. The result is a net in-migration of 10,269.
“That amounts to 110 new people coming to the province every day between July and September. While not a record for any single quarter, the province is on track to set a new high for any given year,” said ATB Financial Chief Economist Todd Hirsch. “If another 8,500 or so arrive in the fourth quarter, 2013 will be the new record setting year. Since the province has surpassed the 10,000 mark for five quarters in a row, this will likely be the case.”
The number of homes up for sale in 2013 also increased slightly, rising one per cent to 22,569. According to incoming CREB® President Bill Kirk, a rise in listings combined with a rising number of new homes for sale should make things a little easier for buyers in 2014.
“All factors being relatively equal year over year and with the likelihood of more listings coming onto the market along with increased supply from the new home sector we expect overall house prices will continue to rise, but the rate of increase in home prices may be slightly slower,” said Kirk.
Through the first 11 months of 2013, total housing starts reached 11.688 units, compared to 11,975 units during the same period in 2012. According to Canada Mortgage and Housing Corporation (CMHC), total housing starts are forecast to rise 12 per cent to 13,100 units in 2014. While increases are expected for singledetached starts, multi-family starts should see more pronounced gains, with demand in the sector driven skyward by low vacancy rates in the rental market. This, combined with lower inventories, should prompt more multifamily construction in 2014.
Issued in November, CMHC’s 2014 forecast called for net migration to the city to drop considerably from the 30,000 predicted in 2013, dropping to 23,000 this year. While CMHC is expecting fewer new Calgarians in 2014, they are still forecasting an increase from the 29,200 MLS® transactions forecast for 2013. According to CMHC, the number of resales in the city is predicted to reach 30,000 in 2014.
More information regarding what’s in store for the city’s real estate market in the coming year will be available later this month when CREB® releases their own 2014 forecast. The event, which takes place Jan. 15, will feature talks from Kirk and Lurie, along with speakers Connie Podesta and Ian Hanomansing. For more information on this year’s CREB®forecast, visit www.crebforecast.com.