With an increase in Calgary’s single-family market sales, a decline in new listings has brought inventory numbers to their lowest level for the month of March since 2006.
Single-family sales at the end of the first quarter of this year totalled 3,901 units, a 9.5 per cent increase over the same period last year while new listings declined by nearly five per cent. As sales growth outpaced the amount of new listings growth in the market, inventory levels dropped to just over 2,000 units.
“There are several factors contributing to the growth in housing demand including the inflow of people to our province over the past two years, strong gains in employment and tight rental conditions,” said Ann-Marie Lurie, CREB®’s chief economist.
Between April 2012 and April 2013, the Civic Census found Calgary’s population increased 2.62 per cent to 1,149,552 including a net migration of 19,067 residents. With that inflow of people, plus the living spaces affected by June 2013 flooding, Calgary’s rental vacancy rate as of October was one per cent according to the Canada Mortgage and Housing Corporation.
While the single-family market is seeing low inventory, Lurie said supply conditions vary amongst different property segments impacting sales and price growth.
“If supply constraints persist in the single-family sector, prices are expected to record further gains as we move into the spring market,” she said.
Persistently tight market conditions prevented any relief in terms of price gains. The unadjusted single-family benchmark price totalled $490,600 in March, a 9.9 per cent increase over the previous year and monthly increase of 1.6 per cent.
“With tight market conditions, particularly in the single-family market, purchasers should ensure they have a clear understanding of what they can afford and what they are willing to pay for a home,” said Bill Kirk, CREB® president. “However, both sellers and buyers need to be aware that conditions are dependent on the community and price range that they are targeting.”
Condominium apartment sales totalled 1,062 after the first quarter of this year. Sales growth was strongest in the condo market due to the availability of listings. After the first quarter of this year new listings totalled 1,722, an 18 per cent increase over the first quarter of 2013. While demand continued to outpace listing growth, the result of which is keeping market conditions relatively tight, inventory levels are similar to the previous year.
Kirk explained almost 50 per cent of new listings in the apartment sector are priced in the $200,000 to $299,999 range.
“However, there are far fewer options for those looking to spend less than $200,000,” he said. “After the first quarter, apartment product priced below $200,000 has dropped from over 16 per cent of the market last year to 6.4 per cent.”
Condominium apartment and townhouse prices totalled a respective $287,200 and $313,100 in the first quarter of this year. Condominium apartment prices recorded a yearover- year increase of 11.5 per cent and are the highest relative to the townhouse and single-family sector. Despite strong price gains across all sectors, condos continue to record price levels below peak records. With new condo developments in the city, Lurie explained the market should see some breathing room.
“Some easing of the supply pressure in the condominium market is expected as new construction projects are completed,” she said. “However, thanks to Calgary’s strong economy, it is expected that most new supply can be absorbed without risk of oversupply and condominium price correction.”
In the inner city alone there are more than 30 condo projects preselling units including The River in Mission, Ven in Kensington and 43 Park in Bridgeland.