Residential real estate sales in the city of Calgary ended the year on a high note, with sales volume up 15 per cent in 2012 compared to 2011, and benchmark prices up five per cent.
“Calgary’s housing market has finally started to recover,” said Ann-Marie Lurie, CREB®’s chief economist. “While prices remain shy of the highs recorded in 2007, this is a move in the right direction.”
Much of the sustainable recovery is fueled from the growth in the energy sector, spilling over into all aspects of our economy, including housing, said Lurie. “There is no question employment and migration growth has supported housing demand, a trend that is expected to continue this year, albeit at a slower pace.”
The single family market sales growth outpaced increases in the total condominium market within city limits. Single family sales rose by 15 per cent in 2012 compared to 2011. New listings did not keep pace, declining by seven per cent over the same period. This has significantly reduced the inventory of single family homes in the market, pushing prices up.
“Consumers in the market were looking for value and, if a home was priced right based on a longer term view of theirhousing needs, they were buying,” said 2012 CREB® President Bob Jablonski.
The price spread is expected to narrow as balanced market conditions support further price growth, he said. But in most communities, prices remain lower than 2007 levels.
The unadjusted single family benchmark price was $434,800 for the month of December, 8.7-per-cent higher than 2011. On average, single family prices are up by seven per cent for the year, and remain two per cent below peak pricing in 2007.
Condominium sales are improving, as lower supply levels and rising prices in the single family market drove consumers to explore alternatives. Sales in the apartment and townhouse sector recorded annual increases of 12 and 16 per cent, respectively. Meanwhile, listings are declining in both sectors, keeping both markets in balanced conditions. Price growth has not been at the same pace as what was recorded in the single family sector.
Condominium apartment benchmark prices totaled 248,700 in December, a 5.4 per cent increase over 2011. Annual average benchmark increases were two per cent, significantly lower than the five per cent increase in the annual average price.
The average price increase is misleading, as there were several multimillion-dollar condominium sales in 2012 that skewed figures up. With more sales occurring at the higher end of the spectrum, average and median prices are trending higher than the benchmark, which represents price growth for the same type of property. “Calgary’s 2013 housing sector growth will ease both in terms of sales and price growth, differing from the declines expected on a national level,” said Lurie.
Calgary’s housing market did not recover at the same pace as other Canadian centres and 2012 was the first time resale sales returned to more normal levels of activity, she said.
“It is expected that continued weakness in the natural gas sector, combined with the more cautious expansion approach in the oil sector, will persist this year. While economic activity will be strong enough to support moderate housing growth, the notion of an overheated housing market in 2013 is unlikely, given the economic backdrop.”