Calgary and area’s resale housing market is expected to continue to grow in the latter half of 2012, but at a slower pace than the first seven months of the year CREB® said in its mid-year update.
In an update of its forecast, CREB® said Calgary’s resale housing market is expected to continue to grow but at a slower pace in the latter half of 2012.
“Typically we do see slowing down occurring in the second half of the year for sales activity,” said CREB® economist Ann-Marie Lurie. “The key thing to note, even though improvements in housing sales are occurring, we’re just returning to more typical levels. We’re really recovering in the housing market so we’re just returning to more typical levels of activity.”
The slowing pace of growth in the market not only comes with the seasonal slowdowns in the latter part of the year but also on the heels of recent mortgage rule changes combined with tight supplies in the single-family market.
Mortgage rule changes announced early this summer by federal Finance Minister Jim Flaherty include the reduction of the maximum amortization period from 30 years to 25 and the limit Canadians can borrow when refinancing their home decreasing from 85 to 80 per cent of the value of the home.
“Usually in the summer (sales) slow down a little bit but I think it’s good news all around,” said CREB® president Bob Jablonski. “Our price point is a little over a two per cent increase this year which is a good, nice steady pace and we are slowly recovering back to the times when it was higher, but we’re not there yet.”
With the shortage of available listings in the single-family market, Jablonski said buyers are turning to other avenues when it comes to finding a place to call home.
“Consumers are looking to buy what they want to buy and they can’t find it so resale starts have really gone up quite a bit,” he said. “So (potential buyers are) looking at new homes, or if they’re looking now at affordability, that’s helping increase the sales in the condo market or they’re going outside to the surrounding towns which helps the surrounding town sales.”
Even with a slower pace recorded, BMO Economics is reporting smooth sailing for the national market, which saw flatter sales recorded for July but was still up 3.3 per cent year-over-year.
“Despite the high levels of activity seen in Canada’s housing market this year, the reality on the ground for both sales and prices is quite calm,” said Dough Porter, deputy chief economist, BMO Capital Markets. “Average prices fell two per cent year-over-year in July, although the reported drop reflects lower sales in Vancouver.”
With the latest statistics released from the Canadian Real Estate Association (CREA), the MLS® Home Price Index for Vancouver decreased by 0.45 per cent in June 2012, a further slowing from the 0.38 per cent decrease recorded in April.
“Recent changes to mortgage regulations were widely expected to temper sales and prices in Greater Toronto and Greater Vancouver, and data released (Aug. 15) confirms that,” said Wayne Moen, CREA president. “Even so, sales and price trends can be very different from one market to the next, and run counter to national trends. Buyers and sellers should talk to their REALTOR® to understand how the housing market is shaping up in their area.”
According to CREA, the national sales-to-new listing ratio stood at 53.4 per cent in July up from 51.6 per cent in June, based on the ratio two thirds of all local housing markets were in balanced market territory in July.
With Calgary’s slow but steady recovery from the recession, the city has a lot going for it as far as becoming a potential “it kid” in the national real estate scene.
“When we look at Calgary we have been very slow to recover out of the housing market as it is so when I look at Calgary and go ‘what do we have here?’ we have very good income so our affordability is quite strong,” said Lurie. “It’s actually the best levels we’ve seen in many years and we continue to have job growth and opportunities here for people.”
Calgary’s Civic Census 2012 reported the city’s population increased almost 30,000 to 1,120,225 people in 2011. Of those, 19,658 people moved to Calgary as a result of net migration, numbers the city called similar to levels seen during the boom of 2007. The year-to-date is $427,809 compared to more than $600,000 in Greater Vancouver.
As far as employment is concerned, Alberta has an unemployment rate of 4.5 per cent, which ATB Financial Senior Economist Todd Hirsch said ranks the province as “the fourth best place in the industrialized world in which to be looking for work.”
What do you think about Calgary’s Growth? Are you a homebuyer struggling to find the right property?