Calgary’s housing market emerged from February’s deep freeze to post some impressive numbers. While keeping active proved to be a difficult task for many Calgarians, with wind chills in the city dropping down to minus 40, activity amongst home buyers and sellers remained brisk.
According to CREB®, 1,854 homes changed owners in February, marking an 8.7 per cent increase over February 2013. While still representing a significant rise in sales, February’s gain fell short of the impressive double-digit growth seen in January, when yearover- year sales grew by 17 per cent.
“Demand growth in the singlefamily sector has been restricted by the availability of product,” said CREB® Chief Economist Ann-Marie Lurie. “New listings in this sector fell for the second consecutive month, causing further tightening in an already undersupplied market.”
Although single-family sales rose by only 1.9 per cent, condo apartment and condo townhome sales increased by 28.7 per cent and 20.45 per cent respectively, a clear indicator of the number of new homebuyers eager to enter the market.
Along with an increase in sales, Calgary’s housing market posted some impressive price gains in February. The benchmark price paid for a Calgary home during the month rose to $434,100. In comparison, active listings in the city are down by more than 18 per cent to the same point of 2013.
“Resale market conditions have favoured the seller, and this has translated into price gains, which is strongest in the condominium sector,” said Ann-Marie Lurie. “However, it is important to note that condominium prices have not yet risen above previous highs, whereas single-family prices recovered last year.”
Despite the hike in average prices, a new report shows housing affordability in the city is still amongst the most attractive in the country. According to RBC’s Housing Trends and Affordability Report, which measures the percentage of pre-tax household income required to purchase and maintain an average home, affordability in Calgary increased by 0.3 percentage points to 34.2 per cent for two-storey homes and by 0.2 percentage points to 33.8 per cent a condo in the city inched slightly higher, with affordability decreasing by 0.1 percentage points to 20.0 per cent for condominium apartments.
As opposed to an actual drop in prices, the main reason for Calgary’s resilient affordability has been the health of Alberta’s economy.
“Calgary is one of the few markets in Canada where affordability conditions look better than their historical norms, keeping housing in the city attractive relative to other major markets across the country,” said Craig Wright, senior vice-president and chief economist, RBC. “This is not to say that home prices are cheap in the area – they are in fact the third-highest in the country after Vancouver and Toronto – it is instead a reflection of just how strong household incomes are in Calgary. “
According to Statistics Canada, the average hourly wage in Alberta between January 2012 and January 2013 was $27.86 – the highest rate of pay in all of Canada. By comparison, those living in New Brunswick had the lowest average wage at $21.783 an hour.
Looking at the other major centres included in RBC’s affordability survey, Vancouver once again came in as the priciest centre to buy and service a home, with the average purchase requiring 81.6 per cent of household income. Toronto was the next at 55.6 per cent, while Montreal ranked third at 38.8 per cent.
Looking further into 2014, both CREB® and RBC are predicting Calgary’s market to continue to post positive numbers, with a booming provincial economy and strong population growth continuing to drive the provincial economy. Forecasting a rise in the number of homes up for grabs, CREB® President Bill Kirk said the market should improve for prospective homeowners in the city.
“As we move into the spring market we expect that listings will improve in all sectors. The rise in listings will help ease some of the tightness in the market, with price growth impacts varying by community and property type.”