After seeing double digit growth in 2012, CREB®’s housing market forecast for 2013 shows things settling into more balanced territory.
“Overall, we expect sales growth to ease to two per cent next year,” said CREB® economist Ann-Marie Lurie at a forecast sneak-a-peek Dec. 11.
“With continued downward pressure on supply levels, balanced conditions will persist, allowing for further price recovery,” she said. “Citywide prices are expected to increase by 2.9 per cent in 2013.”
Lurie explained some risks on the upside and downside can depend on global economic conditions, while locally concerns revolve around the energy sector.
“The weak natural gas market will likely result in further restructuring,” she said. “This could erode confidence and place a greater than expected decline in housing demand.”
For 2012’s forecast, Lurie predicted a sales increase of 11 per cent and a price increase of around two per cent. Yearto- date, Calgary has seen a sales increase of 15 per cent and a price increase of five per cent. The strong sales and price increases can be attributed to employment growth, strong migration numbers and market confidence.
According to Calgary’s 2012 Civic Census, the city saw a net migration increase of 19,658 additional residents between April 2011 and 2012 bumping total population in Calgary during that time to 1,120,225. In turn, vacant dwelling units in the city decreased from 16,180 to 12,616, which Lurie said dropped elevated inventory levels and brought the overall market into balanced territory leaving room for price growth.
“We are seeing good resale activity in both the city and surrounding areas, we have neither a buyers market or a sellers market. In other words, buyers are buying and sellers are selling,” said CREB® president Bob Jablonski. “While some real estate markets in Canada are contracting, we’re expecting some growth.”
Calgary has continued to buck national trends when it comes to home sales after posting a 15-percent increase year-over-year for the month of November. Comparatively, the Toronto market decreased 16 per cent in November compared November 2011 and sales in Vancouver decreased 28.6 per cent in the same time frame.
“Transactions have been down on a year-over-year basis since June, after being up substantially in the last half of 2011 and the first half of 2012,” said Toronto Real Estate Board president Ann Hannah. “Some buyers pulled forward their decision to purchase, which has impacted sales levels in the second half of 2012.”
In Vancouver, the decline is in part being attributed to patient sellers and buyers.
“Home sellers appear more inclined to remove their properties from the market today rather than lower prices to sell their properties,” said Eugen Klein, president of The Real Estate Board of Greater Vancouver. “On the other hand, buyers appear expecting prices to moderate.”
As well as Calgary, Alberta’s real estate in general has, according to ATB economist Will Van’t Veld, marched to its own rhythm for the better part of a decade.
“The real estate craze that has gripped most of the nation since 2009 has largely bypassed a province where the memory of a bursting real estate bubble was still fresh. Over the years, Alberta has managed what is hoped the rest of the country will experience: a soft landing,” he said.
Van’t Veld said there are small signs home prices in Alberta are starting to move higher with average home prices in centres such as Calgary and Edmonton standing at $429,000 and $331,000 respectively, an increase of 4.2 and 3.1 per cent year-over-year for the month of November.
Lurie said the sneak-a-peek is a snapshot of the year: “We’re going into the full ‘what’s going to happen’ in single-family and condo markets in the January forecast so this is really just a snapshot of what’s happening citywide.”