Calgary Area Real Estate Newsletter
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April, 2014

In this issue:

Calgary Real Estate Board Update

Conditions Continue To Favour The Seller

New listings remain below expectations in the single family sector

Calgary YTD total sales April 2014 - apartments, single family homes, townhomes

Calgary, April 1, 2014 – Residential sales activity improved across all sectors in March. However, declining new listings in the single family sector combined with further gains in sales activity decreased single family inventory to the lowest March level since 2006.

“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,” says CREB®® chief economist Ann-Marie Lurie. “However, supply conditions vary amongst the different property segments, impacting the number of 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.”

Single family sales at the end of the first quarter totalled 3,901 units, a 9.5 per cent increase over the same period last year. Meanwhile, the amount of 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.

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,” says Bill Kirk, CREB®® president. “However, both sellers and buyers need to be aware that conditions are dependent on the community and price range that you are targeting.”

Condominium apartment sales totalled 1,062 after the first quarter. Sales growth was strongest in this sector due to the availability of listings. New listings after the first quarter totalled 1,722, an 18 per cent increase over the previous year. While demand continued to outpace listing growth, keeping market conditions relatively tight, inventory levels are similar to the previous year.

“Nearly 50 per cent of new listings in the apartment sector are priced in the range of $200,000 - $299,999, providing options for those looking for affordable product,” says Kirk. “However, there are far fewer options for those looking to spend less than $200,000. 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. Condominium apartment price recorded a year-over-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, overall the condominium sector continues to record price levels below peak records.

“Some easing of the supply pressure in the condominium market is expected as new construction projects are completed,” says Lurie. “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.”

Read the full report

Home sales hold steady in February


National average price $406,372
Calgary average price $456,008

Click the map image at the right to open the interactive map showing average prices across Canada in a new page.

The number of houses sold in February inched up 0.3 per cent over the previous month, according to Canadian Real Estate Association data. The national average price climbed to $406,372, an increase of 10.1 per cent in year-over-year comparisons.

Calgary real estate market to leave Vancouver in the dust

By Barbara Yaffe, Vancouver Sun

Emerging trends survey: Smaller Prairie cities thriving on the back of petroleum and potash

I recently sold my condo for a laughable price and purchased a half duplex for an even more outrageous sum.

That's just the way things are in Vancouver, where residential real estate is hot to the touch, a daunting high-stakes pursuit that can leave its players feverishly counting their remaining pennies.

But, believe it or not, in the coming year the market is expected to be even hotter elsewhere in Canada.

That's according to a comprehensive study of Canadian real estate prospects, which suggests that Calgary gary is poised to leave Vancouver in the dust.

The recently released report, by PricewaterhouseCoopers and the Urban Land Institute, examines real estate investment, development and home building in nine major urban centres across North America.

Emerging Trends in Real Estate 2014 identifies Calgary in Canada, and San Francisco in the U.S., as the hottest markets in their respective countries.

In Canada, Edmonton takes second spot, Saskatoon third. They are booming because of petroleum and potash.

Vancouver is back in fourth position, unchanged from a year ago, reinforcing a notion that high prices do not always suggest a booming market.

The study notes urbanization and densification trends continue to be all the rage in Canada, with locations near mass transit stations being in strong demand.

Buyers increasingly want to live in "mixed-use products," featuring office, retail and residential in one convenient location.

And these "commercial/multi-family developers are expected to have slightly better prospects than home builders."

Gen Y-ers are having an enormous influence on the real estate sector, says the report.

"This generation will be more urban and less suburban. They won't want to drive as much but will want to be mobile. From intown (sic) rental housing to collaborative office space to close-in warehousing to ensure same-day delivery from online retailers, Gen Y will be a noticeable force." This shift is taking place as baby boomers also are moving to core areas to be near amenities and health care services.

One reason why Vancouver is trailing the three smaller Prairie cities on the real estate front, the report suggests, is because of "a slowdown widespread through all sectors of the economy" in 2013.

It's a gorgeous place to live but Vancouver's employment growth was just 0.5 per cent last year, compared to 6.1 per cent in Saskatoon.

The office sector is particularly robust these days, with space being moved away from suburban areas and into city centres. Companies are also reconfiguring their office space, providing for multipurpose uses and less space per employee.

As for Calgary, the flooding of 2013 has not slowed its real estate sector. "Holding the top spot for both investment and development, Calgary moved into first place for homebuilding as well."

Across Canada, the real estate investment market "is expected to remain strong in 2014 as both domestic and non domestic investors find the Canadian real estate market attractive." But the report points to a particular problem, one that is a huge challenge in Vancouver. "Rising housing prices will put more focus on how the nation can continue to provide enough affordable housing to a population base fuelled by strong immigration."

How is a good question. Many homes on the east side of Vancouver are now selling for more than $1 million, even as median family incomes in B.C. remain below those in Saskatchewan and Alberta, and below the national average.

Which probably explains why Vancouverites have been seeing so many construction cranes hard at work, building more affordable, urbanized and densified communities characterized by tall, multi-purpose buildings. This, it would appear, is our future.


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